|August 18, 2004||Posted by Lindy Davies under Art and Letters, Book Reviews|
Alodia? Seizing Control of a Whole Country?
Have you ever run a nation? What economic policies would you try? An amazing experiment took place a couple of years ago, when the poor African nation of Alodia was taken over by its military. The new leaders put some remarkable Georgist changes in place.
Alodia is a fictional nation and its great experiment has ended, so now it’s time to evaluate the whole thing. We asked Dr. Bill Batt, who has done many book reviews for The Progress Report, to somehow construct a “review” of the entire Alodia project.
by Bill Batt
Albany, New York
I am responding to an invitation to write a review of The Alodia Story, the imaginary institution of a government based on Georgist themes in a sub-Saharan West African nation.
Why me, was my first reaction. But then as I thought more about it, I realized that Hanno Beck, who singled me out for this task, probably knew me a bit better than I realized. My earliest introduction to strategies of political and economic development for the third world followed my Peace Corps experience in Thailand from 1962 to 1964. Thereafter I entered graduate school and was introduced to all the reigning writers whose works were thought to hold the keys to a rapid leap to modernity. Among them were economist Walt Rostow who, besides being a Kennedy/Johnson advisor on Vietnam, is best known for his 1961 book Stages of Economic Growth. This was one of many required reads at that time, the major focus being how best to achieve what he called take-off. (Today, there might be equally as much concern about the liabilities of his mass consumption stage!)
Other books on the canon for those aspiring to future positions in the then burgeoning field of international development were those by Benjamin Higgins, Harvey Leibenstein, and Albert Hirschman, whom students today have never heard of. Who today has ever heard of the big debate at the time about balanced or unbalanced growth, i.e. whether economic development needs to be prior to, or concurrent with, political development? There was just as much discussion, as there is today, about the competing development approaches of China and India, each a stand-in for what were seen as the authoritarian versus the democratic political path that might accompany economic modernization.
The paths to successful national development were then thought to lie in intensive capital investment, especially in infrastructure — roads, dams, steel mills and so on, largely financed by the newly constituted World Bank. Its formal name is the International Bank for Reconstruction and Development, and it closely followed the Marshall Plan and Truman’s Point Four agenda. The anniversary year 1994 witnessed the publication of a book entitled 50 Years is Enough: The Case Against the World Bank and the International Monetary Fund. It reflected the disillusionment and even the bitterness of underdeveloped nations whose hopes and expectations had been inspired in the aftermath of the colonial era. With the Cold War over and American voter resentment toward what it sees as extravagant foreign aid (actually it’s inconsequential), poor nations of what is now called the Global South are being left to fend for themselves, increasingly captives of an alliance between wealthy national elites controlling most of the natural capital and corporate powers in the modern industrial world. Who would have thought, half a century ago, that debt forgiveness would be a primary agenda item for nations holding half the world’s people, and that it would be so difficult a decision for the creditor nations to carry out! Jubilee is still unknown in its contemporary context.
Today we see a new crop of theories offered for how best these societies can develop their economies, even if by their own bootstraps. The most notable of these is the approach of Bangladesh’s Mohammad Yunus in the form of micro-credits. There is little reason to believe that this stratagem, however noble, can ever hold the solution to enervate whole national economies, especially in the face of the international economic and political forces arrayed against them. And there is the more recent fascination with Hernando deSoto’s suggestion of giving greater security to property titles so that these can be leveraged to obtain the liquid capital for further investment. Micro-credit at least has the virtue of helping people at the bottom of the economic ladder; fixing property titles is likely to promise greater cupidity to the international financial community.
Alodia was created by Lindy Davies, director of the Henry George Institute. You can view a map and links about Alodia and consider getting your own copy of Davies’ 2004 summary booklet “The Alodia Story,” explaining the whole Alodia enterprise
Lindy Davies’ The Alodia Story strives to apply the venerable Georgist tradition to a context where marginal economic gains have occurred since post colonial independence. Alodia, which looks suspiciously like the mirror image of Ghana, is described as a struggling, debt-saddled, former French colony in West Africa. Its agriculture and industry function well below their capacity; it has a large and growing population of AIDS victims; it has deepened its people’s suffering in order to secure debt relief; it has been plagued with ethnic conflict. It plays out over a short 60 pages, mainly by news narratives and commentaries.
It is the only instance of which I’m aware where this genre of writing has been applied to illustrate Georgist ideas. As a hypothetical case, the task I’m asked to consider is whether it is effective in presenting its message.
I’m of mixed feelings about whether The Alodia Story is successful. On the one hand I appreciate the value and need for such materials, and I certainly understand and am in sympathy with Lindy’s message. On the other hand, I wonder whether the story is sufficiently compelling that it makes its case, i.e., that it can sell the unconverted. As it happened, I was given the opportunity to meet for two hours with three members of the Ghana Parliament, all members of the Finance Committee, two months ago when they visited my capital city of Albany to learn more about New York State’s government processes. After discussing my own ideas about fiscal designs, I saw to it that Lindy would send along to each of them a copy of The Alodia Story. I have yet to learn of any reactions they might have. But that will be the acid test.
