Polanyi along the Mekong
New Tensions and Resolutions over Land

by Larry Lohmann

first published 31 January 2002


As the economic historian Karl Polanyi noted 60 years ago, full commoditization of land is impossible and “would result in the demolition of society”. But what are the strategies by which privatization of land is variously advanced and resisted? Some contemporary trends and case studies from mainland Southeast Asia, where multilateral agencies have been promoting land commoditization, are briefly discussed in this article, which results from impressions gained during a January 2002 study tour of some Northern Thai communities with Vietnamese and Thai non-government organizations



To isolate [land] and form a market for it was perhaps the weirdest of all the undertakings of our ancestors.

Karl Polanyi, 19441

"To allow the market mechanism to be the sole director" of how land is used, the economic historian Karl Polanyi wrote nearly sixty years ago, "would result in the demolition of society":

"Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation ... Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, ... the power to produce food and raw materials destroyed.... A self-adjusting market ... could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness." (3)

Why would this happen? "What we call land is an element of nature inextricably interwoven with man's institutions," Polanyi explained:

"It invests man's life with stability; it is the site of his habitation; it is a condition of his physical safety; it is the landscape and the seasons ... land remains part of nature [and] is thus tied up with the organizations of kinship, neighborhood, craft and creed - with tribe and temple, village, guild and church."

Land is immobile. Cultivators commit themselves and their communities to improvements fixed in particular places, which must be built up gradually by generations of effort. Not only local food supplies but also the preservation of soils and forests depend on people not constantly exchanging their lands for other lands, or the land constantly exchanging its peoples for other peoples. The "economic function is but one of many vital functions of land". So to make the use of land fully dependent on the market mechanism would be "to subordinate the substance of society itself to the laws of the market".

Of course, there are different degrees and aspects of commoditization of land. In the extreme case, any land can be bought and accumulated in any amount by anybody with the money to do so and then used for any purpose. It can be exchanged for anything with anybody in any amount. This scenario offers the clearest threat of the "demolition of society" of which Polanyi wrote. It makes it theoretically possible for one person to own all land and everybody else to own none. It makes it possible for land to be destroyed if that for which it is exchanged is temporarily a source of greater profit. It makes it possible for land to be treated as a mere speculative instrument without even being used in any physical way, while people go hungry. It makes it possible, in short, for landowners to do anything with their land regardless of the consequences to their neighbors in pollution or hunger. And it makes it possible for landowners to be people who never see or understand the land they control.

Most cases are less extreme. In the real world, all local communities and states possess rules or unwritten or unstated customs which determine whether and to what extent land can be exchanged, impose limits on how much can be accumulated by one person, restrict what it may be used for, and specify carefully who may buy or acquire it.

Overcoming or watering down these varied rules or customs - a conscious neoliberal project as well as being a business interest for many individual companies - is an enormously difficult and complicated job. Eliminating them completely - reversing the "normal" state of affairs in which the "economic order is merely a function of the social order" - would be impossible. That's why, in England,

"the road to the free market [had to be] opened and kept open by an enormous increase in continuous, centrally-organized and controlled interventionism ... laissez faire economy was the product of deliberate State action."

Innumerable laws had to be passed, from the 14th century onwards, enclosing, commercializing and individualizing common land and mobilizing feudal revenues. Neighborhood, kinship and church organizations' claims were eliminated. As the industrial revolution advanced, sites for mills and laborers' settlements were carved out. Through the mobilization of produce, land was reorganized around the "needs of a swiftly expanding urban population" needing cheap food and industrial raw materials. Through state subsidies, commercial monocrops replaced commons, impoverishing people and driving them off the land. "Farming is business," insisted the trading classes, and those who were broke had to clear out. Food markets were made regional instead of local, and then, in the second half of the 18th century - with the help of railroads, steamships and trade subsidies from the state - national and even global. As prices became determined by regional, national or global supply and demand rather than local bargaining power, bread became periodically unaffordable for many, triggering food riots.

A New Version of an Old Project

In contemporary mainland Southeast Asia as well, massive state action, undertaken at first in reaction to colonial-era intrusions and later on backed by the World Bank, the Asian Development Bank, the United States, and bilateral agencies, has been crucial to the attempt to turn land into as much of a commodity as possible.

In Thailand, for instance, a political takeover of forests in the north of the country by the Bangkok bureaucracy a century ago was necessary before teak forests could be fully turned over to the British for exploitation. Local subsistence lowland agriculture, as well as swidden agriculture and communal use of forests and streams, came under state assault sixty years later. So did much fertile river valley land, which was exchanged for hydroelectric or irrigation reservoirs. During the subsequent era of "development", high-input cash crops have been heavily subsidized, forcing many farmers into debt and foreclosure and damaging soils, waterways and forests.

