The Privatization of Land
How It All Began
[Reprinted from Land & Liberty, 1995]
Dr. Hudson is co-author of A Philosophy
for a Fair Society, London: Shepheard-Walwyn, 1994.
The Henry George School of New York sponsored the International
Colloquium on Privatization at New York University. The conference
was organized by the school's Research Director, Dr. Michael Hudson,
author of this essay, and Prof. Baruch Levine of New York
University's Skirball Department of Hebrew and Judaic Studies.
Participants represented each major period and geographic region of
antiquity. The colloquium papers will be published at the end of the
year by Harvard University's Peabody Museum.
SCHOLARS from Russia, Germany, Italy, Israel, Canada and the United
States gathered in New York last November for a colloquium on the
origins of privatization in the Ancient Near East and the Classical
World. The US scholars were from Harvard and the University of
Leading archaeologists, cuneiformists and philologists traced the
dynamics of privatization from 3500 to 500 EC, from Bronze Age
Mesopotamia through Biblical, classical Greek and Roman times. In his
essay, Dr. Hudson argues that the forces unleashed in Mesopotamia 5000
years ago must be clearly understood if we are to solve contemporary
problems like private poverty and public indebtedness.
POTS and statues do not tell much about social institutions that
produced them. Bronze Age written records are laconic, consisting
mainly of abbreviated notes (largely receipts and internal accounts
from the public temples and palaces) mat take for granted the economic
The colloquium was important because its participants were willing to
compare their various data and venture a plausible context for just
what kinds of societies produced the artefacts dug up or the tablets
recording resource flows within the temples, palaces and private
Their findings challenged many now-orthodox economic assumptions.
There was general agreement that from Bronze Age Mesopotamia down
through biblical times in me Levant, classical Greece and Rome, each
society progressed through broadly similar (but by no means identical)
experiences as they commercialized their economic life. The "wild
card" proved to be how they handled interest-bearing debt, and
the limits they placed on debt bondage and forfeiture of the land to
In antiquity, as today, debt was the major economic lever of
privatization. But whereas today's privatizations stem mainly from
public debt pressures that encourage governments to sell lands and
forests, mineral resources and public utilities, there were no public
debts in antiquity.
Temples and the palace typically were creditors, especially in Bronze
Age Mesopotamia. However, private debts with the land pledged as
collateral led to its forfeiture for arrears. Personal indebtedness
was the catalyst for transferring subsistence lands to absentee
owners, in epochs when the outright sale or alienation of land was
prohibited for more than just a temporary period.
ECONOMISTS have long been notorious for taking private property as an
elemental and original institution in human experience. This
assumption is a carry-over of the Social Contract theories of John
Locke and Adam Smith.
In these theories no role is played by me idea of land originally
held by communal groupings and allocated to members who bore a
military liability and other public obligations attached to the land.
Whatever does not belong to the palaces and temples is deemed "private"
ipso facto. Yet the idea of private property as it is understood in
modern times developed relatively late.
"In the beginning," Sumer's temples (and in time me
palaces) were the major profit-seeking entities (and even more, rent
and interest recipients). The non-public communal sector functioned
mainly on a subsistence basis. Indeed, all the basic 'elements of
modern enterprise, including such basic practices as charging
land-rent and interest, developing standardized production runs, lot
sizes, weights and measures, and monetary standards of exchange were
innovated by the Sumerian temples in the fourth and third millennia
Accordingly, one riddle that we addressed was why entrepreneurial
techniques were first developed by public institutions, above all by
the Sumerian temples, rattier than within private households. Why was
there public enterprise to be privatized in the first place, rather
than autonomous private enterprise to be taxed or otherwise made
subject to social overrides? If private enterprise is an inherently
superior mode of organization, why did civilization take the seeming
detour represented by the Sumerian temples and, later, the palaces?
The fact that the first commercially organized enterprise is found in
Sumer's temples as early as the fourth millennium BC indicates that
the state is not inherently antithetical to private property. It seems
that public enterprise was needed as a catalyst.
