Meanwhile, in Ethiopia
Just in passing, this sort of thing is the reason why I downscaled Project Africa to Project Zambia. It is very clear that Ethiopia is on the brink of a very nasty famine, but understanding anything beyond this would take a vast amount of work and the consumption and digestion of bushels of not very nutritious Afrobollocks[1]. A few things that strike the attention:
First, the combination of green fields and famine is not "ironic" or "strange" - it's pretty much fundamental to the whole question. It means that any explanation of the famine based on the failure of the spring rains has to be wrong. If grass is growing, then grain is growing, or at least, if grain isn't growing then there's some other reason why than drought. So the Ethiopian government are, as far as I can see, at the very least not being totally straight here.
It looks to me like a classic Sen famine, with the root cause in (among other things) the fact that wine is more profitable than wheat[2], being dressed up as an ecological rather than economic crisis in order to save everyone's blushes. I don't doubt that the Meles government have screwed things up much more badly than they needed to, and suspect that their recent Somalian adventure might have caused them to take their eye off the ball. But it seems as if the famine is being used by the global punditosphere to twist their arm a little bit further up their back in the direction of neoliberal reform. Viz, from the article:
Farmer Mohammed Kedir, 23, dreams of the day when he can own his own plot of land. If he owned the land, Kedir said, he might experiment with more-profitable crops, and he said he'd take better care of the soil.
"But if the government can take my land at any time," he said, "what's the point of trying so hard?"
"Guess I'll just sit here 'n' starve to death", he presumably then added. I mean, I'm sure he does dream of a sensible land reform in Ethiopia, but doesn't this obvious propaganda stick in the craw a bit? Mohammed Kedir presumably doesn't dream of the day that he gets murdered in a horrible civil war over land disputes, but I guess the guy from the Chicago Tribune never asked him that one.
Bonus points for the mention of "the Chinese model" in a country that's so utterly a US catspaw in the region, by the way - the nefarious representative of the PRC is fast becoming a stock Afrobollocks character, along with the poor little starving person, the Nigerian fraudster, the Harvard-educated hope of his country, the "tribal chief" and the James Bond villainesque President for Life (with proverbial "Swiss bank account", natcherally; the Caymans, Channel Isles etc apparently have zero market share with African dicators according to Western hack journalists), the bright-eyed and impractical aid worker and the rascally international banker.
It's not so much that deregulation and land reform are bad ideas - quite the opposite. I'm more worried here that the incessant habit of the neoliberal world to hang them on any passing news story is more or less bound to diminish their own credibility. This is a classic example of a long term solution to a short term problem, coupled with a domestic solution to a fundamentally global problem. We all knew back in March that the sharp increase in soft commodities prices was going to cause famines - now here we are in August and it is causing famines. This isn't new information.
As I've argued before (but never in these precise words), the big underlying trouble with Globollocks in general and Afrobollocks in particular is that neoliberal commentators have a completely, utterly 180 degrees wrong assessment of their own credibility with the people that they're talking too. Someone like Tom Friedman clearly believes that he can lecture the Third World to his heart's content, and they will lap it up. He even seems to reckon that he can glide over a few difficult proofs and stick in a couple of non sequiturs, and his basic message (which I reiterate, is not even necessarily a bad one) will get across - the Africans will treat him as having super-credibility because he plays for Team USA, the winningest team in town.
Actually, of course, in a lot of cases people from a background in the developed world start from the position of a very severe handicap in the credibility stakes; they get negative benefit of doubt. Making the case for market reform has to be done carefully and slowly, with no short cuts, no promises of miracle solutions and overall respect for local politics - the general project of trying to make developing world farmers take on structural reforms that you could never get through the House of Representatives has been the own goal of the century for the neolib project. (There is, by the way, no book token prize for the first person to claim that neoliberals don't underestimate the difficulty of transition, or that they don't oversell their case - look at the italicised quote above). The one thing that one surely can't afford to do in a communicative situation like this, is to lie.
