It was the latter half of the 1980s. The Provisional Freedom Constitution was promulgated by Corazon Aquino and a year later, Filipinos overwhelmingly ratified a new Constitution in the Philippines. 1987 saw Dirty Dancing was all the rage. Elsewhere, a truce began in the Iraq-Iran War. OV-103 better known as Discovery returned to flight after the disaster of Challenger. The first Bush was elected President of the United States. Then 270 people, with 16 crew members died when Pan Am Flight 103 was blown up over Scotland. In March, 1989 Tim Berners-Lee wrote a proposal that described a system of hypertext to store data which would eventually become the WorldWideWeb.
Rewind a year before to 1988 and in the Philippines, we saw Republic Act 6657 better known as the Comprehensive Agrarian Reform Law of 1988, signed. This law wanted to create a more equitable distribution and ownership of land and to provide farmers and farm workers with an opportunity to improve the quality of their lives. The law gave landless farmers, farm hands to own direct or as a group, the land they tilled. For landowners, they could only have seen it as highway robbery: the law by nature forced them to diversify. It forced them to sell their land.
For more than twenty years, the Comprehensive Agrarian Reform Program has utterly failed not only to provide for an equitable distribution and ownership of land, it has failed to improve farmers’ lives and it has disastrously ruined the Philippines’ agricultural industry. How many landowners chose then to sell their land for housing and other commercial development rather than to sell to farmers? How many sugar mills then went out of business simply because of labor disputes that helped cause their closure as much as high operating cost brought about by an inefficient and rowdy labor force and global challenges? How many farmhands have been deceived by marxism to despise capitalism for the sake of despising it?
Agrarian Reform is not evil per se. According to this: after 1945 in Korea, land reform was a crucial factor but one of many confluence of events that help bring about South Korean modernization. Land owned by the Japanese colonial government was confiscated and redistributed. It was followed by reform that prevented large landholdings by Koreans. Large landowning Koreans were forced to divest their land.
On November 16, 2004, a massacre occurred at Hacienda Luisita. According to World Socialist Website: striking workers were seeking for pay rise, reinstatement of “victimized” workers and a nationwide land redistribution to farm and plantation workers. The only rational explanation is that the striking workers wanted to pick and choose provisions of Agrarian Reform Law. The Comprehensive Agrarian Reform Law, specifically Chapter VIII section 31, on corporate farms is quite clear that corporate landowners may divest a proportion of their capital stock, equity or participation in favor of their workers. That provision of the law even protects the beneficiaries with specific conditions such as periodic audit by public accountants by the beneficiaries, a guarantee of representation in the board of directors. Also, shares have the same rights as other shares.
The more rowdy elements of society prefer to fester anger, to feint being victimized when clearly, they prefer to choose to work against the system in some perceived grievance than to engage society openly. How then is this zealot form of marxism any different from the terror Usama bin Laden inspires? How then is this heckling any different from highway robbery? How then is this methodology not a cause of the poverty that their ideology wishes to destroy? How then is this not festering hurt and anger?
Luisita is once more in the news because Noynoy Aquino is running for President of the Philippines. The Cojuangcos who own Luisita may leave the estate because businesses is collapsing. Who then does this failure hurt? Does it hurt the Cojuangcos, who can always find more money elsewhere? Does it hurt then the farmhands, the farmers who will be displaced when business collapses? Eventually, their anger will be towards the former owners. Their anger will be at the “failure” of government. Why can’t they see their part in fostering the seed of their destruction? Why can’t they move beyond anger?
Aquino’s critics can not attack his character. They attack his capability. How many people want him as president? With months still before the elections, always in motion the future is. Yet, not even elected president, not even officially a candidate and here people perceive is Noynoy Aquino’s first test as President. It isn’t so much as he solves the problem of Luisita and by extension, the failed Comprehensive Agrarian Reform Law, but how he answers this attack.
In my most humble opinion, this is an opportunity for him to show how presidential he is.
Noynoy Aquino can stand before the nation, like he did just a few days ago at Club Filipino and tell a story about Luisita. He must be Solomonic as he communicates with the Nation. It could be a way to smite cynicism. He must explain the Comprehensive Agrarian Reform Law. How does that law apply to his family’s land? What has this law done in the past 20 years? Has the labor dispute helped or hurt agriculture in the Philippines? How about business in general? Is Socialism as enshrined in our laws, in this case, right or wrong? What can he do as president to “fix” a problem in the system, if he sees it as flawed? How can he make it work better— or is the law wrong? What is he going to do? A stand, he must make.
Most certainly, the Cojuangcos staying or going doesn’t even matter. It is after all a business decision, isn’t it?
Noynoy Aquino has to communicate with people. He has to tell us what’s in his mind, presidential-like. He must take the first step to bind that festering wound of cynicism, to inspire, to lead. It buys him credibility for other battles like maybe, the RH Bill but more importantly, his agenda should he become president. He must reach out to those professional hecklers who have raised the issue of Luisita to show the irrelevance of an ideology of anger and spitefulness. Noynoy Aquino must engage our society to prove that it isn’t just hope he brings. That his presidency will be about the will to crush cynicism by showing fairness and equal justice for all. That this time, it is different. This is an opportunity to show how presidential he could be and like all opportunities, could be seized or not. That is, if he has it. That is the opportunity of Solomon and the Luisita Connection.
Popularity: 1% [?]
Marxism and Jose Maria Sison’s Maoism are big deceptions and real redistribution became a success only under an anti-communist regime. re MacArthurian Japan and Park Chung Hee’s South Korea. Redistribution went hand in hand with a radical restructuring of the political and social system. In Japan while the Diet was never abolished, the old idea of the Emperor was. The Peerage was stripped of its privileges and the Imperial Family removed of any pretense to sovereignty but given the role to be a symbol of sovereignty.
The greatest failure of Mrs Corazon Aquino’s yellow revolution is that it never went with radical redistribution (even with the supreme powers that Mrs Aquino had at the start) but merely reinstated the symbols of democracy. The CARL is the supreme example of this. The elite weren’t stripped of their privileges and continued to benefit.
Now Noynoy Aquino’s statement about the Cojuangco plan to jettison Luisita is nothing but a way to preserve whatever that can be saved for the family coffers. It is none but a business decision. Noynoyistas should desist from giving a socialist colour to this.
