WEBVTT NOTE 11. Land Monopoly, Past and Present 1 00:00:00.000 --> 00:00:06.000 CHAPTER XI. LAND MONOPOLY, PAST AND PRESENT 2 00:00:06.000 --> 00:00:14.000 Thus there are two types of ethically invalid land titles. Feudalism, in which there is 3 00:00:14.000 --> 00:00:20.040 continuing aggression by title holders of land against peasants engaged in transforming 4 00:00:20.040 --> 00:00:27.780 the soil, and land engrossing, where arbitrary claims to virgin land are used to keep first 5 00:00:27.780 --> 00:00:30.980 Transformers out of that land. 6 00:00:30.980 --> 00:00:37.180 We may call both of these aggressions land monopoly, not in the sense that some one person 7 00:00:37.180 --> 00:00:43.040 or group owns all the land in society, but in the sense that arbitrary privileges to 8 00:00:43.040 --> 00:00:49.700 land ownership are asserted in both cases, clashing with the libertarian rule of non-ownership 9 00:00:49.700 --> 00:00:57.260 of land except by actual transformers, their heirs and their assigns. 10 00:00:57.260 --> 00:01:02.400 Land monopoly is far more widespread in the modern world than most people, especially 11 00:01:02.400 --> 00:01:05.260 most Americans, believe. 12 00:01:05.260 --> 00:01:10.740 In the undeveloped world, especially in Asia, the Middle East and Latin America, feudal 13 00:01:10.740 --> 00:01:17.640 landholding is a crucial social and economic problem, with or without quasi-surf impositions 14 00:01:17.640 --> 00:01:19.820 on the persons of the peasantry. 15 00:01:19.820 --> 00:01:25.400 Indeed, of the countries of the world, the United States is one of the very few virtually 16 00:01:25.400 --> 00:01:32.240 are largely free from feudalism, due to a happy accident of its historical development. 17 00:01:32.240 --> 00:01:39.360 Largely escaping feudalism itself, it is difficult for Americans to take the entire problem seriously. 18 00:01:39.360 --> 00:01:45.560 This is particularly true of American laissez-faire economists who tend to confine their recommendations 19 00:01:45.560 --> 00:01:50.660 for the backward countries to preachments about the virtues of the free market. 20 00:01:50.660 --> 00:01:57.540 But these preachments naturally fall on deaf ears, because free market for American conservatives 21 00:01:57.540 --> 00:02:04.300 obviously does not encompass an end to feudalism and land monopoly and the transfer of title 22 00:02:04.300 --> 00:02:09.660 to these lands without compensation to the peasantry. 23 00:02:09.660 --> 00:02:15.820 And yet, since agriculture is always the overwhelmingly most important industry in the undeveloped 24 00:02:15.820 --> 00:02:22.820 of Most Countries, a truly free market, a truly libertarian society devoted to justice 25 00:02:22.820 --> 00:02:30.820 and property rights can only be established there by ending unjust feudal claims to property. 26 00:02:30.820 --> 00:02:36.540 But utilitarian economists, grounded on no ethical theory of property rights, can only 27 00:02:36.540 --> 00:02:41.820 fall back on defending whatever status quo may happen to exist. 28 00:02:41.820 --> 00:02:47.340 In this case, unfortunately, the status quo of feudal suppression of justice and of any 29 00:02:47.340 --> 00:02:52.140 genuinely free market in land or agriculture. 30 00:02:52.140 --> 00:02:58.100 This ignoring of the land problem means that Americans and citizens of undeveloped countries 31 00:02:58.100 --> 00:03:05.680 talk in two different languages and that neither can begin to understand the other's position. 32 00:03:05.680 --> 00:03:10.020 American conservatives in particular exhort the backward countries on the virtues and 33 00:03:10.020 --> 00:03:15.220 and the importance of private foreign investment from the advanced countries and of allowing 34 00:03:15.220 --> 00:03:20.860 a favorable climate for this investment free from governmental harassment. 