Roots Revolution

Karl FitzgeraldInternational1 Comment

Steve Wall (UK)

1985

For me, there are times when spreading the green gospel can seem like wading up to your nose in a sea of apathy and willful ignorance, buoyed up solely by a slowly deflating faith in human nature. Sometimes it seems as if nothing short of a major catastrophe will penetrate the thick-skulled silent majority’s complacency, upon which they will bestir their feeble minds and demand to know why they weren’t warned. Then again, learning of yet another ecological cock-up, I sometimes feel if only we could accidentally release one of our marvellous new lethal diseases that only affect humans, is virulent, incurable and unbelievably contagious, what a happy place this earth would be; but it passes.

Then I wonder why it should be so. As a child, I remember being taught how the daring explorer, newly stepping onto some distant shore, could lay claim to an entire country, merely by plunging a flagpole into the beach and saying, in effect, “I was here first.” It is quite possible to emerge from eleven years of compulsory education still believing in such fairy tales, which effectively mask the real process shaping the world we live in. History shows nearly all movements for change concentrated in active, vociferous minorities, usually aligned with economic factions, but not always so. (The frequent peasants’ revolts bore much of the character of riots rather than revolution).

To paraphrase, the apathetic are always with us. Yet this isn’t true when we travel further back into tribal society. Nineteenth century ethnological research is crammed with revealing accounts of tribal self-government, showing how we organised ourselves before we began to worship priests, politicians and princes. Greens are fond of buzzwords like decentralisation, responsibility for the earth, local democracy, community etc., yet very few seem to have any concrete ideas as to how to get there from here.

“Why don’t our politicians make the world a better place for us,” is the frequent pathetic bleat, heard all too often, both in and out of the movement. Is this not the self same leaders-and-led politics that greens claim to replace? This article is my attempt to cast off the sheep’s clothing.

Personally, I’ve learnt more about revolution from my garden than anywhere else. Watching and working the soil, the many parallels between the processes of birth, health, decay and inter- relationship taking place in the garden, and those in human society, have convinced me that the only true and lasting changes must come from the roots up. In human terms, not the politics of leaders, but the experience of each individual in the running and living of their own lives. If you have nothing to be responsible for, you have little interest in the organisation of your needs. That apathy allows others to gain power over you by their assuming responsibility for your needs, power and responsibility being the two inseparable faces of the same coin.

Today most people have abdicated all responsibility for even their most basic needs, such as finding their own work, food, building their own shelter, making their own clothes, maintaining their own health, educating their own children; then turn around and wonder why they are treated as a commodity, why they have no influence in modern society. Then too, there is the seemingly inescapable shadow-face of civilisation; alcoholism, child abuse, the abuse of women, vandalism, mugging, abuse of privilege, corporate greed, racial hatred; the desperate catalogue of a society unnaturally caged in, the human zoo plucking out its own fur in vicious fistfuls. The labyrinthine complexity of our society seems to defy understanding, leaving us at the mercy of a whole gamut of enthusiastic saviours, from the therapist to the jackboot, each trading on little more than their own prejudices. Yet as a healthy person arises from a healthy environment, so a healthy plant grows from a healthy soil; then a healthy society must arise from – what? Strangely simple though it may seem, the structure of any society arises from its patterns of use and access to land. We do not have a healthy pattern of land use.

This crucial position of land and its ownership in modern society is a peculiarly misunderstood one.

Today, the ownership of the earth, a concept once universally derided as ludicrous and immoral, is now not only honoured, but feverishly worshipped in every land. Billions grovel before tyrants who dispense morsels of the planet as rewards to their chosen servants, those deemed to serve both well and willingly. Any who are surplus to requirements, or unable to serve through age or disability are thrown aside, to perish in mind and body. The miserable few hundred square yards of earth that could support them, is denied them. The sacred and ‘just’ law of civilisation decrees that if we cannot pay for the earth, we must suffer the consequences, homelessness, hunger, sickness and death. A law obeyed in full by millions daily. The root cause of much of the world’ s misery, poverty, war, unemployment and famine, can be traced directly back to this same single abuse, i.e. the unlimited individual appropriation of the fixed resource of land, the sole source of all life. Any serious seeker of change, unless they first address this primary injustice, is a mere dilettante of revolution, and betrays all hope of achieving real freedom for anybody.

Harsh words, but sadly necessary. Even though these are brutally inescapable economic realities world-wide, they are so deeply entrenched in the fabric of every society, that we have become blinded to their true significance by that very familiarity. These are the simple facts: If you have no land to live from, you are dependent on money to purchase the products of the land; if you have no money to live from, you depend on employment; if you have no employment, then dependent on the State; if the State refuses you, you beg for the charity of the rich; no charity, you steal or die. Such is the chain which binds us to each other, and to the land. It is the entire spectrum of human economic existence, and none can escape it. A moment’s thought reveals it is the rich, who by rationing the land, humanity’s life-support system, actively create the helpless dependence in the rest of us on money, employment etc.

How has this come about?

Historically at sword point; now maintained by a simple legal fiction, masquerading as Mosaic Law.

No matter how far our technology removes us from it, and refines it’s products, everything from computers to satellites, cars, ICBMs and TV’s are all products of the land. Without exception, everything we use and consume either grows in the ground, or lies beneath it. In S. Africa the white minority own 86% of the land; in America (USA), 3% of the population own an incredible 95% of the land; in El Salvador 2% own 60% of the land; in Britain as a whole, 2% own 74% of the land whilst 52% of Scotland is owned by a mere 350 families and institutions. Whilst the land, the only true source of independence, remains thus imprisoned, money is a mirage, employment is slavery, democracy is privilege, charity is injustice. We may no longer be hanged for stealing loaves of bread in dire necessity, but that too is only a legal fiction, a paper privilege often withdrawn in times of war and scarcity.

