This month we feature a guest post from one of our recent Tables of Ten participants, Karl Fitzgerald. Karl is an economist for Prosper Australia, an NGO specialising in a fairer tax system. He runs the monthly Renegade Economists podcast and is best known for his study of vacant housing.
When I first heard about the opportunity for personal development with Global Leadership Foundation, deep down I wondered whether the economics system that directs so much of our lives could ever consider the type of reflection that was on offer.
I am an employee of a 129-year-old trust fund with a unique perspective on the ebbs and flows of economic history. The fund is inspired by the teachings of 19th-century economist and political philosopher Henry George and his seminal book, Progress and Poverty – An Inquiry into the Cause of Industrial Depressions and of Increase of Want with Increase of Wealth: The Remedy. We investigate the role of monopoly interests and the damage they inflict on society, and seek to educate the public and lobby decision makers towards change that could lead to a fairer system.
The Covid-19 pandemic is bringing to the fore numerous examples of the inequities in our society. For instance, our inability to deal with rapid change is exposed by our weekly need to pay for land and housing.
If flexibility is a reflection of resilience, we are learning that society does not have an appropriate operating system for an uncertain future.
We need effective leaders who are able to balance the short-term demands of these times with long-term realities and what really matters.
My family and I decided to look at that arc of time and what really mattered to us when we did a ‘lap’ of Australia in 2016. A six-month sabbatical, coloured by the hotchpotch network of activists, economists and scientists we stayed with along the way, gave us many insights into how others chose to best spend their time on planet earth.
We returned home and quickly decided that living next to a yapping dog in inner-western Melbourne was no longer the go. Six months later we were living on 27 acres in an idyllic valley in a six-bedroom, handbuilt stone home. The universe delivered!
We’d originally bought into Braybrook in 2007, a suburb I soon nicknamed the ‘Braybronx’. We did what we could to engage with our community but it was a hard slog trying to find a way in. The key, eventually, was the local Permaculture Out West group. It ran a permaculture playgroup which our three kids attended.
From there we joined the permablitz trail and soon decided a community nursery was needed. The Power Plants nursery was born as a way to make better use of our spare driveway and meet others doing good things. Over the next four years, we gave away thousands of seedlings.
We sold our home at an opportune time, making a tidy $500,000 profit (known in the trade as an economic rent). The wash was that we had made a reasonable profit from home ownership – something I have advocated against for years. Here I was, an advocate of sharing these economic rents (in place of income taxes), facing the need to justify this gift-horse. I had earned almost as much via property as I had working.
Our new property had been on the market for years, so it was more affordable than we could have hoped for. Sure, it came with gorse, thistles, a leaking water tank and a useless fireplace, but that’s where bargains are born.
As we awoke to the sounds of our new life on the farm, of rosellas, kookaburras and the oomph oomph of kangaroos hopping past our bedrooms, we grappled with a farm name that reflected our values.
Our tree change was driven by the dual purpose of creating a permaculture farm within an independently managed Community Land Trust. A CLT is an affordable housing vehicle, which in this case would mean that magic money delivered to us over our time in Braybrook would actually be shared with the trust.
Our aim is to have a number of other houses on the land, with everyone paying market land rent to the trust. Instead of going into great debt to buy a piece of land, residents simply lease the land from the trust, paying far less over time than they would if they had to take out traditional mortgages. The recent Unspoken Alternatives to Expensive Housing report found a 37% saving for a participant compared to renting over a decade.
Applying Global Leadership Foundation’s guiding principles through this lens could hint at the potential for community evolution. With little debt, residents could enjoy more time on the trajectory towards self-realisation. Paying a land lease fee to the community (rather than the bank) would pay down any trust debt and set it up for potential expansion as an affordable housing vehicle. Now there’s collaboration! Stewardship is enhanced in that no-one owns the land – we all lease it. With less time required to repay the banks, more time could be available to work in the community nursery.
Sure this all sounds so good. But we still have a long way to go with planning regulations tightening in the shire of Hepburn, particularly around flooding. This has pushed change upon our plans, something which we are juggling to make work.
After many a night staring into the embers of our fire, we chose the name Windfall Commons. From the economics perspective, it reflects that synergy between recognising a windfall gain over hard-earned profits. In permaculture, it is the dividend of effective planning (and 12 months of biochar boosting our soil immeasurably – wow!).
The ‘commons’ aspect reflects that this land profit comes more from the community’s existence. By working together from a land stewardship perspective, we can work to enliven a permanent community. Lastly, the sharing of the bounty from our greenhouse repays those helping us out with various projects.
So as I walk these lands on a Friday night, beer in one hand, mattock in the other, whacking thistles and checking in on the health of recent plantings, I consider the first stage of our tree change totally enlivening. However, the bigger systematic issues are where the real challenge lies.
Big Housing’s under-performance in releasing enough supply to actually push prices down and ensure affordable housing for all is comparable to Big Pharma’s dwindling research and development in long-term issues like coronaviruses. They are both looking to manufacture scarcity to generate higher economic rents.
Society is now at a stage where we can no longer afford to don our hats to monopolists. We need to find a way to work together, and sharing this monetary bounty is the key to a society in which our own inner health is in balance with the wider community.