State-facilitated land transfers and land speculation have also played a part in widespread farmer dispossession. Officials with an "inside track", together with their cronies, have hastened to buy up plots near projected roads and other development projects. Concessions of state forest land have been granted to mining and (up to 1989) timber companies, but not to ordinary farmers. As Bangkok and Thailand have integrated themselves more fully with the world market, politicians and bureaucrats alike have cemented their links with, and accountability to, business.

Since 1984, a World Bank-supported land titling program, run partly by consultants from Broken Hill Proprietary, an Australian mining firm, has helped build up the necessary bureaucratic machinery for fuller privatization. Over the years, the project, aimed partly at improving farmers' access to credit, has benefited the Department of Lands by training staff, promoting mapping efforts, and building capacity to value non-forest land. By 1997, over five and a half million property deeds had been handed out to two million households. By increasing land security, the program claims, it has spurred farm investment and slowed land clearance in forest areas, although evidence in support of this assertion is scanty. The program, in four phases of about five years each, is slated eventually to extend to 75 provinces. Funding for the penultimate phase (1995-2001) amounted to US$118 million from the World Bank, $80 million from the Thai government, and $6 million from Australia. All this indirectly helped fuel the speculative boom which contributed to the financial crisis of 1997, which in turn provided the International Monetary Fund with an opportunity to demand that Thailand make land ownership by foreign business easier.

International pressures to create and extend markets in land rights have also recently intensified in Laos, Viet Nam and Cambodia. Complicated new systems are being put in place for granting, adjudicating and registering land titles, recording land transactions, and surveying, classifying, mapping and valuing land, backed by new policies, legal structures, and technological and administrative frameworks - creating, in effect, more, different, and newly far-reaching forms of state power. At the same time, development agencies have helped commoditize land by funding specific land titling or other land administration projects. In Laos, for example, the World Bank, with the help of AusAID, has put $20.7 million into a seven-year land titling program beginning in 1997 and aimed at "creation of efficient land markets" and a "system of clear and enforceable land ownership rights and land valuation capacity".2 Chief consultant for the project is, again, Broken Hill Proprietary. The project hopes to lay the ground for further efforts by issuing 250,000 titles in municipal Vientiane and a few rural areas.

Just as in Europe, where, before and during the Industrial Revolution, "customs of manors were scrutinized in new ways by stewards and by lawyers, whose employers saw property in new and more marketable ways",3 the massing of official power behind land commoditization has stigmatized commons rights4 in Southeast Asia. As the World Bank's own titling consultant admits,

"Land titling, by moving land into the private property regime, can transform long standing communal land systems - and can do so almost overnight. Thus, instead of providing a solution to the problems of development, land titling can be perceived as the very cause of the problems in itself. The application of land titling to customary land has been critically described as a first step in making land more accessible for mining, logging, plantations, urban expansion and other large scale development."5

In Cambodia, as the United Nations Economic and Social Council notes, the new land law "does not consider the differing needs and rights of indigenous peoples, many of whom express a desire for communal, rather than individual ownership rights". This bias is especially severe for highland peoples, whose customary tenure and use of land and forests for livelihood

"is not at present recognized in national or local land-use planning nor in corresponding land rights and ownership titles ... Rural Cambodians are rapidly losing their land because of the wholesale privatization of forest and wetlands that were previously common resources accessible to all.... An OXFAM Land Study Project has estimated that [between 1992-8], no less than half of Cambodia's previously available land has become inaccessible to the rural poor and that less than 10 per cent of those occupying land have tenure, even in the weakest form."6

Land titling programs can also "provide opportunities for land grabbing by those who are better informed, more familiar with the bureaucracy, and have the financial means to initiate registration procedures".7 By making both taxation and land purchases easier, they encourage many farmers simply to sell their land, as has happened in Laos. And they can also be biased against women, if prevailing practice encourages land household titles to be registered in a husband's name only.

In sum, the means and mechanisms propelling a more complete commoditization of land are as diverse as local rules for land use themselves:

  • Common land shared by local people under local rules for subsistence purposes may be privatized through law or outright seizure.
  • Lawyers or stewards may find ways of making customary community uses of commons (for firewood, gathering, grazing, etc.) illegal.
  • Increased dependence on borrowing and investment may force landholders into debt, forcing them to find land assets to sell.
  • The market economy's introduction of endlessly increasing and diversifying needs may encourage locals to treat land as an exchangeable asset.
  • Increasing economic value of land may also cause restraints on exchanging land to be put aside.
  • State land titling programs may increase investor confidence in land as an investment.
  • Land titling programs, in creating new bureaucracies, also create new forms and amounts of power which can be used to override subsistence claims.
  • State "land reform" or "land redistribution" programs - particularly those which make state land available to individual owners - are vulnerable to being used by the rich for their own purposes. They are also unlikely to succeed insofar as they do not provide other goods needed for land security, such as water rights, capital, and so on.
  • In some countries, the rich may find that proliferating state land bureaucracies provide them with new opportunities for legal manipulation and corruption which enable them to buy or lease land more easily.
  • More interest in land investments leads to more pressure to find loopholes in existing customs or laws restricting commerce in land.
  • An ideology of "productivity" and "efficiency" in the production of single commodities favors exchange, commercialization and concentration of land.
  • Increased commoditization of the products of land may make farmers more dependent on the market, leading them to sell land.