The “impartial” law of this nation, and of the world, states that although no mortal created the earth, and although no individual creates the rental value of the soil, nevertheless we shall all pay our rents to whoever is rich enough to demand them from us. Rent in this sense is not the mere cost of a home, but the wealth gathered to him who can say “This is my land, or my oil-field, my gold-reef, my mineral deposit, my sea, and you must pay me if you wish to use them.” He will then effortlessly become richer, enabling him to purchase the legal right to demand further rents, making him yet richer still, so he can collect even more rents, making him……..the land monopolist. Simple isn’t it? Money isn’t power. It’s the legal right to purchase absolute ownership of natural resources, which is power. Ultimate power. Those who achieve wealth by the production of goods and services alone, are but the servants of those who own the earth, and are truly paupers by comparison. (Thus the financial might of the multinational conglomerate is due to their outright [land] ownership of the raw materials, together with lucrative land speculation, and massive up-market office space rentals, as much as actual production.)

Once started, this is a process which tends inevitably towards ever greater monopolies concentrated in the hands of ever fewer individual bodies, and since none of us can survive without making use of natural resources, we find ourselves increasingly powerless and insignificant beneath an ever more monolithic and anonymous tyrant. Why is there a dictatorial centralised government ruling in every nation? Why is there a world-wide movement towards ever larger economic units, entailing even the merger of sovereign states, as within the Common Market, and probably as the eventual fruit of East-West rapprochement? Whom does this really benefit? Why does famine-aid achieve nothing long-term; why is every wage increase met with a corresponding rise in the cost of living? Because the raw materials of life are controlled and priced by the tightest and most vicious monopoly known to history.

Because the land monopolist has ‘gotten in on the ground floor’, the cost of his demands are felt throughout the world economy. Every shop, every house, every factory and workplace stands on land which has to be bought or rented from the monopolist. Every manufactured item is made from raw materials whose cost incorporates the rental of the land they were produced from and/or extraction rights. Every service industry uses manufactured items and a workplace. All food is grown in the monopolist’s soil. Every single time money changes hands, it includes a handout for the monopolist. A society which allows the land to be kidnapped from under its feet in this way, cannot honestly claim to represent freedom, economic or political. Its people are a crop, harvested to the bone by the privileged few in every nation.

Uproot a tomato plant and it dies

Since the power of monopoly resides solely in his legal ability to collect the entire rental value of land to himself, to destroy it utterly it is only necessary for government to collect the rental value created by the bare land alone, wholly to the public purse. (This government MUST be decentralised, if we are not simply to exchange one monopoly for another, equally if not more dictatorial, as under State Communism). The greens have aptly christened this system of public finance, Community Ground Rent (CGR), proposing it as a replacement for the present system of taxing productive activity. Taxation as anciently conceived and currently practised, is the States infinitely flexible weapon for selectively oppressing its citizens, according to how it views its own priorities and objectives. Hardly a recipe for democracy or justice. In the rental value of unimproved (i.e. bare) land though, CGR has a finite, un-evadable and unique natural base, a value created by the democratic and self-adjusting demand of the whole community.

The first hurdle, in grasping the mechanics of this original system for equalising opportunity in life, is to realise that inhabited land acquires a distinct, measurable value entirely separate from the use made, or developed upon, that land. The most blatant evidence for this is the wide differential in housing prices across Britain, due entirely to unimproved land values, since the cost of construction varies but little from one place to another. Because this is a community created value, over which the monopolist can have no direct control, he is forced to resort to indirect manipulation. Since it is a demand-led value, the oldest trick in the book is to hoard supply, forcing prices up, a technique practised to obscenity with housing land today.

But Britain is overpopulated we are told

(by whom?). Try this: At a density of only eight dwellings, housing thirty two persons per acre (urban density is typically around two to three hundred per acre), the entire U.K. population could be housed within a 62 mile diameter circle, complete with 100 foot gardens in each dwelling and all service roads. We could all fit comfortably into N. Ireland three times over. It’s not the space we’re short of, it’s the land monopoly we’re needing shot of, and how.

Assuming you own it, think how much your home cost. Depending on where you live, up to 65% of that price is what you paid for the land underneath it. Think of a street full of houses, add up the value of the land under them all, then think of a whole city full of houses, factories, shops etc., add them up. Instead of being privately pocketed, creating poverty and inflation, imagine that money, as ground rents, funding hospitals, schools, welfare services, old age pensions. It could be done, CGR could replace all taxes. It can easily be locally administered, passing onto central executives only what the locality deemed necessary to fund those central functions. Revenue, and thus decision-making and accountability, would be turned on its head – decentralisation a reality, rather than an election ploy.

As CGR falls only on the unimproved land value, it must be paid for all land regardless of its use or development status. These more properly belong with local planning authorities, sensitive to local needs. By this means, universal liability, CGR would unlock the millions of acres fenced away as private estates, empty houses and factories, speculative holdings etc. Wastefully used, these will become an unbearable financial burden to their proprietors, instead of being the license to live at your neighbours expense, they now are. By abolishing income tax, and expensive farming subsidies, which are anyway almost entirely pocketed by landowners, not working farmers (the average British family pays £10.50 a week extra to support EEC food subsides), and by ending the inflated monopoly value of land: economic, sustainable farming would be brought within the reach of more people, reducing food prices and increasing quality. Similarly, housing costs and business overheads would be dramatically reduced, making self-employment a more attractive option, releasing the energy and potential millions in money of poor people now trapped and pigeon-holed as ‘not needed on voyage’ by out great western ‘democracy.’

Millions of people no longer caught in a treadmill, endlessly trying to keep ahead of the debt man, simply to live. Land freely available at its true cost to any who can make good use of it, or who just wish to live more directly from it. Local government actually able to decide local priorities AND possessing the funds to implement those decisions without dictatorship from Westminster. Central government totally dependent on hand ups from local authorities, no central treasury forking out billions on state censorship and surveillance, secret projects, status weapons systems etc. No income tax, VAT, CAP, rates, only one single public charge, liability limited to the amount of the earth you fence off to call your own. A land where freedom could take a firm root.

Like all practical radical proposals, the vested interests, by filibuster and ridicule, violently oppose even the discussion of CGR and its potential, having long known and feared in it their nemesis. Their tame economists dismiss it as irrelevant without examination, since examination could not but demonstrate its validity. The overwhelming majority would substantially gain from its implementation, so public ignorance is the only safeguard. A widespread information campaign, high-lighting CGR as a real alternative to the medieval poll-tax proposals, could find much support, sufficient to establish a basis in local government funding, as already exists in several countries which could later be expanded to fulfill its radical potential.

