279. Public Ownership of Land
22 December 2014
As far as I am concerned, public ownership of land is the fundamental condition for a country to govern quickly, overcome poverty, and achieve prosperity.
At the beginning of Chinese reform and opening up, there was a saying from the government: to become well-off, repair the roads first.
Therefore, Chinese road works infrastructure construction ranks the first in the world and it fully deserves the title.
I think public ownership of land is the fundamental condition for the government to conduct infrastructure construction.
The reason is very simple: infrastructure construction is a kind of investment and a fixed-asset investment with long return cycle.
Investment asks for returns, security, and rentability. If the investment objects’ ownership and return benefits do not belong to you, will you invest?
The ownership and usufruct of the investment objects must belong to the government and then the government has the necessity to invest.
Also, infrastructure construction investment needs long-term planning and systemic planning, which is also the government’s functions.
I think there are three reasons for the government to conduct infrastructure construction.
Overcoming poverty and achieving prosperity
Chinese poor areas need to overcome poverty, so the government would make great efforts to conduct infrastructure construction.
Road transportation is an important element that restricts a place’s economy.
Each place has its streams in from all over the country. There will always be some projects suitable for development, such as agriculture, fish breeding and poultry raising, mining industry, and tourism. Even if there is no convenient transportation, good products would not be transported out timely and become products to be sold to the world and turn to money. Therefore, transportation is the prerequisite and infrastructure construction needs investment in advance.
Then, China has great technical support and information support to agriculture and avocation. The 7th CCTV Channel introduces agricultural technical knowledge and prosperity-achieving information. It introduces some cultivation techniques every day. Breeding some strange and interesting animals can also make a lot of money. I would like to have a try someday. It is more interesting than Animal World and more practical. Also, you can have a try in person.
Since the land belongs to the country and the country wishes people on the land to utilise land resources reasonably and make money as well as produce more valuable things out of this land. Therefore, it would help ordinary people to overcome poverty, become prosperous and well-off. The government has invested a lot in scientific research, news, and resources to provide fortune-making resources to the public and resources for added value of the land. Since land is owned by the public, so the governments and the public’s benefits agree and heaven and man are integral.
Maintaining GDP growth
If economy declines, the government would make a concentrated effort to conduct infrastructure construction and domestic demands would increase suddenly.
Building bridges and roads are all big projects and would cost a lot; they would also promote development of relative industries, so they are of great promotion role to domestic demands. Also, infrastructure construction is a fixed investment rather than consumption. Later, its investment return would show gradually.
When local economy develops well, more businessmen would come to invest and land would appreciate naturally. Then, local government would transfer land management right and make money out of it.
Another reason for Chinese government’s passion in infrastructure construction investment is that 60% of government’s fiscal revenue comes from transferring land management right.
Local economy can only be prosperous with good infrastructure construction, and then, businessmen are willing to develop land, open plants, and construct buildings. Then, the land would appreciate substantially and governments can make money by selling land. This is another important reason. Chinese governments like conducting infrastructure construction, which is another reason that Chinese local governments are not willing to reduce the prices of real estate market. If prices of real estate market decrease, they will have no money to make.
Of course, prices of land would appreciate with infrastructure construction, which is consistent with the public’s benefits. Though the public are complaining about the high housing prices, they are not willing to see the prices decrease, because their assets would decrease.
It is public ownership of land that make the government’s, the public’s, and infrastructure construction’s benefits consistent. The government and the public make concerted effort to improve the economy, do things well and construct their home well, and this is called syncretism between heaven and man. The government’s benefits and the public’s benefits are consistent and gods’ and humans’ benefits are consistent.
I heard that it took India over twenty years to build a railroad, which was still not completed, since they had to negotiate with various landlords. In India, land belongs to the private and the nation cannot make decisions for people. If negotiations cannot be made on prices, the construction cannot begin. No matter how important this project is to the nation, it would not work if it is not beneficial to the landlord. This is the most obvious disadvantage of private ownership of land. The government’s and the public’s benefits are not consistent and gods’ and humans’ benefits are consistent.
It is because land is created by god rather than by people. Any private ownership is illegal. Only public ownership is legal.
Another resource of land is mineral resources, such as petroleum, coal mine, natural gas, gold ore, diamond, non-ferrous metals, rare metals, and other resources, which are created by God and should belong to the state. The government should take advantage of these resources to create public resources, such as national security, social minimum guarantee and so on and they should be shared by the public equally and fairly. With minimum life guarantee, people should create higher life quality by themselves.
The government should be administrator of public resources and performer of equity and justice rather than pirate of resources, persecutor of race, and maker of inequality.
Now the reason for the turmoil of many resource-oriented countries in the world is that the government works as resource pirate and persecutor of race, which is caused by private ownership of land.
However, turmoil and government issues also happen in countries of public ownership of land, which is because of rulers’ administration ideas and scientific utilisation of public resources, which is just like public ownership if communal pot in Chairman Mao period. It was because of unreasonable utilisation of capital. Just like when a group of monkeys get a BMW, they do not know how to use it. Or a group of peasants use superior quality car to plough and say it is not better than an ox cart.
Besides public ownership of land, there should also be reasonable and healthy operation and appreciation of public capital rather than sitting down and sharing the plunder and equal division, which I have discussed in other papers.