Asia (and elsewhere) Conference on Security of Property Rights - - PowerPoint PPT Presentation

Lessons fr from Europe & Asia (and elsewhere)

Conference on Security of Property Rights

20.November.2018 Johannesburg

• Dr. Tom G. Palmer

Atlas Network Cato Institute Tom.Palmer@AtlasNetwork.org

What can we learn from experiences

• f expropriation without

compensation?

• It’s been tried before;
• It often fails to achieve its ostensible goals;
• Intentions and Consequences Often Do Not Correspond
• It doesn’t matter what region, religion, color, or

ethnicity those affected are;

• Humans respond to incentives;
• The consequences of changing incentives can be

very severe, indeed.

Kazakhstan, 1931-1933

• 1927-28: Expropriation of grain and “dekulakization” (in Kazakh

terms, “debaiization” to expropriate rich landowners)

• 1929: Expropriation of livestock from nomadic Kazakhs
• 1929: European Russian colonists enter Kazakhstan (some

unwillingly)

• 1929-30: Expropriation of land and forced collectivization
• 1930-1931: Harvests collapse; more livestock expropriated to

turn over to collective farms (in 1931, 68.5% of livestock expropriated to feed the cities – numbers of sheep and goats declined by 70% and 90%)

• 1931: Starving people flee to China, Iran, Afghanistan, and other

countries

• 1930-1933: Estimates vary, but a conservative estimate of the

deaths from the expropriations of land, livestock, and grain run to 1,500,000, or about 1/.4 of the entire population and 1/3 of the Kazakh population

• “I hope the current generation of Kazakhs will not forget about

the people, the children, the elderly who died of hunger; about the villages that were deserted and died out; about the sick and those who died in the steppe....”

• Tatyana Nevadovskaya, 1933

Ukraine: 1928-33

• 1928: Collectivization of land begins in the

USSR, with farms expropriated and added to larger collective farms

• Ukrainian farmers resist expropriation of land

and collectivization and are subjected to greater expropriation of grain

• 1929-30: “Kulaks” (farmers with more land
• r a some livestock) are targeted for

expropriation and deportation, often dumped in barren fields in Siberia or Central Asia

• 1932-33: Brigades of urban party

“activists” are brought to Ukraine to police grain requisitions

Ukraine: 1928-33

• 1932-34: Harvests collapse and

livestock is slaughtered (Between 1928 and 1932 the number of cattle and horses dropped by nearly half, pigs declined from 26 million to 12 million, sheep and goats from 146 million to 50 million

• 1932-33: Estimates vary, but

conservative estimates of 4,000,000 additional deaths in Ukraine; approximately 2,000,000 are estimated to have died just in the period May – July 1933.

Romania: 1949-1962

• 1948: Communists nationalize

firms and factories

• 1949: Larger land holdings of

peasants ere confiscated, allegedly to redistribute to poorer peasants

• 1950s: Approximately 80,000

peasants arrested and imprisoned

• Progress on expropriation and

collectivization was slow, but resulted in declining outputs, nonetheless

Romania: 1949-1962

• 1955-1962: Percentage of households

engaged in private agriculture goes from 88.5% to 7%

• Romania rapidly industrializes, focusing on

large state enterprises in chemicals and steel, with much of the investment completely wasted

• Agricultural production languishes and

the state conscripts millions of school children to bring in the harvests

• 1981: Food rationing reintroduced and daily

calorie consumption reduced and monitored

• 1962-1989: Farmers are gradually forced into

communal living arrangements, with buses taking them to the fields

China: 1958-1962

• 1958: Farmers forced to turn over land

and productive assets to collective “Communes”