Evidently some social blocks had to be overcome by creating the
techniques of commercial enterprise -- rent-yielding land,
interest-bearing debt, account-keeping and production planning -- to
generate economic surpluses at least nominally for the community at
large (in Sumer's case, the city-temple) rather than for purely
personal gain. This community-wide social purpose is what seems to
have made the pursuit of private gain socially acceptable, whereas in
traditionally organized chiefdoms it was considered "bad manners"
to take a surplus for oneself.
Sumerian cities needed to generate exports to obtain foreign metals,
stone and other raw materials not found in local river-deposited
soils. The city-temples solved this problem by putting widows and
orphans, the sick and infirm to work in temple weaving workshops and
other public welfare/workfare hierarchies.
Every early society ended up by privatizing its land, industry and
credit systems. But some societies did this in ways mat protected
traditional social values of equity and freedom; others, such as Rome,
did it in such a way as to polarize and indeed, pauperize its society.
THREE types of landed property emerged in southern Mesopotamia's
cradle of enterprise: communal land (periodically re-allocated
according to widespread custom); temple land endowments, sanctified
and inalienable; and palace lands, acquired either by royal conquest
or direct purchase (and often given to relatives or other supporters).
Of these three categories of land, "private" property
(alienable, subject to market sale without being subject to repurchase
rights by the sellers, their relatives or neighbours) emerged within
the palace sector. From here it gradually proliferated through the
public bureaucracy, among royal collectors and the Babylonian damgar "merchants".
However, it took many centuries for communal sanctions to be dissolved
so as to make land alienable, forfeitable for debt, and marketable,
with me new appropriates able to use it as he wished, free of royal or
local communal oversight.
Modern advocates of private enterprise argue that gain-seeking
individuals manage resources more efficiently than do public agencies.
No such economic rationale was developed to support antiquity's
property transfers. No one suggested turning over wealth to the rich
to manage in society's interest. Just the opposite: for century after
century the acquisition of land by public officials or merchants was
reversed repeatedly and indeed, almost regularly, by royal Clean
Slates. These cancelled personal debts (including back taxes) and
returned the land to its traditional holders.
Rulers sought to maintain a free land-tenured body of citizens to
serve in the infantry and provide corvee labour services. Loss of land
rights would have meant a loss of citizenship and military rank.
Hence, rulers had an interest in avoiding social polarization between
large landholders and uprooted landless individuals. Clean Slates also
deterred the consolidation of a wealthy aristocracy as economic rivals
to the palace.
In Roman times the Stoics denounced personal gain-seeking, hoping to
return to what they imagined to have been a Golden Age -- the Bronze
Age -- of social altruism. But by late antiquity the memory of royal
Clean Slates to restore economic order and equity had faded. The rich
themselves were Stoics. They tended to preach in favour of a return to
a broader distribution of land and economic self-reliance, but they
did not actively back this in practice.
Pliny claimed that the vast latifundia estates had ruined Italy, much
as Isaiah a half-millennium earlier had decried the great landlords "who
add house to house and join field to field, till no- space is left and
you live alone in the land." But as Christianity became the "political
correctness" of the day, it removed the Judaic Jubilee Year from
its original Near Eastern context, postponing it until the Day of
Judgment. This effectively turned the Pentateuch's core of debt and
land-tenure legislation into a Utopian, even otherworldly ideal.
Did history have a choice?
Why were the warnings of Isaiah and Pliny not heeded? Was there
another way to go? Did history have a choice? The answers are to be
found more in the forces of social power than in a reasoned economic
Throughout antiquity, social efficiency was defined more in political
and military man in economic terms. Land traditionally was supposed to
be used to support a self-sufficient citizenry which originally
comprised the armed forces and supplied public labour services. Yet
from Bronze Age Babylonia through the Roman empire, privatization led
to fiscal, economic and military collapse as local subsistence lands
were cut away by outsiders (creditors, royal collectors, war
chieftains and merchants).