[1] For example, this article by Rosemary Righter actually has quite a lot of useful factual information in it. But in order to get the ounce of facts, you have to swallow a ton of Afrobollocks. In no particular order, having covered the 1984 famine does not make you an expert on agriculture now, trends in "food produced per head since 1984" is clearly not a useful metric in a country going through a population explosion (children don't produce food, but nor do they consume anything like as much as a working adult), food produced per head is not the be-all and end-all anyway (for example, the flower and coffee plantations that generate so much of Ethiopia's hard currency exports don't produce food), and it really doesn't make sense to both praise Meles as a Western-oriented reformer and castigate him as an old-line Marxist; the reason he hasn't changed the Ethiopian system of land tenure is perhaps less to do with him being "purblind" than that land reform is difficult. I don't want to sound too critical because the Righter article is actually not bad as a statement of the Malthusian position (which is the underlying long term issue here and the one that I don't know enough about Ethiopia to have a view on), but a lot of it really could have been cut out without loss.
[2] And thus, it makes economic sense for Australian wheat farmers to sell their water rights to vineyards and not grow a crop this year, which is what they've done in large numbers. This isn't the only supply shock that's hit the wheat market this year, but it's the one I'm using as a colourful anecdote in this blog post.
you may have seen this already, but here's Owen on Ethiopian food prices.
ReplyDeleteThe fact that Ethiopia is an US catpaw in the region doesn't have anything to do with their economic model, does it ?
ReplyDeleteI mean, if it wasn't for the war on terror and Zenawi's ability to convince the US that Somalia (or Erytrea) is a huge menace, the US agrobusiness would be supporting his right wing opposition, wouldn't they ?
And while there's a lot of bullshit said on the land issue both by the NeoLiberal Internationale and by the Ethiopian opposition, Zenawi is far from coherent either. For instance, he did introduce long term leases to guarantee some kind of tenure security to farmers. And it would have worked if he hadn't insisted on keeping the right to re-redistribute when it's needed. And "when it's needed" is according to him, when there's "differentiation".
Mohammed Kedir may not decide to starve to death but he's surely not making any investment (in money or in labour) that would improve his plot. Because if he does and it works he will be more prosperous than his neighbourgs and/or it will be decided that he's more prosperous because he got better land to start with and such horrible situation will be "corrected".
Zenawi found it easy enough to make the other changes (like the registration or the long-term leases or the restriction to the nuclear family in inheritance) and all of those had great effects.
Hard is not the excuse. Control is.
And it would have worked if he hadn't insisted on keeping the right to re-redistribute when it's needed. And "when it's needed" is according to him, when there's "differentiation".
ReplyDeletewhat you're describing here is just the power to tax though, isn't it? Mohammed Kedir is never going to get into a state where he can be 100% sure that the government won't take the fruits of his investments away, unless he moves to the canton of Zug. I am perfectly prepared to believe that people don't make necessary investments in Ethiopia because they're scared of political expropriation, but this is a different issue from land tenure. The agenda here is to get a reform enacted that would allow Nestle or whoever to buy up all those lovely coffee plantations; Kedir in this case will be just as fucked as he ever was, but Nestle will be a lot safer.
what you're describing here is just the power to tax though, isn't it? Mohammed Kedir is never going to get into a state where he can be 100% sure that the government won't take the fruits of his investments away, unless he moves to the canton of Zug.
ReplyDeleteNo it's not.
Taxation is about taking the fruits of the investment away, expropriation is about taking the INVESTMENT itself away.
And think about the incentive: Zenawi basically thinks that if a farmer somehow, anyhow manages to produce more, his land should be redistributed.
Who would waste time working on terraces or use more fertilizer or whatever in that situation ?
The agenda here is to get a reform enacted that would allow Nestle or whoever to buy up all those lovely coffee plantations; Kedir in this case will be just as fucked as he ever was, but Nestle will be a lot safer.
Like I said, between agrobusiness, the Ethiopian aristocracy and the Neoliberal International, there are plenty of people suggesting the wrong solution. However, Zenawi too insists on doing something stupid.
And it all ends up being an ideological debate "for or against freeshold", which is super dumb as it doesn't discuss any precise set of incentives.
And you're right, Land Reform is hard and complicated and Neo-Libs are lying when they say it'd be painless. The worst are the one who argue that the pre-revolutionary system, with it's 100+ types of arrangements and its feudal elements was somehow better than the current one.
