Land and wealth: An allegory of two countries

By XN Iraki

One family in America owns 600,000 acres of land, which is the size of Rhode Island, one of the states. In fact, most prominent Americans own ranches, big swathes of land, some in beautiful mountainous Montana, while others are in the semi-arid New Mexico.

Surprisingly, I rarely heard anyone talk about land in the US. A drive through most American states, including the outskirts of large cities like New York, indicates land is plentiful there.

One of the surprising things in America is how the country has managed to remain that sparsely populated after the first white settlement 400 years ago.

But is land abundance the only reason no one talks about land in America? Maybe. Why talk about what is plentiful?

But there is another reason. No one in America wants to buy land and keep it.

Not only will it be taxed, there are more and better opportunities to put your money. You can take your money to the stock exchange, to the mutual funds. You can even gamble it out in riverboat casinos on the Mississippi River or in derivatives markets.

Another reason no one talks about land is because the policies on land are very clear. Zoning is enforced, so certain areas are set aside for certain uses. People don’t do whatever they want with land just because they own it.

In US, people don’t use land for economic security. However, in Kenya, people who steal or launder money, or those who get money through their own effort, will quickly buy land to hedge their money against fall in value.

In the US Social Security Administration’s mandatory savings ensures that people will not suffer in old age. People, therefore, don’t need to rush to accumulate, or steal, property.

But more importantly Americans have realised that land is just one of the many factors of production.

Obsession with land

In Kenya we seem to believe it is the only factor, hence the obsession with it.

However, even this is beginning to change as entrepreneurship takes over. Think of the gentleman making so money from mobile toilets or preserving dead bodies?

So, why is land such a big issue in Kenya? Why is it so critical that it is a security threat and holds us a prisoner to progress?

For one, in a country where alternative occupations are rare, and most people have cultural and spiritual attachment to the land, emotions over land are likely to run high. In the US, they will not even bury you in your own land.

In Kenya, owning land has become a matter of life and death. People need land to get their livelihood. In the US, you don’t need land, the returns are higher elsewhere.

Population has ballooned

Most land in Kenya is not arable, so the competition for prime land is intense. By independence, most of the land "just sat there." Anyone could have easily gotten land. Since then, the population has ballooned, and any attempts to tame the population were half hearted, at best.

So, where do we go from here?

We must start by being realistic. Let us not imagine that getting land will solve our problems and make us rich. Lets realise that demand for land is driven by lack of alternative occupations. We all know that most people do not genuinely want to be farmers. Even those who grew up in the farms want to leave it as soon as possible. One therefore wonders why a clause on leasehold reduction got into the draft constitution.

If we are to grow the economy, this obsession with land has to end. It is the economy stupid.

Giving people land will not solve their problems. Rain may still fail and they will still produce more children who will demand more land. Worse, they will subdivide into little sub-plots that make it unproductive.

We should set up a land bank and sell land or lease it to entrepreneurs who are ready to start industries or other money-making ventures, which create employment.

And though people may not like me for saying this, I believe giving land to people not interested in farming will jsut start another vicious cycle of poverty.

Should we not be opening economic opportunities, which are boundless, as compared with land which is finite?

In fact, the leading theories in economics today suggest new ideas have made the term "diminishing returns" redundant.

We also need to change the national psyche so that we have alternatives to wealth and land, which includes honouring achievers, such as great actors, scientists, writers, doctors. This way, people can be satisfied without owning land.

In our envisaged land reforms, land should remain a factor of production, not a cultural curiosity, or a source of civil strife. Fighting over land, where we shall eventually be buried, is a national shame.

We should start by taxing idle land and should set a limit to how much land one can legally own. We must also set a legal limit to which land can be subdivided.

I wish all Kenyans, wherever they are on this small planet, a very merry Christmas.

—The writer is a lecturer at the University of Nairobi, School of Business. xniraki@aol.com