a case study in re-arranging economic rights

Book Review: Stephen F. Williams, Liberal Reform in an Illiberal Regime (Stanford: Hoover Institution Press, 2006).

Understanding how to advance liberal democracy is crucial to the welfare of persons around the world. In Russia in 1906, a decree of the tsar gave peasants living in agricultural communes an opportunity to establish individual land titles and to consolidate their land plots. In Liberal Reform in an Illiberal Regime, Stephen F. Williams analyzes the socio-economic circumstances of this land reform, its legal structure, and its consequences.

This book is a testament to the power of individual enterprise and a model of scholarship in the public interest. Williams is an independent scholar with a highly important day job that does not require him to compete for academic prestige. In the preface to his book, Williams explains that when the Soviet Union fell in December, 1991, he wondered what precedents existed for market-oriented reform in Russia. He recalled Petr Stolypin’s agrarian reforms:

Looking around to get a clearer idea of what these reforms amounted to, I found a wealth of scholarly material. But I found neither a summary account of the story, aimed at the intelligent citizen with an interest in property rights and the development of liberal democracy, nor any sustained application of the fundamental insights of the modern law-and-economics movement. Thus this book.

Thus Williams did an enormous amount of unpaid scholarly work to produce this book.

If you want a solid understanding of land reform in Russia from 1906 to 1915, read this book. The Stolypin land reform has been at the center of contentious debates about the nature of Russia and its future. The author synthesizes an enormous body of both English and Russian-language work concerning these reforms. He carefully analyzes possibilities for individual transactions and consequences of different macro-structures of these transaction possibilities. The author does not tell a dramatic story about the reforms; rather, he works toward an objective, reasoned analysis of what actually happened.

If you want a resource for thinking about re-arranging economic rights to further liberal democracy, read this book. Even in regimes of highly concentrated authority, changes in rights enacted from above can have dramatic effects:

Once perpetual intellectual property was ended in England in 1774 [in Donaldson v. Beckett, a decision of the House of Lords], and Shakespeare was sold in conditions of economic competition, the effects were dramatic. The number of editions rose sharply, print runs lengthened, and minimum prices fell. It had taken nearly 200 years for the minimum price of access to a Shakespeare play to fall back to what it had been in Shakespeare’s day. When we add in the anthologies, the abridgements, the sale in parts, the inclusion in school books, and all the other innovations of the post-1774 public domain, we can say that, by about 1800, Shakespeare at last became available to readers of all classes and ages. [1]

Similarly, shifts from granting to individual companies exclusive rights to control use of a band of radio spectrum to radio regulation that authorizes broad classes of users has fostered enormous expansion in use of wireless devices.

These changes in copyright and radio regulation curtailed types of individual economic rights, while Stolypin’s reform increased a type of individual economic rights. Public discussion of this schematic difference tends to be polarized between idyllic descriptions of social production on the commune under Brezhnev (“joys of zastoy”), and inspiring proclamations that rags-to-riches success, progress, and economic evolution depend on fierce, every-woman-for-herself combat for individual goods in the human jungle. That sort of discussion, as valuable as it may be, is not a sufficient basis for good public policy. Understanding how Stolypin’s reform actually worked provides insights into practical issues relevant to any type of re-arrangement of economic rights across a large population.

Stolypin’s reform re-arranged land rights within one social group: peasant agricultural workers. Chapter 2 of the book discusses how open fields, repartition, and family tenure in peasant agricultural communes reduced their agricultural productivity. As Chapter 5 documents, Stolypin’s land reform improved peasants’ opportunities for acquiring individual land titles and for consolidating their plots. Individual land ownership and consolidated plots gave peasants better incentives for working and improving the land, reduced the cost of traveling between plots, reduced costs of boundary negotiations, improved access to credit by enabling some types of secured mortgages, and promoted the development of a land market among peasants. A land market among peasants provides a decentralized mechanism for establishing land plots that can be farmed more efficiently and for shifting land to more efficient farmers. Stolypin’s reform re-arranged peasants’ agricultural land rights with the primary economic objective of increasing peasants’ agricultural productivity.

