Kwarta, Lupa, Kahon, Asukal, o Tilapia?

First off – let me deal with a couple of issues that have been making the rounds in the AP Galaxy while in the process of free inquiry on the issue of land reform and its impact on national development. Let’s get down to business and take the issues one by one.

FIXATION ON LAND REFORM AS COMPULSORY STATE SEIZURE AND REDISTRIBUTION OF LAND

Land reform as it is generally known involves “state seizure and compulsory redistribution of land” – the same model used by CARP – and the same models y’all are currently harping about.

There are other models – and these don’t revolve around forced seizure and redistribution – which I will discuss later.

THE LAND OWNERSHIP ISSUE

One of the arguments being put forward is why are the tenants who want to be land owners so “fixated on land ownership”.

My answer is – while land tillers who want to become landowners are taken to task about their “fixation on land ownership” – the existing landowner is not being taken to task for “fixation on land ownership”. Both have fixations on land ownership – the difference is the landowner is fixated on the land he already owns – while the tenant is fixated on land he does not own – but wants to own – SAME FIXATION ON LAND!!!

The premise is illogical, contradictory, and ABSURD. It’s not only the tenant who has a fixation on LAND – so too does the current landholder.

THE TRAGEDY OF THE COMMONS AND THE ANTICOMMONS

Land is a finite resource – which at the onset was nobody’s property – a property held in common.

The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently, and solely and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone’s long-term interest for this to happen. This dilemma was first described in an influential article titled “The Tragedy of the Commons,” written by Garrett Hardin and first published in the journal Science in 1968.[5]

The diametric opposite to the commons is private ownership.

In contrast to the tragedy of the commons, when a public resource is overused because there is no one owner to regulate it, a tragedy of the anticommons occurs when a resource is underused because it has been divided up by a number of owners who may not be willing to agree or cooperate with one another. [6]

How does the Philippines intend to handle – depeletion of the commons and undertutilization of private property.

Do we just box, dance, laugh our our way out?

LAND MONOPOLIES AND SERF LABOR

As explained by Murray Rothbard in his book – the Ethics of Liberty [7]

“HERE ARE TWO types of ethically invalid land titles: “feudalism,” in which there is continuing aggression by titleholders of land against peasants engaged in transforming the soil; and land-engrossing, where arbitrary claims to virgin land are used to keep first-transformers out of that land. We may call both of these aggressions “land monopoly”—not in the sense that some one person or group owns all the land in society, but in the sense that arbitrary privileges to land ownership are asserted in both cases, clashing with the libertarian rule of non-ownership of land except by actual transformers, their heirs, and their assigns.

Land monopoly is far more widespread in the modern world than most people—especially most Americans—believe. In the undeveloped world, especially in Asia, the Middle East, and Latin America, feudal landholding is a crucial social and economic problem—with or without quasi-serf impositions on the persons of the peasantry. Indeed, of the countries of the world, the United States is one of the very few virtually free from feudalism, due to a happy accident of its historical development. Largely escaping feudalism itself, it is difficult for Americans to take the entire problem seriously. This is particularly true of American laissez-faire economists, who tend to confine their recommendations for the backward countries to preachments about the virtues of the free market. But these preachments naturally fall on deaf ears, because “free market” for American conservatives obviously does not encompass an end to feudalism and land monopoly and the transfer of title to these lands, without compensation, to the peasantry. And yet, since agriculture is always the overwhelmingly most important industry in the undeveloped countries, a truly free market, a truly libertarian society devoted to justice and property rights, can only be established there by ending unjust feudal claims to property. But utilitarian economists, grounded on no ethical theory of property rights, can only fall back on defending whatever status quo may happen to exist—in this case, unfortunately, the status quo of feudal suppression of justice and of any genuinely free market in land or agriculture. This ignoring of the land problem means that Americans and citizens of undeveloped countries talk in two different languages and that neither can begin to understand the other’s position.

American conservatives, in particular, exhort the backward countries on the virtues and the importance of private foreign investment from the advanced countries, and of allowing a favorable climate for this investment, free from governmental harassment. This is all very true, but is again often unreal to the undeveloped peoples, because the conservatives persistently fail to distinguish between legitimate, free-market foreign investment, as against investment based upon monopoly concessions and vast land grants by the undeveloped states. To the extent that foreign investments are based on land monopoly and aggression against the peasantry, to that extent do foreign capitalists take on the aspects of feudal landlords, and must be dealt with in the same way.”

To paraphrase Rothbard – “It was only the coercion of slave labor that enabled the large plantation system in staple crops to flourish in the LUZON, VISAYAS, and MINDANAO, . Without the ability to own and coerce the labor of others, the large plantations—and perhaps much of the BANANA, PINEAPPLE, ABACA, AND SUGAR —would not have pervaded the South.”

In the face of slavery – there was one moral solution, according to Rothbard:

“there was only one possible moral solution for the slave question: immediate and unconditional abolition, with no compensation to the slavemasters. Indeed, any compensation should have been the other way—to repay the oppressed slaves for their lifetime of slavery. A vital part of such necessary compensation would have been to grant the plantation lands not to the slavemaster, who scarcely had valid title to any property, but to the slaves themselves, whose labor, on our “homesteading” principle, was mixed with the soil to develop the plantations.

In short, at the very least, elementary libertarian justice required not only the immediate freeing of the slaves, but also the immediate turning over to the slaves, again without compensation to the masters, of the plantation lands on which they had worked and sweated. As it was, the victorious North made the same mistake—though “mistake” is far too charitable a word for an act that preserved the essence of an unjust and oppressive social system—as had Czar Alexander when he freed the Russian serfs in 1861: the bodies of the oppressed were freed, but the property which they had worked and eminently deserved to own, remained in the hands of their former oppressors. With the economic power thus remaining in their hands, the former lords soon found themselves virtual masters once more of what were now free tenants or farm laborers. The serfs and the slaves had tasted freedom, but had been cruelly deprived of its fruits.[11]”

LAND MONOPOLY AND LABOR MARKETS

To paraphrase John Medaille – “A thing without proper limits becomes its own opposite, and noblesse oblige quickly becomes a tyranny which threatens both civil and social order. – As of 2010, the communist insurgency is still raging in Negros – and the AFP is still in that age old tradition of declaring that the insurgency will be “wiped out” in 2010.

The case for land redistribution is concisely explained by Medaille using neo-classical terms [8]:

“We have seen how, theoretically, the law of rents is mitigated or abolished in the presence of a frontier or a commons. In such circumstances, wages stabilize at rates far above subsistence; when the frontier is closed and the commons enclosed, the law of rents takes over and the wages tend towards subsistence. We have verified these purely theoretical conclusions by noting the experience of America while she still had a frontier, and of England in the 15th and 16th centuries. In the later case, we noted that by the end of the 15th century, wages had reached nearly 4 times subsistence and attempts to enforce a “statute of laborers” were futile. But after all the land was “privatized” and the commons lost, wages dropped to bare subsistence levels and the statute of laborers became redundant. However, we do not need to look to colonial America or 16th century England for all of our data; we have enough examples in the 20th and 21st centuries; we have enough data from our own time, both positive and negative. Examples of monopolistic land ownership are, alas, all too common and present themselves for our analysis.

The case for land redistribution can be made in pure neo-classical terms.

Where there are few owners, and especially when the few combine to control the market, a monopoly in land is created which in turn creates a monopsony for the labor market; land owners become “price makers” rather than “price takers.”

Further, the economic control of the labor market is often reinforced by a series of institutional controls, such as the difficulty tenants or laborers have of obtaining credit, use of police power to prevent protests or unions, lack of education in rural areas, discrimination, etc.

