The Ethics Of Liberty - Land Monopoly, Past And Present

 

The Ethics Of Liberty by Murray Rothbard

Chapter 11 takes a deeper look at the subject of feudalism and shows its relevance in the current day.  Rothbard also applies ideas from his chapter on criminality in describing to how to right the wrongs of modern day feudalism.  For reference, feudalism is defined as "continuing aggression by titleholder of land against peasants engaged in transforming the soil."  To that Rothbard adds the concept of "land engrossing" and calls the combined practices land monopoly.  Land engrossing involves keeping potential new owners out of raw land.  Governments act in this role in order to grant privileges to specific individuals or groups.  In other words they decide who gets to mix their labor with land in order to transform it into their legitimate property.

The first example of land monopoly in the US that comes to my mind is the settlement of the Unassigned lands of Oklahoma in 1889.  The US federal government cleared the land of the previous owners, the Indians, to give it over to white settlers.  Then they specified no one could claim land until a certain date.  Anyone who crossed the line before then would have their land claims considered illegitimate.  Those who crossed the line early were called "Sooners" as an insult.  They broke the governments rules.  But the government's land monopolistic rules were themselves illegitimate.  They took land from one group to give to another.  They kept potential legitimate owners off the land artificially.  Then they also recognized claims of ownership before the new settlers had transformed the land.  All parts of this action contradict the libertarian theory for proper ownership.  After that, the government left the new settlers alone to manage the land freely.  Therefore, land monopoly ended quickly.

So it isn't an example of feudalism but land engrossing under the umbrella of land monopoly.  When looking at history through this lens, it is clear that land monopoly is very common throughout the world.  Yet, the United States is unique in that the practice of feudalism was much more temporary and less widespread.  In contrast, much of the under-developed world, now called the Global South, still practices feudalism on some level.  In fact, this is the reason why foreign investment doesn't work in many cases, because there are two different systems at play.  Even when land isn't involved the investment comes to the receiving countries through a filter of monopoly concessions.  Think back to the Oklahoma land rush example and draw the appropriate analogies with land, money, resources, supply deals, etc.  Rothbard quotes Carlos Fuentes, who he describes as a Mexican intellectual.

                "You have had four centuries of uninterrupted development within the 

                capitalistic structure.  We have had four centuries of underdevelopment 

                within a feudal structure... We come... from... slavery...to... latifundio 

                [enormous expanses of land under a single landlord], denial of political, 

                economic, or cultural rights for the masses,"

Rothbard then gives examples of his day like the Shah of Iran owning massive amounts of land.  There was an American mining company, Cerro de Pasco, in Peru that forcibly removed indigenous people from their land with no legal justification, the Peruvian government helped.  Oil companies have done similar things around the world.  Sometimes foreign governments extract rent or fees illegitimately from the oil companies.  Sometimes oil companies work with foreign governments to get land grants to keep competitors out or other special privileges to use land which others rightfully owned with no compensation to them.

The story of land monopoly, land ownership and its distribution in the the United States is unique compared to other countries.  However, there were attempts at continuing feudal practices.  The story shows the importance of a populace standing up for natural ownership rights and refusing to accept serfdom.

                "Many of the English colonies made strong attempts to establish feudal rule, 

                especially where the colonies were chartered companies or proprietorships, 

                as in New York Maryland, and the Carolinas."

Those who received government land grants found that the only way to make money off the land was to sell it to settlers.  The settlers were not forced to immigrate, settle, or stay on the land.  They also did not owe rent or tribute to the company or proprietorship.  The requirement to pay for the land did not follow a libertarian theory of ownership.  It was unjust to make the settlers pay for raw, unused land, but after that the settlers did own the land outright.  From there on it was more or less a libertarian system.

In a last ditch effort to continue feudal privilege over their land grants some proprietors attempted to collect quitrents from the settlers.  It was a type of rent paid to escape other obligations to a feudal lord or government.  The Americans' response was most appropriate.

                "the settlers widely refused to pay or to treat the land as anything but their own.

                In every case, the colonial proprietors gave up trying to collect their quitrents."

The only area where quitrents were collected were in the Hudson Valley.  The land was rented not sold, and the settlers were even called 'peasants'.  The situation ended in the 1840s when the 'peasants' waged open war against their ersatz lords and won.  I'm struck by the fact that this piece of history is not taught in school.  A war fought against feudalism (i.e. slavery) in the North by whites against whites sounds like a very instructive and interesting story.

Of course, there was one region of the US where a feudal system continued a few more decades.  The slave system of the American South, which was enforced by law and violence.  Large planting families together with the state governments subsumed the whole culture into perpetuating land monopoly.  We all know how slavery ended but Rothbard points out the moral error the US government made by granting ownership of plantation lands after the war to the previous slavemasters.

                "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."

If made in the days immediately after the Civil War, reparations of land and some back pay to support the ex-slaves' immediate needs would have made sense.  Think back to the chapter defining criminality.  If the victim of the crime and his rightful property is identifiable, then it should be restored.  The criminal gets nothing accept possibly legal punishment.  Today that task is impossible.  Any attempt to restore property to ex-slaves' families would produce more injustice than justice.  Some authority would strip rightful owners of their property to give to others whom have no identifiable legitimate claim.

For those who value economic development, history shows that the system of land ownership is critical.  In the 19th century many historians believed that feudalism was on the small and decentralized side of the government spectrum, while absolute monarchy was on the large and centralized side of the spectrum.  However, as we have seen feudalism is an unjust system which violates the libertarian concepts of property and criminality.  Absolute monarchy then is simply another layer of state authority over the feudal system, the king being a feudal over-lord.

Even more confusing, of those 19th Century European historians, some believed that economic development was faster under monarchy than feudal systems.  Others thought of feudal states as providing enough decentralization to facilitate economic growth.  None of them considered what history actually teaches, that the path to economic prosperity is created by an ethical system which is based on liberty.  A corresponding government would enforce and protect liberty.  That only occurs when the government is small and decentralized.

                "the true dichotomy was liberty on the one side versus the feudal lords and

                the absolute monarch on the other. Furthermore, the free market and 

                capitalism flourished earliest and most strongly in those very countries where 

                both feudalism and central government power were at their relative weakest"