Remember, this is no new imposition, but a radical redistribution. Right now, with every single penny you spend, the community already pays its ground rent, straight into the well-lined pockets of the select band who, quite simply, are charging you the entrance fee to life on planet earth.

I hope this article has shown not only that our bodies, and all our possessions, are literally created of the soil, but that our laws and morals as to who should use the soil and how, also create, with equal finality, the skeletal framework around which our economic potential, and social tissue forms itself. Humanity may shake its technological fist in defiance, but the earth was, and will always, be here first. Land is still the root of all being; ignoring its realities can only lead to delusion and blind despair.

The tollbooths clustered beneath that ancient flag, barring the road up from the beach need dismantling, if humanity is ever going to advance beyond the discovery of slavery, and the consecration of greed, as the basis for civilisation.

Land! Peace! Freedom!

Karl FitzgeraldInternationalLeave a Comment

Christopher M. Hussey 1997

There are three inseparable components of a lasting settlement to Ulster’s and Ireland’s travail: land, peace, and freedom. Like interconnected chain links, these three come as a job lot, together or not at all.

All wars, fair or foul, are ultimately land wars, and, unless a stalemate ensues, all war settlements, fair or foul, involve land transfers. Ireland’s case is no exception. Indeed, everywhere on Ulster’s fraught socio-political landscape, past and present, you will see land.

Ascendancy and Descendancy

The plantation of Ulster involved the dispossession of the gaelic clans and the privatisation by planters of the previously free common lands. This was in a natural environment (rainy, uneven terrain, mild winters) that favoured a pastoralist economy and a mutualist tribalist civil society.

Because land values are publicly created privately appropriated wealth, privatised land entails a hierarchy of privilege. Because such land is assignable and because land values rise inexorably with economic development, this hierarchy persists over time.

In a true clan, land privileges are shared equally. But because Ulster’s land is not shared equally, protestant ascendancy and clan solidarity are maintained by rigidly enforced preferential employment of the protestant landless. Descendancy is maintained by the structural protestant land exaction on catholic labour and capital, and by the preferential exclusion of catholics from employment.

Should the land monopoly in Ulster shift to catholic ownership, as would most certainly be attempted, legally and illegally, in an attempted united Ireland, the relative positions of the two clans would thereby also invert.

Privatised land has thus created two roles for Irish people in their homeland – ascendancy or descendancy. Protestant ascendancy in Ulster, catholic ascendancy in a united Ireland. Privatised land has divided the people and the island of Ireland.

This english land monopoly system has made a devil’s brew of god’s creation in Ireland. With its land unfree, neither Ulster nor a united Ireland could ever be at peace for long.

Not an Inch

On the low value marginal lands and with the growth of the state, of course, this black and white picture shades into grey at the edges. Recent decades have also seen the emergence of a privileged state sector catholic middle class (‘fair employment’). But these recent changes have been imposed on Ulster in conditions of military occupation and generous cross channel exchequer transfers. If circumstances changed, this new shape of Ulster society would be rapidly recast into its traditional mould in the white heat of traditional pogrom.

This case hardened traditional mould has two facets – tribalism and hierarchy. The clan tribalism is a direct result of the natural environment, and is as Irish and as green as grass. The hierarchy is a result of the inheritable privilege concentration that accompanies the alien land monopoly.

All extant approaches support or ignore the facet that is alien, inappropriate and removable; and focus their critique on the facet that is local, natural and unalterable. So it is with sloganeering socialism, pious secularism, Wolfe Tone republicanism, liberal individualism and others.

The protestant marching pageants are vivid enactments of the situation. These marches explicitly celebrate the continuing Williamite land settlement, and, at least implicitly, the consequential continuing dispossession of the catholic proletariat. The respectable, virtuous, landed officer gentlemen lead in front, followed by their trusty enforcers – the proletarian liveried militaristic bandsmen. The drums play the same old simple tunes and convey the same old simple messages – no surrender, not an inch, what we have we hold.

The crucial point is that it is not an inborn malicious supremacism that causes protestant ascendancy. Rather is it an internal protestant egalitarianism and supportiveness that, in the context of land monopoly, necessitates catholic exclusion. Similarly it is a rage for justice that motivates catholic dissent and insurgency. But in the context of land monopoly, this insurgency must needs develop into an inverted ascendancy in any neo-colonialist united Ireland

1916 and Partition

Land and land tenure have always lain at the heart of the national question. The Act of Union of 1801 was enacted by the protestant landed proprietors to copperfasten cross channel military enforcement of their land titles against a developing catholic challenge. Following the Land War, c.1900, most land in the south was transferred to a new neo-colonialist class of catholic landed proprietors. Thereby ‘home rule’ secessionism for the south became essentially non contentious in Britain and throughout Ireland.

The 1916 Rising was thus prompted by a desire specifically to thwart the partition proposals. James Connolly and his colleagues correctly understood that partition would entrench catholic landed proprietorship in the south and protestant landed proprietorship in the north, and poverty and black reaction throughout Ireland. Indeed the future prostration of the Irish proletariat, catholic and protestant, was, at that moment, being presaged on the battlefields of the Great War.

That was why, with their life’s blood, they proclaimed “the right of the people of Ireland to the ownership of Ireland” as well as sovereignty and equal treatment in this, that and everything.

When the partition was enacted, c.1920, the border was drawn where it was, in order to balance the maximising of protestant land holdings against the minimising of possible catholic challenge

In brief, therefore, prior to partition, Irish unity and separatism would have entailed and guaranteed the restoration of the gaelic system of common land tenure. But the partition having been enacted, the subsequent achievement of Irish unity and separatism entailed the prior restoration of the gaelic system on both sides of the border.

The Spires of Ulster

The primary provisions of Bunreacht na hEireann are straightforward land claims. While the British state, in its inimitable way, shows a residual but abiding interest even in southern Irish land with territorial royal titles and insignia, and with a continuing all Ireland participation in its legislature by titled lords of conquered Irish land.

Thus the assertions of differing democratic and national rights and identities, the displaying of flags and emblems, the persistent conflicts over symbolic ‘turf’, the non existence of intercommunity transfers of unimproved land, all show that real land is the real issue at stake.