Aquino should take this opportunity his mother had missed 23 years ago. The sooner he tells the nation about the need to make the reforms and how he plans to go about this, the better it would be for him.
Yes, agree with this, who knows, I might be convinced.
Some of us are talking about land reform from our swivel chairs. It is an old refrain to say that the CARP/CARL had loopholes because it was passed by the feudal congress who are not about to give up their privileges. The reality is the entire country was declared a land reform area in 1973 by MR. Marcos and from that time on DAR/Land Bank started distributing big landholdings of the landlords, except for the 7-hectare retention. Few plantations were exempted for a practical reasons that farmers do not have the technical knowhow to run a huge farming enterprise and one of such entreprise is Hacienda Luisita.
Majority of the farmers now own their lands even without paying the landlords the reasonable value of their lands. I have some relatives who after their landholdings were confiscated by the government in 1973 and distributed them to the farmers, they were still awaiting payment today. The case is still with the Supreme Court and it was there for almost 15 years now.
One of the disadvantages of a owner-farmer is his limited resources, a situation some of our “dreamers” think should also be blamed to the government. Thus after one crop failure, because of typhoon or other natural calamities, the farmer would go back to his previous landlord for a loan so he can work on the farm again next planting season. The farmer ended up being a virtual slave of the landlord again. A situation no different than where he used to till the land as daily wage earner. Some ended up mortgaging their landholdings and look for job abroad. Some farms were totally abandoned.
This could be one of the reasons why despite our being rice-producing nation, we continue to import rice from China and Thailand.
But the rambunctious charlatans among us would point to a few big landholdings that had not been subjected to CARP/CARL to fire up their misplaced sense of nationalism that the land reform program was a failure because of the tenacity of the feudal-Congress to provide funds for CARP/CARL.
The government has already provided them lands by confiscating them from the landlords and now they want the government to provide all the the input for their lands so they can live with decency and dignity. In my argument with the SCORP about the non-payment of my relatives’ landholdings despite the lapse of almost 40 years (1973-2009,) that the government were producing a ton of “mendicants” in our society and not decent and dignified farmers.
Oh, boy, it is sweet to be poor in our country…
Taiwan and the “Land to the Tiller” Program
John C. Médaille
[Chapter 14 from the book, The Vocation of Business: Catholic Social Teaching for the Business Person, a work in progress, copyrighted by the author and reprinted here by permission. July 2005]
The author is adjunct instructor of Theology at the University of Dallas and a Real Estate Agent.
Land Monopoly and Labor Markets
We have seen that Catholic Social Teaching has made wider ownership of the means of production a keystone of its idea of justice. She has, of course, based this on her authority as a moral teacher, but that moral teaching would be suspect if it could not be shown to have a sound economic base. It is not that the Church makes her moral decisions based on some economic system, but rather that a true morality will eventually be shown to be consistent with economic theory. If She is correct in this view, then redistribution of land will be shown to be the basis of a just and stable economic order. Further, this should be shown be both theoretically and in actual historical circumstances.
To some degree, we have already done this. We have seen how, theoretically, the law of rents is mitigated or abolished in the presence of a frontier or a commons. In such circumstances, wages stabilize at rates far above subsistence; when the frontier is closed and the commons enclosed, the law of rents takes over and the wages tend towards subsistence. We have verified these purely theoretical conclusions by noting the experience of America while she still had a frontier, and of England in the 15th and 16th centuries. In the later case, we noted that by the end of the 15th century, wages had reached nearly 4 times subsistence and attempts to enforce a “statute of laborers” were futile. But after all the land was “privatized” and the commons lost, wages dropped to bare subsistence levels and the statute of laborers became redundant. However, we do not need to look to colonial America or 16th century England for all of our data; we have enough examples in the 20th and 21st centuries; we have enough data from our own time, both positive and negative. Examples of monopolistic land ownership are, alas, all too common and present themselves for our analysis.
The case for land redistribution can be made in pure neo-classical terms. Where there are few owners, and especially when the few combine to control the market, a monopoly in land is created which in turn creates a monopsony for the labor market; land owners become “price makers” rather than “price takers.”[1] Further, the economic control of the labor market is often reinforced by a series of institutional controls, such as the difficulty tenants or laborers have of obtaining credit, use of police power to prevent protests or unions, lack of education in rural areas, discrimination, etc. All of these things leave sharecroppers or farm laborers at a disadvantage in wage or rent negotiations, making these contracts leonine. The effect is that the landowners can arbitrarily lower the cost of labor with the results that the marginal costs are higher than the average costs, reversing the situation in a “normal” labor market; to increase the amount of labor would require them to raise wages rather than lower them.[2] This has four consequences from a purely neo-classical perspective.[3] One, the cost of labor is lower than what it would be in a competitive environment resulting in exploitation of the farm worker. Indeed, the low wages make marginal costs higher than average costs. Two, total employment on the farms is lower than what it would be because the higher marginal costs make it inefficient (in terms of profit) to fully utilize the land, resulting in surplus labor. The combination of surplus labor and lowered labor costs in turn lowers the “reservation wage” in urban areas, accentuating urban poverty. The third point follows from the second: since marginal costs are higher than average costs, total output is lower than what it could be, resulting in production inefficiencies. Whenever labor costs are artificially controlled through monopoly or monopsony power, average labor cost is likely to be lower than marginal cost, meaning that optimal returns to capital are reached before full utilization of the resource. Which leads to four, although the farm is less efficient, the total profits are higher, which results in an inequality of income distribution and widespread poverty. In other words, the farm is made “efficient” not in terms of total output, but in terms of total profit.
The implications are that wider ownership of land would raise total output and average income by breaking the monopsony over the labor market. There would be a more equal distribution of income and a reduction in both urban and rural poverty. This in turn would broaden the market in the non-agricultural sectors, allowing for more secure investment opportunities and hence advance the broadening of the economy away from the purely agricultural. However, there is a question of how to break up land monopolies. Three solutions have been put forward, a market-based solution, favored by the World Bank; a re-distributive solution, in which land is simply expropriated; or by a combination of the two. All three have been tried extensively since the 1950′s, when land reform achieved a high priority on the development agenda; the first two have been shown to have extensive problems. The World Bank solution hasn’t worked for reasons which Belloc laid out in The Servile State.[4] In a market solution, by which landowners are simple given the market price for their land, nothing really changes. This is because the “market price” for anything is simply the same thing in a different form. The ownership of land or money is a claim on the output of society; the market price merely converts that claim from one form to another, from land to capital. The practical effects are that the oppressive rents are merely converted into oppressive interest payments. Nor is this effect mitigated by having the national governments pick up the debt, since governments can only pass on the cost to their citizens in the form of taxes. The market solution simply does not change the power relationships involved, which need to be changed, simply because that is not the function of the market; indeed, a free market depends on leaving power relationships exactly in place before and after a market trade. The World Bank solution has therefore merely saddled the so-called Third World with unmanageable debts, crippling interest payments, and even less of a prospect of being properly developed than they would have without the misguided “help” of the Bank.
