CHAPTER XI. LAND MONOPOLY, PAST AND PRESENT
Thus there are two types of ethically invalid land titles. Feudalism, in which there is
continuing aggression by title holders of land against peasants engaged in transforming
the soil, and land engrossing, where arbitrary claims to virgin land are used to keep first
Transformers out of that land.
We may call both of these aggressions land monopoly, not in the sense that some one person
or group owns all the land in society, but in the sense that arbitrary privileges to
land ownership are asserted in both cases, clashing with the libertarian rule of non-ownership
of land except by actual transformers, their heirs and their assigns.
Land monopoly is far more widespread in the modern world than most people, especially
most Americans, believe.
In the undeveloped world, especially in Asia, the Middle East and Latin America, feudal
landholding is a crucial social and economic problem, with or without quasi-surf impositions
on the persons of the peasantry.
Indeed, of the countries of the world, the United States is one of the very few virtually
are largely free from feudalism, due to a happy accident of its historical development.
Largely escaping feudalism itself, it is difficult for Americans to take the entire problem seriously.
This is particularly true of American laissez-faire economists who tend to confine their recommendations
for the backward countries to preachments about the virtues of the free market.
But these preachments naturally fall on deaf ears, because free market for American conservatives
obviously does not encompass an end to feudalism and land monopoly and the transfer of title
to these lands without compensation to the peasantry.
And yet, since agriculture is always the overwhelmingly most important industry in the undeveloped
of Most Countries, a truly free market, a truly libertarian society devoted to justice
and property rights can only be established there by ending unjust feudal claims to property.
But utilitarian economists, grounded on no ethical theory of property rights, can only
fall back on defending whatever status quo may happen to exist.
In this case, unfortunately, the status quo of feudal suppression of justice and of any
genuinely free market in land or agriculture.
This ignoring of the land problem means that Americans and citizens of undeveloped countries
talk in two different languages and that neither can begin to understand the other's position.
American conservatives in particular exhort the backward countries on the virtues and
and the importance of private foreign investment from the advanced countries and of allowing
a favorable climate for this investment free from governmental harassment.
This is all very true but is again often unreal to the undeveloped peoples because the conservatives
persistently fail to distinguish between legitimate free market foreign investment
as against investment based upon monopoly concessions and vast land grants by the undeveloped states.
To the extent that foreign investments are based on land monopoly and aggression against
the peasantry, to that extent do foreign capitalists take on the aspects of feudal landlords and
must be dealt with in the same way.
A moving expression of these truths was delivered in the form of a message to the American people
by the prominent left-wing Mexican intellectual Carlos Fuentes.
You have had four centuries of uninterrupted development within the capitalistic structure.
We have had four centuries of underdevelopment within a feudal structure.
You had your own origin in the capitalistic revolution.
You started from zero, a virgin society, totally equal to modern times, without any feudal
ballast.
On the contrary, we were founded as an appendix of the falling feudal order of the Middle
Ages.
We inherited its obsolete structures, absorbed its vices, and converted them into institutions
on the outer rim of the revolution in the modern world.
We come from slavery to latifundio, enormous expanses of land under a single landlord,
denial of political, economic or cultural rights for the masses, a customs house closed
to modern ideas.
You must understand that the Latin American drama stems from the persistence of those
feudal structures over four centuries of misery and stagnation while you were in the midst
of the Industrial Revolution and we're exercising a liberal democracy.
We need not search far for examples of land aggression and monopoly in the modern world.
They are indeed legion.
We might cite one example not so very far removed from our hypothetical King of Ruritania.
The Shah owns more than half of all arable land in Iran, land originally taken over by
A typical example of foreign investment combined with land aggression is a North American mining
company in Peru, the Cerro de Pasco Corporation.
Cerro de Pasco, having legitimately purchased its land from a religious convent a half century
began in 1959 to encroach upon and seize the lands of neighboring Indian peasants.
