FAILING TO SPOT THE PROBLEM WITH ETHIOPIA

Tim Worstall | Adam Smith Institute

Things are not going well in Ethiopia, this we know. Riots and protests erupt. This is not a good sign for a society. It’s also very much a pity – not just for the usual reasons that violence is a pity – because Ethiopia is one of those places discovering the joys of the early stages of a lift off into the Industrial Revolution. They’re taking those first baby steps to getting rich, that thing that we’ve all done and which has escaped all too much of the world until very recently.

What’s happening is that those living on a piece of land, working it perhaps, are being thrown off it in favour of those doing something else with it. But why?

The Guardian tells us what is happening but doesn’t quite manage to grasp that cause, even though they mention it:

All land is theoretically owned by the government, merely leased by tenants, and when the government says go, you have to go.

This is the problem that private property solves. OK, sure, you can construct a very rickety indeed case that all land is still owned by the Crown (it isn’t, but) and that compulsory purchase equates to this. But that’s not so – compulsory purchase means that you get paid at the market rate for having to move and then only in favour of a project which contributes to the public, not private, good.

But in a system where the government really does own all the land, and can allocate usage without reference to current occupiers, the end result is what we see in Ethiopia. Who gets to use the land depends upon access to the political system and those excluded riot as a result.

It might even be true that no one made the land so there’s no reason why anyone should own it exclusively. Except that, as with democracy, all other systems are worse.