Land Reform

Land Reform is the Jason Voorhees of social planning: a bad idea that fails every generation yet refuses to die and stay dead. For thousands of years enthusiastic reformers have touted Land Reform as the solution to social ills. The idea is so seductive it continues to get hold of the human imagination no matter how often it fails.

Practical Problems of Land Reform

The most celebrated land reform of the modern era took place in Japan during the American occupation. The Douglas MacArthur led government forced ‘absentee’ landowners to sell almost all their land to their government at fixed prices. The occupation government then gave tenant farmers first option to buy the land from the government, and subsidized the sale. The scheme has been hailed ever since for destroying big land holdings as has served as the model (if only rhetorically) for subsequent land reforms.

But the plan succeeded because it was, in effect, an enormous transfer of wealth from Japanese landowners and the American taxpayer to Japanese farmers. The key was the runaway inflation that the American occupation government allowed to happen; the farmers found it vastly easier to pay their loans, while the US Treasury and Japanese landowners received worthless currency. The biggest success of the plan was political, as transferring wealth from a small group of people to a large of people usually makes the large group of people happy.

Subsequent land reforms have not fared nearly as well, except for allowing self-proclaimed land reformers to gain and consolidate power. The land reform in Cuba started following something like the Japan model, allowing private farms of only 30 hectares. A later land grab only allowed private farms of five hectares, or about 12.5 acres. The Communist government ended up taking all the land for itself, destroying Cuban agriculture in the process.

Moral Problems of Land Reform

However much you point out the practical problems of land redistribution, most land reformers are motivated by a nebulous sense of social justice, especially a desire to redress past wrong. In their telling, redistributing land from group A to group B is a virtuous act on its own, even if it leads to misery.

Such resentful nonsense could be rejected on its own, but there are other problems with it. For once, the people who committed injustices to other peoples, to the extent those injustices occurred, they occurred to human beings long dead and buried. Human beings are not ethnic, religious, or political groups. Second, redistribution demagoguery ranks among the better ways to ruin a country. The example of Sri Lanka, ruined by cheap demagoguery, should give us all pause. Promoting hatred of your neighbor has never promoted neighborliness.

My view is that land reform is a terrible way to lift people out of poverty, a bad way to promote wealth creation at all, and a vehicle to worsen ethnic and religious hatred. Land reform through history never fulfills its promise, with unintended (if predictable) consequences ruining the best-laid plans of mice and men. As for redressing past wrongs, stay away from the fruit of that poisoned tree. The injustices of the past are better left in the past, where they belong.

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