The religious labels and allegiances of the different clans are most illustrative. God or nature is the creator of all land, of the earth; and religion is the intermediary between god and man. Therefore the contending claims of divine orthodoxy and the competing spires of Ulster, competing to attract the precious spark of creation, re-echo the challenged legitimacy of rival land claims.

The present troubles started in Derry, initially in protest at the undue political influence of its protestant landowners. The electoral gerrymander ended but the troubles did not, suggesting a deeper resentment at the undue conquest derived economic privileges of the same landowners.

In summary therefore, every possible indicator, past or present, tells us that any Ulster settlement that ignores the land would be all at sea from the start, would drift helplessly and soon would sink without trace.

Axe to the Root

The situation in Ulster cries out for an axe to be applied to the root of the conquest. This can best be done by taxing land, urban and rural, until it is virtually free, by rolling back the taxes on labour and capital, by free markets and a minimal state, and by equal exchequer payments to all citizens.

These policies would guarantee permanently full employment, high living standards and an equal shareout of the socially created wealth – privilege – that would otherwise adhere to appropriated land and other monopolies.

This structural equality would minimise the areas of political discretion and control, and hence of political friction. It would root the peace in creation itself, in the indestructible life sustaining powers of the land.

Thus could be reinstituted the gaelic system of common land and result in free land, free markets, free and equal citizens enjoying equal natural rights. Thus could be reinstituted the egalitarian economic basis of clan tribalism. So that citizenship would replace both ascendancy and descendancy, both proletarianism and privilege.

Core of the Separatist Case

These proposals are tailored to fit the local political topography and specific requirements of Ulster. The very fact that Ulster has these specific requirements and topography, and that these are entirely different to Britain’s, is the core of the separatist case.

In the course of being implemented, they would entail a tax, revenue, monetary, economic, administrative and political system quite different and quite separate from Britain.

On both sides of the channel perceptions of the necessity and desirability of a continuing union could only decline. Meanwhile a breaking of the land monopoly in the south and a growing convergence of social systems would mean that, north and south, perceptions of the necessity and desirability of the border would decline.

Pie in the Sky?

Would those proposals gain widespread acceptance or remain pie in the sky? Let us tease out some hopeful points.

They can be introduced by a programme that is largely voluntary .

Those who have differentially borne the brunt of the suffering, the landless of both traditions, would differentially benefit from a general regaining of their natural inheritance.

From a republican point of view, they would initiate the realisation of the 1916 ideal, a realisation that, if the republicans boxed clever, would be inexorable and rapid.

From a protestant perspective, they would end suspicion of ‘concession creep’ and give a precision and a limit to catholic demands.

Quite unlike positive discrimination (‘fair employment’), more individual protestants would benefit than would individual catholics.

It should be recalled that not long into the present troubles, the then protestant political leadership of landed grandees was unceremoniously expropriated by more plebeian voices.

Both religious traditions have produced advocates of like proposals. Thomas Chalmers, a founder of the Free Kirk, was an advocate of free land. Patrick Edward Dove, a vindicator of Scots Presbyterianism, and, in a masterly exposition, Thomas Nulty, bishop of Meath, both put forward essentially identical proposals to those here.

Of course the pertinent question is why such voices have remained so much alone. After all, the ‘good news’ of the eponymous ‘ gospels’ is derived from the communistic Mosaic manifesto delivered by the messiah Jesus at his first public discourse. This was: “Good news to the poor”, “the prisoners”, “the oppressed” (the landless), “proclaim the year of the Lord’s favour” (the equal restoration to all of any alienated land inheritance – the tradition of the jubilee year).

Who knows but that some highly peculiar land titles dating from the year dot may yet be located. Until then we can safely say that land monopoly is anti-god and antichrist and is the antithesis of ‘good news’.

Blind Alleys and Blatherskite

Some people entertain the notion that demographic changes will enable peaceful democratic evolution favourable to catholics to emerge. This notion is a delusion and an illusion.

Should the demographic balance tilt towards catholics there would be, without a shadow of doubt, an unofficial response in the form of an ethnic cleansing pogrom and an official response in the form of a redrawn border. Starting, lets say, with the River Foyle in Derry. ‘The people of Northern Ireland’ will decide matters, we are told. But who decides what Northern Ireland is? And who decides who the people in Northern Ireland are?

‘Pure’ nationalists and indeed ‘pure’ unionists are wont to argue that sovereignty alone is at issue. Were this the case, would the fact that all interests involved have somewhat pooled their sovereignty in the European Union, not have had some relevance on the conflict?

Were sovereignty the only issue, why then would all nationalist parties term themselves ‘socialist’? And why would all without exception exclude the fat of the land from their socialisation proposals? Is not this exclusion precisely the obverse of the objectives of the revered patriots?

Is this not a code for the retention of the conquest derived land monopoly and its transfer to catholic proprietorship? Is this not a ‘cute hoor’ formula for neo-colonialist secession rather than the communistic gaelic separatism of Fintan Lalor, the Fenians, Michael Davitt and the 1916 martyrs?

Nor will any increased application of state socialism help. Not only would such lead to a growing impoverishment as every elsewhere, but in Ulster, stretching the span of political control would entail extending the areas of political conflict. Combining total state monopoly with the autocracy and serfdom of the Russian steppes (leninism, stalinism, trotskyism) would merely combine maximum poverty and repression with maximum blatherskite.

Desperately seeking some enlightenment or involvement from the USA or Europe is another blind alley. Like Britain itself, these countries are individualist societies where land monopoly is king and who have long histories of bellicose land grabbing. So that a neutral and benevolent goodwill is the very best contribution they could ever make.

A New ‘New Departure’

All pressure from official circles on the republican insurgency is for an internal Ulster settlement – the ‘talks process’ being a proto Stormont. But a reconstituted Stormont with the protestant land monopoly intact leaves protestant ascendancy intact.

Apart from the dubious benefit of the right to marry the Prince of Wales, equal rights at law for catholics (‘civil rights’) have been in force since Catholic Emancipation in 1829. So that a settlement that merely guaranteed ‘civil rights’ and the proportionate allocation of ministerial appointments to catholics (‘power sharing’) would effect little change. And would render the heavy sacrifices made by the republican militants to have been unnecessary and valueless.

