Land Privatization (2)

Yan, a reader, commented on my article on land privatization:

I don't understand why private land ownership should be crucial for Mongolia's development. Sure, many western world are more advanced, and they do have private property rights on land. But I don't really see the direct conection between the two (except that farming societies tend to be more advanced than nomadic societies, and farming societies do require a concept of land ownership). If you are not implying that Mongolia needs to change towards a farming society in order to develope, I don't see what private property in pieces of the mongolian countryside should be good for.

The case is different in cities, aimag and sum centers, of course. But the way those laws on land registration are implemented at the moment (at least in Khuvsgul) is that people try to grab the most scenic spots in national parks etc. in order to build yet another campsite. Who happens to know the people in the registration office comes first, of course.

Me: He raises some good points. First, land ownership is generally tied to the notion of "improving" upon the land by making it somehow profitable (whether in the short or long term). This includes farming, but is not limited to it. Improving land may mean building things on it, growing things on it, raising animals on it, manufacturing things on it, leasing it, digging things out of it, or attracting paying customers to it. Incidentally, I think that's what De Soto was driving at when he said, "Everybody who feels they have something of value" is free to use it in trade, "either mortgage it, lease it, sell it, develop it, whatever." This principle applies whether you're in cities, aimag centers, sum centers, or the countryside.

I've one or two ideas of how land ownership could be avoided, but they're only possible if herding remains the mainstay of Mongolia. And as Baabar was quoted as saying in his UB Post opinion piece, herding is likely not the pathway to a better economic future in Mongolia. One idea would be for herders, once (or if) an international market for Mongolian animal products (meat, milk, cashmere, wool, etc.) becomes more developed, to cooperate in a way that would allow them to combine resources, transportation, and bargaining power. This could potentially cause herders to become more profitable and as a consequence raise them out of a subsistance hearding existance and help them to improve their quality of life in general. But again, this will work only if there's a market for their goods. (There was a time in the United States where this idea worked--when much of the West and the Great Plains were given to cattle. But it didn't last for long--maybe a few decades before the end of the 19th century. That's when the flood of folks from the East Coast and Europe seeking a better life and turned the grazing land into farmsteads.)

Second, the problem that is taking place in Khuvsgul (and in Kharkhorum, where land was, but is no longer, given away freely to Mongolian nationals) of people snapping up prime pieces of land and then just making them their private campsites could be eliminated by adopting the laws that would stipulate that the land would be yours ONLY if you improve upon it (see above) within a certain period of time. If a claimant doesn't improve upon it, the land would no longer belong to them. This would basically be what is commonly called homesteading. The principles upon which homesteading is based stretch back hundreds of years in the West, and it could, with adjustment, be applied anywhere. A great overview of homesteading as it was applied in America can be found at Wikipedia (also apropos at this link, a brief discussion of what happened when homesteaders came to the open range used by ranchers). Homesteading isn't a perfect system for making public land private--fraud is still possible--but it has largely been successful in America.

Two reasons why a homesteading approach to land-privatization might NOT work in Mongolia is that, first, it's predicated upon the assumption that the people who would claim the land would have the intention of improving upon it whether for residential, industrial, agricultural, etc., purposes. After all, there is not much history of land improvement in Mongolia, a nation historically given to herding and subsistance living. Couple this with the second reason--a huge expanse of land (larger than Texas) and a tiny population (under 3 million), and I'm not sure that homesteading is an idea that would prove efficacious in Mongolia. However the principle may still hold.

We'll see what happens.