Protective "Countermovements" in Europe, Thailand and Beyond

Polanyi insists that such moves toward total marketization can go only so far before they are "stopped by the realistic self-protection of society". The "concept of a self-regulating market was utopian", Polanyi reminds us: for every movement to expand the scope of the market, there is bound to be a protective countermovement that emerges to resist the "disembedding" of the economy.

Thus in an earlier period of European history, governments were ultimately forced to introduce devices to insulate farmers from the pressures of fluctuating harvests and volatile prices. Environmental and land use regulations were promulgated for urban areas. From the 18th century in England, "common law in land acted as a conserver of the past in the face of modernizing legislation". Statutes were passed to protect the habitations and occupations of rural classes against the effects of freeedom of contract. Measures were promulgated to protect tenants, slum dwellers. Central Europe was forced to protect its peasantry by introducing corn laws after railways found more fertile land in the antipodes. These self-protection measures were undertaken by many different classes, and were, on the whole, haphazard. "Laissez faire was planned; planning was not." But they once again confirm that market liberalism's view that the state is "outside" of the economy is false.

In contemporary Southeast Asia, various groups have also, inevitably, moved to try to protect society from attempts to commoditize land fully. What is interesting is not so much that these moves have been made - every society makes them - than the variety of actors who have made them.

In Thailand, the countermovement has been spearheaded neither by the state nor by landowners, but mainly by the popular movements of the past three decades. In fact, the Thai state's paltry "countermovement" has created its own problems for rural dwellers, as, under the influence of the Food and Agriculture Organization and international conservationism, new protected areas have been gazetted on top of farms and community forests since the 1980s (see below), while "land reform" projects distribute yet more land to the rich. In a context in which the political system is increasingly dominated by businesspeople with an interest in the full exchangeability of land, and in which a highly-developed bureaucratic system is also largely unaccountable to the grassroots, highly susceptible to influence of consultants, it has been local people who have had to take the initiative.

Thus in Ban Rai Dong in Lamphun province, 282 landless lowland khon muang families recently seized over 400 rai of land left idle for decades by its "owners" under Thailand's policy of extreme land privatization. (The "owners'" title to the land, it turns out, is bogus anyway, having been gained by corruption of the local land office.) The villagers are demanding not only that the land be granted to them for use, but also that it be isolated from the land market - in effect, decommodified. They insist that they be given one collective title to the entire plot and that they have the right to expel any one of their members who tries to sell his or her allocation to anyone else. At the same time, they demand that the state provide necessary water, electricity and other support for their community. Other coordinated land takeovers are happening in at least 17 other Northern Thai localities in a more or less concerted attempt to replace, rather than reform, the local power of a state land administrative apparatus allied with privilege and bent on the full marketization of land. In a quieter movement of "land reform from below" which is proceeding in parallel, many farmers are simply individually moving back onto plots they have sold in the past and which remain unused.

In Ban Pa Phai in Chiang Mai province, farmers' attempts to protect their society from full commoditization of land and its produce are taking a different form. Village leaders are reconsidering the chemical-intensive temperate vegetable cash cropping pushed on them by the state on a number of grounds: debt, pesticide poisoning, environmental pollution leading to conflicts with neighboring groups, and disruption of cultural identity. At the same time, they are battling prejudice against their ethnic group and instituting forest replanting and forest protection activities as a way of supporting their claim to rights to land in an area slated to be gazetted as a protected area. In attempting to roll back farmers' initial enthusiasm for chemical --intensive commercial agriculture, the leaders hope to help reinstitute, in place of a market society's principle of scarcity (formally enshrined in economic theory at least since Walras), a sense of "enoughness". This hope contains a criticism not merely of consumerism and its endless creation of new needs, but also, implicitly, of the reduction of farms and commons to exchangeable, productive resources or raw materials for the global private or public sectors. In opposing subsistence to production, and use to exchange, the village leaders are also implicitly imposing self-governance to policing by the state. As Ivan Illich has observed, "commons can exist without police but resources cannot".

