Greater attention has recently been paid to income inequality. Piketty’s analysis in Capital in the Twenty-first Century, has been a top news story; indeed the World Economic Forum, a major meeting of world leaders and policymakers, identified “severe income disparity” as one of the top “global risks” .
One important solution to inequality that should play a greater role in discussions is land reform: redistribution of agricultural land from those who have lots of land to those who are landless or land-poor. In the world of international development, land reform has largely fallen off the agenda in favour of industrial development as a solution to poverty. Poverty and inequality are related, of course, but not identical. My own graduate students quickly counter my suggestion of the importance of land reform by citing the failure of Zimbabwe’s land redistribution.
It is important to know that land reform has been a staple of the modern era in socialist countries such as China and the Soviet Union and those with covertly or openly anti-communist agendas such as Taiwan, South Korea and Japan. As these examples suggest, reform has not only been a powerful force for challenging rural poverty by giving land to the landless; it has also been foundational to economic growth by providing increased food production to feed large numbers of industrial workers and by increasing incomes among the rural poor so that they can buy consumer goods. There are political consequences too. In a classic analysis of the causes of different forms of government, Barrington Moore in Social Origins of Dictatorship and Democracy, argues that large landholding classes are one of the factors leading to fascism.
China, a nation that arguably carried out the largest-scale land reforms in history, is an interesting case illustrating the importance of land redistribution. In the early 20th Century Sun Yat Sen made land to the tiller a centerpiece of the reforms he advocated. Following the Communist victory in 1949, the first and most important social transformation they carried out was to send groups of educated youth, “work teams,” into Chinese villages to confiscate the land of the landlords and redistribute it in equal parcels to each village family (including to landlords, although those landlords who had been particularly bad, “bullies,” were executed; one million such executions are estimated to have occurred). China collectivised rural production in 1958 but returned to the policy of allocating parcel of land to each peasant family in the early 1980s.
China’s extremely rapid industrialisation in the last two decades, making it the world’s largest manufacturer and exporter, and the second largest economy in the world, has earned it praise from most of the development establishment. In my view, however, China’s real contribution to development theory is its land reforms. Unlike so much of the developing world, China’s rural people – half of the nation’s population – do not suffer from landlessness. All families are allotted plots of land in a process that is fair and equitable.
Economist Yasheng Huang, in Capitalism with Chinese Characteristics, shows that it was in the 1980s, not the 1990s era of massive industrialisation, that China saw the greatest drop in rural poverty. Huang celebrates the earlier decade for the vibrant creation of non-agricultural rural enterprises: is not just land reform that mattered. But having land to fall back on gave many rural entrepreneurs the courage, if not the capital as well, to start these private businesses, while the urban-led 1990s industrialisation undermined small-scale rural industry in complex ways.
As many will know, China in the industrial era has become better-off but much more unequal, with a Gini coefficient of at least 0.47. During recent travels to areas I have visited for over two decades, I have seen major changes but also continuing poverty and desperation. Land to all peasants is, sadly, necessary but not sufficient, especially when food prices are too low to produce enough income for many farmers. Low farm incomes are the main reason so many peasants have fled to cities in search of work in the first place,(although many have returned home due to exploitative work and low pay in urban factories and construction sites.
Even sadder, however, China is in the process of dismantling land reform, as local governments appropriate land from many peasant families for real estate development. This summer I heard few worries about China undoing its greatest revolutionary legacy. Neither officials nor peasants seem worried, for complicated reasons. But academics should not reinforce Chinese myopia. The importance of land reform should attract as much attention as inequality itself, since it is an important means, even if not sufficient in itself, to challenge the persistent poverty and inequality found throughout the developing world.
Photo credit James Wheeler