All of these things leave sharecroppers or farm laborers at a disadvantage in wage or rent negotiations, making these contracts leonine.

The effect is that the landowners can arbitrarily lower the cost of labor with the results that the marginal costs are higher than the average costs, reversing the situation in a “normal” labor market; to increase the amount of labor would require them to raise wages rather than lower them.

This has four consequences from a purely neo-classical perspective.

One, the cost of labor is lower than what it would be in a competitive environment resulting in exploitation of the farm worker. Indeed, the low wages make marginal costs higher than average costs.

Two, total employment on the farms is lower than what it would be because the higher marginal costs make it inefficient (in terms of profit) to fully utilize the land, resulting in surplus labor. The combination of surplus labor and lowered labor costs in turn lowers the “reservation wage” in urban areas, accentuating urban poverty.

The third point follows from the second: since marginal costs are higher than average costs, total output is lower than what it could be, resulting in production inefficiencies. Whenever labor costs are artificially controlled through monopoly or monopsony power, average labor cost is likely to be lower than marginal cost, meaning that optimal returns to capital are reached before full utilization of the resource.

Which leads to four, although the farm is less efficient, the total profits are higher, which results in an inequality of income distribution and widespread poverty. In other words, the farm is made “efficient” not in terms of total output, but in terms of total profit.

The implications are that wider ownership of land would raise total output and average income by breaking the monopsony over the labor market.

There would be a more equal distribution of income and a reduction in both urban and rural poverty. This in turn would broaden the market in the non-agricultural sectors, allowing for more secure investment opportunities and hence advance the broadening of the economy away from the purely agricultural.

However, there is a question of how to break up land monopolies.”

And that my friends – is the proverbial bone of contention – HOW TO BREAK UP LAND MONOPOLIES.

Strong representation was made that there is no need for LAND REFORM OR AGRARIAN REFORM as practiced in the Philippines. Note the QUALIFIER – AS PRACTICED IN THE Philippines because – LAND REFORM is practised differently in other countries as you will see later on. But first, let me go through a couple of some prescriptions out there.

GOAL – Poverty Alleviation

The goal is to alleviate poverty. Quite a great and noble intention – and “the road to hell is paved with good intentions”.

Let’s look at a SIMPLISTIC SOLUTION that has promise – massive industrialization.

MASSIVE INDUSTRIALIZATION AUTOMATICALLY TRANSLATES TO POVERTY ALLEVIATION

This is a MYTH.

Massive industrialization gives the illusion that it DECREASES poverty in the sense that in absolute terms one country’s GDP is higher than another country’s GDP after industrialization. One might also cite the increase in Per Capita Income and Job Growth. However, these do not measure the disparity in incomes between groups within a probability distribution. A better measure is the Gini Coefficient. The Gini coefficient is a measure of statistical dispersion developed by the Italian statistician Corrado Gini and published in his 1912 paper “Variability and Mutability” (Italian: Variabilità e mutabilità). The Gini coefficient is a measure of the inequality of a distribution, a value of 0 expressing total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as economics, health science, ecology, chemistry and engineering. It is commonly used as a measure of inequality of income or wealth. [1]

Applying the Gini Coefficient to the OECD countries provides a measure on the validity of the statement “Massive Industrialization leads to Poverty Alleviation” – the OECD Directorate recently conducted a survey using the GINI and these are its findings: [2]

***

The report “Growing unequal” has been prepared by the OECD Directorate in charge of Employment, Labour and Social Affairs in a response to a Ministerial Council mandate on “establishing the facts and examining trends in income inequality”. The evidence analysed and the main patterns identified have been summarized by the OECD under three headings as follows:

Features characterizing the distribution of household income in OECD countries

  • Some countries have income distributions much more unequal than others regardless of the way in which inequality is measured. Changes in the measure used generally have little effect on country rankings.
  • Countries with a wider distribution of income also have higher relative income poverty, with only a few exceptions. This holds regardless of whether relative poverty is defined as having income below 40, 50 or 60 percent of household median income.
  • Both income inequality and poverty have risen over the past two decades. The increase is fairly widespread, affecting 2/3 of the countries. The rise is moderate but significant (around 2 points for the Gini coefficient and 1.5 points for the poverty headcount based on 50 per cent of median income), but is much less dramatic than is often portrayed in the media.
  • Income inequality has risen significantly since 2000 in Canada, Germany, Norway and the United States, and declined in the United Kingdom, Mexico, Greece and Australia.
  • Inequality has risen because rich households have done particularly well in comparison to middle-class families and those at the bottom of the income distribution.
  • Income poverty among the elderly has continued to fall, while poverty among young adults and families with children has increased.

Factors that have driven changes in income inequality and poverty over time

  • Changes in the structure of the population are one of the causes of higher inequality. However, this mainly reflects the rise in the number of single-adult households rather than population ageing per se.
  • Wages have become more dispersed but their effect on income inequality has been offset by higher employment. However, employment rates among less educated people have fallen and household joblessness remains high.
  • Capital income and self-employment income are very unequally distributed, and have become even more so over the past decade. These trends are a major cause of wider income inequalities.
  • Work is very effective at tackling poverty. Poverty rates in jobless families are almost 6 times larger than those in working families.
  • However, work is not sufficient to avoid poverty, as more than half of all poor people belong to households with some earnings. Achieving larger progress in reducing poverty requires lowering in-work poverty.

Lessons learned by looking at broader measures of poverty and inequality

  • Public services such as education and health are distributed more equally than income, so taking these into account lowers income inequality, though with few changes in the ranking of countries.
  • Taking into account consumption taxes widens inequality, though not by as much as the narrowing due to taking into account public services.
  • Household wealth is distributed much more unequally than income, with some countries with lower income inequality reporting higher wealth inequality. This conclusion depends, however, on the measure used, on survey design, and the exclusion of some types of assets (whose importance varies across countries) to improve comparability.
  • Across individuals, income and net worth are highly but not perfectly correlated. Income-poor people have fewer assets than the rest of the population, with a net worth generally about under a half of that of the population as a whole.
  • Material deprivation is higher in countries with high relative income poverty but also in those with low mean income. This implies that income poverty underestimates hardship in the latter countries.
  • Older people have higher net worth and less material deprivation than younger people. This implies that estimates of old-age poverty based on cash income alone exaggerate the extent of hardship for this group.
  • The number of people who are persistently poor over 3 consecutive years is small in most countries but more have low incomes at some point in that period. Countries with higher poverty rates based on annual income fare worse on the basis of the share of people who are persistently poor, or poor at some point.
  • Entries into poverty mainly reflect family- and job-related events. Family events are very important for the temporarily poor, while lower transfers are more important for those who are poor in two consecutive years.
  • Social mobility is generally higher in countries with lower income inequality, and vice versa, implying that, in practice, equality of opportunity requires equality of outcome.

MASSIVE INDUSTRIALIZATION WITHOUT ECONOMIC LIBERALIZATION LEADS TO DOMESTIC MONOPOLIES

The Case of South Korea’s Chaebols [3]

The chaebol are the large, conglomerate family-controlled firms of South Korea characterized by strong ties with government agencies. The name, which means business association, is properly pronounced jay BOL but the spelling pronunciation chay bol is considered acceptable by Korean speakers. There were family-owned enterprises in Korea in the period before 1961 but the particular state-corporate alliance came into being with the regime of Park Chung Hee (1961-1979).

Park modeled this arrangement on the zaibatsu system which developed in Japan during the Meiji Era. There were significant differences between the zaibatsu and the chaebol, the most significant of which was the source of capital. The zaibatsu were organized around a bank for their source of capital. The chaebol in contrast were prohibited from owning a bank. The Park regime nationalized the banks of South Korea and could channel scarce capital to industries and firms it saw as necessary for achieving national objectives.