Meanwhile a second pressure, this time from the grass roots, is for a significant result and against the arriviste respectability of republican precedent. The published sympathy and solidarity notices tell the tale of people who most desperately want the sacrifice of life or liberty, made by their loved ones, not to have been wasted.

The only way these two pressures can be reconciled is by an orientation towards the land of Ireland – as with the ‘new departure ‘ of fenian times.

The previous politico military strategy of attempting to persuade or coerce the British into coercing the protestants into a united Ireland is a total and proven cul de sac. A clean break British withdrawal or indeed a British coerced united Ireland would lead, in the heel of the hunt, to a repartition and to a refreshed ‘carnival of reaction’, north and south. The no war no peace strategy – a recognition of stalemate – can only be an unstable interregnum.

However, a new ‘new departure’ modelled on the fenian precedent would yield a spectacular outcome for the republican insurgency, for Ulster and for Ireland. Another possible outcome, also with republican precedents aplenty, is an outbreak of recriminations, born of disappointment, and of feuding, born of bitterness.

Freedom and Separatism

But as well as an economic strategy, the separatist aim of a united gaelic Ireland needs a complementary political strategy. Just as there is no need to re-invent the wheel, so too the original Sinn Fein strategy of Arthur Griffith can be reworked to suit the situation. This tried and trusty policy was for the elected Irish parliamentarians to abstain from Westminster and participate in Dail Eireann.

The suspension or termination of this actual or projected nationalist participation in the present Dail ‘Eireann’ could then be used as a barter for the suspension or termination of unionist participation.

What Happened To Japan

Karl FitzgeraldInternationalLeave a Comment

Investor’s Business Daily Feb 27, 1998 reports:

“Asia’s largest economy is in trouble

A long-awaited stimulus package announced last Friday (Feb 20) showed once again why Japan’s model of government-business collusion cannot thrive in a free market.

The package did not cut taxes or try to ease the burden of regulations on the Japanese. Instead, the govt proposes letting Japanese financial institutions package bad loans and sell them as securities. The govt might then buy them up in a bid to stimulate the economy…

A January estimate pegged the amount of bad loans at Japanese banks as worth about 15% of GDP…”

Japan’s banks are under water by an amount approximately equal to their annual government spending, thus dwarfing the American Savings and Loan Crisis. The IBD article goes on to rail against subsidies and protectionism, and calls for further deregulation of the financial sector.

Now, certainly, ongoing protectionism causes problems, as does any restraint of free trade. But, on the other hand, financial deregulation of Japan’s banks, coupled with unwise lending practices, played a major role in creating the overvaluations that preceded meltdown. So, IBD really misses the boat on finding a solution to the Asian Crisis. But then, so does most of the financial profession, including those who run the International Monetary Fund.

WHATEVER HAPPENED TO JAPAN!?

During the 1980’s, Japan was seen as a veritable, and venerable economic miracle. Many Americans were convinced that we had been permanently overtaken by Japan, competitively–and they sought to emulate Japanese success by instituting MITI-style govt-business collusion. Fortunately, most of these efforts were rebuffed, and America has done fairly well with comparatively free trade, despite unexciting “Clinton- growth rates.” But there is no denying that the US Dollar has become the pre-eminent currency of the global economy, and the US stock market the safe-house of global capital. Meanwhile, Japan has fallen on hard times.

As it turns out, Japan was the “front domino” of the Asian economies; the first to fall. While other Asian nations continued to grow at double-digit rates well into the 1990’s, Japan suffered a stock market collapse, zero growth, and a prolonged recession which has even resisted the stimulus of lending rates pegged at ~0%! Imagine free money! And still no capital-spending boom!

Rather than being pulled out of this recession by its local trading partners, the Japanese Plague has spread outward. It has spread to free-wheeling Thailand, which was the most “laissez faire” of the group. It has spread to Indonesia, which was the most corrupt and centrally-planned. It has spread to South Korea, which was somewhere “in between.” What do these nations have in common?

The Japanese Plague is not a function of central-planning vs. laissez faire govt. It is a function of a real-estate bubble, of land-value driven up, mostly by govt-supported banks eager to lend billions of bhat, yen and dollars to real estate speculators.

It is common knowledge that when the Japanese economy was at its peak, the value of Tokyo land exceeded that of the entire United States. This is an impressive statistic, but consider the consequences. Since land is needed by the productive economy, stratospheric land prices make local economic expansion impossible to afford… not to mention what it does to the average working person, whose family is crammed into living quarters not much larger than the space allotted for convicts.

Japan’s banking system created the greatest real estate boom of the 20th Century, probably acting on the advise of influential western economists who equate high land prices to “capital accumulation.” Japan’s banks are now holding trillions of yen of bad loans on land-value which has simply disappeared. Yet Japanese land is still overvalued, relative to its productive use-value, threatening to undermine even more loans.

Hence, the Japanese Govt has done everything in its power to stabilize land prices, even at high levels–and in spite of the cost of ongoing economic malaise. I’m sure they figure that malaise is better than collapse. And that is the Hobson’s Choice which they have become stuck with. But it was not always so.

THE JAPANESE MIRACLE

During the 1970’s, the Japanese invested heavily in plant and equipment, and perfected production processes using the Statistical Quality Control taught by Deming. This success-formula was used in many industries, from automobiles to semiconductors, and it forced the rest of the world to follow suit–while making Japan an economic powerhouse. But this hard-earned prosperity and economic power was not enough for some, who were jealous of the entrepreneurial fortunes of Sony, Honda and Fujitsu.

Within the ranks of the financiers and govt officials there was a push for financial deregulation which would allow high-priced real estate to serve as collateral for loans. World-class manufacturing–which requires a lot of hard work amidst brutal competition, and which is a true engine of wealth–was taken for granted, or even mocked. Many sought a get-rich-quicker scheme which, it was said, would spin-off even more money for “investment,” taking Japan to the “next level” of financial success. (Ref: Barron’s Magazine)

Once these loans started flowing, very little went into the productive economy. Instead, it went into creating a real estate bubble, borrowing and re-borrowing on inflated values. But the only way you can drive real estate to the sky, is to pour your wealth into the ground. And that is literally what Japanese “investors” did. This created the illusion of phenomenal wealth, as Japanese real estate magnates rapidly became the wealthiest individuals in the world–on paper. But this kind of “wealth” does not trickle down. It dries up.