But outright expropriation has it problems as well. This is because there is an immediate moral difficulty. It is certainly true that monopoly power is both morally repugnant and economically inefficient, and given that land ownership is a social convention society certainly does have the power to limit it. However, it is a stretch to then claim that the current owners have no rights whatsoever that society is bound to respect. Certainly, their monopoly rights ought to be terminated, having neither a moral nor an economic root. But neither can they be reduced to penury without creating as great an evil, both moral and economic, as the one expropriation intends to correct. Outright expropriation turns to outright criminality, as it did in the Communist nations or in places like Zimbabwe, because it begins in criminality, that is, with a denial of justice.
The “Land to the Tiller” Programs
That would seem to leave the third solution, a combination of market buy out and expropriation. Like expropriation, this solution actually changes power relationships within a given society; like market based solutions, it recognizes, partially, the rights of existing land owners. In such solutions, there is no magic formula as to the allocation of rights and power; it is arrived at on an arbitrary basis and is purely a matter of judgment. The primary examples of this form of land redistribution are Taiwan, Japan, and South Korea. The circumstances in which the redistributions took place are somewhat remarkable, involving three historical circumstances. The first was the explication of Chinese nationalism given by Sun Yat-sen (1866-1925), head of the Chinese Nationalist Party (the Kuomintang) which overthrew the Manchu dynasty in China and was in turn overthrown by the Chinese Communists. The second was American ascendancy over the east after World War II. And the third was the imperative to effective action given by the fear of a communist victory in all three places and the need to break the power of an oppressive land owning class whose very existence had been the biggest practical argument in favor of communism.
Sun Yat-sen had made “land to the tiller” a foundation of Chinese state, but the Kuomintang, at war with the Communists, then the Japanese, and then the Communists again never had sufficient control of China to implement any actual reforms. Further, they depended to a large degree on warlords and large landowners, so that real reforms were politically impossible in any case. In 1949, the Nationalists were defeated by the Communists and fled to the island of Formosa, now called Taiwan. The Taiwan that greeted the refugees was an agricultural and feudal society. The war had devastated production, which was at half its pre-war levels. Mostly it was a nation of small sharecroppers with most holding about 2.5-3 acres. Rents were from 50-70% of the crop and there was no security of tenure; the farmers could be evicted at will. Most of the land was owned by members of 20 families. Further, since the returns on land were so high, there was little interest in investing in anything but land. In addition, Taiwan had to absorb 2 million refugees from the mainland and bear the costs of defense. It was expected that Taiwan would soon fall to the Mainland communists, as the Kuomintang had never proved very effective in controlling China. It was necessary to act quickly to reform Taiwan; it was the very failure to enact reforms which had made the Kuomintang unpopular in China and led to the victory of the Communists. They could not make the same mistake twice.
Land reform was based on a program initiated in Japan by General Douglas MacArthur, who after the war was the virtual ruler. MacArthur’s plan had both a political and economic purpose: politically, it weakened the landowning class that had supported Japanese militarism; economically, it distributed both income and incentives to innovate among the people. The success of the program in Japan encouraged its application to both Taiwan and Korea. Most of what we say here could apply to all three countries, but mostly we will take the case of Taiwan.
Taiwan’s land reform took place in three phases. In the first phase, starting in 1949, rents were reduced to 37.5% and landlords were required to give 6 year leases. Further, the tenants were no longer required to pay rents in advance. The farmers now had an improved income and at least some security of tenure. This also had the immediate effect of lowering land prices since the returns were now lower, which later facilitated the process of land redistribution. Further, during times of crop failure, tenants could apply for a reduction in the rents. The tenant also acquired the right of first refusal if the landowner attempted to sell the land.[5]
In the second Phase (1951), public lands were sold to the farmers at a fixed rate of 2.5 times the average yield. These were lands which had been abandoned by the Japanese and taken over by the government and represented 20% of the arable land. Each farmer could buy .5-2.5 hectares of paddy land and 1-4 of dry land. The farmer was loaned the money and could repay in kind over 10 years. 266,000 families received land in this phase. The third phase (1953) was the “land to the tiller” proper. The landowners were forced to sell all their land over a small amount at the same terms the government had sold its own land, a price of 2.5 times the yield. 166,000 families received land under this phase. So in total, about 432,000 families came into possession of their own land. The tenancy rate dropped from 64% to 17% and the farmers were now paying 25% for 10 years rather than 50% forever.
Note that 2.5 times revenue is a very low price to pay for any asset. Further, no account was taken of the externalities of any piece of land, which in a free market is usually a critical portion of the price. Land prices are normally set not by the productivity of the land, but by the externalities; things such as how close a piece of land is to a population center, what are the off-site improvements (such as roads or utilities), and so forth, are normally the major determinants of price; all of these were ignored. Thus the program can be considered a partial compensation and partial expropriation of the land. As such, it actually changed the power relationships within the economy and the government.
The results were dramatic. Farm production increased as farmers used more fertilizer, went to multiple cropping with as many as four crops/year and diversified production to higher value but more labor intensive crops. Production increased at an annual rate of 5.6% from 1953 thru 1970. The farmers suddenly had something they never had before: relatively large amounts of disposable income. Now they needed some place to spend it.