The government-favored chaebol had special privileges and grew large. This gave the impression of economic success for the chaebol that was not always valid. In some cases chaebol grew not because they were profitable but merely because they could borrow vast funds. When the international economy took a downturn these debt-ridden businesses were in trouble. In 1999 one quarter of the manufacturers in South Korea did not earn enough to meet the payments required for their debt.

The Philippine Oligarchy

A variant of this same model being pursued by the Philippines – SANS the economic liberalization.

This model has lead to more virulent versions of the chaebols – Ayala, Cojuangos, Gokongweis, Lopez, Tan – and the entire Filipino oligarchy – plantation owners included.

Thus, when an economy INDUSTRIALIZES but REMAINS PROTECTIONIST the tendency to form domestic monopolies IS INEVITABLE.

You will have IMPERFECT COMPETITION – and that’s not going to work for consumers, jobs, and incomes – as more wealth is concentrated into the hands of the monopoly businesses.

We need a globally integrated economy that thrives in the 21st century – NOT a feudalistic plantation economy that exercises life and death over its tenants, tillers, and workers.

Poverty alleviation under a MONOPOLY market?

Sure thingie – poverty will be alleviated for 2% of the population. That’s POVERTY ALLEVIATION?????? You gotta be kidding me!

*****

ECONOMIC POLICY WILL HAVE SOCIAL REPERCUSSIONS THAT FIND ITS WAY BACK INTO THE BOTTOM LINE

Bret Frischmann, professor at Loyola University Chicago School of Law., points out in his essay, “ An Economic Theory of Infrastructure and Commons Management,” (89 Minnesota Law Review 4, April 2005) that the basic problem with relying on markets to allocate access to common assets (such as land) is that [4]

…the market mechanism exhibits a bias for outputs that generate observable and appropriable returns at the expense of outputs that generate positive externalities [public benefits that cannot be captured by market players]. This is not surprising because the whole point of relying on property rights and the market is to enable private appropriation and discourage externalities. The problem with relying on the market is that potential positive externalities may remain unrealized if they cannot be easily valued and appropriated by those that produce them, even though society as a whole may be better off if those potential externalities were actually produced.

“Positive externalities” are precisely those “goods” that benefit all of us, as commoners — clean air, access to information, an open Internet, functioning ecosystems. Yet neoclassical economics and the laws based on it generally discount or ignore these types of value; they assume that monetized forms of individual property are the only important types of value worth maximizing.

By looking at “infrastructure” through the lens of the commons, however, we can begin to appreciate the positive, non-market externalities that a resource actually generates — and begin to design public policies to protect these benefits on their own merits. For example, a lake is not just a source of water that can be owned or sold, Frischmann notes. A lake is also a resource that enables all sorts of fish and wildlife to flourish as part of an intact ecosystem. It is also a part of our social environment that inspires “artwork, literature, memories and culture.” The market, however, has trouble assigning a proper value to these non-market externalities.

When viewed through the local lens, CARP as a model of land reform that falls under the “state seizure and compulsory distribution” category creates more problems than it solves. Absolutely, I agree.

However, the demand for access to land is a social issue – and not addressing it will mean that agribusinesses will have to contend with and factor in the economic costs of dealing with the commons and the economic impact of social movements that will ultimately lead back to the bottom line

  • Impact on productivity – the impact on contracts; competitiveness; productivity.
  • Impact on fixed assets and capital investments – factories, trucks, equipment – and the impact on capital outlays, expenditures, and ROI
  • Impact on human resources – the greatest toll is the impact of violent conflict on human lives – these costs of having to relocate from homes, damage to property, internal refugees due to armed conflict – and death to both landowners and tenants
  • Impact on revenue – The damages will cause disruptions in the supply line leading to higher costs and missed deadlines – and a loss of competitiveness in the market.

These costs are not being computed – and are hidden costs which companies do not factor into their profit and loss statements.

Not recognizing these costs will haunt the companies’ bottom line real hard – as has been the case of the agri-business companies like Lapanday Development Corporation, Del Monte, Dole, Victorias Milling – the “revolutionary tax” of the CPP/NPA has become a real cost of doing business – and the occassional managers who get lead poisoning – in the form of lead bullets pumped between the eyelids – at 320 meters per second.

Not really a good environment for investsments and tourism.

Sure your model looks good on paper – but does it work in PRACTICE?

******

FILIPINO BUSINESSES NEED TO MAN UP INSTEAD OF BEHAVING LIKE PUSSIES BEHIND GOVERNMENT BIG NANNY

Government as big nanny to protect retarded Filipino businessmen is a waste of taxpayers money.

Business is all about the fundamentals of finance, sales, operations, marketing and product development. Do not go into business unless you fully understand what you are going into. A lot have made the mistaken notion that just work hard and everything will follow. You can be working hard at the wrong thing – and bleeding your working capital to death.

Some also want to just hack it out with considering the competition. They don’t study the industry, they don’t study the competition, they don’t know their products, they don’t know their costs – and then expect to turn a profit magically. It’s not gonna happen – you will be creamed, you already lost before the battle was fought.

Using antiquated business models when the competion has upped the ante by optimizing the value chain, the supply chain, and supply networks will ensure that the Philippines remains a LOSS LEADER. Work with the chambers of commerce, business schools, colleges to upgrade our business course curriculum – embrace the global village, work with niche markets, find what we can do differently – after all we can’t expect the same different results when doing the SAME OLD SHIT.

We have much to in terms of getting to parity with the economies we are working and competing with. To reach that level of performance we need to:

  1. Streamline our institutions and processes.
  2. Rationalize access to credit and working capital.
  3. Build the entrepreneurial capability of our citizens – landowners and farmers alike – or anyone who wants to do business for that matter.
  4. Student loans, grants, endowment funds for agricultural entrepreneurshiup and agri business courses. And no – it doesn’t have to come from Government or SUCs for that matter.
  5. Re-engineer, retool, re-imagine our business models.

*****

THE TAIWANESE EXPERIENCE AND HENRY GEORGE

One of the striking features of the Taiwanese model is the adoption of Georgist tax policies.

“To encourage efficient use of the land, a Georgist tax policy was followed. Georgism was a 19th century theory developed by Henry George (1839-1897). George was probably the most well-known and popular economist of his day; some measure of his popularity can be gleaned from the fact that at his death, over 100,000 people filed past his coffin, while thousands more were unable to get in. His major work, Progress and Poverty, was a best seller for many years, and his ideas had a tremendous influence up until recently.

Basically, George noted that while the law of rents allocated all values above subsistence to the landlord, the landlord did not actually do anything to earn those values. George also noted that the claim to the land the landlord held was based not on any natural right, but on government power alone. Further, the rent of land was due totally to the external factors: population and off-site improvements. In other words, the landlord added no values to the land per se. Yet, land tends to be taxed lightly while the improvements on land tend to be taxed heavily.

For George, this reversed the logical order. Land should be taxed to its full rental value, while improvements should not be taxed at all; land after all was pure gift, while what a man made of the land was his alone.

Thus Georgism is often called the single-tax theory, since there would be only land taxes. George believed that the single tax would force down the price of land by making it unprofitable to hold parcels for speculation, while encouraging development by leaving both labor and improvements to the land untaxed. One can say that George socialized the land while privatizing its development; it is an interesting view of the questions of the social and the private values of land that we have previously examined. Sun Yat-sen was an admirer of Henry George and made his ideas a part and parcel of Chinese nationalism; hence George’s theories were spread through the East.

In fact, both Singapore and Hong Kong are based on Georgist principles. In Hong Kong, all the land is owned by the government and leased to developers (which is equivalent to a 100% tax rate), while in Singapore, the government owns 65% of the land.

