Liberal Reform in an Illiberal Regime: The Creation of Private Property in Russia, 1906-1915
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Liberal Reform in an Illiberal Regime: The Creation of Private Property in Russia, 1906-1915
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| ISBN-13: | 9780817947231 |
|---|---|
| Publisher: | Hoover Institution Press |
| Publication date: | 09/01/2013 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 320 |
| File size: | 2 MB |
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Liberal Reform in an Illiberal Regime
The Creation of Private Property in Russia, 1906â"1915
By Stephen F. Williams
Hoover Institution Press
Copyright © 2006 Board of Trustees of the Leland Stanford Junior UniversityAll rights reserved.
ISBN: 978-0-8179-4723-1
CHAPTER 1
Creating Private Property, Dispersing Power
The gist of the reforms
The reforms launched in November 1906 applied to peasants' "allotment land," which they had received as part of their Emancipation from serfdom and which in that year represented the great majority of all peasant-owned land. Three features of allotment land tended to make peasants' property rights collective rather than individual. First, a peasant family's holding was typically subject to periodic redistribution by the commune, a redistribution intended roughly to match a family's land holding with the number of working family members. Second, each family held a large number of small, intermingled tracts — often as many as fifty — scattered over the commune, so that cultivation required close coordination with other households and rough unanimity of approach, not to mention long journeys to work on distant fields. Third, ownership (if we may call it that) was more in the family than in any individual, so that sales or other transfers often required family agreement.
To enable peasants to protect themselves from the risk of losing land in a redistribution, the Stolypin reforms gave individual householders a right to opt out of the whole redistribution process and gave communes a right to do so as a whole by a two-thirds vote.
To reduce plot scattering, the reforms gave peasant householders the right to demand replacement of their holdings with a single consolidated tract of land. An individual household had an unqualified right to consolidate if it timed the demand to coincide with a commune repartition. If a household made its demand separately from a repartition, it could consolidate as long as the process wouldn't impose a grave inconvenience on the rest of the commune; if it would, then the commune could pay the household off in cash. In addition, an entire commune could vote to consolidate by a two-thirds majority.
Finally, to cure the problems of family ownership, the reforms prescribed that a household's decision to opt out of the redistribution process would bring individual ownership in its wake.
To see whether these reforms might have seriously advanced Russia toward liberal democracy requires having in mind some picture of liberal democracy itself, especially the role of private property and civil society, and of the nature of transitions to liberal democracy.
Liberal democracy
Because a premise of this book is that liberal democracy is generally desirable, let me briefly describe my notion of liberal democracy. My aim is not to push my definition on my readers, but simply to establish a framework. Nor are my criteria very demanding; for the purposes of this book, the notion is broad, running from the theoretical night-watchman state through the modern Anglo-American democracies to the dirigiste regimes of continental Western Europe.
"Democracy," at least in the sense of governments selected by the people in free elections, is a relatively easy concept. But without "liberalism," popular elections cannot assure liberty, opportunity, or justice; indeed, without liberalism, there is little to assure that the first free election won't be the last.
Liberalism, as I use the term, requires (at least) the rule of law, property rights, freedom of speech, a vibrant civil society, and suitable habits of mind. These criteria somewhat overlap and are not necessarily exhaustive. Each requires a little elaboration.
The rule of law comprises several elements: (1) Governments themselves must be subject to law, so as to limit government predation. (Government's subjection to law need not come about through courts; it can be through tradition and civil society, as in Britain since the Revolution of 1688.) (2) Rules must be clear enough that the outcomes of disputes that might be brought to court (or a similar adjudicator) will be generally predictable, so that the rules can be a basis for planning economic and other decisions. (3) Courts must be independent and reasonably impartial. (4) Reasonably defined property rights, contract rights, rights in corporate governance, and tort claims must be enforceable in court, so as to limit citizens' and firms' predatory activities against one another and enable them to join voluntarily in constructive activities. (5) There must be formal equality of law — i.e., no caste with inferior rights.
Second, property rights, though already mentioned as an aspect of rule of law, deserve their own discussion. They must be strong enough to allow their holders to resist predation by government and, generally speaking, the more widespread the better, to reduce the risks of predation by property owners against others. In a state without effective property rights, citizens and firms can protect their interests from predation only through patrimonial relationships — informal, personal links between politically powerful individuals and their de facto dependents. This is the system reflected in a question common in Soviet Russia: "And whom do you go to?" In other words, "Is there a high party official to whom you can turn for succor when the state or others start to push you around?" The kind of dependency inherent in patrimonialism is hardly consistent with the individual's place in liberal democracy.
