.


SCI LIBRARY

Land Reform or Red Revolution

Economic Surplus and the Dynamics of Political Violence

Fred Harrison



[Centenary Essay No.1, published by the Economic
and Social Science Research Association, 1980]


PREFACE


WHEN Progress and Poverty appeared in 1880, it produced an almost immediate impact throughout the English-speaking world. This impact considerably antidated any impact of Marx or other socialists. When Marx died in 1883, there must have been dozens of English-speaking people who knew of Henry George for everyone who had even heard of Marx. Not only was Marx unknown to English readers, so also was socialism. H.M. Hyndman's Social Democratic Federalism of 1883 was the first organised socialist body in Britain. Yet, in the years which followed, socialism rapidly overtook Georgeism as the dominant movement of economic and social reform throughout the world. Why? Was socialism in fact more appropriate to current problems, or based on a deeper analysis? The author of this essay does not think so. He thinks that George's analysis was throughout the intervening century, and remains to this day, an essentially accurate and valid analysis, while the views of Marx and other socialists are demonstrably wrong and inappropriate to the problems which socialists set out to solve. [Roy Douglas, February 1980]


I. POLITICAL VIOLENCE METHODS AND GOALS


EVERY day we draw nearer to the fateful event when a small terrorist group will lay its hands on a nuclear weapon which will be used against millions of people. Yet there is little sign that the world's statesmen and foreign affairs analysts have begun to understand, or come to terms with, the primary causes underlying the use of force in domestic or international politics. As a result, the formulation of policies is seriously defective.

Social scientists have attempted to draw us closer to understanding the motivations of those who feel compelled to use violence to further their goals. Most theories, however, have a psychological or sociological orientation.[1] But to say that individuals are "frustrated" by the system into taking aggressive action, or that society is split by "cleavages" which generate friction, does not help us to appreciate the nature of causal influences. Political science makes a contribution, through its analysis of the 'openness" of a system, and its ability to reconcile conflicting demands. But even that is insufficient, for we need an account which helps us to arrive at decisions about the legitimacy of demands. After all, a stable society needs a conservative membrane, and the problem is to decide which demands for change ought to be accepted, and which ought to be resisted.

An analysis will be advanced here which combines economic theory and the ethical content of Henry George's seminal book, Progress & Poverty.[2] The theory accounts for most of the seemingly gratuitous violence which daily assails us on the news bulletins; it will lead to a clearer understanding of the qualitative differences in the violence perceived in the Third World countries in contrast with that in industrial societies. The ethics are important when we come to consider the crucial problem of what to do about dealing with the conditions which nurture the seeds of death and destruction.

The first step is to establish whether the content of political violence is uniform, whatever its geo-political location. I propose to classify political violence by using two generalized variable continua (Figure A). One of them invites a consideration of the methods used by individuals or movements in attaining their objectives. An open society would encourage claimants with legitimate grievances to use institutional processes to advance their causes. At the other extreme, a closed society -- one in which dominant elites resist change -- would encourage the use of violence. The second variable focuses on goals: an open society would be susceptible to incremental change -- reforms -- while a closed society would dispose people with grievances to aim at sudden, drastic -- revolutionary -- transformations.

Four examples have been selected to illustrate how these two variables can be used to analyse the nature of society and the forces which shape political responses. The Sandinista guerrillas of Nicaragua are placed in quadrate I. They have a left-wing philosophy, and have promoted their aims by violence, from urban warfare against the National Guard, to kidnapping foreign businessmen. The near-total control of Nicaragua by the family of President Anastasio Somoza, and the ballot-box corruption which inhibited internal change through institutional processes, made the use of widespread violence in 1978 and 1979 attractive as the only apparent route to an improved socio-economic system.

President Allende's Chile (1970-73) is placed in quadrate II, because it provides an example of an attempt by a political party to revolutionise a society through established processes. This example will be examined in greater detail below.

The Ulster civil rights movement of the late 1960s appears in quadrate III, because its sympathisers used the non-violent methods of the pressure group to express their demands. Because of the electoral system employed at the time in Northern Ireland,[3] the numerically-larger Protestant population dominated regional and local politics. Thus, the Catholics were discriminated against when it came to allocating public housing and local authority jobs. (The IRA exploited the momentum of the civil rights movement, but the aims and methods of the two must not be confused. Catholic civil rights workers were seeking improved social and economic rights within the established political system.)

Finally, in quadrate. IV, we can locate the urban riots (such as in the Watts district of Los Angeles, 1965) which flared in the American ghettos in the 1960s. The black population, living in the most dehumanising physical conditions and with poor employment prospects, resorted to violence to express their demands for reforms. Attempts have been made to promote the view that the black Americans were inclined to revolution. The rhetoric of groups like the Black Panthers encouraged such a view, but these were in a small minority. While it is true that the blacks in the ghettos fiercely distrusted local politicians and the police, they nonetheless approved of the federal structure - because of the existence of, and the prospects of benefiting from, anti-poverty programmes. That is, they were not seeking to subvert the system per se, when they took to the streets.[4]

FIGURE A




II. ECONOMIC IMPERATIVES


A USEFUL starting point, because of its importance in the history of ideas, is the proposition advanced by Karl Marx that capitalist exploitation of the working class would lead to revolution and the creation of a socialist society. This appeared to be a meaningful hypothesis in the 19th century. Unfortunately for Marxists, however, the 2Oth century unfolded ... and nothing happened to verify the theory.

