#84 A Question of Land (The End of Laissez-Faire Part 7)

Read Part 6 of this Series

Author’s note:

This series of blogposts will be my paraphrased notes on a lecture given by Murray Rothbard called “The American Economy and the End of Laissez Faire“. This means the post will contain some word for word transcriptions of Rothbard’s words and some editorializing and rephrasing of my own. I will not distinguish between the two.

The third world model of land ownership is typically as follows… Foreign governments come in and conquer land which is owned and worked by peasants, and they do this almost solely for plunder. By establishing a government and parceling out land to local warlords, they drive working class peasants out of ownership of the land on which they live (and into extortionary tax relationships).

The warlords call themselves landlords and require the working class peasants to pay rent. This would be as if the Rockefeller family suddenly announced they own all of the state of New York, and henceforth, all tenets are required to pay, not only taxes to the state, but also rent to the Rockefeller family.

This is basically what happens in most third world countries except it is typically foreign governments that come in and establish rule over the land.

In Latin America, this is the origin of the ‘peasant problem’. Intelligent warlords will squeeze the tenets for every penny they can, they don’t take everything outright at the beginning, but rather they will tax them more and more slowly over time and still allow them to continue living at a subsistence level.

This system can, for all intents and purposes, be considered theft of property on a massive scale.

Marxist & Leninist theories dictate that revolutions would occur in the most advanced capitalist countries, that the proletariat would rise up against the bourgeoisie…however, in every case of Marxist uprisings throughout history the opposite was actually true. Only in countries where the free market is suppressed, and where private property rights are totally abandoned in favor of forceful wealth redistribution, do peasant uprisings occur. There has never been a communist revolution within a truly capitalist country (Russia, China, Cuba, Vietnam etc. ).

The real ‘peasant problem’ is that peasants of third world countries get extorted by foreign governments and are forced to rise up against established order and against their landlords. They were private property advocates who figured they owned the land which they lived on and worked by right. Their revolutionary spirit was born out of a desire for the fruits of their labor and a right to their private property, they were not interested in communism.

In Vietnam after the North Vietnamese made the Treaty of Geneva in 1954, they were willing to abandon the South of Vietnam. The peasants in the south were ruled by warlords after the Americans re-established French warlords (tax and rent collectors). The revolution in south Vietnam began when Southern Vietnamese peasants began violently rising up against the French tax collectors.

Finally, the south Vietnamese told the northern communists  that they should join forces or get out of the way, so the Northern Vietnamese communists joined forces with the southern rebels and took over. Thus, the initial impetus of the Vietnamese revolution was an uprising in favor of private property.

In the United States we managed to escape these feudal land systems most likely due to the huge amount of empty and undeveloped land in the 18th and 19th century. Hundreds of millions of very productive land with nobody on it (with the exception of Native Americans of course). Many of the Native Americans were wiped out by diseases upon first contact with white settlers.

Unfortunately, many Native Americans were not considered human by the European colonialists and were essentially exterminated. However, regardless of this, the United States was simply not very densely populated prior to westward expansion.

When it comes to the question of unused and un-owned land, there are two theories as to who owns it.

The first is the libertarian theory (adopted by Jefferson and Jackson of the Democratic-Republican and Democratic party respectively) which is that nobody owns land until they settle it and work to improve it and make it productive. This could be a fuzzy distinction, but in practice, in tended not to be. If you clear the land and/or plant crops or raise animals or build roads, you’ve effectively settled it and you become a “homestead owner” (this is also known as homestead theory as popularized by John Locke).

In practice, most people tend to adopt this theory of property rights naturally. For example, in 1848 during the California gold rush, there was no government in California. The United States technically owned the land but played little to no part in the day to day governing of affairs. At this point in time there was no interstate highway system and no transcontinental railroads and thus travel to California from the more densely populated parts of the United States was very difficult and very dangerous.

