Sun Yat Sen – Revolutionary Land Reformer

Ethical Record : February, 1993 : Alan Spence

Reproduced here by kind permission of Ethical Record.

Sun Yat Sen’s Manifesto

Sun Yat Sen (1866-1925), the republican liberator of China, led the coalition of forces which overthrew the Manchus, the last Imperial Dynasty. During the last few months of his life he wrote a manifesto which he titled San Min Chu I, the three principles of Nationalism, Democracy, and People’s Livelihood; central to the last principle is the necessity for Land Reform.

He declared:
‘… to equalise the financial resources of Society. Our first aim is to be the solution of the land problem.’

He then went on to show how this could be done:
‘… the government makes two regulations: first, that it will collect taxes according to the declared value (by the landowners) of the land; second, that it can also buy the land at the same price.’

A Dilemma for Landowners

Thus Sun Yat Sen put landowners in a dilemma: if it were said the land had a low value so as to pay a low tax, then that was the price the government would purchase it at for its public needs. On the opposite hand, if land were valued at a high price, taxes would accordingly be high, perhaps higher than the land was really worth, so then the government could use its discretion not to purchase but to go on drawing the high land tax.

Either way the government was a winner

Either way, the landowner was no longer self-centred, but drawn into being part of a controlled land market.

Sun Yat Sen then went further than this. He stated:
‘After land values have been fixed, we should have a regulation by law that from that year on, all increases in land values, which in other countries means heavier taxes, shall revert to the community.’

Influence of Henry George

He took this fiscal method of raising public funds from the teaching of Henry George (1839-1897), the American land reformer. George’s book, Progress and Poverty, had been studied by Dr Sun during the latter’s many visits to the West after he finished medical studies in Hong Kong. There in England and America he was able to witness the ferment taking place against the extortionate demands of landlords and landowners.

He also took heart, and put into his manifesto, Henry George’s view that:
‘… increase inland values is due to improvement made by society and to the progress of industry and commerce.’

Thus, as land values increased, so would the revenue from taxes and Dr Sun saw this as the source of funds for building the ‘many Shanghais’ China required for its entry into the modern world.

Shortly after 1911, Sun Yat Sen lost power and didn’t regain it until 1922. Thereafter he still had to wage wars to subdue the many warlords who controlled different parts of China’s vast territory, a task he never completed before his death in 1925.

Brief Opportunity for Sun Yat Sen

However, during his period of power, he employed a German, Dr Ludwig Schramier, to prepare land reform proposals based on outlines he had given in San Min Chu I. Dr Schramier had been the former governor of the German colony of Kiao Chan with its seaport of Qingdao (Tsingtao). The German government had compelled the Chinese Emperor to lease this area to it in 1898. It then controlled Kiao Chan until forced out by the Japanese in 1916.

During his period of governorship, Dr Schramier had raised revenue from his tiny colony (20 sq. miles) from leasing land and drawing ground rent in a Henry George manner. Included in this were escalating penalties for land left unused. During the 18 years it was under his control, the colony made rapid progress in developing its infrastructure. This stopped when the Japanese occupied the territory and returned it to traditional landownership control.

Chiang Kai Shek to Power

Unfortunately, Dr Schramier was killed in a car crash a few weeks after the death of Dr Sun; thus the land reform statutes he was working on and which were within days of being completed, died with him. Instead, Chiang Kai Shek, who had assumed the mantle of leader, instigated a policy of repression against militant workers, peasants and the Communist Party. Under Dr Sun the last was becoming ever more influential, with his encouragement, within his Kuomintang Party. This, and the escalation of peasant and working class militancy, alarmed the landlords and business classes, and, also, the mafia-like secret societies. Chiang, whose links with the secret societies had helped him to leadership, now turned against the threat to the secret societies and landowners’ power, and started a campaign of mass executions of militants and communists.

Thereafter the communists retreated to the mountains and interior. From there they waged guerrilla warfare until some twenty years later when they were strong enough to capture mainland China from Chiang. He and the remnants of his army, officer corps and owning classes, some one million people, were driven onto the island of Taiwan.

Surprise Ally of Land Reform in Taiwan

There, paradoxically, the San Man Chu I principles were applied, unevenly and sporadically in relation to welfare provisions and control of capitalists, true, but resolutely in respect of rural land reform. The paradox arose because Chiang was compelled, by his own officer caste and the American advisers sent by General MacArthur from Japan, to introduce these reforms and counter communist propaganda. The intention was to prevent the communists from getting a firm hold on the minds of Taiwan’s heavily exploited peasantry, bringing about a repeat of their experience on the mainland and thus a civil war which would see the establishment of communist government on the island.

