Of Land and Liberation in Bahia

It is quite clear that a more locally based self-provisioning economy would require a change in the pattern of land ownership from that which prevails across the world today. This is why I am a strong supporter of land value tax and land reform, both of which are policies necessary for the transition to a bioregional economy. I am currently in the north-east of Brazil in the state of Bahia. Although it was the area first settled by Portuguese colonisers and then fought over by them, the Dutch and the French, much of its land is extremely arid and away from the rivers the possibilities for agriculture are very poor. Salvador, the colonial capital, was also the centre of the slave trade and still has a strong African influence in the culture and the cuisine, and for this reason was the place where the secret martial art of capoeira was developed.

The African and slave history also gave rise to some interesting patterns of community and land ownership. Most directly we have the quilombros, communities of escaped slaves who fled into the interior and set up villages where they reproduced their African culture and created new traditions of shared use of land and systems of commons. Perhaps the experience of slavery had convinced the of the importance not only of freedom but also of distributive justice? Many of these communities survive today and the federal government of Brazil is supporting them in finding ways to legally defend their access to and use of the land.

Since its independence Brazil has, in a limited sense, taken an emancipatory approach to land ownership. If land is left unused then it reverts to the state. Other communities, known as fundos de pasto, have taken advantage of this by moving onto this state-owned land to find the means for a sustainable livelihood. These communities are made up of poor rural farmers without their own land, and people from the cities who cannot make a living there. We met Gilca Oliveira at Salvador University who is part of a research team that has produced a wealth of research on these alternative land-based communities, including those connected to end MST movement.

We also found here a hero to inspire resistance to neoliberalism. Zumbi dos Palmares is commemorated with a statue in one of Salvador's main squares. Zumbi was born in Palmares, the most famous and successful quilombro but was not content until all other slaves had been freed. He fought a violent struggle for emancipation and is today commemorated as the first freedom fighter for African slaves in the Americas with a national holiday in Brazil called the National Day of Black Conscience.
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Enclosure 3.0

The role of McKinsey, the US-based management consultants, in spreading the new gospel of corporate capitalism around the world has been widely noted. A new report now makes clear how the creation of the concept of 'ecosystem services' was always, as some of us have long believed, a step towards the commodification and sale of life itself. In spite of the clear evidence that globalisation has resulted in rising rates of inequality and ecological destruction, the report, called Resource Revolution, argues that what the world needs is more capitalism, not less.

Green economists have long been arguing that the two centuries of focus on labour and capital and the sidelining of land has been a mistake. McKinsey have now caught up, concluding that:

'In the 20th century, governments and businesses didn’t have to worry about resource productivity; they could focus on capital and labor. Over the next 20 years, resources must be at the heart of public policy and business strategy.'

The report provides a range of scarey statistics about rising population and increasing demand for resources, but then reassures readers that these offer tremendous opportunities. Unsurprisingly given its source, the opportunities are for businesses to take control of global assets and then organise their distribution. This is justified by the claim that the McKinsey model can offer the necessary increase in resource productivity.

Although couched in 21st century language, this is precisely the same argument made by the 18th-century improvers, who provided the intellectual justification for the theft of land during the Enclosures. Then, as now, the role of politicians was limited to freeing up the market ('unwinding subsidies'), making capital available, guaranteeing property rights. Oh yes, and providing safety-nets for those 'very poor people' who may lose out to deal with change. Perhaps we could ask McKinsey to hold a public meeting to discuss their findings - I'd like to suggest we book the Speenhamland Village Hall.
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Factors of Production and Fictitious Commodities

When economists address the issue of the production of goods they begin with the concept of ‘factors of production’: these can be thought of as akin to resources, but fundamental productive resources that are necessary to make anything that can later be sold in a market. This is important because, as Polanyi pointed out, labour is not labour until there is a labour-market. Before this momentous transformation people are people or citizens or even workers, but not labour.

Land also undergoes a transformation when it becomes available for sale in a market, although it does not undergo a change of name. What an economist means by land, however, is not what the layman means by land. As a factor production land includes everything that can usefully be extracted from land (including from deep beneath it) to become part of a productive process. Thus ‘the economic notion of resources is strictly anthropocentric. That is, the economic value of any resource is defined by human needs and nothing else’ (Hussen, p. 4). There is no space in this definition for land to have a spiritual or relational importance, what economists would call an ‘intrinsic value’, as it does for many indigenous people, who see the land as their mother.

Polanyi referred to land and labour as ‘fictitious commodities’. Real commodities are ‘objects produced for sale on the market’. Land, by contrast, ‘is only another name for nature, which is not produced by man’ while labour ‘is only another name for a human activity’. To refer to these basic economic elements as equivalent to goods that were produced specifically to be sold he considered to be a fiction.

