Sun Yat Sen:
Revolutionary Land Reformer

Alan Spence

[Reprinted from Land & Liberty, July-August 1993]

SUN YAT SEN (1866-1925), the republican liberator of China, led the coalition of farces which overthrew the Manchus, the last Imperial Dynasty. During the last few months of s life he wrote a manifesto which he called San Min Chu I, the Three Principles of the People. Central to the last principle is the necessity for land reform. He declared: "... to equalize the financial resources of Society, or 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 valuer assessed by the landowners, of their land; secondly, that it can buy the land at the same price."

Sun Yat Sen put landowners in a dilemma: if they said that the land had a low value so as to pay a low tax, the government would purchase it. But if the land was valued at a high price, taxes would accordingly be higher, perhaps more than the land is really worth.

Either way the government was winner and the landowners were drawn into being part of a controlled land market.

Sun Yat Sen then went further than this: "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."

He took this fiscal method of raising public funds from the teachings of Henry George (1839-1897), the American land reformer. George's book, Progress and Poverty, had been studied by Dr Sun during his many visits to the West.

He also took to heart, and put into his manifesto, Henry George's view that "...increase in land 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 a source of funds for building the "many Shanghai's" China required for its entry into the modern world.

SHORTLY after 1911 Sun Yat Sen lost power and did not regain it until 1922 when he was mainly occupied with subduing the many war lords who controlled parts of China's vast territory -- a task he did not complete before his death in 1925.

During this period of power, he employed a German, Dr. Ludwig Schramier, to prepare land reform proposals based on outlines set out in San Min Chu I. Dr. Schramier had been governor of the German Colony of Kaio Chan which included the seaport of Tsingtao. The German Government had compelled the Chinese Emperor to lease this area to it in 1898 and controlled it until forced out by the Japanese in 1916.

During his period of governorship, Dr. Schramier had raised revenue from his tiny colony (22.0 sq miles) by leasing land and drawing ground rent, imposing 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 arid returned it to traditional landownership control.

Dr. Schramier was killed in a car crash a few weeks after Dr. Sun's death and although the land reform statutes he was working on were within days of being completed they died with him. Instead, Chiang Kai Shek, who had assumed the mantle of leader, instigated a policy of repression.

Under Dr. Sun the Communist Party had become more influential within his Kuomintang Party. This and the escalation of peasant and working class militancy alarmed the landowning and business classes and the mafia-like secret societies. Chiang, whose links with these interest groups had helped him to power, now turned against the threat to their power and started a campaign of mass executions of militant workers, peasants and Communists.

The Communists retreated to the mountains to wage guerilla warfare for some twenty years until they were strong enough to capture mainland China from Chiang. He and the remnants of his army and supporters, some one million people, were driven onto the island of Taiwan.

In Taiwan, paradoxically, the principles of San Min Chu I were applied, somewhat unevenly in relation to welfare provisions and control of Capitalists but resolutely in respect of rural land reform. Chiang was compelled by his own officer caste and the American advisers sent by General MacArthur from Japan to introduce these reforms to counter Communist propaganda. The intention was to prevent the Communists from getting a firm hold on the minds of Taiwan's heavily exploited peasantry and a repetition of their experience on the mainland: a civil war which would see the Kuomintang's inevitable defeat, and die establishment of Communist government on the island.

THE ESSENCE of Taiwan's rural land reform programme was that the land should be owned by its tiller. A three stage programme was adopted: first, that rent should be set at a maximum of 37 1/2 % of the value of the crop; secondly, that public land should be sold to tillers; and, thirdly, that landowners who had land in excess of their tilling capacity sold it to tillers at 2 1/2 times its annual produce price.

There was vigourous opposition from Taiwan's landowning classes. 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 from the new government and particularly from Cheng Chen (later to become Vice-President and Prime Minister). It was he who, whilst military governor of a mainland province, had independently introduced such measures and seen, as Sun Yat Sen had predicted, how successfully they had lifted the living standards of the peasantry.