The owners were paid with 10% cash, 30% in stocks from four government-owned companies, and 60% in industrial revenue bonds. In other words, the government simply printed the money to buy the farms. Normally, when governments merely print up so money to accomplish some project, the result is merely an inflationary spiral. But this did not happen. Why no inflation? This is where the Taiwanese strategy really becomes clever. The bonds that the landowners received were negotiable industrial bonds which they could then invest in any light industry they choose;[6] indeed, there was nothing else they could do with the bonds; it was a case of “invest or die.” The strategy was two fold: get capital, in the form of land, into the hands of farmers; get capital, in the form of industrial investment, in the hands of entrepreneurs. Note that the strategy provided both goods to buy and purchasers to buy them; it was a binary strategy, giving equal weight to production and consumption. A tremendous number of capitalists were created overnight; the former landowners, who previously had no interest in manufacturing, were converted into instant urban capitalists and had to find places to invest the proceeds from the lands sales; the landless peasants became proprietors. By this method, the government provided support to Taiwan’s fledgling industrial base. But the fact that the actual companies to invest in were picked by the former landowners meant better investment decisions than if the government had tried to pick the winners itself. Industrial production expanded, giving the newly empowered peasants some place to spend the money buying locally produced goods.
We can see the Taiwanese experiment for the conjuring trick it was: the government sold land it didn’t own, bought with money it didn’t have and managed to expand both the consumer market and to provide the industrial production necessary to serve that market and serve it from local resources. There was no inflation because the money supply expanded at the same rate as production by a sort of automatic method. Redistribution allowed for expansion of the consumer base which allowed for expansion of the industrial base. It is not often in business and economics that one gets to see solutions which are elegant and beautiful, but certainly the land to the tiller program qualifies. We can also note that all of this was accomplished with relatively little “foreign aid” or development assistance; the United States provided the 10% cash that the landowners received, but the rest was pure monetary “magic.”
The story in Korea was much the same. In 1945, the American military government reduced the rents from 50-60% down to 33%. Later the provisional government forced the larger landlords to sell their land at a price of three times the annual output to be repaid in 15 years. However, the actual price was in reality only 1.8 times the produce, since the price was set using the depressed post war averages.[7] In 1949 and 50, there were further forced sales, the owners being compensated in bonds that could be used to buy the industries left behind by the departing Japanese, which represented 80% of Korea’s industrial base.[8]
Industrial Policy
The benefits of land distribution would not have been half so great had it not been coupled with an intelligent industrial policy. The monetary conjuring trick which provided land to the peasants and capital to the entrepreneurs worked in concert with the industrial policy that began where Taiwan actually was: in a very primitive state. The “light industries” in which the bonds were invested were very light indeed. Few had more than 25 employees and the average number was just eight. But a business-any business-always depends on a network of other businesses. To set up shop, one first needs land, then a building, office supplies, telephones, delivery services, furniture, machinery no matter how primitive, etc. Business breeds business. But the Kuomintang was especially interested in a particular kind of business: Import substitution. Since Taiwan’s own industrial capacity was limited, most manufactured goods had to be imported. The government encouraged import substitution industries, first in such things that were easy to make, such as shoes, clothing and textiles.[9] Import substitution is a key part of development strategy; local resources were used to produce what had previously been imported and a judicious but limited use of tariffs were designed to give an edge to local businesses.
Taiwan was still a low labor cost state and hence there were transplant factories, what we now call “outsourcing.” Manufacturers in Hong Kong and Japan contracted out some work to Taiwan. This gave the Taiwanese valuable experience in setting up factories and managing production. In learning how to make things cheaply for others, they learned how to make the same things for themselves. But the skills learned were then used to set up their own factories.
To encourage efficient use of the land, a Georgist tax policy was followed. Georgism was a 19th century theory developed by Henry George (1839-1897). George was probably the most well-known and popular economist of his day; some measure of his popularity can be gleaned from the fact that at his death, over 100,000 people filed past his coffin, while thousands more were unable to get in. His major work, Progress and Poverty, was a best seller for many years, and his ideas had a tremendous influence up until recently. Basically, George noted that while the law of rents allocated all values above subsistence to the landlord, the landlord did not actually do anything to earn those values. George also noted that the claim to the land the landlord held was based not on any natural right, but on government power alone. Further, the rent of land was due totally to the external factors: population and off-site improvements. In other words, the landlord added no values to the land per se. Yet, land tends to be taxed lightly while the improvements on land tend to be taxed heavily. For George, this reversed the logical order. Land should be taxed to its full rental value, while improvements should not be taxed at all; land after all was pure gift, while what a man made of the land was his alone. Thus Georgism is often called the single-tax theory, since there would be only land taxes. George believed that the single tax would force down the price of land by making it unprofitable to hold parcels for speculation, while encouraging development by leaving both labor and improvements to the land untaxed. One can say that George socialized the land while privatizing its development; it is an interesting view of the questions of the social and the private values of land that we have previously examined. Sun Yat-sen was an admirer of Henry George and made his ideas a part and parcel of Chinese nationalism; hence George’s theories were spread through the East. In fact, both Singapore and Hong Kong are based on Georgist principles. In Hong Kong, all the land is owned by the government and leased to developers (which is equivalent to a 100% tax rate), while in Singapore, the government owns 65% of the land. Needless to say, both are very prosperous states. Georgism deserves a lot more space then this.[10] But for our purposes we can note that Taiwan followed a Georgist policy to encourage development while keeping other taxes relatively low.
Equality and Development
Taiwan followed an import replacement scheme right up the industrial scale from cheap cloth shoes to shipbuilding, steel making, and electronics, to become a great trading nation. At the same time, she was able to create an economy with greater equity, in complete contradiction of the Kuznets curve. The Kuznets curve states that development and inequality first rise together before falling in later stages of development to form an inverted “U”. Despite the lack of empirical evidence for this thesis, it is standard development dogma.[11] It is often used as an excuse for development programs which seem only to widen the gap between rich and poor without any discernable benefits to the people. But in Taiwan, along with Korea and Japan, rapid development and increased equality went hand in hand.
One of the standard measures of inequality is called the Gini Coefficient, which measures the distance from a “perfect” equality; a Gini score of zero would indicate “perfect” income equality and 100 would indicate a situation where one person had all the income. Taiwan measures .33 on this scale; the U.S., by comparison, measures .41. The ratio between the earnings of the top 20% with the bottom 20% declined from 15 to one in 1950 to 5 to one by the 1970′s. Taiwan has managed 50 years of high growth rates, increased equality, and low tax rates (comparatively). Unemployment was low to non-existent through most of Taiwan’s post war history. Before 2000, it rarely exceeded 3% and usually was less than 2%. Since 2000, the rate has risen as high as the low 5′s before dropping back to the 4% range as Taiwan struggles to adjust to outsourcing to mainland China. Further, Taiwan and the other “Asian Tigers” were able to achieve these successes despite having population densities among the highest in the world, a fact which contradicts the prevailing dogma that population density is an impediment to growth.