35 00:03:20.860 --> 00:03:27.920 This is all very true but is again often unreal to the undeveloped peoples because the conservatives 36 00:03:27.920 --> 00:03:33.980 persistently fail to distinguish between legitimate free market foreign investment 37 00:03:33.980 --> 00:03:42.180 as against investment based upon monopoly concessions and vast land grants by the undeveloped states. 38 00:03:42.180 --> 00:03:47.220 To the extent that foreign investments are based on land monopoly and aggression against 39 00:03:47.220 --> 00:03:54.220 the peasantry, to that extent do foreign capitalists take on the aspects of feudal landlords and 40 00:03:54.220 --> 00:03:58.180 must be dealt with in the same way. 41 00:03:58.180 --> 00:04:03.860 A moving expression of these truths was delivered in the form of a message to the American people 42 00:04:03.860 --> 00:04:09.300 by the prominent left-wing Mexican intellectual Carlos Fuentes. 43 00:04:09.300 --> 00:04:15.540 You have had four centuries of uninterrupted development within the capitalistic structure. 44 00:04:15.540 --> 00:04:21.540 We have had four centuries of underdevelopment within a feudal structure. 45 00:04:21.540 --> 00:04:25.760 You had your own origin in the capitalistic revolution. 46 00:04:25.760 --> 00:04:32.400 You started from zero, a virgin society, totally equal to modern times, without any feudal 47 00:04:32.400 --> 00:04:33.960 ballast. 48 00:04:33.960 --> 00:04:39.080 On the contrary, we were founded as an appendix of the falling feudal order of the Middle 49 00:04:39.080 --> 00:04:40.360 Ages. 50 00:04:40.360 --> 00:04:46.460 We inherited its obsolete structures, absorbed its vices, and converted them into institutions 51 00:04:46.460 --> 00:04:50.720 on the outer rim of the revolution in the modern world. 52 00:04:50.720 --> 00:04:59.380 We come from slavery to latifundio, enormous expanses of land under a single landlord, 53 00:04:59.380 --> 00:05:06.020 denial of political, economic or cultural rights for the masses, a customs house closed 54 00:05:06.020 --> 00:05:08.480 to modern ideas. 55 00:05:08.480 --> 00:05:13.060 You must understand that the Latin American drama stems from the persistence of those 56 00:05:13.060 --> 00:05:19.500 feudal structures over four centuries of misery and stagnation while you were in the midst 57 00:05:19.500 --> 00:05:26.500 of the Industrial Revolution and we're exercising a liberal democracy. 58 00:05:26.500 --> 00:05:32.240 We need not search far for examples of land aggression and monopoly in the modern world. 59 00:05:32.240 --> 00:05:34.760 They are indeed legion. 60 00:05:34.760 --> 00:05:41.960 We might cite one example not so very far removed from our hypothetical King of Ruritania. 61 00:05:41.960 --> 00:05:48.540 The Shah owns more than half of all arable land in Iran, land originally taken over by 62 00:05:48.540 --> 00:06:05.800 A typical example of foreign investment combined with land aggression is a North American mining 63 00:06:05.800 --> 00:06:10.940 company in Peru, the Cerro de Pasco Corporation. 64 00:06:10.940 --> 00:06:16.780 Cerro de Pasco, having legitimately purchased its land from a religious convent a half century 65 00:06:16.780 --> 00:06:25.180 began in 1959 to encroach upon and seize the lands of neighboring Indian peasants. 66 00:06:25.180 --> 00:06:30.100 Indians of Rankas, refusing to leave their land, were massacred by peasants in the pay 67 00:06:30.100 --> 00:06:32.340 of the company. 