When miner’s settled in California to stake out claims in search of gold, there was no established mining property law, so these mostly illiterate miners created their own system of governance by assigning ownership of land and mining claims held on that land to individuals that discovered and worked them. The miners even established their own private courts to arbitrate disputes between claimants. ‘Claim jumpers’ or individuals that did not respect the established property laws were harshly punished or driven out of town.

It worked quite well until after about 10 years of settlement the US government finally started taking an interest in establishing its own property laws governing California. However, it’s a wonderful example of how people using property tend to be able to adequately self organize ownership on a homesteading basis.

The second theory is that the central government owns all unsettled property (hence why the US government showed up in California after about a decade). It is not uncommon, historically, for central governments of the world to claim and divvy up land half way around the world from their seat of power, and occasionally without ever even visiting said far off lands.

Once the government claims it owns something, there is little libertarians can do to argue against it. After all, it is the government which maintains a monopoly on violence to enforce it’s diktats.

In fact, many American states and cities derive their names from their private English or Spanish owners who resided in Europe. These European owners wanted to extract wealth from their land, and the best way to do so was the parcel the land out and sell it to settlers. It was in this way of acquiring land through purchase in conjunction with expanding westward, that early American settlers were able to work their out from under the feudal land system.

Other than plantations, which profited and expanded immensely due to the artificially cheap cost of labor from slavery, the majority of early America was reasonably sized plots of land owned by settlers.

As the United States became a Republic, the United States became the ‘rightful’ owner of un-owned land rather than settlers. The so called “public domain”, just by the virtue of the fact that they were the government.

Problems arose after the civil war with all of the unclaimed land (owned by the Federal government) west of the Appalachians. The problem for the government then became, how to parcel out all of this unclaimed land to westward settlers. The temptation now is for the government to hold onto such land forever (since about 1900 held out of use by conservation movements), however, it can also be sold at auction to speculators or granted to political favorites.

The South and the East were against homesteading. The republicans in 1863 passed a homesteading law, not because they were in favor of homesteading as a means of determining land ownership, but because they wanted to win political favor with the west.

Unfortunately, after the civil war the Washington Elite had little understanding of the geographic differences between Virginia and land west of Iowa and refused to expand the 160 acre provision of the homesteading act of 1863. This land provision was far too small for the much more arid western states where vegetation and water were far more scarce.

As a result, there was what can be referred to as ‘land communism’ all over the western US, from about 1860 to 1890. There were no private ranches because the homesteading act was too limiting on a ranchers ability to raise cattle. Such an environment breeds hostility and violence, which is exactly what happened. Ranchers would fight over pastures and water as well as butt heads with farmers and sheep herders.

This is actually the source of much of the romanticized “wild west” violence portrayed in movies and television. It wasn’t because people in the west were uncivilized or particularly prone to violence, it was that they were not allowed private property rights to peacefully use large acreages of land for productive ventures without fear of their neighbor’s encroachment.

When people communally use property but do not own it, there is little incentive to protect and renew it. After all, why should a rancher invest time and capital in seeding grass for his cattle the following year if the fruits of his labor will just be reaped by his neighbor because he has no right to it. If one owns the grassland, he has an economic interest in maintaining the capital value of the ranch. By keeping the land productive, he keeps his ventures profitable.

This is why private foresters do not chop down all of their trees, but rather selectively log certain areas and then renew the trees for future use.

Left wing historians blame these Western property squabbles on capitalism, however, this could not be further from the truth. The violence and disputes was due simply to the fact that there was a failure of the government to permit private ownership of the land and their natural resources which were vital to productive enterprise.

These types of problems are still persisted by government mismanagement of natural resources to this day. For example, western land in the US is still plagued by chronic shortages of water, and the Federal government wastes huge sums of money redirecting water from say Colorado to Arizona, and sell it at 1/10th the cost (subsidized to make up the difference) to farmers. Farmers are required to buy it, because if they don’t use it they don’t get any at all.

Farmers then take this water an uneconomically irrigate and grow crops which the government then pays them not to harvest or buys and destroys. Farmers get subsidized, water infrastructure gets subsidized, the tax payer gets fleeced, and water gets wasted.

Read Part 8 of this Series