Stolypin’s reform kept peasant agriculture in a category separate from other economic activity. Chapter 6 insightfully notes:

Article 50 of the 1910 Act said, as had prior Interior Ministry circulars, that alienation of allotment land that had become personal property could be effected only in accordance with the system established by the Emancipation. This prevented sale, mortgage, or gift to anyone not a member of the peasant estate, or the enforcement of the owner’s personal debts (by any non-peasant creditor) against the owner’s interest in the land. (p. 221)

Outsiders are likely to be powerful agents of change. In particular, organizations in agricultural supply and services, and agricultural processing and marketing are powerful forces for changes in land ownership, including moving land into and out of farming use. Such organizations were underdeveloped in subsequent Soviet agriculture. [2]

Why did Stolypin restrict land transaction to transactions among peasants? Williams observes:

Stolypin’s speeches in defense of these restrictions were strikingly defective. In his other speeches on the reforms in the Duma or state council, he generally marshaled fact and analysis to make a case that the consequences of his proposals would be desirable and those of his adversaries undesirable. But when it came to the restrictions on allotment lands, he was reduced to a kind of semantic conjuring trick. (p. 221)

Not restricting land exchanges to peasants would make agrarian reform more difficult to describe and predict. Whether for reform or revolution, political proposals typically require describing intentional change and negotiating among established interests. Because economic flexibility and dynamism don’t have specific appeal to established interests, their value is difficult to incorporate in practical re-arrangements of economic rights. The boundaries of Stolypin’s land reform, and his poor justification for them, point to important general issues in re-arranging economic rights.[3]

Administrative capabilities are an important constraint on re-arrangements of economic rights. Assigning meaningful individual land titles requires land surveying. Williams notes that Russian had almost no land surveyors before the start of the reform. Nearly 7,000 persons became surveyors in the course of the reform (p. 158). Nonetheless, more than 60% of the applications for land consolations remained uncompleted when World War I effectively stopped the land reform. (p. 158). Property rights depend on good government administration. Property rights are not effectively established merely by legal decree.[4]

Example is a powerful motivation for re-arrangement of economic rights. Williams finds provinces with a relatively high level of pre-reform hereditary tenure and land consolidation had a higher fraction of households seeking individual title and land consolidation under the Stolypin reform (p. 172-3). Humans have a natural propensity to compare their situation to that of others, and ask, “Why not us?” That sort of question probably played a key role in motivating the large-scale re-arrangement of economic rights in Central and Eastern Europe at the end of the twentieth century.

Ideas have important connections to property rights. Williams includes a poignant quotation from a peasant in a Soviet prison (pp. 1-2). Under the Stolypin reform, this peasant had gotten rich. The peasant explained his success thus:

I worked hard, but to tell the truth, got little from it. I wasn’t able to manage. As least not until the Stolypin booklet fell into my hands. Perhaps he didn’t write it, but that’s what they called it. There it was explained how one needs to manage. And when I applied what was written there to my land, I got rich directly.

In other words, he got rich on his individually owned plot not through hard work but by following authoritative instructions. The Soviet authorities then confiscated most of his land and “threw me out into the forest.” That was not the end of the story:

They took away everything, but I brought my Stolypin booklet. And then years passed, and again I did things according to Stolypin, and again I was rich — not rich, but well enough off.

Farming by the booklet is a wholly implausible cause of success. The peasant seems to invoke the Stolypin booklet as justification for his success, which was not secure:

And again they were envious, and again they took everything and threw me out.

Changing ideas of social value has to occur in conjunction with re-arranging economic rights to make those rights secure.

Property rights reform requires good law and effective administration. The great writer offering to society the big idea has casts a long shadow over the past two centuries of Russian history. Big ideas are no substitute for careful analysis of circumstances, practical proposals, and detailed evaluation of consequences. Liberal Reform in an Illiberal Regime is an impressive example of serious policy analysis.

Liberal Reform in an Illiberal Regime also is a pioneering work of independent scholarship. As such, its greatest flaw is that it is not freely available on the Internet for all to appreciate and study. Many persons around the world who might find this work inspiring and useful are likely to have difficulty gaining access to it. Like Stolypin’s agrarian reform, this work respects, with little deliberative justification, established class boundaries. Made freely available to all, it would have made a much bigger contribution to understanding how to re-organize economic rights in a way consistent with liberal democracy.

* * *
[1] St Clair, William (1994), The reading nation in the Romantic period (Cambridge: Cambridge University Press) p. 157.

[2] See Galbi, Douglas (1994), The Significance of Credits and Subsidies in Russian Agriculture, Table 4.

[3] Telecommunications policy has similarly suffered from lack of appreciation for the possible scope of change. See Galbi, Douglas (2000), Transforming the Structure of Network Interconnection and Transport, Section II.A.2.

[4] Auctions of rights to control use of radio spectrum has tended to proceed under the assumption that administrative assignment of rights is sufficient to establish secure rights. No provision is typically made for an independent institution to adjudicate publicly interference disputes. In practice, almost no interference disputes are publicly adjudicated, and virtually no case law defines relevant precedents and decision rules. See Galbi, Douglas (2006), “rights to communicate using radio spectrum,” post on purplemotes.net.