Taiwan is, of course, far from utopia. For one thing, its very success has brought with it a corrosive consumerism which threatens the very roots of the social order and cohesion upon which these decisions were made. For another thing, the ownership was that was granted to farmers was not often extended to industrial workers. It is likely that coping with the challenge from China will require the same redistributive will require the same kind of redistributive programs for urban workers that were extended to farm workers. Nevertheless, Taiwan, Korea, and Japan have demonstrated the great effectiveness of redistributive policies in providing development with equity. In only a single generation, Korea and Taiwan were able to transform themselves from feudal and highly unequal societies into industrial powerhouses while overcoming poverty and inequality. As such, redistribution of productive assets should provide a model for development. This is an especially important question, given the destabilizing inequality and lack of development that exists in the world today; moreover the question is made more important today by both the phenomenon of “globalization” and the precarious security situation in the world. But despite the evident success of these models, they are not the models that have been followed by the World Bank and other development institutions; these have followed different dogmas, with tragically different results.
REFERENCES AND NOTES
1. Keith Griffin, Azizur Rahman Khan and Amy Ickowitz, “Poverty and the Distribution of Land,” Journal of Agrarian Change, Vol. 2, No. 3, p. 289.
2. Griffin, p. 289.
3. Griffin, pp. 289-91.
4. Belloc, “Appendix on ‘Buying Out’”, pp. 163-170.
5. Griffin, p. 304.
6. Jane Jacobs, Cities and the Wealth of Nations: Principles of Economic Life, (New York: Vintage Books, 1985), p. 100.
7. Griffin, p. 306.
8. Griffin, p. 306.
9. Jacobs, p. 100.
10. See Henry George, Progress and Poverty, originally published in 1880 and available in many editions. As a sidelight, one element at least of Georgism remains in popular culture, the board game “Monopoly.” It was originally developed by Georgists as a teaching tool.
11. Klaus Deininger and Lyn Squire, “Economic Growth and Income Inequality: Reexamining the Links,” Finance and Development, (International Monetary Fund, March, 1997), available at http://www.imf.org/external/pubs/ft/fandd/1997/03/pdf/deininge.pdf.
As pointed out by Medaille’s study – this is where the Philippine government goes kaputz. Trust the Pinoy legislators to bungle it up, courtesy of bozos starstruck with “pedigree”.
Extraordinarily well done piece, explaining things that would have taken me weeks to research, and placing the responsibility on Mr. Aquino to rise to the challenge. I hope he does.
Regarding CARP, I have always felt this is an impractical socialistic program that does nothing for the Philippines. Agribusiness is farming plus business moxie, and the Philippines is simply trying to get more people to farm (have jobs) rather than creating an industry that competes well globally, using machinery to plant, till and harvest, and employing hundreds of thousands in the packaging and transport of product. It is better to allow business enterprise to prosper by MAXIMIZING competitiveness rather than SUPPRESSING it.
I would suggest a simple principle for Mr. Aquino. “We want to compete globally and CARP does not help us do that.”
Almost EVERYTHING in the the major industries (mining, agribusiness, trading and shipping, tourism, call-centers) should be oriented around the principle: “We want to compete globally, and damn it, we will.”
It is the only way out of this malaise of taxing poor people to provide poor jobs for other poor people. Let the people make money for a change . . . the right way, by competing for it . . .
Joe
CARP “failed” for the following reason:
1- It is full of loop holes – (when you have a leak in the dike, you plug the hole – you don’t destroy the dike)
2 – It is not complemented by intelligent industrial policy
3 – A landlord dominated Congress.
John Medaille provides a detailed review in
To paraphrase Medaille – the Philppines depended to a large degree on warlords and large landowners, so that real reforms were politically impossible in any case.
We should get over with the Hacienda-Feudalism set up. It was
placed by the Spanish Colonialists. To asure, we will be their
slaves. And they will be the masters. Now the Filipino “Caciques”
has taken their places. It is an outmoded political and economic
set up. No place in the 21st century.
This is one of the reasons I’m against Noynoy. He’s an elitist through and through. He grew up benefitting from the estate and was brought up with the norm of ‘utang na loob’ to their estate rather than the virtue of ‘hating kapatid’ with the farmers.
From his speeches one can really know his mindset is really of an feudal lord. He is concerned more of his family’s profits and debts rather than the state of the workers (or how many deaths it had). I hope he can sacrifice his materialistc ideals and support CARP. Or better yet, revise, impose and properly execute CARP which is even a legacy of his mother to whom he owes his popularity in the first place.
CARP has failed because of implementation. If implemented properly (and with lesser landowners in congress), it can really alleviate the whole economy. Just by way of statistics, countries with farmers who own land are more stable (meaning GDP growth and lesser number of deaths of farmers). That alone is worth imposing it.
The landowners of course hate it. They hate parting with their wealth (and possible dividends it would pay out). What greedy landowner wouldn’t want to have an estate with minimal work and maximum profits?
I’m betting none. Capitalism is what lost them their lands in the first place. Feudalism–>Capitalism. Capitalism is evolved feudalism according to Marx. Marxism will free them of oppression. I think you’re the one who’s being deceived by capitalism into despising marxism for the sake of despising it my friend.
Try reading it from the masters themselves (rather than from wikipedia) and know how the bourgeoise change their ideology from time to time to hide its history of oppression. It answers all of your questions
“The Communist Manifesto” by Karl Marx and Friedrich Engels.
http://www.gutenberg.org/etext/61
Despise it out of knowledge, not out of ignorance.
Edward,
You know, you may be right, that Noynoy is so steeped in his family and the elite past that he cannot avoid, but I would be inclined to argue that a man . . . a single individual . . . ought not be put into a box of someone else’s definition based on circumstances he cannot control. He should be given the chance to show he can work outside that box, for the good of all Filipinos.
I’ve shared similar views to yours here on FV, but, given the limited number of candidates, and evident flaws for each, will follow the campaigns carefully to see what they say . . . as individuals, in no box but the ones they make for themselves.
Joe
Right. I also would like to believe that Noynoy could be the change that we’re all looking for and give him a chance. I just hope he would be worth the gamble.