“Location” is a passive element; it does not produce anything without some expenditure of labor and capital. Driving up the price of Japanese-locations meant that there was less and less money left over for investment in jobs and equipment. And when the real estate bubble burst, and the banks began to implode, there was no money for ANY kind of new investment. Accordingly, the latest predictions are that the Japanese economy will actually shrink during 1998.

SOME ASIAN TIGERS FOLLOW JAPAN

Parts of Asia have followed in Japan’s footsteps, except that their real estate bubbles have been primarily financed by foreign money as opposed to internally (by Japan’s high savings-rate).

Throughout Asia, foreign money has been pouring in over the last decade to take advantage of high growth rates. The press dubbed these nations the “Asian Tigers,” and billions of investment dollars poured in. Some of this money was invested in plant and equipment, which created many real jobs, a rising middle class, and prosperity in Eastern Asia. But eventually, it became more difficult to invest the money wisely, and money managers began “pouring it in the ground,” financing speculative real estate ventures. Thus, their fate was sealed.

Thailand was the first to collapse, triggered by currency speculators. Needless to say, the fundamentals have to be pretty weak if currency speculators can cause a 50% decline in a currency and touch off a depression. At the time (Summer of 1997) some western pundits blamed it on Thailand’s “laissez faire” investment policies, and pointed with some pride to the “continued stability” of Indonesia and South Korea, which were more “centrally-planned” by their governments. (These laughable articles can still be found on the internet by searching for Asian Crisis.)

Of course, within months, South Korea and Indonesia went down the same rat-hole as Thailand, in spite of all their vaunted govt intervention in the economy. The press called it the spread of “bhat-ulism,” but it is simply the consequence of an implosion of excessive land-values, destabilizing the banks and hence the currency–repeating the catastrophic avalanche of Japan.

As this goes to press, the debate revolves around the conditions that the IMF should impose on a nation such as Indonesia–a nation which will undoubtedly squander any western money by bailing out the Suharto family members who were worst-burned by their speculations. It is a long-shot that IMF funds will actually turn these economies around. Most will probably emulate Japan, and fail to take the radical actions necessary, preferring instead to subsidize failure by Big Players.

But Hong Kong and Taiwan have survived this crisis relatively unscathed.

WHY ARE HONG KONG AND TAIWAN EXEMPT?

Hong Kong and Taiwan have endured assaults on their currencies, and panics in their stock markets, but their economies are intact, even showing good growth in Q1 1998. How can this be?

The answer is quite simple. Taiwan and Hong Kong both tax land values fairly strongly, thus discouraging investment in real estate that is not warranted by actual economic conditions, conservatively measured. As a result, they have a very stable source of public revenue, plenty of reserves to defend their currencies or to provide infrastructure–and the ongoing production-incentives of low taxation on labor and capital. Their banks are stable, because their loans are not based on over-valuation of land.

And, of course, they have free trade working for them–but so do all the Asian Kittens, in greater or lesser degrees.

THE LESSON

Rising land prices (commonly thought of as “home-appreciation” in the USA) are seen as a sign of prosperity, but they gradually sow the seeds of economic reversal. Every recession in the USA has been preceded by a “land-boom,” and accompanied by a “land-bust,” as documented by Mason Gaffney, PhD in Economics.

This bone-crunching volatility is not a necessary part of the free market! The way to achieve stable growth is to keep land available to the productive market economy, by keeping it from being used for private speculative purposes.

Land value taxation, or the community collection of land rent, has the effect of removing the speculative premiums from land-locations. Land simply “rents” for its current use-value, as determined by market forces. This allows the un-taxing of the rest of the economy, such as wages, sales and income, which has the effect of incentivising everyone to make money by working and investing in plant and equipment.

The solution to the Asian Crisis is not the funneling of billions of IMF dollars in to support the sagging fortunes of corrupt officials which are tied up in speculative real estate deals.

What is needed is a permanent tax-shift off of the Asian workers and entrepreneurs, and onto the politically-connected Asian land-holders. Once this tax shift strips away the speculative premiums from land, the land-holders will be forced to swim in the new economically competitive environment–or sell out to someone who can.

–Al Date
442 Brasswood Ct
Santa Clara CA 95054

Al Date is employed as a computer-database manager in Silicon Valley. He has an AA in Electronics Technology; but eclectic interests. He is self-taught in computer programming, financial management, philosophy and economics. Daily reader of three newspapers, including IBD.

The Danish Experience

Karl FitzgeraldInternationalLeave a Comment

by Knud Tholstrup, University of Bergen 1974

Sensational practical experience in taxation of land values was gained in Denmark in the years 1957-60 when the Danish Justice Party, promulgating land value taxation, free trade and equal rights, formed a so-called ‘land tax’ government, together with the Social Democrats (Labour) and the Radicals (Liberals). The three parties made an agreement based on the following:

1. Collection of land rent
2. Liberalisation of trade: including closing the Department of Supply and Import Control
3. A tax freeze

Although the Justice Party was the only member of the triumvirate of parties forming government to have agitated and worked for the introduction of land value taxation, the election programs of all three parties did include a land tax on the growth in land values.

Thus it was generally expected after formation of the government that some kind of land value taxation would be introduced – with the result that land speculation ceased immediately.

Legislation on taxation of increased land values was prepared, presented to parliament and passed with effect as from the new land value assessment of 1960.

Economic effects of the cessation of land speculation were astounding and aroused widespread attention. On the 2nd October, 1960, the New York Times editorialised:

Big Lesson From A Small Nation

Prior to the 1957 election, Denmark had a sizeable deficit on her balance of payments, was in considerable debt abroad, and burdened with a relatively high interest rate, high unemployment and an annual rate of inflation of approximately 5 per cent. Devaluation threatened.