Not on speaker phone, on social mode!

Device design is a significant problem for a show-and-tell communicator. Designing a “phone” that integrates talking and showing would be a useful project for a design school class.

Re-describing features is less costly than redesigning devices. Speaker phones are used for long, boring meetings. But a social mode is just what teenagers need. That’s right kids, just press that button and you and the friend that’s permanently attached to your hip can both talk at the same time with another friend and see and share pictures on your phone at the same time, too.

Put your phone on social mode and you all can talk and see! Who cares if you talk a little louder and adults around you can hear you? That’s their problem. Plus, they’re stupid so they won’t understand what you’re talking about anyway. Privacy? That’s for uptight geezers!

A show-and-tell social mode probably would be a lot more valuable to most mobile phone users than being able to use your Nokia N73 to take and upload photos to Flickr. Martin and his daughter could use it when communicating with Nana. The 78% of Swedish broadband customers who want to use a webcam on Christmas Eve probably would like to be able to do a “group call.” And they would probably rather not have to do it crowding around their desktop computer, wherever that’s located.

Communication devices need to move on from the design of phones. Recognizing that not all interpersonal communication is one-to-one would be a propitious place to start.

will anyone know about “show and tell” communicators?

Attaching a camera to a mobile phone doesn’t seem to create much value. In rank order of occurrence of key Telco 2.0 events, 200 early respondents to the Telco 2.0 survey placed “voice revenue less than 20% of mobile operator total revenue” at “13/never.”

Can you use your mobile to take a photo while talking to a friend and send it to her instantly in the stream of your conversation? In other words, can you do real-time show and tell?

Recently in a bustling T-Mobile retail store, I told an energetic young service representative that I wanted a phone that would let me send a photo to the person I’m talking to. He said that all the phones could do that. I asked him to show me how it’s done. He said the he had never tried it, and asked another representative how to do it. That representative said that the phones can’t do it.

The representative in the Verizon retail store told me that he didn’t know if the phones could do it. He then whipped out his RAZR, dialed a number, and then tried to take a photo. The device produced a message saying that the camera was shut off.

In the Sprint retail store, the first representative said she didn’t know. The second said she wasn’t sure if it was possible. The third said he did it once but he didn’t remember how he did it. A customer overhearing our conversation then told us that yesterday she was making a call about a pie that had arrived damaged and she tried to take a picture of it while on the phone and it didn’t work. Oh, that’s a shame, I said.

To assuage my disappointment, the second representative in the Sprint store then told me that she had sent a text while talking on her mobile phone. I asked her if she sent the text message to the person she was talking to. She told me that, no, she had sent it to someone else.

What’s the problem with showing and telling with a phone? Technically, the problem is that normal voice calls are tightly integrated with the transport infrastructure (“circuit switched” not “VoIP” etc.) Even with mobile phones with messaging capability, Internet access, etc., the communications channel established when a person talks on the phone is a traditional voice channel. Hence placing a photo in the stream of communication isn’t possible.

Applications and networks that can support a show-and-tell mobile communicator are right around the corner. Internet telephony software from everyone can already do this. According to the Telco 2.0 preliminary survey results, in order of occurrence “a leading internet player launches a mobile telephone service” is ranked #1 (it’s already happened: AOL in Germany) and “WiFi capability available in mass-market mobile devices” is ranked #2. So show-and-tell mobile communicators will soon be available.

But will anyone show these devices to you and tell you about them?

Carnival of the Bureaucrats #5

Good bureaucrats recognize mistakes. And they try to rectify them with as little public notice as possible. Under Rule 6 of the Carnival of the Bureaucrats, submissions to this carnival may not include the term “stupid bureaucrat” and related epithets as defined therein. It has come to our attention that we have failed to recognize that it appears to be the case that based on the available evidence before us that a small number of bureaucrats are not in fact heroes.

This month the Carnival of the Bureaucrats condemns the Board of Trustees of Duke University and associated administrative functionaries for conduct unbecoming of bureaucrats. At a recent meeting, the Duke Board took no action and rubber-stamped a proposal that had probably been in the bureaucratic pipeline for years. That’s exactly what Boards of Trustees are designed to do.