Marxism liberating the oppressed?!?! Not with what Marxism has ended up with in Deng Xiao Ping. The highest form of socialism is indeed capitalism. The only true socialist state is Lee’s capitalistic Singapore. Marx was wrong since Marxism is anti-Darwinian.
Marxism ended with the Soviet Gulags. It produced
new aristocrats: the ruling Politburo and their
families.
Revolution begins in the heart, not in ideologies…
And the list goes on…
If even the holiest of ideologies could be butchered and twisted for the interests of evil men, like in the cases of Christianity and Islam, the ideology itself stands.
You cannot argue an ideology based on the people who misused them. Its the fault of those people. The same way I don’t discredit Christianity and Islam just because it was exploited by Osama Bin Laden and the Spanish Friars.
Hyden: What about plutocracy right now? Focusing much on acquiring wealth rather than actually governing. Is it any better?
sorry naputol.
“How many farmhands have been deceived by marxism to despise capitalism for the sake of despising it?”
I’m betting none. Capitalism is what lost them their lands in the first place. Feudalism–>Capitalism. Capitalism is evolved feudalism according to Marx. Marxism will free them of oppression. I think you’re the one who’s being deceived by capitalism into despising marxism for the sake of despising it my friend.
Oh, i just remembered this: you might also be interested in “Re-Imagining Capitalism“
blackshama, Joe, Bert, BongV, Hyden Toro, i appreciate your thoughts.
edited the post to include this link to the RH Bill site (last paragraph). just so everyone knows. thanks to @caffeinesparks for pointing it out.
Edward, well my position on the matter is quite clear on my post. I also hope you take time to read the comments from blackshama, joe, and BongV. as for my position on capitalism, i point you to a previous post i made, “The Virgin Principle on the Road to 2010“
Although I think its a mistake, yes, I understand you’re point. :)
I would just leave a question: Is money the answer to our problems? Or is money the source of our problems?
is it a fault of a man to be born with silver spoon but turns out to be decent? or a poor man become a billionare buts turns out to be a land grabber? hirap kasi sa mga may kaisipan maka kaliwa sarado na ang mundo sa realidad. pag ganun kung ang pananaw nila ay labanan to ng uri laban ng mahirap at mayaman , panalo na naman si erap kasi eto kanyang battlecry laban ng oligaryo at masang maheerap , ang alam ko sa pg babasa ng mga aklat maka banal bibliya man o koran, pati ng mga budista, o hudyo, ang labanan ay between good and evil. Naive lang opinyon ko mga tsong pero sa tingin ko yn ang mging isyo sa 2010, bad or good, kaya ang tutok ng sinoman kandidate ay isyu ng kaerapan, pabahay, seguridad,trabaho, pagkain, magandang pamamahala, disiplina ng masang makaerap na walang disiplina, kung meron pa txt niyo he he
bogrit lee,
exactly.
yung blog post ko before this, “Beyond Good and Evil On the Road to 2010 ang sabi ko ang 2010 hindi cya laban between good or evil. laban cya between cynicism and hope. i hope you can read it.
salamat.
Land reform and Marxism? What an idiotic connection. Japan, S. Korea, China and Taiwan were land reformed under authoritarian governments. The communists had already land reformed in Korea before he split. Vietnam is another example.
You have to become a capitalist country first before Marx makes some sense.
The insurgency in the Philippine is an agrarian problem based on unfair distribution of land. Our type of feudalism providing the foundation of colonialism…Hence the natdems (Maoist) are fighting for national liberation. They have a long term socialist goal…
They farmers want ownership of land. Definitely not socialist. The ideological divide between the two major leftist blocs was based on their differing analysis of the format. There are also right wing natdems who believe in the same thing as the left (Joma group)They do not have a long term socialist perspective. They are also fighting for national liberation. All countries with the exception of China, Vietnam and N. Korea are right wing natdems who fought for economic nationalism. China ,N. Korea and Vietnam are more leftist who are now economic nationalists. (N. Korea is also slowly allowing more private enterprises)
Without a complete asset reform in the agricultural sector no economic development.
The man uses drama to the hilt under the directions of his sister-actress and utilized the death of her beloved mother (may she rest in peace) and – - – voila – - – he decides at last that he is a presidentiable after all in the likes of his more illustrious parents from which name he carried and not by accident. I wonder what were his accomplishments when he was in both houses of Congress and Senate and, from what I hear, I never heard any except maybe he is the unofficial chairman of the Committee on Silence. He cannot be my president. I would have voted for his father were I was of voting age at that time but my vote went instead to his mother but definitely my vote cannot be transferred to their bland son.
pinoyapache,
Someone already has blogged about it. You can find a list of Noynoy Aquino’s Senate and House accomplishments here.
As regards to the Luisita farmlands, one can see the failed logic in the concept of breaking up a huge viable sugar land into small chunks so the farmers who have no capital can own them and operate them at a profit. Society is basically a component of capital and labor. China and Russia, despite their claims to being socialist/communist societies, have not achieved a classless society so far, and yet we still dream of a great rendezvous with an equitable society by simply giving the poor their lands to till. This is a myth that up to now is being fueled by the most incorrigible dreamers of our society. The politburo of China and Russia remain the face of the ruling class and majority of their citizens, their working class and with the doors of both countries greased by the corrupting influence of capitalism, you can see some cities, especially in China, become overnight models of “laissez faire” and the new entrepreneur class in these cities, on the rise.
JCC – society is basically a component of capital and labor? In both China and India the majority of people in both countries still live off the land.
Where did you learn this kind of ideas. Both China and India practice in substance a mixed economy. China a a higher degree of command, control and direction of resources.
China does not give free lands. They practice a usufruct system. All lands belong to the state.
The state leases them to landholders. Today the state has made the trading of landholding rights more liberal to increase rural incomes.
Do you know the difference between a total command and control structure and a mixed one?
The CCP have socialism as a long term perspective. They are smart enough to know that you cannot socialize poverty. You must create the mechanism to create the surplus. They will surpass Japan in the next two years as the second largest economy in the world but they still
have a lot of people living off the land who are not as well off as the urban population.
They are in the process of dismantling their feudal society which has existed for several thousands of years. They are on the verge on establishing the most massive capitalist society on the planet. They have what they describe as a socialist market place.
