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An just and efficent land acquisition

Nandigram village, near Haldia in West Bengal, is up in arms against forcible land acquisition for the Indonesian Salim group’s proposed project. In this case, I do support Arundhati Roy and others who are trying to support the rights of the villagers:

Left and left-of-centre intellectuals like Arundhati Roy, Romila Thapar, Jean Dreze, Sumit Sarkar and others in a joint statement said the tense situation in Nandigram is "likely to be repeated across the state if the policy continues to be executed as it has, without consideration for human rights, democratic procedures and livelihoods".

I wonder if what happened in Nandigram, Singur and Narmada will prompt this leftists to support property rights. Without property rights, only way against govertment violation of property rights is case-by-case agitation. With property rights, the courts will be on the side of those whose property rights are or will be affected.

In the end, we need to ensure that land acquisition is possible without force and without excessive transaction costs and veto by mischievous minorities. Swaminathan Aiyar's proposal for community-led land acquisition sounds pretty interesting!

As a libertarian, I instinctively dislike forced acquisition of the property of citizens by governments. So I support the farmer agitations in Singur and Nandigram against land acquisition by the West Bengal government for the Tata and Salim groups.

I do so with some reluctance, since I would love to see a re-industrialised West Bengal. But there are good and bad ways of achieving this. The wrong way is for state governments to acquire land by fiat. The right way is to empower farmers to become partners in industrialisation.

The Prime Minister has promised a new, humane displacement policy. This implies, rightly, that the old policy was inhumane. In the holy name of socialism, the government acquired land for any purpose it pleased, public or private, and decided what compensation to give. The abolition of the fundamental right to property in 1976 meant that compensation depended on the whim of politicians, not farmers' rights.

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However, a problem can arise when industry requires a block of contiguous land, and a few naysaying farmers exercise an effective veto even when the vast majority of farmers want to sell. The current answer is forced acquisition. Far better will be a new acquisition law that empowers farmers themselves to decide.

After all, if a few naysayers block a deal, they are affecting the property rights of farmers who want to sell. The new land law should provide for state governments or corporations to negotiate acquisition proposals with farmers, and then let the farmers vote on the deal. If a large majority--it could be two-thirds or three-quarters--vote in favour of selling, this should be binding on the minority.
In this scheme, the final decision will lie not with the state government or corporation, but with the community of farmers. It will constitute community-led acquisition. It will respect both the property rights and dignity of farmers, and make them full partners in industrialisation.

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The third feature of the new law should be to ensure that village residences stay untouched even when surrounding farmland is sold to corporations. A typical industrial estate consists of a core area that has to be walled off for security and tax reasons, and a non-core area with residences, community facilities and parks. The original villages should be incorporated into the non-core zones, which will then have a mixed population of villagers and sahibs, and not be enclaves of sahibs alone.

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