Te Whaita-Nui-A-Toi Canyon

Economics in One Lesson

by Bob Keall

Page 2

land-wages-interest diagram The diagram shows the three factors of production
  • Land
  • Labour
  • Capital
and the returns for each:
  • Rent
  • Wages
  • Interest

Land: being all natural resources and natural monopolies, the Rent for which is currently capitalised into a purchase price. By definition the payment should be annualised in favour of the owner, the Crown.
Labour: being all human economic endeavour whether of brawn or brain, for which Wages are paid.
Capital: essentially savings from wages used by Labour to make it more productive. Ideally, Labour should supply Capital and reap the rewards, by way of Interest and better wages. In fact, Capital is currently supplied by the recipients of (economic) Rent compounding their return. Some interest is really Rent. The Landowner currently becomes the Capitalist as well. Rightfully the Labourer should be the Capitalist.

That the price paid for Land can only be at the expense of Capital and Labour. Under the speculative impetus of freehold tenure it incessantly bears upon them (arrows), with Labour in the weaker position. All progress tends to be capitalised into Land Price. Increasing the size of the cake does not alter the proportions. If anything, the mere prospect thereof reduces the proportion available to Labour, driving it even to subsistence level.

The portions taken by Labour and Capital are even further diminished by taxation. Under Resource Rental tenure, these pressures would be reversed. Labour and Capital would be relieved of taxation, paying Rent in lieu, and the level of Rent would be negotiated after Wages and Interest had been determined.

This is summarised in our organisation's motto:
Pay for what we Hold or Take, not from what we Do or Make.
Private Enterprise must not include private ownership of the elements of life.
Free trade must not include the freedom to invest in owning others natural resources
which should rightfully be their source of revenue

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