Indians of Rankas, refusing to leave their land, were massacred by peasants in the pay
of the company.
Indians of Yeros Yakan tried to contest the company's action in the courts, while company
men burned pastures and destroyed peasant huts.
When the Indians retook their land through mass non-violent action, the Peruvian government,
at the behest of the Cerro de Pasco and the regional Latifundia owners, sent troops to
eject, assault and even murder the unarmed Indians.
What then is to be our view toward investment in oil lands, one of the major forms of foreign
investment in underdeveloped countries in today's world?
The major error of most analyses is to issue either a blanket approval or a blanket condemnation,
for the answer depends on the justice of the property title established in each specific
case.
Where, for example, an oil company, foreign or domestic, lays claim to the oil field which
it discovers and drills, then this is its just homesteaded private property, and it
It is unjust for the undeveloped government to tax or regulate the company.
Where the government insists on claiming ownership of the land itself and only leases the oil
to the company, then, as we will see further below in discussing the role of government,
the government's claim is illegitimate and invalid, and the company, in the role of homesteader,
is properly the owner and not merely the renter of the oil land.
On the other hand, there are cases where the oil company uses the government of the undeveloped
country to grant it, in advance of drilling, a monopoly concession to all the oil in a
vast land area, thereby agreeing to the use of force to squeeze out all competing oil
producers who might search for and drill oil in that area.
In that case, as in the case above of Crusoe's arbitrarily using force to squeeze out Friday,
The first oil company is illegitimately using the government to become a land and oil monopolist.
Ethically, any new company that enters the scene to discover and drill oil is the proper owner of its homesteaded oil area.
A fortiori, of course, our oil concessionaire who also uses the state to eject peasants from their land by force,
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.
We are now able to see the grave fallacy in the current programs for land reform in the undeveloped countries.
These programs generally involve minor transfers of the least fertile land from landlords to peasants along with full compensation to the landlords,
Landlords, often financed by the peasants themselves, the estate aid.
If the landlord's title is just, then any land reform applied to such land is an unjust
and criminal confiscation of his property.
But on the other hand, if his title is unjust, then the reform is picayune and fails to reach
the heart of the question.
For then, the only proper solution is an immediate vacating of the title and its transfer to
to the peasants, with certainly no compensation to the aggressors who had wrongly seized control of the land.
Thus the land problem in the undeveloped countries can only be solved by applying the rules of justice that we have set forth,
and such application requires detailed and wholesale empirical inquiry into present titles to land.
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.
It is true that feudalism, as these conservatives point out, was not as evil a system as oriental despotism,
but that is roughly equivalent to saying that imprisonment is not as severe a penalty as execution.
The difference between feudalism and oriental despotism was really of degree rather than kind.
Arbitrary power over land and over persons on that land was, in the one case, broken up into geographical segments.
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.
The systems of power and repression are similar in type.
The Oriental despot is a single feudal overlord with the consequent power accruing into his hands.
Each system is a variant of the other, neither is in any sense libertarian,
and there is no reason to suppose that society must choose between one and the other,
that these are the only alternatives.
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.
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.
and other.
They postulated that capitalist development required absolute monarchy and the strong
state to smash local feudal and guild-type restrictions.
In upholding this dichotomy of capitalism plus the strong central state versus feudalism,
they were joined from their own special viewpoint by the Marxists, who made no particular distinction
between bourgeoisie who made use of the state and bourgeoisie who acted on the free market.
Now some modern conservatives have taken this old dichotomy and turned it on its head.
Feudalism and the strong central state are still considered the critical polar opposites
except that feudalism is, on this view, considered the good alternative.
The error here is in the dichotomy itself.
Actually the strong state and feudalism were not antithetical.
The former was a logical outgrowth of the latter, with the absolute monarch ruling as
the super feudal overlord.
The strong state, when it developed in Western Europe, did not set about to smash feudal
restrictions on trade.
On the contrary, it superimposed its own central restrictions and heavy taxes on top of the
feudal structure.