There have been events which were -- in the heat of the moment -- welcomed as the beginning of revolutionary change, pointing to the day when the proletariat would assume dictatorship over the means of production. The Paris riots of 1968 were one of these events. Violent though the riots were, they properly belong to quadrate IV; for they were initiated by students demanding changes in the structure of French education, and workers were remarkably reluctant to exploit the disturbances to their advantage.[5] France is instructive, but not in the way a Marxist would have predicted. For the revolutionary tradition of that country, which proudly celebrates 1789, developed only in its peasant-based, pre-industrial stage. Yet it would be a mistake to ignore Marx's analysis as irrelevant, for exploitation was undoubtedly present in the 19th century industrial system. We need to know why events failed to evolve as he had predicted. Such a consideration will follow once we have explored the theoretical insights offered by the science of economics.


Agriculture


Using the Ricardian theory of rent, Henry George argued that the basic wage of workers was determined at the margin of cultivation.[6] In a freely competitive system, where monopoly was prevented from distorting the market, workers would receive a wage acceptable to them; otherwise, they would employ themselves for an income which they deemed necessary. Where land was privately monopolised, however, wages would be below this minimum level; for the speculative advantage of keeping land idle or under-used would force out the margin of cultivation, thereby raising rents and reducing wages. Furthermore, this compression of wages and increase in rents would be reinforced by a restriction in the opportunities for self-employment, and result in the impoverishment of unskilled workers.

Thus, we can predict that the lowest wages will be found in the agricultural sector of industrial societies, and that the greatest prospect for revolutionary potential will be found in the mainly agrarian Third World, for the logic of an agrarian system built on land monopoly entails widespread antagonism between labourers and landowners. An increase in output would simply be creamed off in the form of rent, which is the economic surplus over and above that required to reward labourers and the owners of capital. The incentive to increase aggregate output is thus reduced, with the result that developing countries find it that much more difficult to finance fresh fixed capital formation. Economic growth, therefore, is retarded.

Henry George's formulation of the economic laws governing wage determination was vigorously challenged at the time when Progress & Poverty was the subject of general debate.[7] But the empirical evidence supports the hypothesis. In Britain, for example, male agricultural workers, at 16 per cent, are the second largest single group of workers having to rely on the state for supplementary benefits for a tolerable minimum income, just 1 per cent behind general unskilled workers.[8] And the 1.5 billion people described by the International Labour Office as living in "grinding poverty" are concentrated in the Third World.[9] The effect of land monopoly on wages has generally been neglected by economists, and so it would be worthwhile citing two exceptions. Charles Issawi noted in his study of Egypt:

"A survey of the last fifty years shows that the Ricardian analysis of rents and wages applies remarkably well to Egypt. An increase in population and wealth was accompanied by a considerable rise in the remuneration of the scarce factor, land, and by a fall in that of the abundant factor, labour. Indeed wages seem to have reached the minimum level, described by early nineteenth-century economists, below which they can hardly descend."[10]

In case it should be suspected that this phenomenon is restricted to Europe or the Middle East, we can quote an authoritative conclusion reached by the editors of an extensive survey of Asian economies:

"As the land-man ratio has fallen, the level and share of rents has increased while the wage share, real wages and the number of days employed per person have tended to fall."[11]

This process of impoverishment was

"intimately related to the degree of land concentration. A reduction in the inequality of landownership through a redistribution of landed property in favour of landless workers, tenants and small farmers would contribute directly to the alleviation of the most acute forms of poverty."[12]


Industry


The milieu here is different. There is a mutual advantage for both labour and capital in increasing output, through improved productivity and new fixed capital formation. Neither side of industry, under competitive conditions, can dominate, because of their inter-dependence. Workers may compete with each other, and so discipline the demand for higher wages; but, likewise, capitalists compete with each other -- a fact attested to by the tendency for the real rate of interest to be held down in the long run.

But this happy ideal was distorted, by the existence of land monopoly. Henry George dramatised the fact that, despite the abundant wealth which could have eradicated poverty, given the modern methods of production, many people were involuntarily unemployed or on low incomes. He wrote in the light of the American experience of the 187Os, but a century earlier the British workers were participating actors - playing the role of victims - in the first act of a historical tragedy. The enclosures displaced many of them from the land. They were forced to take refuge in the big towns, particularly the cotton-spinning centres of Lancashire, where they were at the mercy of the mill-owners. As a result, the employers were able to exploit a vulnerable workforce in what was a buyer's labour market. This stimulated a reaction through the emergence of trade unions, and the scales have tipped in favour of labour. Capitalists are said to be on the defensive, and the coercion used by many unions runs the risk of putting some firms out of business. But has trade union power in the urban sector overridden the effects of land monopoly on wages, and thereby defused a potentially revolutionary situation?