Economic reaction

The following improvements took place in the next three and a half years (1957-60), contrary to what was occurring abroad:-

1. The big balance of payments deficit was turned into a surplus
2. Denmark’s total debts abroad amounting to 1,600 million kr. were reduced to one quarter of this, to about 400 million kroner
3. Interest rates, and rents in new housing, declined
4. Unemployment was soon replaced by virtual full employment, together with considerable increases in production and wages
5. Inflation was brought to a standstill
6. All wage increases were real wage increases- the highest ever in Denmark
7. There were no new taxes during the three and a half years
8. The Department of Supply was closed down. In 1960 all import restrictions were lifted and duties cut
9. There was a period of industrial peace, with no ‘strike’ activity

Public opinion polls run at the time showed the relationship between satisfied and dissatisfied voters, before, during and after the three-party government. “Undecided” answers have been omitted:-

Survey Results

  Satisfied voters Dissatisfied voters
Before 1957 25% 75%
1957/60 82% 18%
After 1960 20% 80%

Opposition

At the general elections in 1960, however, the opposition started a program directed solely against the smallest party in the triumvirate – the Justice Party’s nine-man group -and used the hitherto largest sum ever in any Danish election campaign, financed by land-owner associations and conservatives. With its limited financial resources, and lacking support from the daily press, the Justice Party could not withstand the attack. The party lost half its vote, and was unable to collect the numbers required for representation in parliament.

Agitation against land tax legislation continued after the election and the new, enfeebled government acceded – and in the face of strong pressure from land-owner associations promised that the new law would be repealed. This was carried out in 1964 before long term benefits of the reform could be secured.

As a result, the following took place:-

1. The current account surplus became a deficit
2. The deficit on the balance of payments 12 years later was 3-4 billion kroner
3. By 1976 debts abroad amounted to 20,000 million kroner, 50 times more than under the triumvirate
4. The effective rate of interest doubled
5. Land prices jumped sky-high. Denmark’s overall land price rose from 17 billion kroner at the assessment of 1960 to 67 billion in 1969
6. Rents in new housing by 1975 were six-fold those of The Justice Party’s period
7. The rate of inflation rose from barely 1 per cent to 5-7 per cent. It was 8.6 per cent in 1965, the year following repeal of the land tax law in 1964
8. Taxes began to escalate again

Significance

A comparison between the three periods, before, during and after the so-called “land tax government,” gives a clear picture of the importance of eliminating land speculation and unearned increment in land.

As there was no longer any unearned income – incomes only resulting from production – the balance between the purchasing power and amount of goods was restored. Inflation therefore came to a halt because it received no nourishment.

These exceptional developments in Denmark’s economy in the three periods mentioned demand the greatest attention – and should be the subject of intensive study by economists and laymen interested in the national economy. The practical experience should form the basis of revised political evaluation of the importance and strength of truly free enterprise and a freed up national economy.

Answers for Indonesia

Karl FitzgeraldInternational1 Comment

by Bryan Kavanagh, Director, Land Values Research Group and blogger extraordinaire.

President Suharto has been poorly counseled by the International Monetary Fund. Its economic prescriptions are pointless and wrong. He needs to take independent economic action if he is to avoid the social chaos erupting out of Indonesia’s financial turmoil. He could do worse than immerse himself in the history of his own ‘Spice Islands’, the wealth of which centuries ago attracted the Portuguese and the Dutch to the great chain stretching between Malaya and New Guinea.

The Indonesian financial crisis is the result of a phenomenal land boom that was a re-run of the West’s late-1980s boom period. It is little remembered that a very similar financial collapse was experienced by the ‘Dutch East Indies’ in the wake of the Napoleonic Wars, and that an amazing Englishman employed a successful technique to overcome it.

After being overrun by France in 1793, Holland was considered an enemy state by Britain, and the British fleet began to take over her scattered and valuable overseas settlements: Cape Colony, Ceylon, the East Indies and various West Indian islands. In 1795, a force from India captured Malacca, and later planned to completely destroy the port and transfer its inhabitants to Penang. This plan was abandoned on the advice of the soon-to-become towering figure of Stamford Raffles.

Raffles had entered the service of the East India Company in London as a clerk at the age of fourteen. His keen mind soon attracted the attention of the governors, and he was sent to a post in Penang. On the way out he learnt the Malay language, his mastery of which brought him both advancement in the Indian Service and a profound knowledge of and admiration for the Malay people.

The British had long been interested in Java, the most prized tropical island in the world, but they believed it to be too strongly held: Raffles had better information. He knew that neither the Dutch nor the French had really conquered Java and that the Javanese were unfriendly to both. The remaining Dutch residents and Chinese traders, too, had good cause to aid a power at war with France. Raffles advised the Governor-General of British India, Lord Minto, who accordingly decided to seize Java. This occurred without serious resistance on 4 August 1811. On his departure in October of the same year, Lord Minto appointed Raffles Lieutenant-Governor of Java and its dependencies, telling him: ‘While we are in Java let us do all the good we can.’ Raffles set about doing all the good he could until he left Java in March 1816. During his Lieutenant-Governorship the Javanese achieved amazingly high degrees of liberty and prosperity.

Raffles laid the foundations that made this possible by restoring the way of life which the Javanese themselves had enjoyed before the coming of the French and the Dutch. He found their finances in a state not dissimilar to Indonesia’s current sorry pass. Taxation and restrictions on trade were rampant. The list of devices adopted by the Dutch and the French in order to sustain their monopoly over Javanese trade included tolls, taxes and restrictions across every activity of Javanese life. There was a 15 per cent tax upon the production of rice, a poll-tax upon families, and market duties, or tolls, levied literally on every article produced by agriculture, manufacture or the petty arts (distinctly resembling Australia’s proposed Goods and Services Tax) and there were additional levies made by Egg Boards, Dried Fruit Boards and similar bodies. There was a tax upon the slaughter of buffaloes, which affected the price of food and restricted the breeding of animals. There was a charge upon the cost of transport of baggage and stores of every description and upon the feeding of travelers. There were obligations to render free labour service for public works and forced contribution to Government monopolies. Duties and charges on seaborn commerce amounted to forty-six per cent. Under the onslaught of these ferocious taxes whole districts had become depopulated. There was a drift from the land to the towns and villages, and production of real wealth was declining rapidly. Amongst the first acts of Raffles – with Lord Minto’s concurrence – was the immediate abolition of most of these imposts.