The French Revolution, directed against the living embodiment of the strong state in Europe,
was aimed at destroying both feudalism with its local restrictions and the restrictions
and high taxes imposed by the central government.
The true dichotomy was liberty on the one side versus the feudal lords and the absolute
monarch on the other.
Furthermore, the free market and capitalism flourished earliest and most strongly in those
Those very countries where both feudalism and central government power were at their
relative weakest, the Italian city-states and 17th century Holland and England.
North America's relative escape from the blight of feudal land and land monopoly was not for
lack of trying.
Many of the English colonies made strong attempts to establish feudal rule, especially where
Where the colonies were chartered companies or proprietorships, as in New York, Maryland
and the Carolinas.
The attempt failed because the New World was a vast and virgin land area, and therefore
the numerous receivers of monopoly and feudal land grants, many of them enormous in size,
could only gain profits from them by inducing settlers to come to the New World and settle
on their property.
Here were not, as in the old world, previously existing settlers on relatively crowded land
who could easily be exploited.
Instead, the landlords, forced to encourage settlement and anxious for a quick return,
invariably subdivided and sold their lands to the settlers.
It was unfortunate, of course, that by means of arbitrary claims and governmental grants,
land titles were engrossed ahead of settlement.
The settlers were consequently forced to pay a price for what should have been free land.
But once the land was purchased by the settler, the injustice disappeared, and the land title
accrued to its proper holder, the settler.
In this way, the vast supply of virgin land, along with the desire of the land grantees
for quick profits, led everywhere to the happy dissolution of feudalism and land monopoly,
and the establishment in North America of a truly libertarian land system.
Some of the colonial proprietors tried to keep collecting quit rents from the settlers,
the last vestige of feudal exactions.
But the settlers widely refused to pay or to treat the land as anything but their own.
In every case, the colonial proprietors gave up trying to collect their quit rents, even
Even before the charters were confiscated by the British Crown.
In only one minor case did feudal land tenure persist, apart from the vital case of slavery
and the large southern plantations in the English colonies.
In the Hudson Valley counties in New York, where the large grantees persisted in not
selling the lands to settlers, but in renting them out.
As a result, continuing resistance and even open warfare were waged by the farmers who
were even known as peasants against their feudal landlords.
This resistance culminated in the anti-rent wars of the 1840s, when the quit-rent exactions
were finally ended by the state legislature and the last vestige of feudalism outside
the South finally disappeared.
The important exception to this agrarian idol, of course, was the flourishing of the slave
system in the southern states.
It was only the coercion of slave labor that enabled the large plantation system in staple
crops to flourish in the south.
Without the ability to own and coerce the labor of others, the large plantations, and
perhaps much of the tobacco and later the cotton culture, would not have pervaded the
south.
We have indicated above that there was only one possible moral solution for the slave question,
immediate and unconditional abolition, with no compensation to the slave masters.
Indeed, any compensation should have been the other way, to repay the oppressed slaves
for their lifetime of slavery.
A vital part of such necessary compensation would have been to grant the plantation lands
not to the slave master, who scarcely had valid title to any property, but to the slaves
themselves, whose labor on our homesteading principle was mixed with the soil to develop
the plantations.
In short, at the very least, elementary libertarian justice required not only the immediate freeing
of the slaves, but also the immediate turning over to the slaves, again without compensation
to the Masters, of the plantation lands on which they had worked and sweated.
As it was, the victorious North made the same mistake, though mistake is far too charitable
a word for an act that preserved the essence of an unjust and oppressive social system,
as had Tsar Alexander when he freed the Russian serfs in 1861.
The bodies of the oppressed were freed, but the property which they had worked and eminently
that they deserved to own remained in the hands of their former oppressors.
With the economic power thus remaining in their hands, the former lords soon found themselves
virtual masters once more of what were now free tenants or farm laborers.
The serfs and the slaves had tasted freedom, but had been cruelly deprived of its fruits.