Needless to say, both are very prosperous states. Georgism deserves a lot more space then this. But for our purposes we can note that Taiwan followed a Georgist policy to encourage development while keeping other taxes relatively low. ” [8]

What is the Philippines not doing which the Taiwan, SG, and HK are doing?

Georgist tax policy is one of the things that the Philippines is not doing – among the plethora of activities which is not being done. Philippines – my land of telenovelas and BLA BLA BLA BLA BLA BLA BLA BLA BLA.

*****

EPILOGUE

As far as I am concerned:

  1. Abolish the CARP and DAR.
  2. Implement Land Reform via Tax Reform – Instead of compulsory state seizure and mandatory redistribution – implement a policy of HIGH LAND TAX, and LOW TAXES on land improvements.
  3. Free the market, open up the Philippine Economy – remove the protectionist provisions of the constitution.
  4. Build more entrepreneurs NOT serfs or talking heads for that matter.

*****
References:

1. http://en.wikipedia.org/wiki/Gini_coefficient

2. http://www.sjsu.edu/faculty/watkins/chaebol.htm

3. http://www.tuac.org/en/public/e-docs/00/00/02/20/document_news.phtml

4. http://onthecommons.org/economic-theory-commons

5. http://en.wikipedia.org/wiki/Tragedy_of_the_commons

6. http://p2pfoundation.net/Tragedy_of_the_Anti-Commons

7. http://mises.org/rothbard/ethics/eleven.asp

8. http://www.cooperativeindividualism.org/medaille-john_taiwan-land-reform.html

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13 comments

  1. Hyden Toro · ·

    A nation still in colonized mode in its mind; will remain Feudal. Unless, we start to chnge now. It is a necessity…change or we face some real violent change…

  2. Hyden Toro · ·

    While the article is long and hard to understand; unless you have a background in Economics, or an MBA degree…I tried my best to understand it…Land resources is to be tilled and used to produce food; to serve us all. Not as a tool; to tie people, or to make people as slaves, like the serfs in Noynoy Aquino’s Hacienda Luisita…Business monopolies can be broken by Anti-Trusts Laws…We have the Oligarchs controlling wealth and the political system…including the Media and other sources of informations. To make us all ignorant and not complain of our situations… We have Political Warlords. Same as the Land Owning Classes in Feudal Japan. Employing Samurais, as their Private Armies, to protect their interests. If you don’t till the land; and make it profitable. You should not own it. This is easier said than done. However, it can be done. Our county’s problems are complicated. It will take visionary and courageous leadership, to solve them. As the Christian Bible has pointed: “Without Visionary leadership, the people perish.” Our leaders have no visionary leadership. They are almost all greedy and self-serving. So, we are all in danger of perishing…

  3. Income inequality and poverty are two different things.

  4. Ben, here’s the inequality, expressed in terms of poverty

    Statistics on poverty & food wastage in America
    By Samana Siddiqi

    Poverty in America? One of the richest countries in the world?

    Yes, poverty is a reality in America, just as it is for millions of other human beings on the planet. According to the US Census Bureau, 35.9 million people live below the poverty line in America, including 12.9 million children.

    This is despite abundance of food resources. Almost 100 billion pounds of food is wasted in America each year. 700 million hungry human beings in different parts of the world would have gladly accepted this food.

    Here are some statistics on the nature of poverty and the waste of food and money in America.

    -In 2004, requests for emergency food assistance increased by an average of 14 percent during the year, according to a 27-city study by the United States Conference of Mayors.

    -Also in this study, it was noted that on average, 20 percent of requests for emergency food assistance have gone unmet in 2004.

    -According to the Bread for the World Institute 3.5 percent of U.S. households experience hunger. Some people in these households frequently skip meals or eat too little, sometimes going without food for a whole day. 9.6 million people, including 3 million children, live in these homes.

    -America’s Second Harvest (http://www.secondharvest.org/), the nation’s largest network of food banks, reports that 23.3 million people turned to the agencies they serve in 2001, an increase of over 2 million since 1997. Forty percent were from working families.

    33 million Americans continue to live in households that did not have an adequate supply of food. Nearly one-third of these households contain adults or children who went hungry at some point in 2000.

    U.S. Dept. of Agriculture, March 2002, “Household Food Security in the United States, 2000”
    Wasted food in America

    -According to America’s Second Harvest, over 41 billion pounds of food have been wasted this year.

    -According to a 2004 study from the University of Arizona (UA) in Tucson, on average, American households waste 14 percent of their food purchases.

    Fifteen percent of that includes products still within their expiration date but never opened. Timothy Jones, an anthropologist at the UA Bureau of Applied Research in Anthropology who led the study, estimates an average family of four currently tosses out $590 per year, just in meat, fruits, vegetables and grain products.

    Nationwide, Jones says, household food waste alone adds up to $43 billion, making it a serious economic problem.

    – Official surveys indicate that every year more than 350 billion pounds of edible food is available for human consumption in the United States. Of that total, nearly 100 billion pounds – including fresh vegetables, fruits, milk, and grain products – are lost to waste by retailers, restaurants, and consumers.

    -“U.S.-Massive Food Waste & Hunger Side by Side” by Haider Rizvi

    -According to a 1997 study by US Department of Agriculture’s Economic Research Service (ERS) entitled “Estimating and Addressing America’s Food Losses”, about 96 billion pounds of food, or more than a quarter of the 356 billion pounds of edible food available for human consumption in the United States, was lost to human use by food retailers, consumers, and foodservice establishments in 1995.

    Fresh fruits and vegetables, fluid milk, grain products, and sweeteners (mostly sugar and high-fructose corn syrup) accounted for two-thirds of the losses. 16 billion pounds of milk and 14 billion pounds of grain products are also included in this loss.
    Food that could have gone to millions

    According to the US Department of Agriculture, up to one-fifth of America’s food goes to waste each year, with an estimated 130 pounds of food per person ending up in landfills. The annual value of this lost food is estimated at around $31 billion But the real story is that roughly 49 million people could have been fed by those lost resources. (For your persona jihad against wastage, see A Citizen’s Guide to Food Recovery)

    (The figures below are 1998 figures)

    Proportion of Americans living below the poverty level: 12.7 percent (34.5 million people)
    The average poverty threshold for a family of four: $16,660 in annual income
    The average poverty threshold for a family of three: $13,003 in annual income
    Poverty rate for metropolitan areas: 12.3 percent
    Poverty rate for those living inside central cities: 18.5 percent
    Poverty rate for those living in the suburbs: 8.7 percent
    Percentage and number of poor children: 18.9 percent (13.5 million)
    Children make up 39 percent of the poor and 26 percent of the total population.
    The poverty rate for children is higher than for any other age group.

    Child poverty:

    -for children under age 6 living in families with a female householder and no husband present: 54.8 percent
    -for children under age 6 in married-couple families: 10.1 percent
    Poverty rate for African Americans: 26.1 percent
    Poverty rate for Asians and Pacific Islanders: 12.5 percent
    Poverty rate for Hispanics of any race: 25.6 percent
    Poverty rate for non-Hispanic whites: 8.2 percent

  5. Polarization and the Decline of the Middle Class: Canada and the US

    Several recent studies have suggested that the distribution of income (earnings, jobs) is becoming more polarized. Much of the evidence presented in support of this view consists of demonstrating that the population share in an arbitrarily chosen middle income class has fallen. However, such evidence can be criticized as being range-specific – depending on the particular cutoffs selected. In this paper we propose a range-free approach to measuring the middle class and polarization, based on partial orderings. The approach yields two polarization curves which, like the Lorenz curve in inequality analysis, signal unambiguous increases in polarization. It also leads to an intuitive new index of polarization that is shown to be closely related to the Gini coefficient. We apply the new methodology to income and earnings data from the US and Canada, and find that polarization is on the rise in the US but is stable or declining in Canada. A cross-country comparison reveals the US to be unambiguously more polarized than Canada.

    http://www.ophi.org.uk/working-paper-number-31/

    ***

    A squatter from the PI will marvel at living in the hood (continuous water, electricity, A/C)- till he has to start paying for his crib in the hood with minimum wage – then he understands – he is still poor – nasa US nga lang.