The third conventional ‘factor of production’, capital, confronts us with even greater definitional problems. Within a market system, some additional force is required to harness the two fundamental factors into useful production: this factor is capital. In everyday discourse, capital might be considered as akin to money, but again it has a different meaning for economists:

‘Capital refers to a class of resources that is produced for the purpose of creating a more efficient production process. In other words, it is the stock of produced items available not for direct consumption, but for further production purposes. Examples include machines, buildings, computers and education (acquired skill).’ (Hussen p. 4)

This is a somewhat confused definition combining intermediate goods and plant with human capacities. Shann Turnbull has suggested that instead we use the phrase ‘procreative assets’ for this type of capital. But any definition along these lines excludes the consideration of money and the power money conveys to acquire productive resources and to encourage people to work to transform them into products.

For Polanyi money was the third basic element of economic production: he addressed the issue of money directly and considered it ‘merely a token of purchasing power which, as a rule, is not produced at all, but comes into being through the mechanism of banking or state finance’. Land and labour are both fictitious commodities in the sense that they are not produced directly for sale, but money is surely an even more fictitious commodity since it is called into being to enable exchange and is maintained by credibility. It therefore has the strongest claim to be a fiction.

Hussen, A. M. (2000), Principles of Environmental Economics: Ecology, Economics and Public Policy (London: Routledge).
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The Church of St. George

A week before the election - and how long ago that seems now - I was happy to accept an invitation to make a presentation to the IU Conference on land issues. The International Union for Land Value Taxation is an interesting organisation with a long pedigree that campaigns under the slogan 'Why is so much wealth in the hands of so few'. Its primary motivation at present is to propagate the policy of land value taxation.

In spite of its obvious appeals in terms of justice and practicality - after all, land cannot be hidden or sent overseas as a means of evading tax, as most other assets can - the taxation of land has not received much attention in recent years. This is partly, I think, because those who argue for it often come from the opposite ends of the left-right spectrum.

On the left end we have people who, following Gerard Winstanley and the Diggers, argue that land is a common wealth and that value extracted from it in tax should be shared between all the citizens of that commonwealth, or nation. On the right end we have those who argue that the absence of a cost for land stifles its efficient exploitation, leading to over-strict planning laws and the like. If people had to pay to own land, they would be sure to get the maximum financial return from it.

Henry George, the radical journalist of some 150 years ago who created a global grassroots campaign for land taxation, seems to have had sympathies with both of these arguments, but that was before the planetary limit was an observable concern. Since the recognition of the limits to growth we would need to work a land tax in conjunction with the planning system to prevent over-exploitation.

I was not received with universal approval at the conference, largely because I had made a speedy attempt to calculate how much a land tax might actually yield in the UK today, and what proportion of the overall tax tax this appeared to be. My assumptions were clearly questionable, but I felt it pointless to discuss theory without having some handle of what the fiscal implications for the UK might be. Although I presented my figures with a lavish quantity of caveats, they were attacked (subsequently) for being treacherous.

However, explanations offered to me as to why I was wrong were theoretical. George argued that a land value tax could be a 'single tax' since all other sources of taxation would ultimately have to be derived from land as the source of all wealth. As a green economist this argument appeals, but it cannot be theoretically upheld today for a couple of reasons.

First, the value that is generated by companies today is not linked to any particular parcel of land and does not derive from it. Most is created from thin air by financial institutions. Second, our consumer lifestyle relies on renting - at extremely cheap prices - productive land in many other countries around the world, to produce our food and the raw products for our clothes and consumer goods. If we truly lived from the value of our own territory we could never sustain the levels of living we now consider our right.

While this undermines the theoretical argument for land value taxation, it also suggests that land value tax might be able to play a crucial role in recreating the link between the value that land can produce and the financially based size of a national economy. It is the breaking of this link that is driving environmental destruction. Limiting the money system and introducing a tax on land values could offer policies to restore it. Tweet

Suits Meet Scythers

My latest issue of The Land has arrived and is filled as usual with excellent things. Perhaps the most encouraging is the serious attempt to find out who owns our most valuable resource - the land itself.

The threatened privatisation of The Land Registry has spurred the Public and Commercial Services union into action and an interesting relationship between land-rights campaigners and anti-privatisation campaigners seems to be developing. The first evidence is a report presenting An Alternative Vision of the Land Registry.

The report in itself is fairly unoriginal - a rehearsal of arguments about the disaster that is New Public Management - but what is interesting, and rather impressive, is that way that the PCS has identified a way of keeping their members' jobs by massively increasing their workload.

The first step to introducing a Land Value Tax would have to be a cadastral survey - a massive data-gathering exercise to establish who actually owns the rolling acres we all feel to be our national heritage. The fact that this information needs to be discovered is what brings the land campaigners - who want redistribution - and the land registry civil servants - who want jobs - together.