It has always been about an exchange economy…They now allow a certain degree of wickedness.
You must allow this part of human nature free rein but directed to creating value. Not the lawyering type of value…
talk to yourself. where did i say that china and india did not live off the land?
my point is that society, (basically those adhering to laissez faire) is about capital and labor.
china and russia despite being communist countries are not true to their philospohies for an egalitarian societies, and with the advent of capitalism on their shore, they might be tempted to open up and become capitalist countries themselves.
http://www.time.com/time/magazine/article/0,9171,1576831-2,00.html
Obviously, the Filipino-style “logic” applied in Hacienda Luisita sucked – but where the “logic” of the Taiwanese, the South Koreans, and the Japanese was used – whaddya know – they thrived. Must be something about Pinoy “logic” – it ain’t anything BUT logical.
The “myth” of the Japanese, South Korean, and Taiwanese success is anything but a “myth” – that the Pinoy has “logic” is a MYTH.
This is an excellent dialogue, with both sides, landowners and farmers intelligently represented. It extends all the way over to Abe’s blog, heh . .
From the perspective of an outsider, bringing in his naïve views, which may be clearer than the polluted perspectives of the engaged parties, I would say:
CARP breaks down because it tries to protect the economic interest of the landowners while giving farmers high value. Both parties, landowners and farmer-receivers, expected “high market value” when Philippine methods of productivity generate the “lowest market value” imaginable. So the economic solution always ends up shorting one, or the other, or both. This is laid out in the fine literature on tilling and distributing provided by BongV. In the Philippines, alas, no one is willing to bear the pain of massive land distribution, and pain there will be.
In Japan, they had just lost the war, so MacArthur’s scheme, or whoever hatched it, did not care about pain. And there is a firmer commitment to SOCIAL GOOD in both Japan and Korea that enables its citizens to suck it up and take one on the chin for the old gipper (or whoever is in charge of the social good). In the Philippines, the thinking is tribal — “what’s in it for me” being the mantra — so there is no one to suck it up for the good of all. I fear there is no national conscience, commitment, or sacrifice unless the entire country is overrun by scurrilous Americans or Japanese, and all the tribes roar at once.
So the land-division process goes on for years with inefficient courts micro-managing tribal solutions, agonizing over every acre, and the country continues to wallow in backward farming methods that ensure high value will never be attained.
Joe’s advice: Bite the national bullet, man, and get on with things.
Joe
I am wondering why Noynoy is somewhat being blamed for coming from a wealthy family. Is it his fault? Is it his fault if his old folks worked so hard to accumulate wealth and become landed? I am aware that there is a land reform law in the land. But this reform law is a big joke. In my opinion, this law was passed by these vote greedy politicians to get votes. This land reform law with the instigation of the leftist, to me, only encourages those talented people with agri-business accumen to be less productive, like what we see now at Hacienda Luisita. And what does that translate to? – Less taxes for the government and less jobs. The way I see this land reform law is, it is a kind of legal land grabing. We hear land owners that were covered by this law complaining about not being paid as yet inspite of many years waiting. This law is counter productive in so far as the economy is concerned. Of course this is not how the communist leaning people sees it. They want a classless society, but we see that only the poliburo members enjoy the good life. Total control of the people is all they want. The state own all of the lands which makes it far worst. I have yet to hear a communist country distributing land for their people to own. Here in our country, they portray themselves as helping the poor, then agitate them to get angry, demonstrate and shout vendictiveness against the stablishment they want to bring down. Let us look at China, slowly it is adopting capitalism, its people are allowed to acquire wealth, why because it encourages productiveness. And look at China now. Even Russia and
Vietman are doing the same. In an article days ago, I read that N. Korea is also showing an indication of adapting the capitalist system.
heavens to megatroid.
am so tempted to repost John Medaille’s piece all over again :D
no one’s faulting him for being born rich.
what’s being faulted is that he being presented as being pro-poor – when he is not – THAT’S A SHAM, THAT’S A LIE, BOGUS. And for someone who claims to base his campaign on morality and honesty – that’s being DISHONEST.
does he become pro-rich simply because he was born rich or there is a possibility of a rich person being pro-poor despite being rich.
i tell you about my landed relatives in my hometown. they did not contest the confiscation of the lands by the government. all they wanted is for the government/farmers to pay the land. they acquired some of their properties both by purchase and by possession. if previously titled, property can be sold to another. if not previously titled, one who cultivates a piece of land for a certain period of time can ask the government to issue title to them.
there was no passionate opposition from my relatives seeing their lands divided into small chunks so some 30 farmer-families can enjoy them, also because the government promised them payment for their land. and my relatives have college degrees and therefore, they can part with their lands and make money sowewhere else. i assumed that most landlords though would object to land reform, were powerless to oppose it specially during the martial law years. and not all these landlords are members of congress to support the argument that CARP was a failure because Congress provided loopholes in its implementation. i think the basic problems is that after being given their lands some farmers were also expecting that their farm inputs be provided also by the government and when no farm inputs were forthcoming the vociferous left would fuel the angst and the anger of the farmers that Congress purposely did not give them money for farm-inputs because these members do not want CARP to succeed. (a loser’s argument, hehehehhee). some exempted huge farms were also being drumbeaten as a reason for the failure of land reform.
i tell you, my relatives acquired their farms without taking them from somebody else and were farming them without help from the government and now they were taken away from them and the recipents want the government also to spoonfed them with farmm inputs and where none was forthcoming, they would blame the government….
i think we should really blame the government for developing in our poor people (including some farmers) the “dole-out” and “mendicancy” culture.
There is a difference between promoting mendicancy and promoting entrepreneurship.
The current implementation land reform by the Phil Government promotes mendicancy.
The implementations of Japan, SoKor, and Taiwan did not promote mendicancy and in fact, transformed their economies from backward agrarian economies to the current industrial form.
More from: http://www.cooperativeindividualism.org/harrison_taiwan_land_reform.html
jcc:
there’s a thingie called, missing the forest for the trees.
so you think you are missing the forest for the trees because you had been cutting and pasting other culture’s achievement in land reform without regards to the local circumstance that is inherently Pinoy?
BongV;
I am intrigued by your Opus about Taiwan’s success in land reform so I queried my friend in Taiwan who works in a multinational company:
here is some of the excerpts:
jose_12650: i am discussing the issue for academic purposes no personal bias at all.
