Great Ideas of the Zhou – Legalism

Episode 9: Great Ideas of the Zhou: Legalism

Foundations of Eastern Civilization

Dr Craig Benjamin (2013)

Film Review

In this lecture, Benjamin explores how the Qin Dynasty unified China at the end of the Warring States Period (480-256 BC) and used Legalism. A system of very strict legal codes, they imposed it not only in their own state of Qi, but also in the states they conquered.

The third major philosophy to come out of the Warring States Period,* Legalism taught that human beings were born evil and would only behave ethically if forced to by the state. Harsh Legalist punishments included enslavement, mutilation, branding the face, amputation of hands or feet, exile to the steppes, castration, strangulation, beheading and slow slicing (death by 1,000 cuts).

The Legalists also imposed collective punishment on villages, neighborhoods and families, although individuals could escape punishment (and be rewarded) if they informed on their neighbors.

The Legalist system calls for these punishments to be implemented by the state, rather than the ruler (who is subject to the same laws as his subjects). This system initially proved extremely effective in crushing dissent under the Qin Dynasty.

The Confucians rejected Legalism, arguing it was better to achieve ethically appropriate behavior by reaching collective agreement of what was socially appropriate.

Legalism influenced governance in other Asian societies, with Singapore continuing to run a quasi-legalistic society into modern times.**

The two main political advisors who helped implement Legalism were Shang Yan (390-338 BC) and Han Feizi (280-233 BC). The Qin nobility despised Shang (in part owing to his insistence that bureaucrats be subject to the same laws as commoners) and eventually had him executed.

Han Feizi served as advisor to Qin Shi Huang, who would become China’s first emperor. Owing to Han’s tendency to favor brutal suppression of dissent over ethics, he is frequently compared to Machiavelli. He was eventually imprisoned and poisoned by a rival.

Legalism, along with Confucianism and Daoism eventually made their way to Europe via Jesuit priests during the Renaissance. The Western emphasis on individualism contrasts sharply with the Eastern emphasis on collective welfare and limited the impact  of Chinese philosophies in the West.

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*The other two were Confucianism and Daoism. See Great Ideas of the Zhou: Confucianism and Great Ideas of the Zhou: Daosim

**Caning is still used as criminal punishment in Singapore.

Film can be viewed free with a library card on Kanopy.

https://www.kanopy.com/en/pukeariki/video/5808628

The Growing Freshwater Crisis

Last Call at the Oasis

Directed by Jessica Yu (2012)

Film Review

This is a wide ranging documentary about the global freshwater crisis. It focuses mainly on the US, which has the largest water footprint per capital. However it also briefly addresses even more severe water issues in Australia, the Middle East and India.

The film addresses numerous issues contributing to the shortage of fresh water – climate change, causing more frequent droughts and declining snow backs (an important source of fresh water), the rapid depletion of groundwater (many US aquifers are predicted to be totally gone in 60 years), and the contamination of remaining freshwater by unregulated toxic chemical discharge, factory farm waste and fracking wastewater.

As usual the federal regulatory agencies (EPA, FDA, USDA) come off looking really badly in contrast to their European counterparts. It also comes across loud and clear that poor Americans suffer the most from contaminated drinking water – especially when government looks the other way.

The film also highlights how spoiled and entitled many Americans are in their attitudes towards water conservation.

My favorite part of the film features renowned anti-toxics activist Erin Brokovich, who continues to work tirelessly for poor communities suffering epidemics of cancer and other debilitating conditions stemming from contaminated water

Unfortunately there are no easy solutions to contaminated drinking water. Drinking bottled water isn’t one of them. As the filmmakers point out, bottled water is even more poorly regulated than tap water. Neither is desalinization, which is extremely polluting, both in terms of CO2 pollution and a nasty brine residue that’s nearly as harmful as nuclear waste to human health and the environment.

It appears that the cheapest and most environmentally friendly solution for desert areas like the Southwest and Southern California is one adopted by the city of Singapore: recycling purified waste (sewage) water. Most Americans resist this approach due to the “yuck factor.” Reportedly Los Angeles is on track to begin waste water recycling  by 2019.

The film, which can’t be embedded, can be viewed free for the next 2 weeks at the Maori TV website: Last Call at the Oasis

 

 

China vs the US: The Battle for Oil

China vs the US: The Battle for Oil

Directed by Jean-Kristophe Klots (2012)

Film Review

The Battle for Oil is about the battle between China and the US over the world’s dwindling oil reserves. Globally China is the second biggest oil consumer – after the US. Owing to its dwindling reserves, they import two-thirds of their oil. High domestic demand for oil leads to periodic power blackouts and long queues at services stations.

China has three state-owned oil companies employing tens of thousands of workers, mainly in London, Singapore, New York. The country’s high demand for oil has led to major investment in African and South American oil producers. Rather than buying barrels of oil, China seeks investment in oil production capacity. Chad, Sudan and other African countries have granted them major oil concessions in return for major infrastructure investment in ports, railroads, telecommunication networks, schools, and clinics.

China’s ability (thanks to immense cash reserves) to invest in massive infrastructure projects gives them significant competitive advantage over western oil companies. As does China’s commitment to absolute non-interference in the host country’s political affairs. This contrasts sharply with western loans. The latter are always accompanied by demands for “democratic” and “human rights” reforms, which turn out to be camouflage for further penetration by Wall Street interests.

In 2005, China freaked out US lawmakers by attempting to take over the American oil company Unocal. Owing to their desire to preserve friendly trade relations, China dropped their Unocal takeover bid and shifted their focus to forging alliances with oil producers hostile to the US, such as Iran, Russia and Venezuela. Much of the current US animosity towards Venezuela stems from growing Chinese investment in their oil industry – a fact rarely mentioned in the mainstream media.