A number of observers have pointed to the existence of channels for collective bargaining in the industrial sector as a mechanism for ameliorating economic discontent,[13] but their importance as an explanation for the political stability of industrial systems seems dubious. Trade unions with power countervailing the might of industrialists are relatively few, and they represent a numerical minority of the working classes of industrial economies (or of the workforce employed in the industrial sector of developing countries). The fact is that, as Henry George emphasised, there is an inter-sectional influence on the wage determination process: low agricultural wages act as a brake on wages in the urban-industrial sector.[14] This effect has been lucidly described in these terms:

"The process of migration results in the gradual elimination of the income differentials which initially provoked it. In particular, the exodus from the countryside tends to undermine income levels in the informal urban sector and reduce them to the levels prevailing in the rural areas. There is a strong presumption, of course, that the migrants benefit from migration, but the benefits are likely to be marginal. In effect, the movement of labour represents little more than a shuffling around of poverty. As long as the economic structure remains as has been described, with its income distribution and resource allocation mechanism intact, the major function of rural to urban migration is to spread the growing poverty of the countryside to the towns."[15]

Thus, if trade unions fail to afford an explanation, we must search elsewhere for a solution to the problem of why industrial societies are apparently immune from revolutionary political violence.

The capitalist system enabled man to produce wealth at a rate unique in history. Yet despite the fact that this system was nurtured within a philosophical tradition which lauded the virtues of individual economic enterprise and political liberty, there was a parallel development: the growth of direct and indirect taxation in the 19th century and its metamorphosis into the form of a large and ever-expanding public sector in the 2Oth century.

In the 18 years following 1960, central government income in Britain rose by seven and one quarter times, and local government income rose by nearly nine times - but national income increased by under five and one half times! In the mid-1970s the ratio of tax revenue of GNP in the UK was over 35 per cent, with an average of 39.2 per cent in West European countries.[16] This tax/GNP ratio is a crude measure,[17] but if anything it grossly understates the point we are making -- the scale of public appropriation of privately-created wealth for the purposes of redistribution. Ivor Pearce, Director of Research at Southampton University's Econometric Model Building Unit, has reached this conclusion:

"As long as the question is what proportion of GNP is spent or redistributed by committees the answer remains 'more than 70 per cent'.[18]

A popular belief is that this avariciousness is explained by self-seeking bureaucracies enlarging their budgets and therefore their spheres of influence. This appears to be too tenuous an explanation, given the considerable reluctance with which people part with their hard-earned wage The hypothesis advanced here is that capitalist economies have had to buy peace, and that the potential for doing so existed in the increasing volume of output as science and technology advanced by leaps and bounds. In effect, the imperfect system, in a struggle to maintain equilibrium, was logically forced to respond to the impoverishment arising from land monopoly by redistributing income and creating jobs through the public sector, which amounts to a compensating mechanism to offset pressures which would otherwise have destroyed the system.


THE GROWTH OF PUBLIC CHARITY


THROUGHOUT most of the 19th century, private charity played the major part in seeking to alleviate suffering. As late as 1861, when the annual expenditure of private charities amounted to tens of millions of pounds, the total expenditure on public poor relief was only £5.8m.[19] Riots were regular in the first two decades of the century, but slowly -- painfully slowly -- the philanthropists articulated ways of rescuing people, providing those who could not afford them with homes and rudimentary education.

The early public relief work was financed out of rates levied locally, under the Boor Laws. It would be a mistake, however, to assume that the switch from the Poor Laws to centralised public welfare programmes financed out of progressive income taxes was motivated by altruism. Obligations under the Poor Laws were met in part out of the pockets of landowners. They did not like it, and since they controlled Parliament they had the power to transfer the burden to those who earned their incomes. As Thorold Rogers put it:

"One of the ways in which the owners of land have striven to maintain artificial rents has been, first, by starving the peasant, next by putting the cost of his necessary maintenance on other people."[20]

In other words, private charity and state subsidies were a way of increasing rental income. For if everyone independently earned a living wage -- attainable only in a system shorn of monopoly power -- the economic surplus (rent) would constitute a smaller percentage of GNP. But landowners take into account the fact that their labourers receive benefits transferred from other people's income, so the lowest wage levels were forced down and the difference absorbed by the appropriators of rent.

British farm workers illustrate this point. A substantial number of them receive rent and rate rebates, family income supplement, child benefits, free school meals for their children and other benefits which are related to their low incomes. They are part of what is termed the "poverty trap": an increase in wages results in a reduction in the benefits transferred through the state apparatus, leaving them no better off! But while an increase in wages results in reduced benefits, it does not follow that if benefits were reduced landowners would have to increase wages. While some farm employers might like to raise wages, such increases could not come out of the returns to their capital: price competition ensures that interest received on capital is held down to a common level, thereby precluding those farmers who would like to do so, from significantly increasing the level of wages paid to their workers.[21] The only source from which increased farm wages could be met would be rental income. But the monopoly power exercised by landowners enables them to resist the pressure for wage increases for a longer period than the labourers could subsist without state subsidies. So as to avoid the rick-burning protests which were characteristic of the 19th century, the state has had to step in and subsidise the pitiful wages of farm labourers, out of income earned by other workers.