68 00:06:32.340 --> 00:06:37.980 Indians of Yeros Yakan tried to contest the company's action in the courts, while company 69 00:06:37.980 --> 00:06:42.380 men burned pastures and destroyed peasant huts. 70 00:06:42.380 --> 00:06:48.420 When the Indians retook their land through mass non-violent action, the Peruvian government, 71 00:06:48.420 --> 00:06:54.580 at the behest of the Cerro de Pasco and the regional Latifundia owners, sent troops to 72 00:06:54.580 --> 00:07:00.380 eject, assault and even murder the unarmed Indians. 73 00:07:00.380 --> 00:07:06.780 What then is to be our view toward investment in oil lands, one of the major forms of foreign 74 00:07:06.780 --> 00:07:10.980 investment in underdeveloped countries in today's world? 75 00:07:10.980 --> 00:07:17.780 The major error of most analyses is to issue either a blanket approval or a blanket condemnation, 76 00:07:17.780 --> 00:07:22.940 for the answer depends on the justice of the property title established in each specific 77 00:07:22.940 --> 00:07:23.940 case. 78 00:07:23.940 --> 00:07:30.660 Where, for example, an oil company, foreign or domestic, lays claim to the oil field which 79 00:07:30.660 --> 00:07:36.900 it discovers and drills, then this is its just homesteaded private property, and it 80 00:07:36.900 --> 00:07:42.640 It is unjust for the undeveloped government to tax or regulate the company. 81 00:07:42.640 --> 00:07:48.300 Where the government insists on claiming ownership of the land itself and only leases the oil 82 00:07:48.300 --> 00:07:54.180 to the company, then, as we will see further below in discussing the role of government, 83 00:07:54.180 --> 00:08:00.060 the government's claim is illegitimate and invalid, and the company, in the role of homesteader, 84 00:08:00.060 --> 00:08:05.660 is properly the owner and not merely the renter of the oil land. 85 00:08:05.660 --> 00:08:10.620 On the other hand, there are cases where the oil company uses the government of the undeveloped 86 00:08:10.620 --> 00:08:17.020 country to grant it, in advance of drilling, a monopoly concession to all the oil in a 87 00:08:17.020 --> 00:08:23.940 vast land area, thereby agreeing to the use of force to squeeze out all competing oil 88 00:08:23.940 --> 00:08:29.100 producers who might search for and drill oil in that area. 89 00:08:29.100 --> 00:08:35.620 In that case, as in the case above of Crusoe's arbitrarily using force to squeeze out Friday, 90 00:08:35.620 --> 00:08:42.620 The first oil company is illegitimately using the government to become a land and oil monopolist. 91 00:08:42.620 --> 00:08:52.620 Ethically, any new company that enters the scene to discover and drill oil is the proper owner of its homesteaded oil area. 92 00:08:52.620 --> 00:09:01.620 A fortiori, of course, our oil concessionaire who also uses the state to eject peasants from their land by force, 93 00:09:01.620 --> 00:09:13.620 As was done, for example, by the Creole Oil Company in Venezuela, is a collaborator with the government in the latter's aggression against the property rights of the peasantry. 94 00:09:13.620 --> 00:09:21.620 We are now able to see the grave fallacy in the current programs for land reform in the undeveloped countries. 95 00:09:21.620 --> 00:09:30.620 These programs generally involve minor transfers of the least fertile land from landlords to peasants along with full compensation to the landlords, 96 00:09:30.620 --> 00:09:36.420 Landlords, often financed by the peasants themselves, the estate aid. 97 00:09:36.420 --> 00:09:42.860 If the landlord's title is just, then any land reform applied to such land is an unjust 98 00:09:42.860 --> 00:09:46.440 and criminal confiscation of his property. 99 00:09:46.440 --> 00:09:52.240 But on the other hand, if his title is unjust, then the reform is picayune and fails to reach 100 00:09:52.240 --> 00:09:54.400 the heart of the question. 