Babylonian scribal exercises illustrated how rapidly debts mounted
out at the customary 20% commercial interest rate, doubling in five
years, quadrupling each decade, and multiplying 64 times every 30
years. Rulers such as Hammurapi who lived long enough to celebrate
their 30th anniversary on the throne proclaimed new Clean Slates, as
they did at the first New Year festival after they took the throne
(and when circumstances warranted it at other times).
In antiquity, therefore, the public sector was not the enemy of
economic freedom and private enterprise that it is portrayed as being
today. Not only did the Sumerian temples innovate most of
civilization's entrepreneurial techniques, but rulers preserved
widespread economic liberty by periodically annulling the overgrowth
of agrarian debt, freeing debt bondmen and restoring to their
customary holders lands (and hence, citizenship status) that had been
forfeited for debt arrears.
PRIVATIZATION of the land led to absentee ownership and
monopolization. Ultimately, they also led to fiscal crises as wealthy
landholders managed to avoid taxes by shifting these onto the rest of
the population. This economic polarizatiaon was staved off by the
tradition of royal Clean Slates, which finds its final expression in
the Biblical Jubilee Year of Leviticus (Ch. 25).
What hitherto was a royal act was made the centrepiece of Judaic
religion. The Jubilee Year restored the status quo ante by wiping out
the overgrowth of agrarian debt, freeing debt bondmen, and restoring
subsistence lands to the cultivators who had forfeited them to
creditors. Prof. Baruch Levine pointed out that although the Jubilee
Year seems to be a post-Exilic phenomenon, it was part of a living
tradition extending back thousands of years. Indeed, biblical economic
legislation represents the last major repository of Bronze Age Near
Prof. Maynard Maidman argued that although Nuzi's rulers proclaimed
Clean Slates in the 16th and 15th centuries BC, they seem to have been
unable to obtain compliance by the large landowners, for private
holdings survived intact for time periods spanning such proclamations.
As privatization spread up the Euphrates from Babylonia into less
centralized economies, the power of large landholders (often war
chieftains) increased. Partly as a result of the ensuing domestic
social polarization, societies such as Nuzi collapsed relatively
suddenly, their economic and military base hollowed out by
privatization of the land leading to fiscal strangulation.
One result was a rural exodus of men uprooted from their land. In
18th century England this rural exodus following the enclosures of the
commons provided a key element of the Industrial Revolution, in the
form of cheap urban labour. But in archaic times there was little
industrial wage labour market. Manual labour in Mesopotamia's temples
and palaces was composed of persons who could not make a go of things
on the land, mainly because of physical infirmity or the misfortune of
having lost their husbands and/or fathers through war, and not been
incorporated into the households of relatives. (Skilled craftsmen were
formed into company-type unions run by the palace, not by the
craftsmen themselves. Hence, labour was not unionized and "privatized"
along today's lines.) Much of the displaced labour joined floating
vagrant bands of migratory workers, some of whom found work as
mercenaries, pressing out of Mesopotamia into the Levant. Thus, the
result of rural uprooting was to create a military force more than the
industrial labour force found in post-feudal Europe.
The collapse of civilizations
Bearing in mind the manner in which each major ancient society
collapsed, the colloquium's participants emphasized how privatization
represented more than merely a shift of resources from public to
private hands. This shift went hand in hand with economic
polarization, fiscal crises, and the inability to field an army of
Often the process involved civil warfare, such as the overthrowing of
landed aristocracies by popular tyrants in 7th century BC Greece, the
popular walkout in Judah under Zedekiah c. 590 BC (Jer. 34),
contemporary to Solon's cancelling the rural debts and banning
debt-slavery in Athens in 594 BC, and the reputed refusal by Romans to
fight behind Coriolanus until their debts were annulled or they were
promised lands of their own.
"In the beginning," most land was held communally and
allocated to citizens as subsistence lands for their self-support.
These cultivators in turn owed military and corvee labour services.