Three Stages Reform

The essence of the rural land reform programme was that land should be owned by its tiller. To implement this a three stage programme was adopted: first, that rent should be set at a maximum of 37½ per cent of the value of the crop; two, that public land should be sold to tillers; and three, that landowners who had land in excess of their tilling capacity sold to tillers at 2½ times its annual produce price.

Opposition from Landowners

Naturally, there was vigorous opposition from Taiwan’s landowning class. Yet as there were few members of Chiang’s military caste on whom they could count for support as their brethren had successfully done on mainland China, the landowners received short shrift when complaining to the new government and particularly from Cheng Chen (later to become vice-president and prime minister). It was he who independently, whilst military governor of a mainland province, had introduced such measures into his province and seen, as Sun Yat Sen had predicted, how successfully they had lifted the living standards of the peasantry.

Taiwan Becomes Capitalist Tiger

In addition to the above, by converting to private ownership the public utilities left from fifty years of Japanese rule, and using the share issues to pay the landlords the 2½ times produce price for their former landholdings, the opposition was fractured and virulent resistance withered away. The first generation of disposed landowners, having now lost its function of organising local and national power to ensure receipt of rent from the peasantry, simply pined away. However, its offspring, and those of the first generation already capitalistically minded, used the cash flow from these shares and state bonds to become industrial entrepreneurs, aided in this by American advisers and fledgling commercial work for the U.N. forces engaged in the Korean War. From this basis Taiwan began to move onto the high-ground of industrial capitalism, which it so successfully occupies today.

Thus came into being one of the so-called tigers: Taiwan, Singapore and Hong Kong. It is significant that these three either reformed rural landownership or already held the land in public ownership. Among the latter was Hong Kong. Here the land is a colonial possession and it is auctioned off on fixed term leases to capitalist entrepreneurs. Likewise in Singapore; here the government of this city-state owns 70 per cent of the land and uses it either for its extensive state industry network or leases it out for commercial purposes.

Sun Yat Sen’s Land Policy Sound

These three countries provide empirical evidence for the soundness of Sun Yat Sen’s policy of using land reform as the generator of revenue for industrialisation, Hong Kong in particular. For that colony has no landowning class, only workers, capitalists and a very few lease-holding horticulturalists. Therefore, it presents itself in a pure form of capitalism as a model for study which can lead to deductions being drawn to form a body of economic law, with the latter being applicable elsewhere – East or West, Socialist or Capitalist.

Within traditional capitalist societies – which have the three classes of landowner, capitalist, and worker – the landowner gets the first sum of money which goes into the making of the trade cycle. Before the capitalist can get his means of production and his labour force to begin to operate, ground rent must be paid to the owner of the land. Much of this goes into the conspicuous consumption of the aristocracy, landed gentry and other landowners.

If this ground rent is received by a government and part spent on improving infrastructure and part put into government reserves and kept aside for spending on ‘rainy days’ as is the case in Hong Kong, then these savings can be used to intervene against a capitalist slump which has arisen because of overproduction of commodities or whatever. By spending on building houses, mass transports systems, ports, hospitals, etc., demand is restarted within the economy and this helps the capitalist to get things moving again which gives the trade cycle a beneficial push.

Ground Rent Misunderstood by Keynes

This process is able to fulfil the ambition of John Maynard Keynes (1883-1946), whose policy of kick-starting economies was flawed because governments had either to borrow or print money in order to get an economy out of its slump. This only stored up problems of a larger size for later solution. Keynes had little understanding of the role of ground rent within capitalism; therefore he was unable really to get to grips with its economic cycles. However, once we understand the role of ground rent, then his work does provide a basis upon which an interventionist employment programme can be devised, to benefit both capitalist and worker. From a socialist point of view, ignorance of the part which ground rent has to play within socialist society is one of the reasons for the profound problems now besetting the socialist countries, of Europe in particular.

Ground Rent Opportunity in Communism Lost

Marx used a good part of Volume 3 of Capital to analyse the role of rent within a capitalist society. Unfortunately this initiative was not carried over into the era of socialism, either by Lenin or Mao Zedong. Lenin, though, in introducing his New Economic Policy in 1921, began to reappraise the role of the market in the transition from capitalism into socialism – including various forms of taxes; within this examination, the rudiments of a proper land taxing system began to emerge, only to be crushed by Stalin, along with the rest of the N.E.P. programme. Thereafter, Stalin took the path of brutal coercion as the means to achieve a socialist society. It failed, and the attempts to put socialism’s failure back onto the high-road of progress are setting Russia and other countries, horrendous problems of restructuring.