Jean Jean Kho: yes
Jean Jean Kho: i know
Jean Jean Kho: judging from the way u attack the topic, it’s academic
Jean Jean Kho: what’s the merit of this academic discussion?
jose_12650: the purpose is to find out if our democracy-type of government harms us in the long run or should we shift to a dictatorship form of government so we can improve economically.
Jean Jean Kho: ohhh!
jose_12650: i am a poor man but i would not trade my liberty for a plate of rice, but for another poor man he would trade his soul so his family can eat.
Jean Jean Kho: ive travelled to china for the past years, been to wuhan, shenzhen, guangzhou, shanghai, beijing,
Jean Jean Kho: and i dont think the dictatorship improved the lives of the chinese people,
Jean Jean Kho: we’ve visited rural communties too.
jose_12650: but taiwan is almost monarchical type of government.
Jean Jean Kho: we elect our government officials in taiwan too.
jose_12650: this is only recent but when land reform was implemented in taiwan, i think it was not that type of government that implemented it.
jose_12650: do you think there is some inherent flaw in our character as a people?
Jean Jean Kho: but agri industry of taiwan boomed later, there were problems prior to that too.
Jean Jean Kho: pinoys are hardworking people, no doubt about that.
Jean Jean Kho: our customs and traditions are similar to other asian countries,
jose_12650: the pinoys who went outside the country, that i can agree much… but it has nothing to do with our work-habit… it has something to do with our character to make fast money.
Jean Jean Kho: we just dont have the same opportunities that other developing countries have,
Jean Jean Kho: fast money? hahaha! are u referring to madoff?
Jean Jean Kho: i still have family and friends in pinas who work diligently, not necessarily for “fast money”
jose_12650: we should create the opportunity… but we cannot because that inherent flaw in our psyche of “this is mine and mine” no concept of nationhood and a feeling that we belong to something bigger than our individual self.
Jean Jean Kho: i mean they dont go about their daily routine looking for “fast money”
Jean Jean Kho: hmmm…. concept of nationhood? the lack of it in pinas? i dont think so, most of our pinoy overseas workers invest their money back to pinas,
Jean Jean Kho: if that shows lacking of concept of nationhood, i dont know what it is then
jose_12650: you are looking at it from the point of view of an OFW. this are special bred of people who would not depend on their government for survival… so they liberated themselves from the concept that everything should be provided by their government.
Jean Jean Kho: OFWs are representative of the global pinoy, and even the local pinoy
Jean Jean Kho: hindi naman po makasarili ang pinoy natin na naiwan sa Pinas,
jose_12650: it is you who said that we are corrupt, our priorities are misplaced.
jose_12650: putting money into their pockets instead of putting them to farm to market roads.
Jean Jean Kho: this is mine and mine is not being corrupt pro – survival,in any country
Jean Jean Kho: what im referring to now is the ordinary pinoys who are working hard in pinas, not those in power
Jean Jean Kho: not all are in power like the agri secretary
Jean Jean Kho: just as i have said, my family and friends are hardworking,
Jean Jean Kho: and luckily they’re not in government positions
Jean Jean Kho: kung di man makapag share sa iba ung family and friends ko it’s because kulang pa yun for them,
jose_12650: do you think an ordinary poor pinoy if put in the shoes of Agri Sec would not do the same? Is not his being honest and good only because he does not have the opportunity to be dishonest?
Jean Jean Kho: how about you? would you if you wer agri sec?
jose_12650: i don’t know.. it is quite presumptuous for me to say what i can do in the future if appointed Agri Sec. but the reason i did not even to want to become a judge because i know the corrupting influence of the office.
If we really want to provide farmers and farm workers an opportunity to improve the quality of their lives, we should enourage (by tax cuts) the private sector to invest in businesses that generate jobs.
In its almost 20 years of existence and under 4 different presidents, CARP has not alleviated poverty in this country. Farmers who have been given land (and there are many) sold their land and left to find work in the city.
We cannot make the country prosperous by making the rich as poor as the rest of us.
You are right, encourage private sector to invest. But if you were the investor, would you invest in an environment where workers are easily agitated by left leaning people? We have seen lots of these things happening around us. These people makes the workers believe that they are being taken advantaged, abused, and that they do not get fair return of their labor, but all of these issues are relative, even subjective. Instead of letting labor be aware of their duties and responsibilities, and that capital and labor are partners, these leftists portray capital as adversaries. The end result of these, are labor disputes mostly instigated by leftist people, as we can see is disruption of economic activities. Trade unionism is good as it serve as a good vehicle in establishing harmonious relationship with their counterpart. But when leftists ideology is allowed to come into play in every labor/capital relationship, the relationship between the two becomes a disaster. And that is the goal of the leftists, to create chaotic situations until the goose that lays the golden egg is breathless.
On the second topic of uncle pinoy, CARP was politically motivated, we must remember that this was passed during marcos time where people are not allowed to express their views freely so that loopholes are aplenty in the law. I believe CARP was not honestly intended for the landless farmers, rather a tool designed against marcos’ landed political enimies and to appease the leftists who are rapidly multiplying at that time. And rightly uncle pinoy’s observation is accurate. Most CARP recepients sold their lands because the farmers were insuficiently prepared to take over the lands awarded to them. Moreover, the program is inadequately funded so that owners who voluntarily submitted to the CARP progaram are until now, still awaiting payment. Very sad!!!!!
I agree with the statements articulated. And this assessment coming from one who is at the other end of the situation narrated by JCC above with regard to his relatives’ plight. In my desire to become a farmer, albeit just a part-time and leisure one, I had purchased several has. of agri-land from the landowners, who were members of a local indigenous tribe and who were granted their plots by the government (under the regime of Marcos) evidenced by sketch plan as initial documentation. And my initial findings were that the landowners were seriously unprepared under a whole host of reasons – farming education, capitalization, etc. Their very culture of indolence and passivity were not even addressed. Thus, the lands remained idle from the start, getting only sporadic visits from their owners. They were only too glad of the purchase, with only one caveat that they would be first in line for employment in those lands.
Phil, you are absolutely correct, it shows that you’re an authority on the subject. I admire someone that takes the pride you have and with your projecton of information. oSo when i actually do sit down to read material, I appreciate well written and organized blogs like this one. I have it bookmarked and will be back. Thanks.