By converting the public utilities -- left from 50 years of Japanese rule to public ownership -- and using the share issues to pay the landlords for their former holdings, the opposition was fractured; virulent resistance withered away. The first generation of dispossessed 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 capitalistically minded offspring used the cash flow from these shares and state bonds to become industrial entrepreneurs, aided by American advisers and opportunities for fledgling commercial work for the UN 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. These three either reformed rural landowner ship or already held the land in public ownership (as in Hong Kong, where land is a Crown possession: it is auctioned off on fixed term leases to Capitalist entrepreneurs). Likewise in Singapore where the government of this city-state owns 70% of the land and uses it either for its extensive state industry network or leases it out for commercial purposes.

These three countries provide the 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, has no land-owning class -- only workers, capitalists and a very few lease-holding horticulturalists. Therefore it presents itself in a pure form of Capitalism as a model to form a body of economic law 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 in the trade cycle. Before the capitalist can get his means of production and labour force to operate, ground rent must be paid to the owner of the land.

If this ground rent is instead received by government and spent on improving infrastructure with part put into government reserves, these savings could be used to intervene against slumps which may arise because of overproduction or whatever. By spending on house building, mass transport systems, ports, hospitals etc. demand is restarted within the economy and the trade cycle is given a beneficial push.

This process is able to fulfill the ambition of John Maynard Keynes (1883-1946), whose policy for kick-starting economies was flawed because governments had either to borrow or print money in order to get the economy out of its slump. This only stored up problems of a larger size for later solution. Keynes had little appreciation of the role of ground rent within Capitalism and failed to understand its economic cycles. However once we recognise the role of ground rent, his work does provide a basis upon which an interventionist unemployment 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 a Socialist society is one of the reasons for the profound problems now besetting the countries of Eastern Europe in particular.

Marx used a good part of Volume III of Capital to analyse the role of rent within a Capitalist society. Unfortunately this study was not carried over into the era of Socialism either by Lenin or Mao Zedong. But in introducing his New Economic Policy in 1921, Lenin did begin 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 did emerge, but were crushed by Stalin along with the rest of the N.E.P. programme. Stalin took the path of brutal coercion to achieve a Socialist society. It failed, and the attempts to put Socialism's failure back onto the high-road of progress is setting Russia and other countries horrendous problems of restructuring.

MAO Zedong was never able to get to grips with the significance of ground rent which, given the enormous respect with which Sun Yat Sen is still 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 with The Great Leap Forward was a disaster. Putting this right, as Deng Xiaoping is doing, still has 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.

Taiwan, though benefitting from its land reforms and the revenue it receives from leasing out urban land, suffers from the distortions of having a Capitalist government and 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, as in Singapore, is it possible to ensure the transition to a fully structured form of Socialism.

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

To the western historian this seems exceedingly odd. For according to our notions, Feudalism came into existence with the downfall of the slave economy of Rome, and, therefore, arose after 8 AD. This tradition of history sees the periodisation as being from primitive Communism to slavery, from this to Feudalism, on to Capitalism and then a Socialist society.

A schematic presentation of the above leads easily to presenting history as a unilinear process of progressive betterment, in which each mode of production mechanically creates the next stage. In this pattern, Feudalism inevitably produces Capitalism. However, if Feudalism was overcome in China 1,000 years before it became established in Europe and 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 superstructure and, therefore, was sustainable as an entity. Nor was there any sign in the following 1800 years that it could not carry on indefinitely.

It took invasion from Western Capitalism to dislocate this balance and push China on to a path which has led to the present where a Communist government is laying the basis for a Socialist society.

WHAT I would like to draw attention to though, is this: if social life is not linear, is it cyclical? Evidence for this could be the way Capitalist society is evolving 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 few transnational companies. Furthermore, the landowning class is deepening its political grip through concentration of political power in the superstructure. The country is being depopulated of its Capitalist entrepreneurs and there is dispersal of its organised workforce. It is also reducing the number of its 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 plebians. Fed on "dole & television", with malnutrition and psychological despair reducing the birthrate and population to 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.

A SOCIALIST programme structured to neutralise the landowners, could annul this tendency. My conviction is that the British people will do this. They will see the danger, visualize the alternative, and organise to make sure that it is the beneficial society which is constructed in these islands.

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