And so the need for revolution is deferred until the political and economic elites fail to provide public subsidies as substitutes for the private wealth which the imperfect market system prevents so many people acquiring directly for themselves. People in need can turn to the established holders of power and, by exercising ingenuity in the pro-motion of their case, compete for a share-out with other groups with similar claims on the public purse.

The growth of taxation and social services, then, was a structural development, a logical response to the deficiencies in the system. Marx because of his ideological commitments, failed to appreciate how the sys tern would resiliently preserve itself. This could be done only by reducing real wages and profits for many people, a result which has been accepted for various reasons ranging from humanitarianism to self-interest.

Similarly, the growth of the public sector in industry can be seen as a response to the business crises which have periodically resulted in depressions. Henry George's analysis, which revealed that cyclical depressions were largely a function of bouts of land speculation, has been ignored. The policy options for dealing with depressions, therefore, have been fatally narrowed. The dominant rationale is that if entrepreneurs cannot remove unemployment (because of the "anarchy" presumed b socialist critics to rule the market), then the politicians and civil servants have to step in with public controls, economic planning and subsidies. The absurd position was reached in late 1978 whereby the government contemplated financing job-saving schemes which compelled Sir Douglas Wass, Permanent Secretary to the Treasury, to state in a confidential memorandum:

"The startling and disturbing conclusion is that we have been accumulating prospective losses of real resources at a rate faster than the growth of national income."[22]

If the foregoing analysis is correct, it would seem that conservative politicians who have promised to reduce taxation and the size of the public sector without appropriate structural adjustments -- of the sort which would free people to create their own employment -- are misleading the people. For, once in power, they are bound by the internal dynamics of the industrial system as it is at present constituted to buy social and economic stability through income transfers. As an example, we regularly receive reminders of such words as were enunciated by Jack Boddy, General Secretary of the National Union of Agricultural and Allied Workers at the Tolpuddle Martyrs' Memorial Rally in 1978:

"It will seem incredible to many people that in 1978 many of the people whose work keeps the nation fed cannot afford to keep their families fed."[23]

A pessimistic conclusion follows from our analysis of economic theory: no matter how much is transferred to low income earners, poverty will not be eradicated (since the benefits actually end up, ultimately, in the pockets of the landowners). This pessimism is warranted by the empirical facts. For example, Prof. Dennis Lees concluded that

"... there seems very little likelihood of the problem of family poverty (however defined) being overcome by increased family allowances. Nevertheless, the cost in monetary and real terms will inevitably rise if present trends continue, increasing the tax burden on childless couples and single persons without necessarily reducing the difference in living standards between them and poor families."[24]

A growing population, therefore, entails an inevitable continuation of the process of income redistribution.


IV. THE REVOLUTIONARY THREAT


THE three great revolutions in modern history -- France, Russia and China -- have taken place in peasant societies. The autocrats did not have the "surplus" wealth to redistribute in a way that would diffuse the discontent. So the political systems were not able to accommodate the legitimate demands of hungry peasants who sought a more equitable means of sharing out material wealth. The seeds of revolutionary potential were thus sown by those who held the power to reshape man's destiny ... discontent smouldered until it ignited into mass fury.

In France the peasants took to the streets in a straightforward demand for bread -- and the outcome was bloodshed and land re-allocation on a massive scale. Before that great event, there was little systematic use of the tactical terror which was to be employed in Russia in the 19th century.[25]

All the 2Oth century revolutions (such as in Cuba and Vietnam) have been in pre-industrial systems.[26] Dramatic transformation of the dominant ideology has occurred in those systems which are agricultural, where there is an unjust distribution of landed resources, where the tax burden has finally proved to be intolerable, and where the only solution has turned out to be a resort to violent destruction of the status quo.

Huntington, in his exhaustive cross-cultural study of political disorders, has pointed out how violence by urban groups has led only to the overthrow of existing ruling elites -- not the subversion, the transformation, of the system itself.

"By themselves, in short, the opposition groups within the city can unseat governments but they cannot create a revolution. That requires the active participation of rural groups."[27]

Rural groups, however, exercise what Huntington calls "the crucial 'swing1 role." Thus, control over land -- the natural resources on which society relies for its existence -- is the ace.

"In traditional society and during the early phases of modernisation, stability rests on the dominance of the rural landowning elite over both countryside and city. As modernization progresses, the middle class and other groups in the city emerge as political actors challenging the existing system. Their successful overthrow of the system, however, depends upon their ability to win rural allies, that is, to win the support of the peasants against the traditional oligarchy."[28]

Marx, despite the critical emphasis he placed on the role of capital in his theoretical scenario, appears to have glimpsed the truth of the fact that land was the key variable when it came to social change. In reviewing the prospects for an upheaval in England, the first of industrial societies, he concluded that all depended upon subverting the landed aristocracy, and the battleground was not the Manchester factory but the Irish estates owned by the absentee landlords.[29]

The problem, then, for those wishing to prevent the adoption of communism resolves itself into either of these two options:

  1. reinforce the power of landowning elites so that they can repress the changes desired by the peasants, who constitute the largest group of workers in the world today; or
  2. direct the transformations in such a way as to remove the apparent attractions of violence and communism.

