Property Rights, Prosperity and Democracy

When I was a boy, growing up in a household impoverished by an alcoholic father and a mother with barely three years of basic education, we lived in a housing scheme built during the Second World War to house air force personnel who would then go off and fight in Europe.

Eddie Cross

The houses were built of mud, plastered on the outside, cheap and built only to last a few years. Heavily subsidised, this was all we could afford. It was a slum.

Then we got a letter from the City telling us that from now onwards, our rent would be a bond repayment and after 5 years, the property would be ours. Thereafter we would pay rates and taxes like any other property owner. The transformation was immediate and long lasting. Families painted their homes, put up walls and hedges and planted trees and gardens. Using our rates, the City tarred our roads and put in street lights. We were home owners.

Today when I drive around our City, I can easily spot the properties that are not owned by the occupants and whose real owners are absent or the property is State owned or owned by the Council. In 1972 I visited Glasgow in Scotland and saw a housing Estate put up by the Council to house homeless families – it was three years old but looked like a war damaged building site. In another three years it had to be demolished.

If you live in one of the mature economies of the world, you will be living in a country where property rights are held as sacrosanct. Farm and urban property is usually held on freehold title or on long term leases that can be sold for real value. How these countries got there is another story, the unification of Germany, the Enclosure Acts of England. But eventually they all worked out that this was the only way to hold property in a stable, prosperous country. What we seldom understand is the link to democracy.

A democracy is made up of people, the majority of whom own property and live independent lives where they can hold an opinion that might or might not resonate with their neighbours.  In Feudal States and in all Dictatorships, the ownership of property is almost always limited to those in power, who can then control the views and even activities of those who depend on them for shelter and sustenance. In such societies, democracy in any form is not only alien but unwanted, even impossible.

It is astonishing that only 18 per cent of the agricultural land in the world is held under freehold title. Yet this tiny proportion of one of our most important resources produces the great majority of our food and agricultural raw materials. Urban land is much more likely to be held under some form of secure title and for this reason it is the Cities that often lead the way in pioneering democracy in societies that are more dictatorial.

In America the arrival of migrants from Europe brought with them, not only their law, culture and language but also the tradition of land ownership – home steading in the Mid-West changed the whole character of the States and the subsequent virtual elimination of the indigenous peoples sealed their fate and laid the foundations of what makes up the USA today. While only 3 per cent of all Americans farm, they produce the great majority of global food needs and surpluses. Australia has the same historical roots.

In Africa the situation post colonisation, was very different – here the migrants were always a tiny minority, except perhaps in South Africa. However even there the migrant population of people of European extraction were never more than a significant minority. In those African States with a European migrant community with roots – Kenya, Angola, Mozambique, Zimbabwe, Botswana, Namibia and South Africa, the settlers occupied vast areas of the available agricultural land – the most extreme example being South Africa. Invariably they adopted freehold title for the legal status of their occupation and tried to protect these rights in their Constitutions or even at the time of Independence.

Once change came and the indigenous majority took power, they almost always brushed aside property rights in rural areas. The emergence of dictatorial or even feudal type regimes in post-Independence Africa almost everywhere led to the destruction of rural property rights. Even in South Africa, land acquired after the transition in 1994, has not been settled under freehold title. Even urban housing for low income communities has been developed almost universally on the basis of rental accommodation. The reason – the desire of the new political elite to manage or even control their populations politically. Democracy takes a back seat under these circumstances unless the new elite in power feels totally secure.

Here in Zimbabwe, when the MDC emerged as the leading opposition to the ruling Party in 2000, their sphere of influence in political terms was in two areas – the urban centres and the commercial farms –  6 000 farmers, a quarter of whom were black, with their 300 000 workers formed a formidable block of voters. When the ruling Party woke up to the threat, their reaction came in three stages – stage one, they destroyed the commercial farming industry by simply taking over the farms by force and allocating them to new occupants, without tenure, who were given conditional rights to use the land and the assets on the farms. By the time of the next general election in 2005, this voting block was to vote solidly in favour of the Mugabe dictatorship.

Secondly, in the urban areas, the resistance was more difficult to deal with. However, in 2005 they launched an effort to crush the informal sector and a quarter of the urban population was displaced in a program they called Murambatsvina – literally “throw out the rubbish”. This was largely a failure as the affected populations simply drifted back over time.

Thirdly, also in 2004, the ruling Party ran an experiment. They took over a commercial farm on the outskirts of Harare and settled 9 000 families on small plots that were sold to them for a small sum of money. These families were then allowed to build a home on the site but were required to join the ruling Party and attend political meetings. In the election that year, they were required to vote at a given polling station and to the shock of the MDC, Zanu took back the seat – Harare South.

This then became policy, and over the next decade dozens of peri urban farms, taken from their previous owners in the land reform program started in 2000, were handed over to politically connected “land barons” who were then allowed to secure a plan for the land from a government agency – Udicorp, and then sell the land without title, to families. I estimate that today there are over 1,4 million homes under construction across the country in all urban centres and that together these now constitute more than half the urban population. Using the same tactics as were used in 2005 in the Ushewokunze Housing Co-operative in Harare South, these areas have, in the main, started returning Zanu PF candidates to Parliament.

The law of unintended consequences then takes over and we face a situation today where we have to import the majority of our food and agriculture generates only half of the output it has historically. But in the urban areas, the housing program has created the biggest construction boom in our history and we are selling more than 4 million tonnes of cement a year. It has become one of the main drivers of economic growth and recovery. The President has announced major changes to land policy and promised to formalise urban land holdings with title and to incorporate these areas into the Towns and Cities. This will create massive new wealth for the majority of our people, but in the process, it could lay the foundations for a return to real democracy.

Post published in: Featured

Leave a Reply

Your email address will not be published. Required fields are marked *