In these patrimonial structures, friendships, connections, and the attendant back-scratching become the vital currency in decision making. Accurate information — which is critical to economic decisions and which private property and markets provide, if somewhat imperfectly — is scarce. A manager or entrepreneur can't decide on the best mix of alternative inputs or outputs without information about their relative values. Because that sort of information is scarce in a patrimonial system, another set of costs, known among economists as agency costs, is high. All agents have some interest in advancing their own welfare at the expense of their principals (the people or interests on whose behalf they are supposed to be acting). Where good information about relative values is unobtainable, the higher-ups find it hard to monitor the underlings' claims about what is feasible and even what is happening. With information and agency costs both high, the incentives faced by those deciding about investments differ radically from those in a private property regime, where (1) enterprises acquire their inputs in market transactions in competition with other enterprises, and (2) failure to offer a competitive product at competitive prices is usually fatal. These differences seem to be the main source of private property's economic advantages.
Of course, property rights and patrimonialism typically co-exist. Even an economy with strong property rights will have niches of patrimonialism, such as the nepotistic corporation (while it lasts) and enterprises (public or private) sheltered from competition. And even a despotic regime, the epitome of patrimonialism, will honor claims to resources — if the holder has the necessary political power or connections. There, politics drives property. In a despotism, as David Landes puts it, "it is dangerous to be rich without power."
Third, there must be freedom of speech and press, so that people can point to what they believe is government misconduct or neglect and rally democratic forces against it.
Fourth, there must be a vibrant civil society. As no imaginable government structure can alone subject the government to law, society must have some capacity to pose a counterweight. This requires organizations that can actually do things for people (reducing excuses for government action), that give people practice at self-rule and participation in constructive groups, and that facilitate cooperation against any state predation.
Fifth, and most elusive, is the requirement of suitable habits of mind. Individuals — not all of them, of course, but at least enough to set a tone — must think of themselves as responsible, rights-bearing citizens; be realistic, not fatalistic or utopian; be bold and outspoken, but capable of compromise; be ready to organize the sorts of groups that make up civil society; and be tolerant of groups with differing ideas and interests. Among Stolypin's hopes was to foster such inclinations.
Justifications for liberal democracy are many, but one requires special mention. Humans are imbued with irresistible impulses toward both competition and cooperation, greed and generosity. They commonly have a passion to dominate, to display superiority and excellence, to attain distinction and honor, and to create (and to be seen as creative). Liberal democracy seems to offer a better avenue for reconciling all these drives than any yet developed. It channels people away from grabbing goods and services (as in a culture of warfare), away from manipulating kinship or other ties (as in a culture of patrimonialism), and toward the provision of goods and services that others enjoy. "There are few ways in which a man can be more innocently employed than in getting money," said Samuel Johnson. But the aphorism is correct only where property is protected and markets prevail. In a society where people "get money" by violence or by courting higher-ups in a food chain of elites, there is no reason at all to believe that getting money is an innocent employment, much less a productive one.
Property rights, civil society, and liberaldemocracy
The property rights reforms of 1906 directly advanced the "liberal" side of liberal democracy: i.e., a system of rights and relationships in which people find their niches through "private ordering"; where people interact with others as free citizens; where resources are allocated mainly in the market; and where citizens freely form groups to accomplish common goals (including not only charities and social welfare organizations, but also partnerships, cooperatives and corporations).
The rather collectivized rights of peasant allotment land seriously conflicted with liberalism. Compared with individual ownership, they offered less opportunity for individual initiative. The rights were murky and the holders' relationships enmeshed. Commune members could not exit freely with their property intact (or even without it). All this hindered the development of relationships based on each side's independent ideas of its own good, as well as its recognition of others' reciprocal freedom not to associate or deal.
The property rights advanced by the Stolypin reforms related mainly to liberalism, but also, indirectly, to the "democratic" aspect of liberal democracy. First, if the core of liberal democracy is a broad diffusion of power, widespread private property is the core of that core. Private property enables its owners to make decisions about how productive resources are used. As just discussed, the other systems of allocating power have a hierarchical and/or patrimonial quality, and power is relatively concentrated. Even with democratic elections, the voters' periodic chance to choose one team to make thousands of decisions over the next several years is no real diffusion of power — except in the limited sense that electoral competition among parties will somewhat diffuse power in the political class. Apart from the way private property directly allows owners to make independent choices as producers and consumers, it gives political entrepreneurs access to a wide range of independent sources of assistance, enabling them to offer more varied choices, thus enhancing individuals' minute power as voters.
Second, property rights and liberalism yield productivity advantages that make it easier to maintain liberal democracy. If a tide is rising and lifting many boats, fewer mariners will incline to mutiny.
Finally, many of the bourgeois virtues that a market economy depends on and nourishes seem to match the ones needed in a healthy democratic process: skills in bargaining toward win-win solutions, with each party's main bargaining weapon being simply his ability to take his business elsewhere (whether it be buying or selling, goods or services). Respect and protection for others' rights is the common ground of liberalism and the sort of long-lived democracy in which incumbents reliably step down when defeated.
