How Georgism can be the answer to environmental degradation

The Amazon rainforest has been burning for three weeks. This is devastating the lives of indigenous communities and the wildlife that inhabit this fundamental ecosystem of the earth. On Monday, the smoke covered the skies of Brazil’s biggest city, Sau Paulo, blocking out the sun of a city that is over 2700km (1700 miles) away. The Amazon is often referred to as the planet’s lungs, producing 20% of the oxygen in the Earth’s atmosphere. The fact it has taken up to three weeks for the news of the fires to reach the West has been cause for concern to the public and many have taken to Twitter to express their sadness, anger, and disbelief, as seen below.

Indeed, it is important to identify the role of President Bolsonaro in enabling such catastrophic deforestation, which begun immediately after he took office in January with his assault on Amazon rainforest protections through the transference of regulations and creation of new indigenous reserves to the agriculture ministry. The agricultural ministry is controlled by the powerful agribusiness lobby and led indigenous spokespersons to highlight such an event as a symbolic concession to farming interests at a time when deforestation is rising again.

Such a statement has unfortunately been proven correct by data from the National Institute for Space Research, whom have reported the number of fires in Brazil this year is has increased by 84% than over the same period in 2018.

Nevertheless, it is time for more pragmatism in addressing environmental degradation. Calls to organise demonstrations and other forms of virtue signalling from the left simply aren’t good enough. Environmental disaster is here and now, calls to defeat capitalism are not. Capitalism is deeply ingrained into the global order, therefore to create a new global order takes time which we simply do not have at our disposal. Instead, I argue we must invoke the ideals of Georgism.

Georgist economic theory posits that whilst individuals should own the value they produce themselves, economic value derived from land should belong equally to all members of society because the resources of the land should be free for all to benefit from. Policy proposals that incorporate this are eco-taxes which tax polluters. This would include deforestation by farmers. In Georgist terms, this is a land-value tax which discourages waste. Therefore, for a land mass as large as the Amazon, which provides up to 20% of global oxygen, any attempts to deforest would see a huge financial burden placed on the individuals and businesses that seek to do so.

Although the majority of deforestation in the Amazon is illegal, the actions of President Bolsonaro in weakening the power of government agencies responsible for protecting the rainforest, implicate him as an enabler and as someone who doesn’t take climate concerns seriously. This is most recently evident in his dismissal of former head of agency and physicist Ricardo Magnus Osório Galvão, for releasing a report highlighting the alarming rate of Amazonian deforestation in Brazil.

However,  international sanctions on states which do not adhere to an international standard of land-value tax would demand much more action. This would make the continuity of such economically damaging activities politically nonviable. Therefore, this is a possible route to success in saving the environment from leaders such as Bolsonaro, whom seek to bypass the importance of protecting the environment in their pursuit of development.

If, and it’s a big if, the international community and world leaders can come together to implement a global, Georgist land-value tax, it would go a long way in beginning to reduce pollution and other damaging activities to our environment.

Amazon pays tax of £63.4 Million on sales of £8.77 Billion and we wonder why the High Street is crumbling

Being successful in business is all about cutting your costs and increasing profits. Luckily if you’re Amazon, getting away with not paying what should into the economy helps you achieve these goals with ease.

It seems every year there are questions and criticism surrounding the morality of big businesses ability to evade paying tax, as well as the other unsavoury ways they avoid contributing to the economy of the countries in which they work. The latest culprit is e-commerce behemoth Amazon. It has recently been disclosed that they only paid £63.4 million in business rates (charges for property used for non-domestic purposes) in 2018, while their sales in the UK netted £8.77 billion that same year.

In comparison, high street retailer Next paid £100m in business rates on sales of £4bn. This amounts to around 2.5% of Next sales, whilst in the case of Amazon their business rate payments are less than 1% of their overall sales in the UK. For Debenhams, who had a tough financial year, 3.5% of their sales went towards business rates, as they paid £80m on a comparably low £2.3bn for the year.

An official blog post by Amazon stated “online sales are still less than a fifth of total sales in the UK and Amazon is a small percentage of that – perhaps a lot less than people realise.”

Statistics from 2017 show Amazon held a third of all online spending in the UK, a figure which will likely be even greater for 2018. This is a huge market share from a company who are downplaying their success in order to explain away their low tax contributions.

These figures are increasingly important as avoidance of these payments by companies such as Amazon clearly has a drastic effect on our high street shops. This past Christmas was the worst for Britain’s high street since the 2008 financial crash. Helen Hayes MP voiced concern that businesses in her constituency are struggling more and more every year and that “They cite business rates as the single biggest contributory factor, many of them, to the particular pressures that they have faced over the past year.”

Jake Berry, Minister for the Northern Powerhouse and Local Growth, has said the Government are planning to introduce a digital tax in order to “level the playing field” between online and high street retailers. However, he confirmed the treasury were responsible for adjusting business rates.

The disappearance of the high street may be an inevitability as the ease of online shopping pushes more people to turn to their electronic devices for purchases rather than their local shops. Whilst the high street still exists, however, the Government have a responsibility to ensure online retailers are paying their way the same as their brick and mortar counterparts.