  6. Hyden Toro · ·

    True…true…we think America and Canada, and Filipinos living abroad, as rich. However, I met some Filipino Caregivers; who wanted to return to the Philippines. They told me: ” Trabaho ka ng trabaho. Puro bayad naman sa utang. Walang mangyari.” They think these countries are lands of milk and honey. Money sprouts on trees. Because of the “pasikat mentality” of Filipinos living in the United States and Canada. They come home: they flash their Almighty Dollars infront of the noses of their poverty stricken countrymen. So, Filipinos come here as “tago ng tago”; being paid of labor intensive jobs, of low wages…and living in below acceptable human condition – below poverty line…

  7. Dave Hojilla · ·

    When communism in the Soviet Union crumbled, and the Berlin Wall was torn down, I hoped that our citizens educated through “nationalistic” writings would finally see through all the propaganda. Sadly, that hope will not be realized today.

    “Fixation” on the fixation of land ownership issue
    The landowner will always have the “fixation” of being accorded the same justice everyone is demanding. He isn’t asking for any special treatment; all he wants is that his constitutional rights which are guaranteed in the Bill of Rights are respected; respect for his right to property, right to just compensation, right due process, right to equal protection under the law, etc. Last I checked, the Philippines was still a democratic country.

    Former Supreme Court Justice Isagani Cruz explains it clearly…
    All these rights are enshrined in the BILL OF RIGHTS which are the most sacred rights in the Constitution. As Constitutional Rights they are superior to any law, administrative or executive order, which must all be in accord with the Constitution; else, they may be declared as a nullity (for being “unconstitutional”) –Cruz, CONSTITUTIONAL LAW, supra, note 14, at 4.

    “The Constitution is the basic and paramount law to which all other laws must conform and to which all persons including the highest officials of the land, must defer. No act shall be valid, however noble its intentions, if it conflicts with the Constitution. The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its strength nor greed for power debase its rectitude. Right or wrong, the Constitution must be upheld as long as it has not been changed by the sovereign people lest its disregard result in the usurpation of the majesty of law by the pretenders to illegitimate power.”

    Whether it is confiscating land, or a discriminate imposition of a bigoted tax (World Bank’s new position to replace agrarian reform), anyone who believes that it is justified to screw Juan to benefit Pedro is confused with the true meaning of justice. This “more Popish than the Pope” mindset is appalling. It is so easy to “give” what does not belong to you. But then, how can you give something you don’t have?

    Solving poverty is a concern for everybody. At the very least it is our government, with all its resources, who should spearhead such efforts by reducing graft and corruption(30-40% of our public funds), legislate sound economic policies, give importance on providing quality education(the great equalizer), improve health services, etc. Alas, it conveniently shifts its huge responsibility to one segment of society and encourages the promotion of mendicancy*. As a result, our agricultural sector has remained stagnant for close to 40 years. As a whole however, this burden should be a shared responsibility.

    * Doleouts: Perpetuating mendicancy
    (http://www.philstar.com/Article.aspx?articleId=613493&publicationSubCategoryId=108)

    It is hypocritical for anyone to preach social justice and at the same time promote bigotry. So once and for all, why don’t we define “social justice” and in the process answer a few “loose ends”.

    I’d like to quote the following:

    Senior asso. justice Josue N. Bellosillo…
    It has been said that social justice-or howsoever it is called- is for the deserving, whether he be a millionaire in his mansion, or a pauper in his hovel; in other words regardless of his economic station in life. Justice must serve all men alike, without fear or favor, and treat them equitably on matters of life, liberty and property. Never is it justified to give preference to the poor simply because they are poor, or reject the privileged simply because of their privilege; for justice must always be observed pursuant to the mandate of the law.

    In Samanillo v. Cruz, et al., G.R. No. CA-194 (L-597)..
    “Social Justice is intended to ameliorate the hardships of the persons acting within the law. It is never intended to help those who trespass upon the rights of others, and not because a litigant is poor social justice is invoked in his behalf, must the courts fail to dispense justice to the rich and poor alike giving the poor a right to which he is not entitled, only because he is poor. Morever, before any party may claim the benefits of social justice he must come to court with clean hands.”

    Thus in Justice Laurel’s words (Calalang vs. Williams, et. al (70 Phil. 726) ring true till today:

    ” The promotion of social justice is to be achieved not through sympathy towards any given group.”

    It is not all the time that we will remain poor unless we fail to plan and cease to fight for our dreams. And being poor is subjective because there are some people who are materially poorer than the other. When that day comes when we face a poorer person who wants something from us do we tilt the balance to the poorer person? or when we reach the apex of our efforts, do the non-landowners deserve the same injustice as the landowners face?

    Our Catholic teachings might remind us of one of the eighth commandments…”Thou Shalt Not Steal”. Unfortunately, atheists might think that mortal sins do not apply to them.

    “Two wrongs (perceived or not) make a right” is a logical fallacy that occurs when it is assumed that if one wrong is committed, another wrong will cancel it out. Like many fallacies, it typically appears as the hidden major premise in an enthymeme—an unstated assumption which must be true for the premises to lead to the conclusion. — Wikipedia

    If all of these don’t help clear the cobwebs, why don’t we just take the hint from Hustler’s Larry Flint, who said, “The majority rule only works if you’re also considering individual rights; because you can’t have five wolves and one sheep voting on what to have for supper.”

    ***
    Agrarian reform failed in more than 30 countries(including the Philippines) and was suppose to have “succeeded” in only three(South Korea, Japan and Taiwan). However, after breaking up large tracts of lands into plots, these countries reversed their program and started re-consolidating. So what kind of “success” are we really talking about?

    Let us take the case of Taiwan, which, like the two other countries, implemented an agrarian program after a war with help of the United States.
    ___
    Begun in 1949, the ROC’s land reform program achieved with impressive success its goals of distributing the ownership of agricultural land to farmers and increasing production. But while the program ensured a more just distribution of land, by the late 1950s it had become clear that land reform had fallen short of guaranteeing efficient utilization of farmland and the development of rural areas.

    In effect, a more widespread ownership of land resulted in small-scale farming, which hindered agricultural development. Farmlands were irregularly shaped and fragmented, with a farmer’s land often divided among several scattered plots. Production was also limited by other problems, such as rather primitive irrigation facilities, little mechanized tilling, and inadequate roads and paths, which made transportation of crops difficult. Insufficient or inefficient irrigation often led to water disputes.

    Government land administration was not made any easier by the traditional inheritance system of dividing up the land equally among the children, resulting in ownership of parcels of land too small for efficient farming. A 1952 survey of several districts and townships provided clear evidence of a widely known fact: Taiwan was filled with farms that were so tiny they were not productive. In the areas surveyed, farmer-owned farms averaged 2.7 acres divided into fourteen plots, and tenant farmers worked on an average of 2.5 acres divided into nine plots.

    To cope with these problems, the government decided to implement land replotting and consolidation as part of the land reform program in order to increase land usage and to lay a solid foundation for the modernization of agriculture. The projects would improve the economy of the rural areas, and this in turn would lead to the overall development of society.