In other words, land reform in the Third World becomes the major political issue. The response to this question determines the general socio-political status of a society. One of the well-documented facts about the peasant is his conservatism. Both Lenin and Mao Tse-Tung noted that with land, peasants resisted social change, but without land they constituted the most volatile force for generating a total transformation of the system. Lenin, for example, was alarmed at the success of Stolypin's land distribution programme. Lenin saw this as a threat to the Russian revolution for which he prayed. For without the peasants, the urban workers would not be able to mobilize the necessary force to overthrow the Tsarist regime.[30]

Since these practitioners of revolution recorded their observations, scholars have arrived at similar conclusions.[31] Gerrit Huizer, who has studied and worked among the peasants in Latin America, arrived at the conclusion that "Once the peasants receive land through agrarian reform, they seem to lose interest in promoting further revolutionary change in society as a whole."[32] But on the basis of the evidence at present available, it is clear that, strategically, the content of a land reform is as important as having a programme in the first place. Before defining the elements of an ideal land reform, we need to consider the political willingness to institute any change in the distribution of rights to natural resources.

It is a notorious fact that land monopolists are reluctant in the extreme to abandon their rights in favour of others: hence the rarity with which we come across examples in which these legal rights have been voluntarily relinquished, as a reform instituted through peaceful, democratic processes.

Reforms have usually come about when an autocratic ruler perceives that his interests lie in a change in that direction, even though this might erode some of the loyalty of the landowning class (e.g., the reforms instituted by the Shah of Iran in the early 1960s, in the face of strong opposition from the landlords), Or the reforms have followed the rise to power - by coup or ballot box - of a strong military leader (as with Gen. Ayub Khan in Pakistan).

Parliaments, because their composition favours the landlord class, have been singularly ill-equipped to institute what is clearly an important political as well as economic reform.[33] Egypt is illuminating as an example of the fateful costs of not acting fast enough in the interests of the people who toil on the soil.

For 50 years the fellahs laboured under a system in which most land was owned by a few people.[34] Landowners dominated Parliament, and the king was the largest owner of them all. Not even the Communist Party bothered to articulate the grievances of the fellahs.[35] Then, in 1951, a number of rebellions broke out for the first time in modern Egyptian history: there were land invasions and violence, and Col. Nasser (espousing socialism) came to power in a coup in July 1952. The first land reform law was enacted two months later, by which time Farouk had sought solace at the gaming tables of Monte Carlo, a king without a kingdom.

The great powers, although they could exercise influence over the policy orientations of the Third World countries, have refused to advocate land reform unless this was compatible with their national interests. The USA under President John F. Kennedy did advocate certain reforms.[36] But given the fact that the model of proprietorial rights dominant in Third World countries was imported from European culture, little radical effort was made to re-arrange the obligations of existing landowners. And the Kennedy influence was in any event short-lived. As a result of his assassination, Texas cattle rancher Lyndon B. Johnson moved into the White House and shifted policy in favour of the landlords.[37] Huizer summarizes the position with respect to American foreign policy:

"US aid to peasant organisations is generally channelled only for those movements that do not strongly emphasize the need for radical land reform. In some cases, however, such as Venezuela in the early sixties, land reform and peasant organisation was strongly supported because it helped to prevent what was called 'Castro's attempts at insurgency'"[38]

Cynically, the US shapes its attitudes according to its own interests (the need for regional "stability" within which the multi-national corporations can operate unhindered) rather than the social cohesion and economic prosperity of its neighbours in America. Rather than helping these countries to foster self-sufficiency by developing their economies, the US has been willing to "buy peace" -- this time on an international scale -- by pouring out billions of dollars in foreign aid. A large slice of this "aid" takes the form of armaments with which to suppress the legitimate demands of the oppressed. Washington ought not to be under any illusion as to its culpability for creating a favourable climate for communism and inducing crimes of violence. Rural banditry has been a traditional method of expressing psychological frustration and economic need.[39] This was recognised by the Survey of the Alliance for Progress, Insurgency in Latin America, which states:

"There exists an ideologically unfocussed quasi-insurgency of peasant uprisings as one aspect of the violence that is an endemic feature of political life in many Latin American countries. Usually these have sought a remedy for a specific grievance or have been the attempt of land squatters to protect their claims against the government forces. This shades into rural banditry. Peasant-connected incidents of this type are not insurgency but can develop into it. Legitimate guerrillas often utilise peasant unrests or incorporate rural bandits into their ranks."[40]

While the landless may respond with individual acts of violence, to be transformed into a mass force for change they need an ideology and organisational discipline; communism provides both of these. Of the former, McBride captured the prospects in his discussion of the Chilean inquilino:

"The inquilino, in common with the labouring class of the cities, the mines, and the nitrate grounds, has no property and virtually no experience as a land-holder. He has developed no devotion to any land of his own. It would seem to be an easy step from his present landless condition into a concept of community ownership and a communistically organised society."[41]

In addition, the Marxist emphasis on collective behaviour facilitates the organisational needs of initially ill-organised and ill-equipped people. Mao Tse-tung drew on the experiences of the Red Army when he wrote a resolution for the Ninth Party Congress (Dec. 1929) in which he criticized "The tendency towards individualism in the Red Army Party organisation" as "a corrosive which weakens the organisation and its fighting capacity".[42] In order to build the Red Army on Marxist-Leninist lines, he declared: "The method of correction is primarily to strengthen education so as to rectify individualism ideologically".[43] The expression of individual eccentricities, while permissible in a liberal society, has little value for those seeking to mobilize opposition to an exploitative system where the economic and political divisions can apparently be surmounted only through the use of force.