 

Facebook’s Billionaire Tax Refugee

French actor Gerard Depardieu

In January, Forbes reported that Facebook’s billionaire co-founder Eduardo Severin had renounced his U.S. citizenship to move to Singapore, where the top tax rate is 20%. The article about millionaires and billionaires fleeing high western tax rates was triggered by French actor Gerard Depardieu’s renunciation of his French citizenship to move to Russia. He chose Russia based on its top tax rate of 13% on individuals and 20% on corporations (except for the oil and gas industry – see below). France had just enacted a 75% tax on millionaires to pay off the 1.7 trillion euros it owes to international banksters. Socialist president Francois Hollande sees taxing the rich as a better alternative than laying off public servants and cutting health care, education, and pensions like Greece, Spain, Portugal, and Italy.

Forbes clearly disagrees. Predictably the article represents the traditional neo-classical economic viewpoint – slashing public services is always a better alternative than increasing taxes on the rich. They also leave out the most important part of the story – namely why income taxes in Singapore and Russia are so low.

The real reason income is taxed at a low rate in Singapore and Russia is because both countries have adopted a modified Land Value Tax (LVT). An LVT is a tax on unimproved land, resources and the cultural commons (e.g. public airwaves). It was journalist Henry George who first proposed replacing taxes on income and capital with a single LVT in his 1879 international bestseller Progress and Poverty. See Progress and Poverty: the Suppressed Economics Classic.

Singapore’s Economic Miracle

Singapore, a flourishing city-state of 5.3 million people, faced massive unemployment and a major housing crisis when it first gained its independence from Malaysia in 1965. Its leaders immediately launched a modernization program funded by an LVT. Although Singapore no longer relies on a single tax, income taxes still remains extremely low with corporate rates between 8.5 and 17%.

Thanks to the LVT, Singapore recovered much more rapidly than western countries from the 2008 economic collapse. In 2011 a 12% increase in GDP enabled them to pay a dividend to all adult citizens of approximately $269 each (total $1.22 billion).

How Putin Saved Russia’s Moribund Economy

Russia’s LVT, introduced by President Vladimir Putin as part of a 2001 tax reform package, falls more heavily on mineral (e.g. oil and gas) extraction than unimproved land. Taxes on oil and gas revenues amount to approximately 45% of net sales (compared to 12 percent in the construction industry and 16.5 percent in the telecommunications industry). Property owners pay a tax ranging from 0.1 – 0.3% on land value (and a comparable rate on state-owned land that they lease).

Experience with LVT in other countries

Hong Kong (1985) – thanks to LVT, enjoys low taxes, low inflation, high investment and high salaries. Often voted the world’s best city for business and the freest for residents. According to Bloomberg’s they, too, paid a $700 dividend to all adult residents in 2011. Unfortunately since rejoining China, Hong Kong has been gradually replacing land and resource taxes with income tax. This has resulted in a return of land speculation and increasing income inequality. The Hong Kong real estate holdings of China’s multimillionaire president Xi Jinping are valued at more than $24.1 million.

Taiwan (1949) – following the Communist takeover of mainline China, Chinese nationalists under General Chiang Kai-shek fled to Formosa (Taiwan), a brutally poor feudal island controlled by a handful of rich farmers. Chiang Kai-Sheck, a follower of Sun Yat-Sen, the first Chinese president and  a great admirer of Henry George, introduced a LVT. When plantation owners found themselves paying as much in taxes as they were collection in rent, they sold off their excess land to peasant farmers. Taiwan went on to set world records with growth rates of 10% per annum.

Denmark (1957) – the small Georgist Justice Party won seats in parliament and a role in the ruling coalition. A year later, inflation had gone from 5% to under 1%; bank interest dropped from 6.25% to 5%. By 1960, 100,000 unemployed (out of a population of 5 million) had found jobs and received the highest average pay increase in Danish history. In the 1960s, a media backlash funded by wealthy bankers and corporations caused the Justice Party to lose its seats. Land taxes were decreased and income tax and sales tax (currently at 25%) drastically increased. Inflation quickly rose to 5% and by 1964 reached 8%. Land prices began to sky-rocket, increasing 19-fold from 1960 to 1981 increasing 19-fold.

Estonia (1990s).- enacted a 2% LVT following the break-up of the Soviet Union. It was much easier to collect than the income taxes enacted by other former Soviet republics, more successful than trying to collect from others, succeeding over 95% of the time. It’s largely the LVT that has enabled Estonia to become the electric car capitol of the world. In addition to installing 165 electric vehicle fast-charging stations country-wide, it provides a 50% subsidy for residents who purchase electric vehicles.

Other jurisdictions that opted for LVT:

• Ethiopia 1990s
• Saudi Arabia, Kuwait, UAR – resource-based LVT on oil and gas exports
• Baja California (Mexico) 1990s
• British Columbia (1912) – resource-based LVT on forestry
• Vermont 1978
• Kansas City 1930s
• Pennsylvania – Pittsburgh and Scranton in 1975 and 18 other cities following suit in the 1990s. Housing costs and crime in both Pittsburgh and Scranton have trended the lowest in the US, despite the collapse of the steel industry. Both avoided the 2000-2007 real estate bubble and 2008 collapse. Foreclosure rates in Pittsburgh remain the lowest in the country.

Single tax colonies founded by Henry George’s American followers:

• Free Acres (New Jersey) 1910
• Arden (Delaware) 1900
• Fairhope (Alabama) 1894

 

photo credit: igorjan via photopin cc