    Source: Whither Landreform by Yen Ai-ching (http://taiwanreview.nat.gov.tw/ct.asp?xitem=100403&ctnode=1446&mp=1)

    ***
    Philippines vs Japan, S. Korea and Taiwan
    Compared to the Philippines’ 8,000,000 hectares, Taiwan has only 900,000 hectares of arable land, Japan has around two million has. And South Korea has the least. We are under a democracy, there is no war, our arable land area is four times that of Japan(largest of the three), we don’t give just compensation to our landowners who could reinvest in our industries and remain productive, they finished their program with five years while we are still at after 38 years, etc. Again, what good is breaking up lands into tiny plots, when we end up re-consolidating them?

    Independent and credible institutions expose agrarian reform (CARP) for what it really is.

    Dept. of Agrarian Reform(DAR)-Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) 2006 Study:

    Between 2004-2006, DAR, in collaboration with Germany’s GTZ commissioned a team composed of an international agrarian reform expert and four national agrarian reform specialists to study the impact of CARP.

    These were some of their conclusions:

    • Philippine Agriculture is now in a “state of distress”. At the macro level, the social and economic conditions in the rural communities are not any better than 10 years ago. Macro policies are prejudiced against agriculture. The “agricultural trade balance” has had a clear deteriorating trend since the ratification of CARP with the country having been transformed from a net agricultural exporter into a net agricultural importer by mid-1980’s.

    • Agrarian Reform Beneficiaries (ARB’s) selling and mortgaging their lands: Nueva Ecija – 41 percent; Laguna – 53 percent; Iloilo – 35 percent; Quezon – 26 percent; etc..

    • “Contrary to general perception, there is really no landowner resistance because voluntary offer to sell (VOS) accounted for 120 percent accomplishment of DAR target while voluntary land transfers (VLT) scheme accounted for 180 percent accomplishment.

    • The DAR-GTZ study also accused our membership in the World Trade Organization (WTO) as another factor behind the failure of FBs and in whole, by the CARP.
    “The government joined the WTO with hopes of exporting Philippine products to developed countries, but this was never realized as Filipino farmers were “still in the primitive stage and could not compete with the modern farms abroad,” it said.

    • “DAR admits that about three million out of the four million farmer beneficiaries did not receive any support services at all,” the study says. (“Aanhin ang damo kung patay na ang kabayo?”)

    WORLD BANK
    ”the uncertainty surrounding [CARP] has discouraged the flow of investments into agriculture as well as encouraged non-planting and premature conversion of agricultural lands into non-agricultural uses. It has also diminished the collateral value of agricultural lands” (World Bank 1995, 18).
    ___
    MANILA — Misguided farming policies, including land reform, are keeping millions in the Philippines poor, according to a report released by the World Bank this week.
    The report said only the manufacturing and service sectors, which require huge capital and skilled workers, had grown significantly over the last decade while agriculture, which employs most of the non-skilled, faltered.

    “These productivity trends reflect a growing scarcity of land and a progressive reduction in the amount of land per worker, aggravated by agrarian reform policies,” the World Bank said.
    The Philippines passed a land reform law in 1987 to break up large agricultural estates owned mostly by the ruling elite and give land to millions of farmhands.

    Last year parliament extended the programme by five years amid widespread landlord opposition, which has kept a number of big corporate farms intact, including one controlled by the family of President Benigno Aquino.

    The World Bank urged the government, among others, to set up a commission to review its current agrarian reform policy so farm land is not tied up and can be used more freely as capital.

    The government says one in three people in the country of 95 million are poor, with most living in rural areas. The farm sector employed 32.5 million people in April, the latest official data available.

    Productivity among Philippine farms has stagnated over 30 years due to falling investment in public infrastructure such as irrigation, as well as reduced farm sizes owing to rapid population growth, the report said.

    “This decline in farm size has been intensified by agrarian reforms that have negatively affected the functioning of land markets and made access to land more difficult for small-scale farmers,” it added.

    The report said other policies over the period brought only short-term relief to select groups though not necessarily the rural poor.

    Efforts by the Philippines, now the world’s largest rice importer, to grow all of its needs merely stifled the efficient allocation of resources and hindered families from earning incomes from other farm activities, it said.

    Source: “World Bank: Philippine farm policy deepens poverty (Aug 19, 2010)

    ***
    (2007) Malacanang Palace indirectly admits CARP has been a huge failure and yet, it continues to dig its own grave.

    Read: Malacañang is proposing to condone as much as P42 billion worth of agrarian loans (http://fromthenews.net/palace-eyes-condoning-p42b-in-agrarian-loans.htm)

    For more on the effects of CARP, please visit the ff:

    (1) The challenge to ruin agricultural development successfully met by carp
    http://badmannersgunclub.com/2010/12/the-challenge-to-ruin-agricultural-development-successfully-met-by-carp/

    (2) More on agrarian reform
    http://badmannersgunclub.com/2010/12/more-on-agrarian-reform/

    ***
    NPA, Negros and Agrarian Reform

    Back in 1972, Marcos implemented an agrarian reform program (PD27 ) to address a growing insurgency problem. This program covered rice and corn lands throughout the country. There was little basis for the program and in fact the retention limit of the landowner was set to seven(7) hectares simply because it was his favorite number.

    Between 1976-1979 and 1984-1986, the sugar industry almost collapsed under the monopoly and control of the dictator and the depressed world prices of sugar. These were the times when everybody(producer to worker) suffered. The only way to sell your sugar then was through the martial law government (PHILSUCOM and its subsidiary NASUTRA). Some producers left the country, while the majority who couldn’t, had to take out exorbitant loans from government banks. In short, if you planted sugarcane, you would lose money (many have not recovered until this day). Many didn’t understand this and started pointing fingers at everyone they could. The landowners who provided “gising to libing” benefits to its people, were caught between the devil and the deep blue sea. It certainly was an opportune time for recruitment and many did fill up the ranks of the NPA including some landowners who could no longer stand the oppression.

    In 1986, when the main recruiter of the communist insurgency fled to Hawaii, the NPA had grown to 22,500 armed guerillas and the revolutionary government of Cory Aquino came into power.

    In 1987, the peasant leader Jaime Tadeo and his group of leftist farmers marching toward Malacanang Palace were shot by Cory’s jittery security forces. 19 of them died (Mendiola Massacre). Her newborn government panicked and to make amends, exceeded the original demands of these farmers who then wanted government lands.

    NOTE: In the debates of the Constitutional Commission where the bishops and leftists participated, they agreed that plantations are not covered by agrarian reform as the workers are not tillers of the soil but hired workers. (See volume on the debates between Bishop Bacani, Tadeo and Nieva.)

    Source: http://opinion.inquirer.net/inquireropinion/letterstotheeditor/view/20100903-290406/Revisit-constitutional-limits-of-agrarian-reform

    Negros and its sugar industry has never been what it was before the dictatorship of President Ferdinand Marcos. Continues challenges in the guise of smuggling(technical included), the insurgency problem in the 80’s and early 90’s, floods and typhoons, restrictive & oppressive government policies, spiraling cost of inputs like fertilizer, the continued effects of agrarian reform, etc., have left it vulnerable.

    The NPA on the other hand, has shrunk in size and splintered into two groups, the NPA and the RPA-ABB. If the AFP is to be believed, the NPA has transformed from an ideological movement to a bandit group to a terrorist organization. Their umbrella organizations recognize the failure of CARP and have also rejected its re-extension. In other words, the NPA has other reasons for existing.