We can conclude that there is (a) the need for land reform in the Third World, where land is grossly maldistributed, (b) that the failure to take effective remedial action disposes opponents towards a communist-inspired revolutionary solution to their plight, and that (c) the industrial countries, through trade and foreign aid, are inextricably linked with -- and can, for better or worse, help to shape the destinies of -- the affairs of developing countries.


V. LAND REFORM


IS there any one model of rights to land which would best serve the interests not only of the rural sector but also the infant industrial sectors which many developing countries are trying to nurture? The demand for land reform is almost exclusively articulated in terms of ownership, following the European model of fee simple. This requires the physical re-allocation of land to new owners. There are three fatal defects with this.

The spatial problem


The ratio of land to those who wish to work it is an obvious constraint. This does not present such a critical difficulty in most parts of Latin America and Africa, where population densities are relatively low; so, if land redistribution was regarded as the economically sound strategy for the individual and the economy, there would be scope for incorporating the physical re-allocation of land as part of a programme of reform, although it would somehow have to take into account the varying values of land (fertility, location) in order to be just to all. The situation is totally different in Asia,[44] where the size of populations has ensured insufficient land to go round any significant number of people.


The temporal problem


Even if a society's man:land ratio was such that everyone could benefit from a re-allocation of rights to specific plots, this happy solution would apply only for the present time. What of the next generation -- and the one after that? The division of farms can take place only up to a point, beyond which it becomes uneconomic ... and future generations would find themselves in an identical situation as exists at present. The difficulty is illustrated by Mexico, where after the revolution in 191O, many peasants enjoyed the benefits from large-scale land distribution. Unfortunately, however, the number of landless peasants today is greater than at the time of the revolution. In 193O the figure of agricultural workers was 3,626,OOO and landless peasants 2,479,OOO and in I960 numbers had increased as follows -- agricultural workers 6,144,OOO and landless peasants 3,3OO,OOO.[45] The landless peasants decreased as a proportion of the total, but that is no comfort for the 80O,OOO extra landless workers who followed the early rounds of land distribution. So an ideal reform ought to incorporate a solution to the intergenerational problem.


Unemployed urban workers


If it is impossible to allocate an economically-viable piece of land to everyone, can urban workers be disregarded as irrelevant to a programme of land reform? Superficially, this would appear to be the case -- if we restrict our considerations to one of physical relationships. But the latter solution is offensive to justice, and is seen as such by the unemployed urban workers who usually end up in the tin shacks of Sao Paulo and Karachi because the rural sector which spawned them spurned them. Do they not have an equal right to land? This is a moral problem, and we have to address ourselves to the question of whether it can be resolved within the context of a complex, multi-sector economy. Can a programme be devised which accommodated the rights of urban citizens while simultaneously encouraging the creation of economically viable farms which put scarce resources to their best use?

Generally, the choice as to the content of a land reform programme is dangerously narrowed down to the two extremes: absolute individual ownership or collectivisation. Strategists who fail to open up the options are inviting political violence, both in the pre-revolutionary period (from the large mass of people in need) and in the post-revolutionary era associated with the totalitarian suppression of individual freedoms by communist regimes. We can predict that both approaches must be self-defeating.

The political preference for the western model of proprietorial rights is encouraged by the declarations of "human rights" promoted by international agencies like the UN and the European Convention. These are either ambiguous - asserting the general right to property, without confronting the problem of how property can be effectively enjoyed by everyone -- or they explicitly promote the notion of absolute individual ownership. Since land is in fixed supply, this effectively means arrogating monopoly power to a minority. This prescription offends social justice, but is defended on the basis of the mistaken belief that absolute ownership is a necessary condition of economic growth.[46] In fact, the necessary prerequisite to economic growth based on individual enterprise is secure possession of land, which does not necessarily require ownership.

Allocating land with the right of absolute ownership may succeed in enlarging the class which fortuitously benefits, but it does not deal with the out-group -- those who have no stake (directly or indirectly) in the natural resources of their community. Social friction might be reduced for a time, but not eliminated.