101 00:09:54.400 --> 00:10:00.600 For then, the only proper solution is an immediate vacating of the title and its transfer to 102 00:10:00.600 --> 00:10:07.600 to the peasants, with certainly no compensation to the aggressors who had wrongly seized control of the land. 103 00:10:07.600 --> 00:10:16.600 Thus the land problem in the undeveloped countries can only be solved by applying the rules of justice that we have set forth, 104 00:10:16.600 --> 00:10:24.600 and such application requires detailed and wholesale empirical inquiry into present titles to land. 105 00:10:24.600 --> 00:10:36.600 In recent years, the doctrine has gained ground among American conservatives that feudalism, instead of being oppressive and exploitative, was in fact a bulwark of liberty. 106 00:10:36.600 --> 00:10:44.600 It is true that feudalism, as these conservatives point out, was not as evil a system as oriental despotism, 107 00:10:44.600 --> 00:10:50.600 but that is roughly equivalent to saying that imprisonment is not as severe a penalty as execution. 108 00:10:50.600 --> 00:10:58.600 The difference between feudalism and oriental despotism was really of degree rather than kind. 109 00:10:58.600 --> 00:11:07.600 Arbitrary power over land and over persons on that land was, in the one case, broken up into geographical segments. 110 00:11:07.600 --> 00:11:19.600 In the latter case, land tended to concentrate into the hands of one imperial overlord over the land area of the entire country, aided by his bureaucratic retinue. 111 00:11:19.600 --> 00:11:23.600 The systems of power and repression are similar in type. 112 00:11:23.600 --> 00:11:30.600 The Oriental despot is a single feudal overlord with the consequent power accruing into his hands. 113 00:11:30.600 --> 00:11:36.600 Each system is a variant of the other, neither is in any sense libertarian, 114 00:11:36.600 --> 00:11:41.600 and there is no reason to suppose that society must choose between one and the other, 115 00:11:41.600 --> 00:11:44.600 that these are the only alternatives. 116 00:11:44.600 --> 00:11:58.600 Historical thinking on this entire matter was shunted onto a very wrong road by the statist German historians of the late 19th century, by men such as Schmoller, Bücher, Ehrenberg and Sombart. 117 00:11:58.600 --> 00:12:10.600 These historians postulated a sharp dichotomy and inherent conflict between feudalism on the one hand and absolute monarchy or the strong state on the other. 118 00:12:10.600 --> 00:12:11.900 and other. 119 00:12:11.900 --> 00:12:17.500 They postulated that capitalist development required absolute monarchy and the strong 120 00:12:17.500 --> 00:12:23.060 state to smash local feudal and guild-type restrictions. 121 00:12:23.060 --> 00:12:30.000 In upholding this dichotomy of capitalism plus the strong central state versus feudalism, 122 00:12:30.000 --> 00:12:35.740 they were joined from their own special viewpoint by the Marxists, who made no particular distinction 123 00:12:35.740 --> 00:12:43.300 between bourgeoisie who made use of the state and bourgeoisie who acted on the free market. 124 00:12:43.300 --> 00:12:49.660 Now some modern conservatives have taken this old dichotomy and turned it on its head. 125 00:12:49.660 --> 00:12:54.740 Feudalism and the strong central state are still considered the critical polar opposites 126 00:12:54.740 --> 00:13:01.060 except that feudalism is, on this view, considered the good alternative. 127 00:13:01.060 --> 00:13:05.180 The error here is in the dichotomy itself. 128 00:13:05.180 --> 00:13:09.660 Actually the strong state and feudalism were not antithetical. 129 00:13:09.660 --> 00:13:14.820 The former was a logical outgrowth of the latter, with the absolute monarch ruling as 130 00:13:14.820 --> 00:13:17.720 the super feudal overlord. 131 00:13:17.720 --> 00:13:23.060 The strong state, when it developed in Western Europe, did not set about to smash feudal 132 00:13:23.060 --> 00:13:25.300 restrictions on trade. 