Mao Zedong was never able to get to grips with the significance of ground rent, and this, given the enormous respect with which Sun Yat Sen was and still is held by the Communist Party of China, is surprising.

Mao’s attempt to cover the distance between China’s Asiatic/feudal mode of production and socialism by means of a Great Leap Forward was a disaster. Putting this to rights, as is being done by Deng Xiaoping, has still to overcome the omission of ground rent within China’s economy. Fortunately, this appears to have been recognised, and the last congress of the Communist Party introduced various mechanisms for obtaining ground rent by various forms of leasing.

China Could Emulate Hong Kong

As experience is gathered in this, and revenue from land use is obtained by more sophisticated means, then China will repeat the success of Hong Kong – but better. For, lacking a capitalist class, it will have at its disposal the surplus value normally expropriated by capitalism; then, with no landowning class, either, to pay ground rent to, it will have this as revenue to fund the process of industrialisation and to advance at a more rapid rate than it is doing at present.

Taiwan, though benefiting from its land reforms and the revenue it receives from leasing out urban land, suffers from the distortions of having a capitalist government and capitalist state structure in conflict with the socialist tendencies of Sun Yat Sen’s policies. This offers a lesson. For it shows that only where there is a regime based on determined leadership and a hegemony of working class/socialist forces, for example as in Singapore, is it possible to ensure the transition to a fully structured form of socialism.

China Post Feudal BC

There is, interestingly new for academic researchers, one area of history commented on by Dr Sun which has had little attention given to it by left theoreticians, and this is where he said:
‘ China destroyed her feudal system as long ago as the Ch’in dynasty’.
And the Ch’in dynasty ruled China from 246-207 B.C.

To the western historian this seems exceedingly odd. For according to our notions of feudalism, it came into existence with the downfall of the slave economy of Rome, and, therefore, it arose after A.D. This tradition of history sees the periodisation as being from primitive communism to slavery, from this to feudalism, on to capitalism and then socialist society.

Is History Linear?

Therefore, a schematic presentation of the above leads easily to presenting history as a unilinear process of progressive betterment. In this, each mode of production mechanically creates the next to follow. In this pattern, feudalism inevitably produces capitalism. However, if feudalism were overcome in China 1,000 years before it became established in Europe, and China, post-feudalism, did not lead to capitalism, then what?

In fact, China, post-Ch’in, settled down to a social form which had balance between its mode of production, relations of production and its superstructure, and, therefore, was sustainable as an entity. Nor was there any sign within the following 1,800 years that it could not carry on indefinitely.

It took invasion from western capitalism to dislocate this balance, and to push China on to a path which has led to the present where a communist government is laying the basis for a future socialist society.

Is Social Life Cyclical?

What I would like to draw attention to, though, is that if social life is not linear, is it cyclical? Evidence for this could be the way capitalist society is evolving here in Britain. Here, landowners are the most powerful class, in both urban and rural settings. Systematic expropriation of ground rent has sapped capital from industry – to such an extent that industrial capitalism lacks the financial resources to renovate itself , apart from a very few transnational companies. Furthermore, the landowning class deepens its political grip through concentration of political power on the superstructure.

Capitalist Malaise in Britain

In this process the country is being depopulated of its capitalist entrepreneurs and there is dispersal of its organised workforce. It is also reducing the number of tenant farmers and introducing a new form of ‘second serfdom’ on farm workers. Within this structure the only capitalist fraction which is growing stronger is merchant capitalism, both in consumer commodities and the financial markets of the city and the banks.

In this scenario, the former industrial working class will become declassed and disenfranchised plebeians, fed on ‘dole & television’, with malnutrition and psychological despair reducing the birthrate population proportions similar to those of the Middle Ages. Of course, this scenario is but a tendency. A tendency, however, which flows from seeing modes of production manifesting themselves in a cyclical fashion.

Alleviation Possible via Sun Yat Sen’s Land Analysis

A socialist programme, however, accurately structured to neutralise the above, could annul this tendency and point people’s minds in the direction of beneficial change,

My conviction is that the British people in sufficient numbers will do this. They will see the danger, visualise the alternative, and organise to make sure that it is the beneficial society which is constructed in these islands.

To do this, however, we can be helped by a study of the Land Problem as seen by Dr Sun Yat Sen; then apply those appropriate to our economy, social life, and the political conditions within Britain.