Gradually, the land was privatized and transformed into property in
the modern sense of the term - property immune from social control and
periodic redistributions, able to be alienated (either sold or
forfeited to creditors for debt arrears) without recourse for the
seller, his relatives or neighbours to redeem it.
Privatization in feudal Europe often took the form of seizure of
lands by individuals through force or legal stealth (as in England's
enclosures), but there is little evidence of this in the Bronze Age.
There were three major types of privatization, each with its own set
(1) The first real "privatizer" was the palace ruler.
Rulers acted in an ambiguous capacity, treating royal property -- and
even mat of the temples, which they took over in time -- as their own,
giving it to family members and supporters. In this respect "private"
property, disposed of at the discretion of its holder, can be said to
have started at the top of the social pyramid, in the palace, and
spread down through the royal bureaucracy (including damgar "merchants"
in Babylonia) to the population at large.
Bronze Age Mesopotamian rulers are found acquiring property mainly by
purchase (with tribute money), but royal appropriation of land within
the ruler's own community was strictly circumscribed. When the
Israelite king Ahab sought to obtain Naboth's vineyard, for instance,
he was constrained to operate within the bounds of popular traditions
that dictated that kings could obtain property only by voluntary sale
or confiscating it as punishment for a capital crime.
(2) A derivative form of private ownership developed as rulers gave
away land to family members (as dowries), or companions, mainly
military leaders in exchange for their support. The recipients tended
to free themselves from the conditions placed on what they could do
with the land and the fiscal obligations associated with such land. As
early as the Bronze Age, such properties and their rents are found
managed autonomously from the rest of the land (viz. Nippur's Inanna
temple privatized by Amorite headmen c. 2000-1600 BC). Likewise the
modern system of private landholding was catalyzed after England's
kings assigned property to the barons in exchange for military and
fiscal levies which me barons strove to shed, as can be traced from
the Magna Carta in 1215 through me Uprising of the Barons in 1258-65.
Much as modern privatization of the national patrimonial assets often
follows from the collapse of centralized governments (e.g. in the
former socialist states and Third World kleptocracies), so in
antiquity the dynamic tended to follow when centralized palace rule
fell apart. Royal properties were seized by new warlords, or sometimes
simply kept by the former royal managers, e.g. the Mycenaean basilae,
not unlike how Russia's nomenklatura bureaucrats have privatized
Soviet factories and other properties in their own names.
(3) A third kind of privatization occurred in the case of communal
lands obtained by public collectors and "merchants" (if this
is not an anachronistic term used for the Babylonian tamkaru), above
all through the process of interest-bearing debt and subsequent
foreclosure. Ultimately, subsistence lands in me commons (or more
accurately the communally organized sector, which often
anachronistically is called "private" simply because it is
not part of the public temple-and-palace sector), passed into the
market, to be bought by wealthy creditors or buyers in general.
The fiscal crisis and taxation
AS PRIVATE creditors and merchants appropriated the land in each
region, they did not themselves take on the corvee labour, military or
tax obligations (which would have been impossible for large
land-grabbers such as Tehib-Tilla of Nuzi, who acquired hundreds of
subsistence-land parcels), but shifted these onto the population that
had been expropriated.
Antiquity's privatizations thus went hand in hand with a fiscal
crisis not unlike those of modern-day America and Britain, Latin
America and the former Soviet sphere. Landlords managed to cast off
the social obligations "originally" attached to their
property, thereby starving the public sector for funds. The fiscal
problem was aggravated by the fact that the public sector was no
longer self supporting as industrial enterprise passed out of the
large public institutions (the Sumerian temples, emulated by the
palace workshops in northern Mesopotamia and the Levant).
It is at this point that states were obliged to begin taxing the
population. The taxes were used to hire mercenaries in place of the
peasantry that was losing its lands (most notoriously in Rome), and to
purchase from private suppliers the services and goods mat formerly
were produced by public institutions and the community's land.