In Ban Huay I Khang, a Karen village not far away, villagers stress the same point using a different metaphor. Money, they say, is like a bird flitting through the forest. Villagers may chase it, but they can never catch it, meanwhile leaving their children helpless far behind them. Again, this implicit criticism of a market society is more far-reaching than it may seem. But another, more immediate focus of Huay I Khang villagers is on the deleterious effects of the Thai state's own self-serving attempt to contain the environmental effects of land commoditization: Thailand's expanding "protected area" system, under which Huay I Khang villagers, like two million of their compatriots elsewhere in the country, are threatened with eviction. It is as if having done its best, over the past century, to make people an enemy of the land by converting forest commons to corporate log mines and plantations and agricultural land to an item of exchange, the state now wishes to stem the tide of degradation by excluding people from the land altogether. Huay I Khang, accordingly, is joining with other minority villages in seeking to prove to outsiders, and indirectly the state, that the people/land dichotomy is false and that instituting and trying to police a permanent border between humans and forests is counterproductive. They are attempting to demonstrate and reinforce their own forest conservation traditions; to show that it is beneficial for some areas of forest to become swidden and then allowed to regrow into forest again; and so on.

Interlaced with, and supporting, such actions are the efforts of both national-level people's networks and NGOs to coordinate lobbying for a new macro-level approach to land. These networks have been crucial in drafting a community forest bill recognizing the use-rights of local people to the forests they maintain. The importance of this bill can be indicated by the fact that it is the first draft law to be proposed directly by the people through a clause of the 1997 Constitution allowing laws backed by a petition with 50,000 or more signatures to be introduced into Parliament. Peoples' and NGO networks have also pressed the Thai government to institute a progressive land tax to limit land concentration and large landholdings, and to introduce stricter zoning measures on land use, to limit speculation and inappropriate or socially or environmentally damaging uses of land. In short, just as Bangkok officials keen on the fuller privatization of land are backed by an international network of capital, technocracies, consultants and international organizations like the World Bank, so, too, local people seeking to protect themselves from this all-out attempt at commoditization benefit from national-level networks.

Such creative grassroots and grassroots-accountable attempts to contain the effects of commoditization of land are not, of course, limited to Thailand. In Laos, for example, the state - formerly more protective of local interests than it is today - is on the way to being overwhelmed by pressures from international funding agencies and Western and Japanese consultants to turn land into a resource, combat swidden agriculture, and embrace a "protected areas" model. Local-level resistance (including the blocking of logging trucks) is currently more isolated than in Thailand, but may well grow in the future.

In Viet Nam, by contrast, the state has, since 1945, been far more resistant to the pressures of international business and its agents and far more responsive to ordinary people's need to be protected from a full land market. (Many decades ago, Polanyi defined socialism as the tendency to avoid the temptation to believe in the impossible dream of a self-regulating market "by consciously subordinating it to a democratic society".) In Viet Nam, everyone has a formal right to use land, land exchanges are restricted, and in place of the "freedom" to use private land for any purpose whatever which would prevail under a regime of total commoditization, the state has instituted a system of land management which specifies only some uses as appropriate to a particular area. Increased urban and foreign investment in the countryside, however, is finding many loopholes in the official system of land controls, resulting in increasing speculation and transfer of land to larger interests. The state, meanwhile, is under considerable pressure both from inside and outside to take at least a few more steps toward full commoditization of land.

Notes and References

1 All Polanyi quotations are from The Great Transformation, Beacon Press, Boston, 1957 (1944).

2 World Bank, Reaching the Rural Poor in The East Asia and Pacific Region: A Rural Strategy and Action Plan, Washington, June 2001.

3 Thompson, E. P., "The Grid of Inheritance: A Comment" in Jack Goody, Joan Thirsk and E. P. Thompson, eds., Marriage and Inheritance, Cambridge: Cambridge University Press, 1975, 328-360.

4 For introductions to the notion of the commons, see, for instance, Fairlie, S., Hildyard, N. et al., Whose Common Future? Reclaiming the Commons, Earthscan, London, 1993. See also various issues of Watershed. Ivan Illich opposes porous commons ("that part of the environment that lay beyond a person's own threshold and outside his own possess, but to which, however, that person had a recognized claim of usage--not to produce commodities but for the subsistence of kin. Neither wilderness or home is commons, but that part of the environment for which customary law exacts specific forms of community respect") to scarce productive resources, which may be public or private. See Gender, New York, Pantheon, 1983, pp. 15-19.

5 Grant, Chris, BHP Engineering, "When Titling Meets Tradition", 1999, www.sli.unimelb.edu.au

6 Economic and Social Council, Commission on Human Rights, "Situation of Human Rights in Cambodia", Report of the Special Representative of the Secretary-General for Human Rights in Cambodia, Mr. Thomas Hammarberg, submitted in accordance with Commission resolution 1998/60, 55th Session, Item 19 of the Provisional Agenda, Advisory Services and Technical Cooperation in the Field of Human Rights, www.hri.ca.

7 Grant, Chris, op. cit. supra note 4.


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