The dogmatic insistence on absolute rights of ownership necessarily creates a reaction among members of society who do not share in the gifts of nature. This reaction may be mute at first, but -- depending on local conditions --eventually explodes in violence. The communist ideology, in such conditions is bound to gain recruits.[47] Academics, politicians and the bureaucrats from the international aid and development agencies who encourage absolute ownership rights are actually turning developing countries into hostages of fortune, for by commending the free market model with the built-in defect -- land monopoly -- they invite false comparisons which appear as revealing evidence in favour of the communist alternative. One of these is a study by Kathleen Gough.[48]

Gough compared two rural areas on either side of the ideological divide. One was the Thanjavur district in southeast India, the other Thi Binh province in North Vietnam. She found that, despite the Green Revolution --the introduction of high-yield crops -- and land distribution in the post-independence period, many Indian smallholders had suffered. In fact, their number decreased from 3O per cent in 1951 to under 2O per cent of the population today, while absentee ownership increased and constituted 58 per cent and 75 per cent of the land respectively in two villages which she studied. Agricultural labourers increased from 4O per cent to over 6O per cent and up to 35 per cent in some of the densely populated coastal village with a deterioration in real wages and food supply for most of them since 1961.

"The underlying reason for this situation lies in the fact that, despite its 'socialist' rhetoric, India is following a path of dependent state-capitalist development. The properties groups who control the government have been unwilling to make the sacrifices necessary for independent capital investment."[49]

Not surprisingly, this volatile situation gave rise to Communist Party-led struggles among Thanjavur's poor peasants and landless labourers for 3O years, and the Emergency in 1975-76 is traced by Gough to economic stagnation, corruption and speculation.

By contrast, in Vietnam, although Thai Binh's population density was nearly three times greater than Thanjavur's, its villagers were more cheerful and prosperous. Communism had banished the landlords along with the French colonialists. The land was progressively amalgamated into fewer and fewer collectives until, in 1961, these were united into a single cooperative enterprise run by 4,000 people. The root cause of the contrast Gough attributed to the fact that "Thanjavur's peasants and labourers produce for private profit, usually for someone else, while those of Vu Thang produce for their own and for the national welfare."[50] The principles guiding the transformation of the Vietnamese situation were said to be planning, egalitarianism and the retention of wealth within the cooperatives. Ergo, nirvana lay the communist way:

"I have tried to show that the living standards, as well as the usefulness, hope, and well-being of Thai Binh's rural people are much higher than in the villages of Thanjavur, in spite of 34 years of intermittent warfare and 10 years of extraordinary devastation in Vietnam. The main reasons are that the distribution of wealth is relatively egalitarian in Vietnam, and that there is also more to distribute, since the produce per hectare is larger and there has been no 'drain' on the villagers' surplus to absentee landlords, money-lenders, nor, as far as I know, to foreign companies or governments. The product is greater because cooperation, full employment, and planning allow much greater labour efficiency and creativity, yet without overwork, starvation, or oppression for anyone. The removal of profit as the main motive for production leads to less interest in and reliance on foreign models, to cheaper and more useful machines, and to full use of local materials. The problem of 'lack of demand,' which is so crippling for Indian industry, disappears in a planned and cooperative economy; the only problem, then, is how to produce enough things to serve the people."[51]

Thus we are invited to conclude that the humane alternative to the present exploitative system favoured by the west is the communist model, a view which, however, is based on the spurious belief that there is no third com available.

The urgency for change in man's relationship with natural resources, however, seems to command a considerable measure of agreement. Huntington's conclusion that "the alternatives of revolution or land reform are very real ones for many political systems"[52] is a realistic one. We can illuminate the choice examining the case of Chile, which illustrates all the conflicts of interest (based on past injustices) and dilemmas for policy making.

Chile is important because it has a predominantly industrial economy: only about 25 per cent of the population lives in the countryside. Yet the conflict over landownership proved to be decisive in the destiny of the polital experiment attempted by Salvador Allende, the Communist President.

The colonial history of Chile followed the familiar pattern: expropriation the indigenous Indians and the creation of a rich landowning class which exploited the workers.[53] By 1966 the latifundistas comprised two per cent of the population but received 36.7 per cent of income.[54] An Agrarian Reform was passed in 1967 by the Frei Government. It fell well short of the target redistribution of land to 1OO,OOO peasants. The latifundistas, in fact, were not hostile to the law: they were, after all, to be paid for the land which they lost. They used their political and judicial influence to shape event to their advantage.[55] Even so, although the right-wing parties had formed an electoral bloc behind Frei's candidacy to prevent Allende winning office in the 1964 presidential elections, Jorge Alessandri's National Party broke with Frei over the land reform programme. It was this weakening of forces the right which proved to be crucial to the result in the 197O election.

The number of illegal occupations of land by peasants accelerated in the late 1960s.[56] In 197O, Salvador Allende was elected in his fourth bid for the presidency. As was to be expected, the programme of land reform accelerate dramatically. But this did not take the radical form of wholesale dispossession without compensation which one might have expected from a Communist. On the contrary, as Steenland noted, Allende's multiparty Popular Unity "pushed a traditional, progressive land reform to its ultimate consequences within the context of capitalism",[57] following a pattern basically similar to that used by reformist parties throughout Latin America. It is important to emphasise that Allende was attacked by the extreme left-wing for failing to institute a revolutionary Marxist programme;[58] the logic of the ballot box, and the willingness to evolve reforms in sympathy with the wishes of the majority, placed practical constraints on Allende's ideological commitments.