The role of debt in social crises DEBT and privatization problems are
central to the economic histories of Rome written by Livy and
Dionysius of Hallicarnassus, and have been traced back to the XII
Tables. They are the central points of Solon's Athens and Lycurgan
Greece as told by Plutarch, Aristotle and other early historians. And
they are the central core of biblical law, as well as forming the
centerpiece for Hammurapi's laws c. 1750 BC and those of earlier
rulers. However, conference participants pointed out that what long
have seemed to be ancient records actually were, in their own time,
relatively late reconstructions. The story of debt and privatization
thus has had to be rewritten on the basis of what can be more securely
confirmed by modern historiography.
During the early centuries of privatization there was no market
economy as modern economists use the term, i.e. an economy whose
resources were allocated by price-clearing, self-equilibrating
markets. Interest rates and rent rates remained fixed for centuries
rather than responding fluidly to market conditions. When adjustments
were made, they were more by royal, religious or political
intervention than by commercial forces.
The new archaeological reading confirms mat land tenure, the
collection of land-rent and taxation are the most important economic
phenomena of every ancient society, juxtaposed to the attaching of
interest-bearing debt claims to the land. This central role of rentier
income (rent and mortgage interest) hardly is surprising in view of
the fact that the land was the basic resource producing the crop
surplus which in turn was converted into industrial handicraft labour
and output, military power, public infrastructure work and the
accumulation of monetary treasure.
A second dynamic at work was a phenomenon that also disturbs today's
Third World economies: monopolization of the land in the hands of
absentee commercial owners who displace self-supporting food-growers.
This was at least as problematic in antiquity as it was in the case of
England's enclosures of the commons from the 16th to 18th centuries of
our modern era. After about 1600 BC, many became landless hapiru,
migrant seasonal labourers who doubled as mercenaries and formed
themselves into bands troubling the Levant for two hundred years or
so. In Greece and Rome, the displacement of cultivators by absentee
owners led to the planting of luxury export crops, mainly olive trees
and grape vineyards to make wine on large plantations worked
increasingly by slaves. By Roman times the expropriated cultivators
and their heirs formed part of the urban masses who turned the ancient
cities into net economic drains.
The conference found that land monopolization, debt polarization and
fiscal crises (as the new absentee landlords cast off the former
public fiscal responsibilities attached to the possession of land)
intensified over the course of antiquity, aggravated by three major
- First, archaic safeguards preserving communal land tenure broke
down, especially as the privatizers grew more powerful and ended
up unseating central palace rulers. (Indeed, public officials in
classical antiquity pledged not to cancel the debts and
redistribute the land!)
- Second, there was less and less tradition of royal Clean
Slates, and these seem not to have been enforced as effectively as
they were "in the beginning" in Early and Middle Bronze
Age Sumer and Babylonia.
- Finally, armies came to depend more on mercenaries than on free
It would be almost a truism to say that in antiquity, as today,
economic progress was associated with poverty. What is now clear is
that the very idea of progress -- the irreversible arrow of time --
represented an oligarchic refusal to periodically restore economic
order and equity. The archaic royal program of annulling consumer
debts and reversing land forfeitures and debt bondage gave way to debt
strains and the loss of widespread land tenure which destroyed the
economic balance of ancient societies.
Ultimately at issue was the idea of cyclical time restoring economic
balance and equity rather than irreversible economic polarization. The
fact that royal Clean Slates long were proclaimed afresh by each ruler
(and for the Babylonian rulers of Hammurapi's dynasty, on numerous
occasions during their rule) did not mean that they were ineffective.
Rather, it was recognized that market developments, if left alone, did
not lead to economic balance but to just the reverse -- a
concentration of land and other wealth in the hands of creditors,
public officials and war chieftains.
Poverty and the Bible's laws
Rulers had a concrete interest in alleviating poverty. To have
permitted cultivators to lose their lands to creditors and merchants
would have been to exclude these cultivators both from the obligation
to provide public corvee labour and from the army. Such a society
would have suffered emigration and other depopulation, or military
defeat by rival communities. This is what we see in the Hellenistic
and Roman periods at the end of antiquity (viz. Sparta at the end of
the third century BC, and Rome at the hands of the northern invaders
in the fourth century of our modern era).