133 00:13:25.300 --> 00:13:31.860 On the contrary, it superimposed its own central restrictions and heavy taxes on top of the 134 00:13:31.860 --> 00:13:33.940 feudal structure. 135 00:13:33.940 --> 00:13:39.500 The French Revolution, directed against the living embodiment of the strong state in Europe, 136 00:13:39.500 --> 00:13:45.140 was aimed at destroying both feudalism with its local restrictions and the restrictions 137 00:13:45.140 --> 00:13:49.220 and high taxes imposed by the central government. 138 00:13:49.220 --> 00:13:55.860 The true dichotomy was liberty on the one side versus the feudal lords and the absolute 139 00:13:55.860 --> 00:13:57.900 monarch on the other. 140 00:13:57.900 --> 00:14:03.720 Furthermore, the free market and capitalism flourished earliest and most strongly in those 141 00:14:03.720 --> 00:14:08.800 Those very countries where both feudalism and central government power were at their 142 00:14:08.800 --> 00:14:16.960 relative weakest, the Italian city-states and 17th century Holland and England. 143 00:14:16.960 --> 00:14:22.680 North America's relative escape from the blight of feudal land and land monopoly was not for 144 00:14:22.680 --> 00:14:24.760 lack of trying. 145 00:14:24.760 --> 00:14:30.280 Many of the English colonies made strong attempts to establish feudal rule, especially where 146 00:14:30.280 --> 00:14:35.560 Where the colonies were chartered companies or proprietorships, as in New York, Maryland 147 00:14:35.560 --> 00:14:37.720 and the Carolinas. 148 00:14:37.720 --> 00:14:43.680 The attempt failed because the New World was a vast and virgin land area, and therefore 149 00:14:43.680 --> 00:14:50.240 the numerous receivers of monopoly and feudal land grants, many of them enormous in size, 150 00:14:50.240 --> 00:14:55.440 could only gain profits from them by inducing settlers to come to the New World and settle 151 00:14:55.440 --> 00:14:57.640 on their property. 152 00:14:57.640 --> 00:15:04.200 Here were not, as in the old world, previously existing settlers on relatively crowded land 153 00:15:04.200 --> 00:15:06.280 who could easily be exploited. 154 00:15:06.280 --> 00:15:12.920 Instead, the landlords, forced to encourage settlement and anxious for a quick return, 155 00:15:12.920 --> 00:15:17.700 invariably subdivided and sold their lands to the settlers. 156 00:15:17.700 --> 00:15:23.600 It was unfortunate, of course, that by means of arbitrary claims and governmental grants, 157 00:15:23.600 --> 00:15:27.160 land titles were engrossed ahead of settlement. 158 00:15:27.160 --> 00:15:33.480 The settlers were consequently forced to pay a price for what should have been free land. 159 00:15:33.480 --> 00:15:39.200 But once the land was purchased by the settler, the injustice disappeared, and the land title 160 00:15:39.200 --> 00:15:43.060 accrued to its proper holder, the settler. 161 00:15:43.060 --> 00:15:49.040 In this way, the vast supply of virgin land, along with the desire of the land grantees 162 00:15:49.040 --> 00:15:55.800 for quick profits, led everywhere to the happy dissolution of feudalism and land monopoly, 163 00:15:55.800 --> 00:16:01.600 and the establishment in North America of a truly libertarian land system. 164 00:16:01.600 --> 00:16:06.900 Some of the colonial proprietors tried to keep collecting quit rents from the settlers, 165 00:16:06.900 --> 00:16:09.880 the last vestige of feudal exactions. 166 00:16:09.880 --> 00:16:16.160 But the settlers widely refused to pay or to treat the land as anything but their own. 167 00:16:16.160 --> 00:16:22.140 In every case, the colonial proprietors gave up trying to collect their quit rents, even 168 00:16:22.140 --> 00:16:26.520 Even before the charters were confiscated by the British Crown. 