Note first that the hypothetical conversion of Alodia to a Georgist economy comes about only by dint of a military coup, where the strongman is able to maintain order and stability for a year of transition only through the personal loyalty of his army. He does this by a combination of personal magnetism, enlightenment about his aims, and financial support from enterprises that continue via illicit channels.
The regime takes power to immediately stop debt payments to international banks, limits import and export trade, and embarks on a nationwide land cadastre campaign. It cancels all taxes on labor and manufactured capital. In the immediate aftermath it addresses health and education challenges while at the same time focusing on development of natural resource wealth that are un- or under-recognized for their potential. The final design is clear enough; the transition to the new utopia relies on a number of deus ex machina devices that may be just too implausible to accept. Is it realistic to believe that the agents of financial capital would be restrained in the face of such unilateral defiance of contract, however remote the prospect of repayments might ever be and however immoral those arrangements are designed? Is it realistic to think that the American government would not facilitate a regime change through some instrument of the CIA, however well concealed?
It is perhaps salutary to look at other instances in history where regime changes transpired in the absence of international manipulation. What means were employed to ensure the directions and stability of government programs once the reins of power were seized? Three instances come to mind that provide some reference: 1) The American Revolution of 1776; 2) the Russian Revolution of 1917, and 3) the Cuban Revolution of 1956. At the risk of oversimplification, certain patterns can illustrate how in these instances the visions were realized in greater or lesser degree.
In the first instance, the American Revolution can be seen as one episode in a grander struggle between England and France, one which in total lasted throughout the 18th century. Toward the end of that era, England was plainly exhausted, and could ill afford to impose itself so heavily upon the North American continent. Until the British conceded, it was by no means assured that the colonists would prevail, and they did so only by a device which has been too little explored in American history. The fact is that George Washington was able to maintain the service and the loyalty of his soldiers only by promising them something that no other leadership had ever before been able to offer: titles to land. Following the war, millions of acres were titled to continental soldiers in compensation for their services, a promise that could only be kept had they won. Indeed many of these lands were sold twice: first by the several states to raise money for the war, and later in depreciated specie to those who could afford to secure title for speculative gain. It was Hamilton, the prescient banker, who most saw value in land sales. One might wonder, just engaging in recent vogue of counterfactual history, whether the colonists might have prevailed had leaders not been able to hold the army together.
The Russian revolution also offers a telling instance of how capital in land allowed the Bolsheviks to consolidate their position. Russia was a largely rural agrarian society even at the moment of its upheaval. Most of the land was owned by rentiers who were able to live off the toil of its peasants. Tolstoi’s final novel Resurrection is witness to the extent that such arrangements were morally questionable to its intellectual elite. It is not surprising therefore that when Lenin came to power, one of his first acts was to abolish private titles to land throughout the nation, a measure which provided the regime in its later years substantial means by which to hold its position, even as its economy’s growth often sputtered during the 1920s.
As to the Cuban revolution, the resentment toward the minority of absentee landowners provided a fair portion of the animus for the insurgency. One hundred fourteen farms, less than a tenth of one percent of the total number, encompassed over 20 percent of the land area. Eight percent more covered another 71 percent of the land, while at the other extreme 39 percent of the farms were peasant holdings of less than an acre and together accounted for 3.3 percent of the land. Moreover, the Cuban economy was dominated by giant American monopolies — the public utilities and especially sugar. Crowning all this was the gangland dictatorship of Fulgencio Batista, who treated his holdings as a playground for the rich who came mostly from America. Castro was the embodiment of the revulsion of the general public toward all of this, and his personal charisma carried him to legitimate standing even while the United States did its best to make things difficult for the nation’s economy.
What these three instances show is that certain special circumstances account for the success of radical regimes, even when they replace political and economic systems that are strongly reviled. Might it happen that a revolution based on Georgist ideas could prevail in exceptional instances? The answer is certainly yes. The pattern as laid forth in The Alodia Story gives only a hint of the antecedents under which General Samuel Akuopha comes to power; the suggestion, however, is that it follows a succession of corrupt and exploitive regimes that track from the time of the French colonial departure. The inertia that propels a revolution such as The Alodia Story portrays cannot be discounted, but even more importantly it must be understood. The education necessary for the public to appreciate the difference between what exists and what is possible is the heart of the Georgist message. And it is for this reason that Lindy’s effort is valuable.
Only when people appreciate how economic rent — the surplus which by rights all people should share — is being skimmed off by a select few, and how a just economic system could provide it for the benefit of all people, will it be possible for a scenario such as he outlines to happen. It is our charge to help bring it to pass.
Bill Batt, Ph.D., runs the Central Research Group, Inc., headquartered in Albany, New York.
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