It was in response to these impoverishing tendencies that Judaism
sanctified the economic legislation that survives today as the core of
the Bible. The Pentateuch took the idea of social equity out of the
hands of rulers and made them the core of its religious commandments,
attributed to Moses himself, whose story - along with that of the
conquest and settlement of Israel -- was elaborated into a foundation
myth as a literary vehicle for the laws concerning the land and rural
usury. In mis way the spirit first found in the Mesopotamian response
to privatization of the land passed into Christianity and subsequent
European tradition. Indeed, biblical stories such as that of Naboth
and his vineyard became rallying points for social reformers down
through European feudal times to modern-day liberation theology.
Counterpoised to the spirit of Judaism and its Near Eastern
predecessors was the Roman response to debt-strangulation and
monopolization of the land into the great la ti fund ia estates that
Pliny blamed for ruining Italy. Roman society in the Western
(European) half of the empire saw interest-bearing debt disappear
along with the money economy (with the Christian Church condemning
usury outright, as in the Mosaic laws of Exodus), while Outright
slavery was replaced by serfdom.
One can look at modern Western civilization as having been shaped by
the particular way in which Rome's imperial economy collapsed. Its
oligarchic spirit left a legacy of property-based law that has
continued to shape European civilization since it emerged from
feudalism. In the end, it was the force of Roman civil legal
principles that dominated the Judaic laws in shaping Christianity, in
contrast to the earlier Bronze Age Near Eastern overrides to the
land's privatization and monopolization.
The upshot is that although the dynamics of land privatization
inspired the economic core of biblical laws, mis core is all but
ignored today. Few people would think of applying biblical injunctions
to modern debt and privatization policies. What is remembered is more
the dramatic stories mat now seem, in light of modern archaeological
discoveries, to have been composed in large part to form a sacred
mythic wrapping for the Mosaic laws.
No doubt it would be hard to fit the details of Leviticus and the
Jubilee Year into a Hollywood movie, however. No Cecil B. de Mille has
made a film of how Nehemiah and Ezra carried out their reforms and
helped sponsor a school which edited and composed the Bible in the
form that has come down to us. Despite the importance of the land
question for the early history of civilization down through the
present, the subject tends to be ignored in school curricula. Most
economists identify the land with capital in general. Historians also
tend to ignore the role played by land, despite the central role mat
land tenure and debt play in the Bible. But the lessons of history
must be retrieved.
Ways of doing things mat were invented in Bronze Age Sumer have
shaped history ever since, but in ever-new ways as they have passed
into private hands. The privatization of land-rent in particular has
had major fiscal consequences. The particular way in which the land
has been privatized from one society to the next -- and over time in
any given society - has shaped the economy's distribution of wealth
and income, the pattern of urbanization, freedom or slavery, and
ultimately the rise and fall of civilizations and their religious
responses to the economic imbalances associated with privatization.
The New York University conference thus outlined the extent to which
the history of civilization will have to be rewritten to take account
of the cuneiform and related archaeological discoveries made in the
past few decades. A foundation was laid for placing the role of
privatization of the land and economic enterprise at the centre of a
new view of history's broad dynamics, the evolution of economic policy
and the economic core of ancient religion.
The New York University symposium has defined a research agenda for
the remainder of the decade. It has shown that privatization is more
than just a shift in ownership from public to individual holders; it
connotes a shift of social costs and other burdens from landlords and
creditors onto the shoulders of the population at large.
One question to be addressed is whether today's resource owners and
creditors will act differently from those of antiquity. Will they
realise that there is a need for them to invest their revenue
productively, or will they merely attach this income as
interest-bearing debt to property? Will they strip assets in
foreclosure proceedings and distress sell-offs rather than investing
directly to bring new productive powers into being? Will landlords and
creditors ultimately prove more efficient than public agencies in
overseeing society's land, natural resources and other means of
production? Or will they resist their tax obligations and deepen the
fiscal crisis, as they have done so often over the millennia?