Of course, without civil society to constrain predation, private property would be highly vulnerable; ruling elites could sweep it aside or undermine its independence. Civil society enables groups holding productive property to secure their rights. Its efficacy depends in part on groups' organizing ability. Marx noticed that this was a problem for peasants, arguing that the limited nature of their involvement in markets tended to disable them from political self-defense:
The smallholding peasants form a vast mass, the members of which live in similar conditions but without entering into manifold relations with one another. Their mode of production isolates them from one another instead of bringing them into a mutual intercourse. ... Each family is almost self-sufficient; it itself directly produces the major part of its consumption and thus acquires its means of life more through exchange with nature than in intercourse with society. ... In so far as there is merely a local interconnection among these smallholding peasants, and the identity of their interests begets no community, no national bond and no political organization among them, they do not form a class. They are consequently incapable of enforcing their class interests in their own name, whether through a parliament or through a convention.
A modern-day illustration of Marx's point is the way that, in many parts of Africa and Latin America, ruling elites are able to impose price controls on the produce of Marx's "smallholding peasants," capturing much of the return on their labor and siphoning it off to city dwellers. An exception is Kenya, where larger farmers have mobilized enough political resistance to protect not only themselves, but also their smallholding peers. One question about the Stolypin reforms is whether the property rights they created could have enabled farmers to win that sort of security.
Transitions to liberal democracy
There is a range of views on the attainability of liberal democracy. At the optimistic end is Francis Fukuyama, whose The End of History seems to suggest that liberalism's apparent superiority for realization of human good should be enough to carry the day. But that optimistic vision — at least in an unqualified form — encounters the obvious problem that in many nations liberal democracy has yet to triumph.
One obstacle to the prompt or easy arrival of liberal democracy is precisely the fact that it is a system of highly diffused power, in contrast to the known alternatives. So its arrival by simple decree from on high would require a rather astonishing self-abnegation by those in authority. As Frederick Douglass said, "The whole history of the progress of human liberty shows that all concessions yet made to her august claims, have been born of earnest struggle. ... Power concedes nothing without a demand." A nasty asymmetry follows. A tyrant such as Stalin can set democratic development back radically; but a counter-Stalin, an autocrat delivering liberal democracy on a platter, is scarcely imaginable. Worse yet, talented autocrats and elites will resist economic changes that might, in the long run, crimp their political power. Thus, the Russian and Austro-Hungarian states for some time resisted the coming of railroads for fear of their political implications; more recently, Kwame Nkrumah of Ghana preferred foreign investment over domestic, seeing that homegrown capitalists would pose a far greater threat to his political power.
Of course, one can imagine a grand bargain in which an authoritarian ruler and associated elites might give up their preeminent place in exchange for an outsized share of the abundance that would flow from liberal democracy. But consider the difficulties with such an agreement. Although the hypothetical bargainers could see the likelihood of future abundance by looking around at other societies, they could hardly be confident that, even if all sides implemented the bargain as best they could, the expected abundance would really arrive, much less in the reasonably foreseeable future. Besides, the perks and privileges of the elites could not be easily valued, especially in an illiberal regime. The murkiness of the status quo would itself obstruct escape from the status quo. Most important, in the absence of an established rule-of-law state, neither the ruler nor the other bargainers could expect to be able to enforce the deal without a risk of violent conflict. Each side would have to heavily discount its hoped-for benefits.
It is hardly surprising that liberal democracy has never come into existence by deliberate plan, whether of a group or a beneficent ruler. The closest candidate for a counter-example would be the United States, through its adoption of the Constitution. But it seems naïve to see the adoption itself as the cause of freedom's triumph. The main ingredients of a liberal democracy had been in place for nearly two centuries (with many critical gaps, to be sure). The rule of law functioned tolerably well for the most part; laws were made by representative colonial legislatures operating under colonial charters; free speech and free exercise of religion prevailed to a large degree; and civil society flourished. The framers saw a need to weld the states into "a more perfect union," curbing undue populism in the states and improving their defense against foreign powers. Apart from a few corrections of colonial practice, such as explicit limits on governmental powers, life tenure for judges, and the requirement of congressional endorsement for taxation, they largely built on their colonial experience. Did we acquire freedom because we had a (sound) Constitution, or did we acquire a Constitution because we were free? The latter seems more plausible, especially when we compare our experience with that of dozens of nations with beautiful constitutions and little freedom.
(Continues...)
Excerpted from Liberal Reform in an Illiberal Regime by Stephen F. Williams. Copyright © 2006 Board of Trustees of the Leland Stanford Junior University. Excerpted by permission of Hoover Institution Press.
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Table of Contents
Contents
Tables, Figures, and Maps,Preface,
Acknowledgments,
Introduction Reform from above,
Chapter 1 Creating Private Property, Dispersing Power,
Chapter 2 The Property Rights to Be Reformed,
Chapter 3 Peasant Conditions on the Eve of Reform,
Chapter 4 The Politics of Reform,
Chapter 5 Overview of the Reforms,
Chapter 6 Purposes and Pressure: Issues of Reform Design,
Chapter 7 The Long-Term Implications,
Statutory Appendix,
Glossary,
Bibliography,
Index,