No, I don't see this distinction between confiscatory taxation of an investment and of its proceeds. To put it bluntly; if Mr Kedir does get to own a plot of land and he then makes a big investment in it while Meles Zenawi is in charge, he's a mug and he's going to get screwed. The problem is the specific government in power, not the land tenure system - AFAICS, you can't own land freehold in most of Zambia either (and albeit that Zambia has a lot of terrible rural poverty and underinvestment, I think it's pretty clear in that context that it's not the land tenure system that's the problem).
ReplyDeleteI don't think I really disagree with you here - what really irks me is the use of an impending famine that's got very little to do with ethiopian policy as a peg to hang a neolib sermon on. It's a sort of master-story that's really destructive to any sensible politics. Also I think I was much too soft on the Malthusianism in Righter's piece.
Luis - thanks for that. I must confess to being mystified at owen's mystification that a rise in the price of wheat would affect the market for tef, or that hoarding of grain takes place at the start of famines. What do they teach them?
No, I don't see this distinction between confiscatory taxation of an investment and of its proceeds. To put it bluntly; if Mr Kedir does get to own a plot of land and he then makes a big investment in it while Meles Zenawi is in charge, he's a mug and he's going to get screwed.
ReplyDeleteIf Mr Kedi owned the land, or if his long term lease wasn't revocable on the grounds that he's more productive than his neighbourg, he could make investments with the hope that they'd pay off after Zenawi's confiscatory taxes are still in use.
The problem is the specific government in power, not the land tenure system - AFAICS, you can't own land freehold in most of Zambia either (and albeit that Zambia has a lot of terrible rural poverty and underinvestment, I think it's pretty clear in that context that it's not the land tenure system that's the problem).
It's not only Zambia. Most African countries have limits on freehold.
And in Zambia precisely, one detail in the tenure system make things a lot worse: the right to allocate land season after season is given to chiefs. There's the same incentive problem.
Once again, I'm certainly not saying freehold is the only solution, Zenawi made some moves that actually improved the incentives problem without privatizing the land (by introducing leases, by formalizing titles, and by having standardizing the system - he actually didnt do that one, Mengistu did). But he won't do one simple reform within the system on grounds that look like vulgar maxism and for motivations that look crearly political.
I don't think I really disagree with you here - what really irks me is the use of an impending famine that's got very little to do with ethiopian policy as a peg to hang a neolib sermon on. It's a sort of master-story that's really destructive to any sensible politics. Also I think I was much too soft on the Malthusianism in Righter's piece.
Well, that's the thing. Everybody does that. Catastrophes are used to defend all sorts of thing.
Famine in Ethiopia was used to sell the nationalization of the 70's.
Famine in Ethiopia was used to sell the improved nationalized system.
Famine in Ethiopia is used to sell malthusianism.
Famine in Ethiopia is used to sell the idea that the World Bank is evil.
But in all the cases, it did have much to do with Ethiopian policy. And some improvements could lead to a different outcome. Then again, I am not involved in the ideological battles between Western pundits, so I may have a hard time understanding the urgency in all that.
Well, conversely, the ideological battles between Western pundits is exactly what I am involved in, as mentioned above, and they matter too.
ReplyDeleteAs I see it, the one certain consequence of the land tenure reform you're talking about is that the coffee plantations end up in the hands of multinational corporations. That's the banana republic development path and its not vulgar marxism to be very wary of it.
The possible favourable consequence appears to be some investments in fertilizer and terracing which allegedly aren't being made now but would be under freehold tenure or equivalent. I just don't believe this is true - I don't see where the capital would come from and AFAICS, ethiopia would still be just as politically unstable and vulnerable to expropriation (conversely, vietnamese farmers under doi moi don't seem to need freeholds to make investments and though I think the phrase "chinese model" is misplaced, the guy said it for a reason)
And I'm not really swayed in this view by sunday-school testimonials like that of mr Kedir, who I strongly suspect of being a fictional character.
I hope it's clear I'm not interested in Meles Zenawi apologetics here, but equally I'm not going to fall for obvious propaganda. It's not unlike the fact that it's possible to both condemn mugabe in the strongest terms and to be aware that 90% of British newspaper commentary about him is bullshit (patrick bond has made this point on occasion iirc). The battle of opinion among pundits isn't as important as a famine, but as a limited goal, it's more achievablle and practical for a low readership economics blog.
i can't remember whether i got this recommendation from you in the first place, but if not you might enjoy The Economist's Tale by Peter Griffith - it covers attempted market liberalisation in Sierra Leone, and has some interesting stuff on the behaviour of traders and farmers in the run up to a famine (yes, i don't see why Owen was suspicious of claims of hoarding). But the book's really about how badly thought out market liberalisation can make a bad situation worse.