169 00:16:26.520 --> 00:16:33.060 In only one minor case did feudal land tenure persist, apart from the vital case of slavery 170 00:16:33.060 --> 00:16:37.420 and the large southern plantations in the English colonies. 171 00:16:37.420 --> 00:16:42.880 In the Hudson Valley counties in New York, where the large grantees persisted in not 172 00:16:42.880 --> 00:16:47.220 selling the lands to settlers, but in renting them out. 173 00:16:47.220 --> 00:16:53.060 As a result, continuing resistance and even open warfare were waged by the farmers who 174 00:16:53.060 --> 00:16:57.660 were even known as peasants against their feudal landlords. 175 00:16:57.660 --> 00:17:03.920 This resistance culminated in the anti-rent wars of the 1840s, when the quit-rent exactions 176 00:17:03.920 --> 00:17:09.160 were finally ended by the state legislature and the last vestige of feudalism outside 177 00:17:09.160 --> 00:17:12.740 the South finally disappeared. 178 00:17:12.740 --> 00:17:17.660 The important exception to this agrarian idol, of course, was the flourishing of the slave 179 00:17:17.660 --> 00:17:20.140 system in the southern states. 180 00:17:20.140 --> 00:17:26.020 It was only the coercion of slave labor that enabled the large plantation system in staple 181 00:17:26.020 --> 00:17:29.060 crops to flourish in the south. 182 00:17:29.060 --> 00:17:34.460 Without the ability to own and coerce the labor of others, the large plantations, and 183 00:17:34.460 --> 00:17:39.340 perhaps much of the tobacco and later the cotton culture, would not have pervaded the 184 00:17:39.340 --> 00:17:41.420 south. 185 00:17:41.420 --> 00:17:47.580 We have indicated above that there was only one possible moral solution for the slave question, 186 00:17:47.580 --> 00:17:53.500 immediate and unconditional abolition, with no compensation to the slave masters. 187 00:17:53.500 --> 00:17:59.620 Indeed, any compensation should have been the other way, to repay the oppressed slaves 188 00:17:59.620 --> 00:18:02.260 for their lifetime of slavery. 189 00:18:02.260 --> 00:18:07.880 A vital part of such necessary compensation would have been to grant the plantation lands 190 00:18:07.880 --> 00:18:13.960 not to the slave master, who scarcely had valid title to any property, but to the slaves 191 00:18:13.960 --> 00:18:20.100 themselves, whose labor on our homesteading principle was mixed with the soil to develop 192 00:18:20.100 --> 00:18:22.220 the plantations. 193 00:18:22.220 --> 00:18:28.740 In short, at the very least, elementary libertarian justice required not only the immediate freeing 194 00:18:28.740 --> 00:18:35.460 of the slaves, but also the immediate turning over to the slaves, again without compensation 195 00:18:35.460 --> 00:18:41.220 to the Masters, of the plantation lands on which they had worked and sweated. 196 00:18:41.220 --> 00:18:47.580 As it was, the victorious North made the same mistake, though mistake is far too charitable 197 00:18:47.580 --> 00:18:53.800 a word for an act that preserved the essence of an unjust and oppressive social system, 198 00:18:53.800 --> 00:18:59.100 as had Tsar Alexander when he freed the Russian serfs in 1861. 199 00:18:59.100 --> 00:19:04.300 The bodies of the oppressed were freed, but the property which they had worked and eminently 200 00:19:04.300 --> 00:19:09.360 that they deserved to own remained in the hands of their former oppressors. 201 00:19:09.360 --> 00:19:15.140 With the economic power thus remaining in their hands, the former lords soon found themselves 202 00:19:15.140 --> 00:19:21.460 virtual masters once more of what were now free tenants or farm laborers. 203 00:19:21.460 --> 00:19:27.380 The serfs and the slaves had tasted freedom, but had been cruelly deprived of its fruits.