Raffles had looked to Javanese history for answers, and discovered how a prosperous and glorious past on the great island had been effectively destroyed by the folly of invaders, ignorant or uncaring of Javanese land laws. Under these laws, there was no room for land speculation and monopoly which Java was experiencing. Land might be held for use, provided ground rent in full was paid over to the governing authority. The Malays and Javanese both had put into practice for many centuries the principles espoused by the physiocrat economists of the eighteenth century as having enormous potential for forestalling revolutionary foment in France.

Average land rent was estimated at two-fifths of the yield. The cultivator had free disposal of the rest of his produce, which was rice in most cases. He could pay his dues in rice or money. If in money, payment was to the desa headman, and thence to the divisional office. If in rice, he had to convey it at his own expense to Residency headquarters.

Raffles proceeded by diplomacy to overcome opposition and to secure the cooperation and friendship of the established chiefs and rulers. When they learned that through his Land Settlement Memorandum he proposed to completely restore the ancient system of Java, one by one, they accepted his authority without further question. Accompanied by his wife, he travelled over the island for the purpose of establishing his government and appointing suitable Javanese to carry out the details of administration. He was available to all.

Raffles had believed that the re-introduction of the land-rent system would provide a surplus to cover expenditure. The revenue did increase, and more than covered the normal operations of Government, but it was inadequate to cover, in addition, two crippling burdens with which the administration was unfairly encumbered. First was the payment of the cost of the wars of occupation. Second was the “appalling handicap” of carrying out Lord Minto’s promise to redeem, at the rate of 20 per cent discount, the paper money still circulating from the Dutch period. Raffles hoped that the island would continue to be held after the war was over, but recognised that neither the East India Company nor the British Government would want this unless it was self-financing – inclusive of these extra impositions. Hence, he had an enormous amount of external pressure continually exerted upon his administration (of which President Suharto and his IMF advisors could currently take a salutary warning). Raffles’ evaluation was confirmed later, when it inevitably transpired that these extra demands could not be fully covered from the revenue. The directors of the East India Company then accused him of rendering the occupation of Java “a source of financial embarrassment to the British Government”! It had clearly been the extra demands on his Treasury that prevented him from carrying out his proposals to abolish the toll gates and to free internal trade fully.

Raffles had dreamed of making a new British empire of the islands centred on Java. However, soon after the re-introduction of the Javanese land-rent system, Napoleon fell and the Netherlands regained independence. At the convention of London in August 1814, Britain agreed to restore Java to the Netherlands. This eventually happened in August 1816, in the wake of Napoleon’s escape to Elba. Whilst the Dutch did continue with the principle of Raffles’ land policy, they began to re-institute many of the old interferences with trade and industry.

When Indonesia finally passed from Dutch control in the twentieth century, the rate of land tax had become only 7.5 per cent of the full annual rental value, and impositions upon trade again flourished.

Public Recognition

In England, Raffles’ outstanding achievements and abilities were recognised, and a knighthood conferred upon him by the King. Whilst in Europe he took the opportunity of calling on the King of the Netherlands to make intercessions in favour of his former Dutch colleagues in Batavia, as well as the Princes of Java. He was successful, because the Dutch authorities had already reported favourably on the merits of the Raffles administration. Raffles afterwards observed, however: “The King and his leading Minister seem to mean well, but they have too great a hankering after profit – and immediate profit – for any liberal system to thrive under them.” (This insight into Indonesia’s ongoing plunder has been confirmed many years later: by President Sukarno’s inability to be able to grant economic freedom to his peasants in the years following independence from the Dutch in 1949; and by President Suharto’s recent failure to curb the corruption and land speculation in the 1990s.

Land Rent System in Sumatra

Raffles returned to Indonesia in 1818, this time to the island of Sumatra, as Governor of Bencoolen. When he returned the East India Company was deriving its main income from slavery, gaming, and cockfighting farms, together with the enforced growing of a few tons of pepper. He wiped out these sources of income on principle almost immediately. He was later reprimanded for disposing of the slaves, referred to officially as “the property of the Company”. Raffles was a friend of Wilberforce, and, not content with dealing with the Company’s slaves in this fashion, he also acquired the Island of Nias, off the coast, for the express purpose of completely eradicating the slave trade in all its forms.

Following his successful policy in Java, Raffles repealed all restrictions and taxation upon trade and secured the revenue of Sumatra on ground rents. Owing to the under-development of the island of Sumatra, which for richness and production could not be compared with Java, he did not follow in detail the direct collection of the ground rents, but obtained them through the princes and chieftains similarly to feudal dues. The immediate result was an increased flow of trade which brought unexpected revenues to the Company, and the production of pepper, now produced for payment at market rates, increased many times. By the time this island was handed over to the Dutch, it too had virtually become a self-paying proposition, and the native inhabitants began to experience prosperity. The withdrawal of the blight of government interference and repeal of taxation upon trade, wages and industry, accompanied by the collection of ground rent for public revenue, were once again at the forefront of Raffles’ thinking. Of the ancient land revenue system, Raffles came to say: “I have the happiness to release several millions of my fellow creatures from a state of bondage and arbitrary oppression. The revenues of Government, instead of being wrung by the grasping hand of an unfeeling tax-farmer from the savings of industry, will now come into the treasuries of Government direct and in proportion to the actual capacity of the country.”

After his work in Sumatra, Raffles went on to establish Singapore on the same principles, as a free trade open port, and it is perhaps for this that he is best known in the English-speaking world. His Indonesian history does not seem to have loomed large in the minds of the neo-classical IMF economists currently advising President Suharto. It would be encouraging to believe that the Australian Minister for Foreign Affairs, Alexander Downer, might have reminded the President on his visit to Indonesia in January 1998 of the manner in which Sir Stamford Raffles had effectively handled the Dutch East Indies financial crisis almost two hundred years ago.

Answers for Indonesia is based upon the below mentioned work by the late Allan Hutchinson (Director of the Land Values Research Group) published in the Melbourne journal Progress in 1967.

Sources:

Sir Stamford Raffles in Indonesia by AR Hutchinson
History of Java by Sir Stamford Raffles
Netherlands India by JS Furnival
A History of South East Asia by DGE Hall
Social Patterns in Jogjakarta by Selosoemardian