But the big landowners struck back. They still controlled the judiciary, the Senate and the military, and while they went unpunished for the murder of peasants, many a peasant was unceremoniously locked up without good cause. The trump card used by the latifundistas was to sabotage food production. Output increased in 1972 due to increased productivity per acre and increased area under cultivation in the reformed sector. But in 1973 output decrease by 15 per cent because of (a) the prevention of seed and fertiliser distribution during the planting season, and (b) the cut-back in area under cultivation. This forced up food prices, creating a crisis for the poor who found themselves unable to pay black market prices. The military then effected the coup de grace in September 1973. "Despite all the criticism of Allende's agrarian reform, we must remember that because of it tens of thousands of Chilean peasants took control of their own lives for the first time. Even if only for a brief moment, the agrarian reform righted many wrongs that had oppressed the peasants for centuries."[59]

By 1975, 23 per cent of the land in the reformed sector had been returned to previous owners, and the government busily divided up the cooperatives into individual plots in the certain knowledge that these would sooner or later be bought back by the latifundistas. The peasants have been denied the right to organise themselves, whereas the landlords have had this right confirmed for them. Since the coup, there has been a drastic reduction in the food grown and imported into Chile, with the result that "malnutrition, severe enough to cause mental damage, is more widespread than it has ever been among working-class children in Chile".[60] The aspiration of the peasants who just wanted the freedom to prosper by labouring on modest holdings was crushed by a brutal repression well-documented in the world's media. Five years after the fall of Allende, the authoritarian power exercised by President Augusto Pinochet, one of the military leaders of the coup, proved unpalatable even for Gen. Gustavo Leigh, commander of the Air Force. He was obliged to resign after failing to press his view that there ought to be a clear timetable for the restoration of democratic processes in Chile.[61] His departure from the junta left Pinochet in absolute control of the country.

President Richard Nixon and his administration must take a considerable share of the blame for the demise of the Allende government. The socialist bias of the Chilean government immediately resulted in a powerful configuration of financial policies which played an important part in dislocating the growth of the industrial sector of the Chilean economy. The US attack took the form of a three-pronged assault aimed at discrediting Allende and his policies:

  1. a financial blockade, led by the refusal of the US Government agencies and corporations to extend credit;
  2. development of the view that Allende's administration "lacked creditworthiness"; and
  3. through the consequential disruption of industry, promotion of the allegation that economic instability was identified with Allende's policies rather than external influences on the economy.[62]

After two years under Allende's presidency, Chile was enjoying full employment and a respectable rate of economic growth; by 1973 the international financial squeeze began to have its desired effect, fomenting internal disorder and diminishing the attractiveness of Allende's socialist approach.

Landowners were prominent in helping to train fascist para-military groups in a manner reminiscent of their creation of a powerful military organisation in the 1930s which was designed to oppose land reform.[63] Thus, right-wing forces and US pressure finally terminated Allende's constitutional attempt at instituting change in favour of the masses. As a result, those responsible have narrowed the options open to Chileans, compelling people with grievances to move from quadrate II (in Figure A) to quadrate I, to express their alienated political and economic condition through organised warfare. We cannot predict, in particular cases, when people will resort to violence; this would be determined by specific geo-political and historical facts, and future developments unforeseeable at present. People can be subjected for centuries to seemingly intolerable oppression, before they rise up against tyrants. For example, in the circumstances of present-day Chile, the topography affords little protection for guerrilla groups; forest cover is restricted to the south, but this is rendered vulnerable by strategically-located army camps. In addition, US support for the junta will shape the time-table for change.[64] Nonetheless, it would be foolish of the Chilean right-wing to assume that the people will not eventually react. There has been a tradition of "radical doctrines ... reaching the labouring classes, penetrating even the haciendas,"[65] going back to the start of the century. If and when the masses rise in the way that they have done in many other parts of the world, the logic of their situation will be such that the new leaders will necessarily adopt extremist solutions rather than the reformist policies attempted by Allende.

It is this prospect upon which the policy-makers in Washington should be reflecting. For example, would South Vietnam have fallen to Hanoi if the peasants had benefited from enlightened land reform? For without the willing aid of the peasants, the communist forces in the field could not have successfully waged their guerrilla warfare against the might of US military technology for so long.

The communists, in conditions of maldistribution of land, have the propaganda edge in the ideological war: they can promise land in return for help administered to the Red Army. The peasants, of course, are initially shielded from the emphasis placed on collective ownership, which requires total confiscatior of all land in the first place. Mao Tse-tung, for example, quickly learnt that "confiscate all the land" was not a winning slogan, so it was changed (April 1929) into "confiscate the public land and the land of the landlord class".[66] Lured by the prospect of land, peasants throughout the world have flirted with Marxist ideas, and have provided the food and intelligence which is vital to a guerrilla army.

Yet the Marxist victory in South Vietnam has not proved to be any more acceptable to its people than the landlord-dominated elites who were bolstered by the US. This is proved by the thousands of people who have fled Vietnam years after the fall of Saigon, even at the risk of drowning in the South China seas in their flimsy craft. Somewhere in the middle, between the two extremes of monopoly power (private and collectivist) there must be a socio-economic system which would be the ideal for everyone. It is towards this that we should be working.


Part 2