Simon Fairlie, bless him, is leaving nothing to chance and his cynical view of politics is likely to be proved right. In typical DIY mode, Chapter 7 are launching their own 'Map Your Local Landowner' award, with prizes of £400 for 'the best cadastral maps to show how landownership is distributed within any given county, district, town, village or parish.' If they receive enough entries they'll be able to piece the map together themselves in the Flaxdrayton Potato Store. If you feel inspired you can contact them on: chapter7@tlio.org.uk Tweet

Not Earning but Owning

There are two important questions that keep recurring in current debates about the resilience of our economy: 'Can Britain Feed Itself?' and 'Who Owns Britain?'. The first is the title of an excellent study by Simon Fairlie in The Land, which reported his back-of-an-envelope calculations about how we might survive if our post-colonial trading links with the rest of the world were suddenly cut.

As I consider these two questions I am developing a particular fondness for the word 'requisition'. Like the landless peasants of Brazil, we should use the concept of usufruct to prevent the rentier landlords from depriving us of land for homes, growing plots, and useful wastes. Hugh Fearnley-Whittingstall's Landshare idea is all well and good, but, as an old Etonian, he is unlikely to challenge the ruling class and - as ever - access to land is not the point. It is ownership that really matters.

Here we come to Kevin Cahill, whose weighty but fascinating book Who Owns Britain?, first published in 2001, is the product of another man's healthy obsession. It is the best account we have of how the land that should be our common treasury is actually parcelled out between us - well between very few of us as it turns out. It is a fairly patchy account, since 1066 and 1872 are the last two dates when a proper cadastral survey of the country was undertaken.

My own county of Gloucestershire is dominated by large estates. I've been somewhat distracted by Cahill's excellent book and have checked out that of Lord Sudeley (Merlin Charles Sainthill Hanbury-Tracy), who I once shared a platform with at the House of Lords. His wikipedia entry fills me with a combination of hilarity and rage. His pedigree truly is Eton, Oxford and the Guards. I can't be sure whether I am pleased or not that he has now had to sell the family seat to Damien Hirst.

Sudeley's peerage arose from the political activities of plain John Hanbury (he adopted the 'Tracy' suffix as his career developed), whose father made his money in the Pontypool Ironworks. My great-grandfather was just down the road in Merthyr, but on the other end of the class system. Hanbury became MP for Tewkesbury and was later given a hereditary seat in the Lords. This is how power, wealth and most importantly land are allocated in our far from meritocratic society.

We don't know what we could grow on our land and we don't know who owns it. These two issues are obviously closely connected. Before the enclosures or 'lowland clearances' as we should really call them took place in the 17th and 18th centuries (these are profiled in depth in the latest issue of The Land), whether or not we could feed ourselves was a question we had it in our power to answer, both as individuals and as communities who shared common land. This made us free in a sense that most of us today cannot even imagine; and that explains why the question about who owns our land today is so difficult to answer. Tweet

Wind Power is Our Mutual Friend

Bob Crow, whose RMT union is representing the workers occupying the Vestas wind turbine factory on the Isle of Wight, asks with understandable frustration why money can be found to keep RBS afloat when the much smaller sum that would be needed to keep this industry of the future in Britain is denied. The answer is simple if unpalatable: the interests of business prevail over those of the people. We might say that capital is dominant and labour discounted.

From a green economics perspective we might look at this in different terms. Our current economy is dominated by money; a green economy would have energy as its central value. If you remove the distorting lens of a capitalist vision the decision to premit the redundancy of skilled workers who produce machinery that can turn moving air into energy is absurd.

It almost makes you join Bob Crow in yearning for the days when there was political direction over vital areas of public life, whether energy, water, or transport. Certainly, many whose own lives have been dedicated to the political freedom of others have looked enviously at the rapid progress towards a sufficiency economy that Cuba made following the ending of cheap oil imports from the Soviet Union. And China seems best placed to shift its economy rapidly towards a low-carbon future precisely because it does not have to worry about selling these changes to a sceptical electorate.

But the answer is not to sign away from our hard-won right to power over our lives, or to return to the days of public ownership and central planning, it is rather to call for ownership and control at the local level. Vestas offers a perfect example of how a mutual future would achieve the advantages of rapid change without the political opposition that arises when people feel they are powerless pawns in another move that is for the benefit of others.

It seems incredible that the market for wind turbines in the UK is too small to keep the plant in production. The reason is the slow rate of agreement on the siting of these desperately needed energy plants because of local planning opposition. Communities will not agree to having windfarms in their 'view' when the profits are extracted and they gain nothing in return. If the turbines are community owned, research indicates that this opposition evaporates.

And if Vestas central - and how strange it feels that the bad guys in this particular story are Scandinavian - has no need of this plant because it is receiving a better 'green new deal' from President Obama, then it should be passed on to the skilled engineeers and lathe-turners who are the heart of the company. Like the workers at Tower Colliery in South Wales, there is no doubt that they will be able to keep the factory going without the dubious skills of managers and money-men.