• End of 1958: 25,000 state communes

created, with an average of 5,000 households each

• Farmers respond by hiding grain,

slaughtering livestock, and selling what they could

• 1959: Starvation becomes widespread
• 1957-1961: Numbers of pigs and other

animals plummets, as they are slaughtered or starve

• In Hunan Province the numbers go from 10.9

million in 1957 to 3.4 million in 1961

Cambodia: 1975-79

• 1975: Khmer Route take
• ver and property is

expropriated while land titles and registries are destroyed

• Urban people are forced into

agricultural labor and frequently beaten to death

• 1976: Four-year plan

instituted to manage collective agricultural production

• Mass starvation ensues
• 1979: Vietnam invades and
• verturns Khmer Rouge

Afghanistan: 1978 - 1992

• 1973: Mohammad Daoud overthrew

King Zahir Shah, his cousin, with the support of Communist army officers;

• 1978: Daoud and most of his family

killed by his Communist allies in 1978);

• Debts cancelled and large tracts of land

expropriated;

• 1979: Popular rebellions, often

spearheaded by farmers, led the USSR to kill the leaders and install rival Communists who were loyal to Moscow; firms were nationalized.

• The country is almost totally destroyed

in war

If that all sounds like ancient history

• Let’s consider this case:

Venezuela: 2001-2018

• 2001: Chavez issues a decree on expropriation of

farmland

• "Our socialism accepts private property, just that

private property should be in the framework of a constitution, laws and social interest."

• "To those who own the land, this land is not
• yours. The land is not private, but the property of

the nation.”

• Hugo Chávez
• 2005: Expropriation of land proceeds without

compensation – farmland, followed by companies, shops, and other property

• As output of farms collapsed, agricultural supply

firms were expropriated (also without compensation)

• Food disappears from shelves and prices soar
• Average Venezuelan weight loss in 2017 was 11

kilograms

• But not, of course, for everyone

Venezuela: 2001-2018

• The law has been used

systematically to punish government opponents and to reward government supporters, confiscating land from opponents and giving it to supporters

• The state combined lists of

signers of petitions against Chávez and for him and used it as the basis for redistribution

• f land
• Violence has engulfed the

country

• Tens of thousands of refugees

are fleeing the country daily

Sometimes bad intentions are less important than unintended consequences

• Famines resulted in massive

deaths among ethnic Kazakhs, Ukrainians, and

• thers mainly because of

indifference from the rulers, rather than openly genocidal intentions

• Chains of consequences are

set off, with one leading to another, without any coherent plan; one intervention leads to another, which leads to more unintended consequences

• You don’t have to have bad

intentions to generate very bad consequences

• If anyone thinks, ”It can’t

happen here,” they should think again.

• The awful consequences in

Kazakhstan, Ukraine, China, Afghanistan, and Venezuela also were not intended

• But they happened

nonetheless

Sometimes bad intentions are less important than unintended consequences

• Communist ideologues

have a different understanding of truth and loyalty than others;

• If you rely on them to

gain or hold power, you may find yourself in the position of President Daoud of Afghanistan

• When people begin to

consume capital and reduce production, the confiscation will not be

• blamed. The blame will

fall on

• “Wreckers”
• “Saboteurs”
• Enemies of the People
• Political Opponents
• Ethnic Minorities
• Anyone but those truly

responsible

Expropriation Without Compensation Is Not a Novel Idea

• It has been used to

dispossess individuals and groups for millennia. It has taken many forms

• Conquest
• Colonization
• Ethnic Cleansing
• And many others
• Among the valuable incidents
• f ownership that has been

expropriated is the right to “traffic in land.”

• One of the most egregious

acts of expropriation in the 20th Century was the exclusion

• f black Africans from the

transmission of land titles in the

• Native Land Act of 1913
• Eliminated “free traffic in

land” by prohibiting sale or acquisition of land to members of other ethnic groups and reserved the bulk

• f agricultural land to “whites”

Expropriation Without Compensation Is Not a Novel Idea

• EWC means the abolition of property altogether.
• If property can be confiscated without

compensation, there is no property at all – for

• anyone. No one can be sure that they will own

tomorrow what they own today.

• People who do not believe that they will will

benefit from investing in productive assets will cease to invest; they will consume it.

There are millions of Zimbabwean refugees in South Africa

If same conditions are created in South Africa, where will you go?