    ***
    Doomsday for Philippine agriculture is coming

    I am disturbed, that after distributing 4.119 million hectares* of agri land to farmer-beneficiaries nationwide, we lease close to 1.5 million hectares to foreign corporations for 25-50 years.** There is also the realization that we are ill-prepared for Free Trade. It will permanently disable our anemic and antiquated agricultural sector. It will finish what our agrarian reform programs started out to accomplish. Our small carabao plowed plots will be at the mercy of fully mechanized & fully subsidized plantations of competing countries.*** It would have been a different story if we had or could prepare properly, but its getting late, and the risks imposed by our government and our pro-agrarian reform advocates prevent Philippine agriculture from its only means of survival.

    Conclusion: Mahilig siguro sa imported!

    *http://www.businessmirror.com.ph/component/content/article/53-agri-commodities/20294-412m-hectares-awarded-under-carper-law.html
    ** http://newsinfo.inquirer.net/topstories/topstories/view/20101112-302855/Aquino-urged-to-review-farmlands-lease-to-foreign-investors
    ***http://www.nytimes.com/2003/07/20/opinion/harvesting-poverty-the-rigged-trade-game.html

    ___
    In closing, let me share with you a short article written by a Univ. of Illinois Economist who is suggesting an alternative solution to agrarian reform.

    ***
    LAND REFORM LIMITED SUCCESS AS AGENT OF ECONOMIC AND SOCIAL CHANGE
    http://www.news.uiuc.edu/biztips/01/02landreform.html

    CHAMPAIGN, Ill. — One of the most hotly debated topics over the years has been land reform.
    Dating from the influential 1951 United Nations report, “Land Reform: Defects in Agrarian Structure as Obstacles to Economic Development,” redistribution of land has been hailed as a remedy for third-world poverty.

    Examining the record in Asia and Latin America, University of Illinois economist Salim Rashid argues that land reform has had limited success as an economic tool and offers a “very indirect means” of political and social reform. Improved education, credit from banks, industrialization and “rule of the law” all hold greater promise to end the cycle of rural impoverishment and periodic starvation.

    There are many reasons why the issue should be re-examined, according to the UI economist. The threat of Communism has disappeared, and land reform had a Cold War motivation.

    Moreover, the relatively few examples of successful land reform in Korea and Taiwan were achieved under non-democratic regimes.

    “What are the prospects for land reform under democratic regimes in countries like India, the Philippines, Brazil or Mexico? Does land reform remain of central importance when countries like Indonesia, Malaysia and Thailand have been able to grow without such reform?”
    Much of the supposed success of land reform stemmed from early favorable reports of Stalinist collectivization in Soviet Russia. Subsequent decades, however, have made it clear that the farm collective stunted Soviet agriculture and failed to improve significantly the lot of the poor.

    “It is astonishing to think how the presumed success of the Soviet model served to inspire generations in developing countries — and how no one made an effort to ascertain if this model was factual.”

    Much of the advocacy for land reform involves animus toward landowners who enjoy undue legal and social privileges. Rashid said the solution for such inequality is for state authorities to enact reforms that give landless farmers access to educational facilities, bank credit, extension services and a competitive local economy.

    A government unable to provide its rural citizens with a basic set of legal and social rights is invariably too complacent or corrupt to undertake the enormous task of redistributing land across society.

    In addition, land reform has typically been stymied by the enormous cost of buying private property or the social disruptions that stem from outright confiscation of the land.
    “Advocates of radical land reform argue that land reform has not worked because it has been subverted. But of course. This is what comes of planning a radical reform without thinking how it is to be administered,” Rashid noted in his paper, “Is Land Reform Viable Under Democratic Capitalism?”

    “When one reads the list of items needed for successful land reforms, it is a complete menu for economic development. But then it is probably better to aim explicitly at economic development, and if such development necessitates land reform, that is the appropriate time to face up to this issue.”

  8. Hi Dave,

    Agree on a lot of issues:

    “Much of the advocacy for land reform involves animus toward landowners who enjoy undue legal and social privileges. Rashid said the solution for such inequality is for state authorities to enact reforms that give landless farmers access to educational facilities, bank credit, extension services and a competitive local economy. ”

    That would be the following recommendations listed below:

    1. Rationalize access to credit and working capital.
    2. Build the entrepreneurial capability of our citizens – landowners and farmers alike – or anyone who wants to do business for that matter.
    3. Student loans, grants, endowment funds for agricultural entrepreneurshiup and agri business courses. And no – it doesn’t have to come from Government or SUCs for that matter.

  9. On Property Rights

    I am in favor of this “school of thought” – http://www.mutualist.org/id45.html

    Although there are significant and fundamental differences between mutualist and Lockean (and Geoist, for that matter) theories of land ownership, the issue is beyond our scope here. What is really important to note is the extent of agreement between these rival theories as to the illegitimacy of much of present nominally “private” landlord property.

    The vast tracts of land claimed by present-day land barons are illegitimate by any plausible libertarian standard, including the Lockean rule of appropriation. In early modern Europe, the landlord class acted through the State to turn its “ownership” in mere feudal legal theory into a modern right of absolute ownership, and in the process robbed the peasants who had occupied and tilled the land from time out of mind of their very real traditional rights in the land. This process was followed by rack-rents or by mass eviction and enclosure.

    In the New World, the state acted to preempt access to empty or nearly empty land, by claiming it for the “public” domain. This was followed by restrictions on access by individual homesteaders, coupled with massive land grants to land speculators, railroads, mining and logging companies, and other favored classes.

    The result was to limit the average producer’s independent access to the land as a means of livelihood, to thereby restrict his range of independent alternatives in seeking a livelihood, and thus force him to sell his labor in a buyer’s market.

    In virtually every society in the world where a few giant landlords coexist with a peasantry that pay rent on the land they work, the situation has its roots in some act of past robbery by the State. The phenomenon goes all the way back to the Roman Republic, as recounted by both Livy and Henry George, in which the patricians used their access to the State to appropriate the common lands and reduce the plebians to tenancy and debt slavery. As Albert Nock wrote, “economic exploitation is impracticable until expropriation from the land has taken place.” (15)

  10. On the CARP/DTR/GTZ Study

    Even without the GTZ study – the trends were already showing that CARP sucked, as already mentioned.

    ***
    NPA, Negros and Agrarian Reform

    As you pointed out and to which I agree, monopolist business practices don’t work.

    For all the “gising to libing” noblesse oblige – the bigger picture as previously written is this

    Recent studies of the sugar cane industry in diverse regional and national settings have affirmed its role as a social determinant. The methods of crystallizing sugar from cane syrup originated in India during the first millennium B.C.E. , and Arabs subsequently introduced this technology to the Mediterranean world in the seventh and eighth centuries. The beginnings of the modern mass production-mass consumption market, however, date back to the seventeenth century, to the time of the formation of estates in the French and English colonies of the Caribbean. Here European planters used African slaves to grow cane and operate mills.

    Slavery proved an expeditious system because of the peculiar labor needs of planting and harvesting cane. The two activities follow closely upon one another: the growing period for cane is about one year, and the new crop must go into the ground as soon as the old one leaves. Moreover, because cane begins to deteriorate immediately upon being cut, it must be delivered rapidly and in proper amounts to keep mills operating efficiently. The harvest season, therefore, is very busy, and only a large, well-disciplined labor force capable of toiling in the tropical heat can meet its demands. During nonpeak periods, just a fraction of those workers are required to weed and maintain the fields. Thus, unpaid chattels best fulfilled the requisites of this sector of the industry.

    Milling—a capital-intensive activity that utilizes machinery to grind the cane, boil the extracted syrup, and crystallize it into brown sugar—is the other component of sugar production. In various eras owners have employed animal power, windmills, waterwheels, and steam and electricity to run their factories. Mechanical advances have gradually reduced labor costs, enlarged grinding capacity, speeded up manufacturing, and improved the purity of the end product, thus yielding ever greater profits to mill owners.