There are numerous reasons why capitalism is unsustainable but perhaps the most pressing is that, in pitting the interests of labour against those of capital, it slows the process of change. In a time when a rapid transition to a low-carbon economy is essential this could truly be a fatal flaw. As the new Co-operative advert says, the answer really is blowing in the wind. Tweet

Domesday survey to avert doomsday

I've just spent a sublime half hour in Tewkesbury Abbey for choral evensong. There were another four people enjoying the transcendently beautiful singing, from the men's voices of the Schola Cantorum, who outnumbered us by about two to one. This tradition of singing evening prayers has been going on in our cathedrals for around a thousand years, kept alive by the dedication of those who value the ethereal rather than the financial. Once might say the same about our Gloucestershire apple varieties and old spot pigs. In these days of crisis and rapid change I find these traditions deeply comforting.

The Abbey building dates back to 1121, before the Medieval architects discovered the flying buttress, or whatever else it was that allowed them to build enormous height without the support of hefty pillars. Its style, therefore, is sold, stocky and reassuring. It was built just thirty-five years after the Domesday Book was first published.

The domesday survey was compiled by William the Conquerer so that he could assess the exact value of the land he had just invaded. This was to be his source of power and wealth so he needed to know, virtually down to the last chicken, exactly how much he had to bribe the barons with and to extort taxes from. I doubt if there has been such a thorough survey of our natural resources since that time.

The name 'domesday book' did not come into usage until the late 12th century and I wonder whether it was a statement on the devastating effect on the lives of the English people caused by the shift from the essentially egalitarian Saxon farming system--based on strip farming and common rights to land use--to the fedual system. Under feudalism the king owned all land, which he could give to barons who would then live without having to work. Their tenants owed them both farmwork and war-work.

1066 is remembered as an important date because of the battles that were fought in that year. The fundamental shift in economic structure and power is rarely taught in schools. Yet it was at this time that the focus of the economy changed to be about the financial rather than subsistence value of land. As we move towards an economy that is more self-sufficient in food we need to have similarly detailed knowledge of the land that is available to us and what purposes it could serve in terms of grazing land, arable land, forestry and so on. The land that we discover should be once again a common treasury for the people of Britain to feed themselves from. It is about time we reversed nearly a thousand years of feudal servitude. Tweet

Rents and tears

I recently had the pleasure of sharing a platform with David Boyle of the New Economics Foundation, and we will be together again on Thursday. The focus of interest for both of us, and for those who invite us to speak, is the strange death of the real economy in the UK and the need to rebuild and revive our local economies.

David edits NEF's newsletter radical economics and has an article in the most recent issue called 'The Unbearably Empty Economy'. He highlights the hollowing out of the British economy so that businesses are 'little more than packaging for computer programmes, call centres and contract staff, while the corporations have divested themselves of most of their skills and activities except financial services'. He also asked the question: 'When was the last time you were in a shop where the person serving you knew more about the product that you did yourself?'

His concern was the loss of meaning in the economy but the more serious aspect is the loss of ownership and control. The economy is now being driven by a very small number of very large investors simpy as a mechanism to extract maximum wealth for them. This is the real 'unbearable lightness' at the heart of 21st century capitalism. The classical economists would have despised this from of economy, since they recognised the rentier class as parasites who obstructed useful economic activity. But now, whether by gambling on the stock-market or watching our house prices rise, we are all being encouraged to ape the rentier mentality rather than engaging in useful productive activity.

The latest wheeze of the late-capitalist wizards is the private equity company which profits by investing borrowed money. Public listed companies, those whose stock is sold on stock markets, are subject to some degree of regulation and auditing. Life is easier for the footloose private equity company, usually headed up by a dashing young Turk, who can persuade a bank to lend him a laughable sum of money which he uses to buy out a public company. He can then sell the assets of the company, or rent them back to the main business, in the case of shops, for example. The cash thus realised is used to pay off the loan, leaving the private equity company owning the real business.

Recently bastions of our economy such as the AA (formerly a mutual), Debenhams and NCP have been hollowed out in this way. Now the private equity players are aiming at Sainsburys, an attractive target because of its large land bank, and possibly British Airways. Because such buyouts are supported by borrowing rather than capital investment there are also huge tax advantages involved in acquiring assets in this way.

This is just the most recent form of asset-stripping, sucking money out of the real economy. We need to respond urgently and our response needs to be in the form of bringing about mutual or community ownership. This is particularly important in the case of land, which has become a target of speculation recently and has doubled in value over the past year. We need to work to build up a network of Community Land Trusts, and on the production side to establish and maintain our own businesses as co-operatives, and use our consumer power to support the co-operatives that others work for.

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