How AID goes WRONG
A Cautionary Tale

The much travelled author Karl Eskelund describes the effort made by a band of young American and English Quakers in trying to assist some of the Indian population, millions of whom live at starvation level.

The young idealists took up their task in 1946 at the village district of Pifa, which lies in the Ganges Delta. They were fully aware that their work would test their patience, for in India you can get no results 'at five minutes past twelve.' But after having outlined their plans to the peasants, the fishermen and the landowners - which met with general approval - they organised a co-operative enterprise for cultivating the land and marketing the produce. They set up day schools for the children, evening schools for adults, clinics et cetera.

After overcoming the initial difficulties, they saw signs of progress. Inspiration grew. Health conditions improved. Everyone took a greater interest in their work and their earnings increased. New ideas took shape - there was advance along the whole line - an advance, slow but sure.

Only the landowners grew fatter

Five years after the experiment began, Karl Eskelund visited Pifa and, with one of the Quakers as his guide, went through the village to see how it was faring. The Quaker had lost more than two stone and was as thin and spare as the natives. But what was worse, he had lost heart because the experiment had proved a failure. The day school still existed, but only one-quarter of the children attended it. The evening school had closed. The clinic was hardly used. Agriculture, fishing and trade were back to the old methods. Eskelund asked for an explanation of this fiasco. The young Quaker offered quite a number of reasons, none of which Eskelund could accept. Finally, he got to the root of the matter. This is what he says:

"In the first year after beginning the experiment, both peasants and fishermen earned more than ever before. What was the result? The large landowners at once raised their rents and the smaller landowners followed suit. The peasants had to pay more for permission to cultivate the land. The fishermen had to pay more for permission to cast their nets on the flooded fields. In that way, practically the whole of the increased earnings passed into the landowners' pockets."

"The people of Pifa were unhappy at this. Nevertheless, next year they worked hard. Crops were plentiful, there was a rich catch of fish; good prices were paid for produce. At once, the landowners raised their rents still higher."

"The people then began to lose heart. What was the use if, for all their efforts, they got no benefit? Only the landowners waxed fatter. The peasants and fishermen did not become any thinner - they could not - otherwise they would die."

"Indians are ignorant, but they are not stupid. They can put two and two together. They had found themselves momentarily enriched by the new methods but, in the end, all the extra money went to the landowners. If one of the new ideas would not work, what faith could they put in any other novelties? Perhaps, after all, the old methods were the best."

This story reveals the problem in all its simplicity; cleared of all that in civilised society makes it more difficult to see the importance of land.

The need to remould the whole system

The young Quaker would not lay any blame on the landowners. There could be no objection against the landowners trying to gain as much as possible, and after all, there was nothing unlawful in owning land. The young Quaker admitted the immorality of the circumstances, but argued that it could be mended only be "remaking the law and remoulding the whole system."

Eskelund himself sees clearly the part the land question plays, and proposed the subdivision of land (by creating small-holdings). Yet he is not sure that subdivision will solve the problem. For he writes:

"Meanwhile, there is evidence that you don't get rid of landownership in that manner. Landownership is like the weed that always resprouts."

"The Indian peasant has a habit of using every penny he possesses to spend on festive occasions; when a son is born or when a daughter is married. If he has no cash he goes to the moneylender, who is often the landowner, the only person in the village who has ready money. Of course that is stupid of the peasant, but he has so little in hand. Already there have been occasions where a man who had become owner of his plot got into debt and had to forfeit his land. Thus he became a day labourer again, to toil for the same landlord as before."

The story of Pifa reveals the evils of the private ownership of the rent of land. The comments of the Quaker and the author both go to prove the weakness of dealing with effects.

The author is honest enough to acknowledge that small-holding schemes are no remedy, and the Quaker, although unconsiously, tells the truth that things cannot be changed without "remaking the law and remoulding the whole system."

For the truth is that we cannot reach a solution of the social problem without "remoulding the whole system", without recognising the joint property right of the people to natural resources. This truth applies in our own country and the world over. We can offer all manner of foreign aid to underdeveloped countries, but so long as we fail to solve the land problem, all this will be in vain.

There is a solution to this problem and it is simple, practical and just:

Collect the rent of land for the community and reduce taxes that cripple industry and labour.

In his book 'Progress and Poverty', Henry George argued that economic problems can only be treated successfully once land rent, instead of being taken by the landowner, is returned to the community by the method of Land Value Taxation. Without this basic reform, no matter what optimistic aid schemes are introduced, the labourer can be forced to work for starvation wages.

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