ReplyDeleteit's a very easy read - short too
As I see it, the one certain consequence of the land tenure reform you're talking about is that the coffee plantations end up in the hands of multinational corporations. That's the banana republic development path and its not vulgar marxism to be very wary of it.
ReplyDeleteWell, *I* was talking about removing the re-redistribution option. Not privatizing land, not allowing corporate ownership, not even privatizing, not allocating land (it's already done), just improving on the tenure security thing by getting rid of a constitutional clause that may have an impact.
And even if I was arguing to freehold, nothing prevents Ethiopia for going the Japan way and outlawing foreign and corprorate ownership and absentee landlordship.
The possible favourable consequence appears to be some investments in fertilizer and terracing which allegedly aren't being made now but would be under freehold tenure or equivalent. I just don't believe this is true - I don't see where the capital would come from and AFAICS
For fertilizer, you're right.
For terracing, conservation efforts and a bunch of other things (including birth rates) don't necessarily require intensification of capital. You can do a lot of things with higher labour intensity. And improving the incentives could help.
While political unstability and all that are issues, things are marginally better since Zenawi reformed the system, so I can't see why it cannot be improved further. And China, Vietnam and the rest certainly didn't mind the reforms that increased private gains.
But we do agree. Whoever is acting like freehold is a sure fire solution and has no down-sides is crazy. But anyone arguing that the current system in itself (beyond the possibility of illegal corrupt behavior by the government) doesn't have a bunch of issues is only slightly better (and I'm not accusing you of doing that).
I* was talking about removing the re-redistribution option
ReplyDeleteright, in which case I apologise for acting as if you were on the freehold-cheerleaders' side above, but I therefore resurrect that this is very similar to making non-time-consistent promises with respect to the power to tax.
I therefore resurrect that this is very similar to making non-time-consistent promises with respect to the power to tax.
ReplyDeleteAnd this still isn't right.
The tax equivalent would be a government who makes the promise to use confiscatory taxes if there's differentiation between owners.
But even that would be unperfect. The promise is to seize and redistribute productive assets partly because - and that's where vulgar marxism comes in - that government believes unequality is always the result of unfair distribution of productive assets.
That's a serious disincentive for investment of any kind..
" I therefore resurrect that this is very similar to making non-time-consistent promises with respect to the power to tax."
ReplyDeleteI don't know anywhere enough to comment on any specifics here, but the difference between high taxes and outright expropriation is that the former can be evaded and the latter not. You can hide the grain under the floorboards, bury the homebrew behind the shed, get neighbors to hide your livestock and other myriad ways that people've dealt with the taxman through time immemorial. If the government takes your land, that's pretty much it.
Furthermore, taxes may be more costly to administer - you got to send some folks to look under the floor boards and the shed, then some folks to watch the folks who're looking to make sure they don't steal, then some folks to watch the folks who are watching the folks, etc. This can limit to how high you'd be willing to set the rates. With expropriation it's pretty much a one time fixed cost.
All of which means that leaving the possibility of future expropriation on the table is a much stronger recipe for time inconsistency then the power to monkey around with tax rates.
I still don't really see this - I'd also note that the original land reforms would presumably have been a heck of a lot more difficult to put through if they had been carried out on the basis that it was once-and-for-all, and that any inequalities in the distribution could never be altered.
ReplyDeleteI'd also note that the original land reforms would presumably have been a heck of a lot more difficult to put through if they had been carried out on the basis that it was once-and-for-all, and that any inequalities in the distribution could never be altered.
ReplyDeleteBy the Derg is 1975 ? Really ?
Furthermore, it was in 1975, and after 20 years of constant changes and incredible unstability (in land tenure, i mean), Zenawi and his crew had no difficulty selling the long-term lease thing and that was more than 10 years ago! And people, I mean Ethiopian farmers like it and they actually want more tenure security within the current system.
There's really no sensible reason for continued re-redistribution.