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.
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. 
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 
“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.”
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 :
“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. 
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: 
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 
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 
…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:
- Streamline our institutions and processes.
- Rationalize access to credit and working capital.
- Build the entrepreneurial capability of our citizens – landowners and farmers alike – or anyone who wants to do business for that matter.
- 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.
- 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. ” 
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.
As far as I am concerned:
- Abolish the CARP and DAR.
- 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.
- Free the market, open up the Philippine Economy – remove the protectionist provisions of the constitution.
- Build more entrepreneurs NOT serfs or talking heads for that matter.