    At the same time, because of the general availability of an abundant, cheap work force in tropical and semitropical climes, the invention of laborsaving field machinery has not kept pace with the technological improvements in milling. Only recently in places like Australia and Hawaii has sophisticated mechanical harvesting equipment come into use.

  11. NPA, Negros and Agrarian Reform – (continuation)

    In the Philippine case cultural ecologists would conclude that the methods by which Filipinos produced sugar shaped to a large degree their cultural and social behavior, especially those aspects closely associated with the industry. In regard to millers and landowners, their capitalist outlook and extravagant behavior sprang from their control over and ownership of land and energy-efficient equipment. As for field hands, the way they cultivated cane as tenant farmers or plantation workers molded their social behavior and attitudes. Where tenancy and barrio communal living prevailed, a cooperative outlook developed that expressed itself not only in mutual assistance, but also in joint resistance to oppression. On isolated haciendas where wage labor dominated, social anomie and a sense of helplessness became the behavioral norm. Moreover, because the industry grew to such importance, in terms of political power, economic prestige, and the great number of people who participated in it, the attitudes of both rich and poor sugarmen spread throughout the archipelago. Hence, to understand the values and attitudes of Philippine society, one needs to understand something about the manner in which the sugar industry functioned.

    Large-scale sugar production eventually spread to regions possessing diverse social and labor systems; therefore, the resultant sugar society exhibited considerable variation in structure, norms, and behavior. To describe change in all these places in any meaningful fashion would require a work of massive proportions; instead, I have opted to focus upon just two areas, northern Pampanga and western Negros. Besides encompassing the two largest sugar-growing regions in the country, they also had very different histories and social circumstances. Long-settled Pampanga benefited from its proximity to the colonial capital of Manila and began making sugar in the seventeenth century; Negros, more isolated, remained a wilderness until the opportunity to grow sugar led to its nineteenth-century transformation into a plantation economy. Landholders in the former area built their sugar agriculture upon a traditional patron-client relationship with their tenants; in contrast, newly arrived Negrense entrepreneurs exuding a frontier spirit established and operated haciendas through the more efficient, economical, and flexible use of paid labor. The determinants of the sugar market were common to both.

    The sugar industry and Philippine society interacted in complex ways, and concentrating on two disparate local regions as well as upon the insularwide and international levels enhances comprehension of three dimensions of that interaction. First, examining what happened to Pampanga and Negros reveals the regularities in sugar’s impact upon local farming areas. The development in both places of the classic pattern of very rich and very poor, millers and field hands, argues persuasively for the universal determinism of sugar in societal development.

    Second, observing the contrasts between the two regions, even under the impact of sugar, indicates just how the original culture of each endured and continued to shape local society. Farmers could and did grow cane under differing systems of labor organization, and the degree of sugar’s sway varied from place to place. Especially in Pampanga old traditions proved persistent. Moreover, ideas about society and social organization formed in the provinces sometimes affected the way people thought and acted at the insular level. In brief, the influence of the sugar industry did not move just one way.

    Finally, portraying broad changes in the industry focuses attention upon the emerging supraregional sugar elite, a small number of powerful and influential individuals and families, many of them from Negros and Pampanga. Because of their political clout and extravagance, derived from their ownership of vast lands and mills, they heavily influenced Philippine society, government, and economic life. On one hand, elite leadership at the local level encouraged the kind of regional identity and loyalty that has operated to the detriment of national political unity; on the other hand, their business and lobbying activities at home and abroad led to the acceptance of a national economic purpose on behalf of their industry. They forged social links in every sugar-growing area, and, through their interactions and business contacts with Europeans and Americans, they became internationalists. At the same time, their need to secure overseas markets strengthened the ties of dependency and neocolonialism that have characterized modern Philippine-American relations.

    http://bit.ly/gcIEU7

  12. Doomsday for Philippine agriculture is coming

    After distributing 4.119 million hectares* of agri land to farmer-beneficiaries nationwide, we lease close to 1.5 million hectares to foreign corporations for 25-50 years.

    The question to a lessor is – whether they make more margins if they:

    1. Go with the previous landlord
    2. Go with the foreign corporation
    3. Run their own operation
    4. Work for someone else, while doing #1
    5. Work for someone else, while doing #2
    6. Work for someone else, while doing #3
    7. Leverage the power of consolidation by joining cooperatives.
    8. Spend time lobbying for the repeal of CARP.

    There are of course – ideal solutions, and there are realistic pragmatic solutions given the context of what’s going on in the field. If you are in the optimal condition – no CARP – you have a set of strategies.

    If you are in a less optimal condition – w/ CARP – you have a different set of strategies – while working on the side to gain the optimal solution (No CARP). Under such circumstances – agility, resiliency, continuous improvement, re-engineering, reviewing the value chain and the supply chain will go a long way – including diversification.

    There is also the realization that we are ill-prepared for Free Trade. It will permanently disable our anemic and antiquated agricultural sector. It will finish what our agrarian reform programs started out to accomplish. Our small carabao plowed plots will be at the mercy of fully mechanized & fully subsidized plantations of competing countries. *** It would have been a different story if we had or could prepare properly, but its getting late, and the risks imposed by our government and our pro-agrarian reform advocates prevent Philippine agriculture from its only means of survival.

    We keep on protecting our industries – the validity of this argument, is undermined by the tendency for such policies to become permanent as the aided industry grows dependent on the support and even lobbies government officials to keep protectionist measures in place.

    Note that a country that restricts goods from other countries may find its products similarly restricted, which slows growth by making it harder for industries to export their products.

    Protectionism restricts competition by limiting the availability of foreign goods, forcing consumers to buy more expensive domestic products. The costs of tariffs and other protectionist barriers are passed on to consumers in the form of higher prices for foreign goods. Free trade, in contrast, forces more competition among producers around the world, which lowers prices and increases the diversity of goods.

    Moving forward – we cannot put all our eggs in just one basket called agriculture and return to our previous state of being a plantation economy – we need to diversify and reduce reliance on agriculture as the primary provider of jobs. To do so – we need to open up the economy.

  13. Other Alternatives to CARP: Geolibertarianism

    Geolibertarianism is a political movement that strives to reconcile libertarianism and Georgism (or geoism).

    Geolibertarians are advocates of geoism, which is the position that all land is a common asset to which all individuals have an equal right to access, and therefore if individuals claim the land as their property they must pay rent to the community for doing so. Rent need not be paid for the mere use of land, but only for the right to exclude others from that land, and for the protection of one’s title by government.

    They simultaneously agree with the libertarian position that each individual has an exclusive right to the fruits of his or her labor as their private property, as opposed to this product being owned collectively by society or the community, and that “one’s labor, wages, and the products of labor” should not be taxed. Also, with traditional libertarians they advocate “full civil liberties, with no crimes unless there are victims who have been invaded.”

    Geolibertarians generally advocate distributing the land rent to the community via a land value tax, as proposed by Henry George and others before him. For this reason, they are often called “single taxers”

    Perhaps the best summary of geolibertarianism is Thomas Paine’s assertion that “Men did not make the earth. It is the value of the improvements only, and not the earth itself, that is individual property. Every proprietor owes to the community a ground rent for the land which he holds.

    On the other hand, Locke wrote that private land ownership should be praised, as long as its product was not left to spoil and there was “enough, and as good left in common for others”; when this Lockean proviso is violated, the land earns rental value. Some would argue that “as good” is unlikely to be achieved in an urban setting because location is paramount, and that therefore Locke’s proviso in an urban setting requires the collection and equal distribution of ground rent.

    Nobel Prize-winning Austrian School economist Friedrich Hayek expressed an appreciation for the special role of land in an urban setting, in The Constitution of Liberty (1960)

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