The Duke Board anchors the university bureaucracy and has a solemn obligation to ensure that its bureaucrats represent the interests of their own group. As a result of a grotesque travesty of the presumption of innocence, due process, and equal justice under law, three Duke students have suffered greatly and continue to face the possibility of lengthy imprisonment. One of the students explained his feelings about Duke now:

“I chose Duke to be my home for four years. And to see your professors … go out and slander you and say these horrible, untrue things about you and to have your … administration just … cut us loose for, for, based on nothing. Duke took that stance that “We wouldn’t stand for this behavior.” They didn’t want to take a chance on standing up for the truth. I can’t imagine representing a school that didn’t want to represent me.”

No excellence in inaction and rubber-stamping can make up for the failure of bureaucrats to defend vigorously their own organization. Their organization is Duke, and students are part of it. The actions of the Duke Board of Trustees, Duke President Richard Brodhead, and the faculty functionaries of the Group of 88 deserve the contempt of bureaucrats world-wide.

My brother graduated from Duke. In bureaucratic fury at the highly unacceptable behavior at Duke, I intend to destroy him in this year’s Galbi Brothers’ 800 Meter Challenge.

GrrlScientist at Living the Scientific Life reports that the USDA has stopped using the term “hungry” and started using the term “low food security.” Her reference explains:

The switch of bureaucratic jargon came about after the White House budget office questioned why the agriculture researchers actually called hungry people “hungry.’’ The USDA bucked the question to the National Academies of Science, where it was determined that using the word “hunger’’ wasn’t entirely accurate, since the agriculture researchers can count people who say they don’t have enough food—but can’t necessarily describe the symptoms they experience while doing without.

GrrlScientist notes:

“Very low food security”? Hello?? Is that like rethuglicans referring to themselves as having “very low truth security”?

GrrlScientist also reports that Reality TV is going to be used to choose a Price Minister of Canada. She notes, “Imagine choosing your next national leader by using reality TV.” I think reality TV is boring. I suggest instead having avatars vote in Second Life.

According to her profile and postings, GrrlScientist is a molecular evolutionary biologist who has been looking for a job for four years. Looking for a job is highly stressful. Now she’s coping with a very difficult personal situation. GrrlScientist, I wish you a speedy liberation and good health! Can any of you high-placed and influential purple motes co-participants help her to find a job?

Jack Yoest at Reasoned Audacity presents Donald Rumsfeld’s Rules: Advice on Government, Business & Life. Rumsfeld has offered some questionable advice:

Don’t let the complexity of a large company mask the need for performance. Bureaucracy is a conspiracy to bring down the big. And it can. You may need to be large to compete in the world stage, but you need to find ways to avoid allowing that size to mask poor performance.

Doing one’s job isn’t the same as a conspiracy!

Paul at Paul’s Tips offers tips about how to deal with information overload. He explains:

Most of what’s demanding your attention is probably pointless anyway. Information is so abundant and easy to get in today’s world, that any individual instance of it is likely to be next to worthless. It’s a simple case of supply and demand.

Nonetheless, documents must be filed appropriately.

Steven Silvers at Scatterbox describes “the big picture behind congressional investigations that are going to create new corporate scandals.” He notes,

The turmoil of the next two years marks the emergence of a new socioeconomic order in the three-way relationship between America’s largest employers, their stakeholders and representative government.

My department doesn’t handle those issues.

Alvaro at SharpBrains presents brain teasers. SharpBrains describes itself thus:

A mix of fun brain teasers and serious commentary on neuroscience-based brain fitness and “brain gyms” for health, education, and corporate training.

Check out the size of the face on this homunculus!

The China Law Blog presents China’s Foreign Business Blame Game and notes, “Chinese bureaucrats going wild with blame.” Hey, blaming is for politicians, not bureaucrats!

James Enck at Eurotelcoblog describes The Winter of Our Discontent, explaining:

I have just been given a pay rise so derisory that it will cost more in administrative costs than the actual value of the extra cash they’re giving me (who ever said that a high ranking, unusual ideas and interesting CV should matter to a bureaucracy which focuses on page count?)

I don’t believe that anyone ever said that. Moreover, here at purple motes, we surely know that’s not the case. But cheer up, someday you may get selected as Bureaucratic Hero of the Month!

RDoctor presents “Psychology of Law and Order. Interview with Dr. Deborah Serani.” Dr. Serani explains:

One of the recent trends in psychology highlights has been how the world has become fast-paced and media saturated. As a result, the world is filled with individuals who are either desensitized or overly anxious. And that is just the tip of the iceberg.

I hope the good clean fun here at purple motes helps all its co-participants become more sensitive and less anxious.

That concludes this edition of the Carnival of the Bureaucrats. Submit your blog article to the next edition using our carnival submission form.