Trophy lands: why elites acquire land and why it matters

Abstract

This article explores the motivations, and some of the consequences, of concentrated land holdings among elites. Within the characterisation of land deals as rent-seeking behaviour, three inducements (power, prestige and option value) are found to motivate elites in both the Global North and South. Among the many social and environmental costs of land concentration, two are highlighted here: the privatisation of social property and the profligate use of labour. The article concludes with a call to reframe land reform in terms of land sovereignty, as a means of countering land concentration and the rent-seeking behaviours that animate it.

Résumé

Cet article se penche sur les raisons, et certaines des conséquences, de la concentration des grandes propriétés foncières dans les mains des élites. En caractérisant les transactions foncières comme une recherche de rente apparaissent trois facteurs qui motivent les élites du Nord comme du Sud, soit le pouvoir, le prestige et la valeur d'option. Parmi les nombreux coûts sociaux et environnementaux de la concentration des terres, deux ressortent : la privatisation de la propriété collective et la prodigalité dans l'utilisation de la main d’œuvre. L'article propose de recadrer les réformes foncières sous l'angle de la souveraineté foncière afin de contrer la concentration des terres et la recherche de rente qui la stimule.

Keywords:

• land concentration
• rent seeking
• land sovereignty
• elite motivations
• new enclosures

Acknowledgement

I thank the anonymous reviewers for strengthening this paper.

Notes

1. Exceptions in the Global South are many (see, for example, El-Ghonemy 1999; Griffin 1981; Rama et al. 2014; World Bank 1975), but they are few in the Global North (Barker 2004; Stiglitz 2013; Piketty 2014). In Piketty's widely read Capital in the Twenty-First Century (2014) real estate is considered capital and is foundational to his case.

2. We use “new enclosure” and “land deal” interchangeably in this paper. The Land Matrix, an online database on land deals, has documented 924 major land deals as of 2012, with 10 per cent of investors accounting for 68 per cent of the acquired land (Land Matrix 2013). By 2030, according to the Swedish International Peace Research Institute, the new global demand for land could amount to over 500 million hectares (De Koning 2009). Other researchers are more cautious (Wolford et al. 2013).

3. See TPS Extra at http://www.thepoliticalsword.com/page/Picketty-Un-picked

4. Family wealth in Canada is more concentrated in real estate than in any other investment (Farrington 2008).

5. In 1978 the US Department of Agriculture integrated findings from its survey of farm finance and land ownership and published these findings (Lewis 1980); it repeated the survey with less detail in its 1999 Agricultural Economics and Land Ownership Survey (AELOS).

6. “Land barons” and landlords are encompassing categories, but their members (high net-worth individuals, wealthy families, corporations, non-profit institutions and churches, as well as government bodies) run a gamut of interests. The motives of these different elites vary but also overlap; they are contingent on other wealth opportunities confronting elites and on biological and social life cycles (see Mitchell 2012 for discussion of elite interests in non-land assets).

7. If wealth were shared in proportion to population – that is, the bottom quintile holding 20 per cent of wealth, the bottom half holding 50 per cent, and so forth – the Gini coefficient would be zero (no inequality). Conversely, scores at or above 50 per cent signify that land is owned by half or less of the population.

8. For in-depth discussion of land grabbing and inequality in Latin America, see Borras et al. (2012) and other articles in the same journal special issue.

9. The same study reports work by Torche and Spilerman (2006) on housing-wealth Ginis in nine Latin American countries, the range of which is 0.56 in Uruguay to 0.85 in Bolivia, though here non-owners are included in the calculations. According to more recent research reported in Davies et al. (2007), Ethiopia has a land Gini coefficient of 0.65.

10. Norms of privacy and secrecy cloak much of the data needed to perform research ownership concentration (Wolf 1981).

11. Rent seeking is the quest for rewards and prizes neither earned nor consistent with competitive market returns. For Tullock (1988), there is progressive as well as regressive rent seeking. For Stiglitz (2013, 40), “Rents are nothing more than redistributions from one part of society to the rent seekers. Much inequality results, because, to a significant degree, rent seeking redistributes money from those at the bottom to those at the top”.

12. This option value of land is a large part of what makes frontier territories attractive to elites: such lands can be recycled and exploited for different rent-seeking ends. The case of Cornell University is illustrative. In the 1860s, its businessman founder, Ezra Cornell, convinced the State of New York to let him purchase half a million acres of frontier forest lands to endow the New York land grant university (Gates 1943). Cornell sold the timber at a handsome profit and then the land itself. He retained the valuable mineral rights, however, which benefitted the endowment trust in later years. The land's option value continues to enrich the university today.

13. For a detailed discussion of land use and legislation in Mexico, see Robles Berlanga (2012).

14. For a skeptical view of the common and a rebuke of its periodic use for neoliberal ends, see Caffentzis (2010).

15. For an overview of such reforms in the Philippines, see Hayami, Quisumbing, and Adriano (1990). Agarwal (1994, 23) expresses similar worries: “Commonlands being privatized […] under a variety of means, including ‘land reform’ and anti-poverty schemes ostensibly designed to benefit the landless but effectively endowing the already landed […] The process of privatization has been accompanied by an increasing concentration of previously communal land in the hands of the male members of relative few households”. Authors who approve of neoliberal reform (for example, Holden, Otsuka, and Deininger 2012) concede that higher yields may in fact be conditioned by the highly egalitarian, initial land distribution that resulted from administrative land reforms.

16. In this, land owners may get tacit government support. Schleifer and Vishny (1998), in The Grabbing Hand, portray state officials as predatory and embroiled in rent-seeking actions that stifle redistribution.

17. For more on the negative effects of land rights and concentration for farmers, see Alonso-Fradejas (2012).

Additional information

Funding

I am grateful for funding support from the Institute of Social Sciences (Contested Global Landscape Project) at Cornell University while doing this research.

Biographical note

Charles Geisler is a professor in the Department of Development Sociology, Cornell University. He specialises in topics of possession and dispossession, occupation and enclosure, evolving land reform and land use planning, and ownership alterations due to homeland securitisation and dislocations accompanying climate change. His co-authored and edited books include Property and Values (2000), Biological Diversity: Balancing Interests through Adaptive Collaborative Management (2001), Land Reform, American Style (1984) and The Siege of Westphalia: Non-State Challenges to a State-Centered World (forthcoming, Routledge).