Bounty: Why Don’t Professors Profess the Figure?
As fewer can afford a home, might they nudge the experts to tally up what everyone pays to live where they love?
January 17, 2018
“I didn’t become a software engineer to be trying to make ends meet.” — a Twitter employee
We’re not numerous but we who love science and swear by logic want to know the worth of Earth in America. Not just out of curiosity but also because such knowledge is crucial. Yet according to conventional economists, mainstream statisticians, even some critics and reformers, “rent” does not matter.
They trivialize and misconstrue “rent”. Economists compare it to the portion of earnings of a talented person above the earnings of an average person. No, that’s wages, however towering. Want an accurate analogy? Try urban drivers stuffing coins into a parking meter.
Naysayers say our spending for land et al is not enough to either feed or starve economic growth. Cynics claim that capital accounts for growth, yet it’s the soaring price of land that stymies growth. And it’s not owning capital that widens the income gap but owning land as Matthew Rognlie shows in correcting Thomas Piketty. Can’t get more relevant than that.
Doubters also doubt land’s impact on the business cycle. They’re not impressed by the “geonomic” argument, to wit … Our spending for never-produced land—typically beneath housing—gets so huge, that it consumes so much of our household budgets, that we don’t have enough wherewithal to spend on the goods and services that our neighbors do produce. That spells recession. Can’t get more crucial than that, either.
If only some agency would track and release figures for spending for land and other assets non-produced. That’d let us see the approaching tipping point where a downturn follows. Rational actors could take protective measure, re-arrange their portfolios. Furthermore, knowing the success of their economy, society might find a socially beneficial use for this windfall now arriving in very few pockets.
In the political sphere, our critics say, despite evidence to the contrary, that no one demographic gets the lion’s share of such spending; it’s spread out. And no one misspends it. Yet even if true, are those reasons enough to oppose others trying to tabulate this value?
You can’t blame the help, of course. Academics depend on donors and subsidies, bureaucrats squarely on government expenditure. It’s a bit much to expect hirelings to go against the grain, even if public servants, paid with public funds, should serve the public at large.
Funny that a mere statistic is controversial. It does not take much guesswork to imagine why, or an ounce of cynicism. Those who get the spending for land now want to keep it for themselves. Keeping the total unknown helps their cause. Slam dunk.
Ironically, what’s taboo to academics is invisible to most critics. Reformers, without any pressure constricting them, give rent a pass. Look at what they overlook. As Bloomberg’s Noah Smith said, “[I]t’s landlords, not corporate overlords, who are sucking up the wealth in the economy.” And when humans wage war—for oil today, for surface land in the past—it’s not for the actual turf so much as it is for the payments people make for the stuff.
Yet given human diversity, some reformers might lend a hand in ferreting out a stat for “rent”, particularly those battling NIMBYs for affordable housing:
Most of the above appeared in 2017. One can find a dozen similar articles every year.
Once a critical mass sees how cost of living rides location rent, they may demand the statistic from responsible agencies. Meanwhile, let’s trot on over to the hall of records, see what officials have to say. Googling should dislodge the statistic easily, eh?
This article is Part 4 of a series highlighting the forthcoming book, “Bounty Hunter: a gadfly’s quest to know the worth of Earth,” by Jeffery J. Smith. To date, the experts have not risen to meet the challenge. Indeed, some have even stood in the way. Yet the payoff for knowing this datum is huge.
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JEFFERY J. SMITH published The Geonomist, which won a California GreenLight Award, has appeared in both the popular press (e.g.,TruthOut) and academic journals (e.g., USC's “Planning and Markets”), been interviewed on radio and TV, lobbied officials, testified before the Russian Duma, conducted research (e.g., for Portland's mass transit agency), and recruited activists and academics to Progress.org. A member of the International Society for Ecological Economics and of Mensa, he lives in Mexico. Jeffery formerly was Chief Editor at Progress.org.