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Mutualist Blog: Free Market Anti-Capitalism

To dissolve, submerge, and cause to disappear the political or governmental system in the economic system by reducing, simplifying, decentralizing and suppressing, one after another, all the wheels of this great machine, which is called the Government or the State. --Proudhon, General Idea of the Revolution

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Location: Northwest Arkansas, United States

Friday, May 19, 2006

Managing, Somehow, to Survive Without Parasites

Via Mark Monson's LVT News Digest, a regular feature on the Land Theory yahoogroup. Damien Ochiel, Mbaratho Mulago, writing in the Kenya Times:


Six thousand people. Five clinics. Two primary schools. Two churches. An endless string of clubs.

Two supermarkets. Five storyed buildings. A booming construction industry.

Four petrol stations, one casino with live entertainment, a cyber café, photocopying centres.

No slums. No beggars. No street children. No banks.

Mlolongo.

As recently as 1984, this bustling trading centre in Mavoko Municipality was a mere expanse of African bush on a narrow strip of land approximately 50 by 1,000 metres between the old and the new alignment of the Mombasa road, some 15 km from Nairobi city.

In the mid 1980s, crafty sand traders from Machakos district, some 30 km further east, found that by dumping their lorry loads along the old alignment of the Mombasa road, not more than 50m from the new one, they avoided the weighbridge charges....

Soon after the sand trade begun, the first shops started appearing. They mostly sold food and drink, but in no time other services were provided for: tailors, clinics, a locksmith, shoemakers. It did not take long before wooden shacks gave way to stone and cement buildings. By 1990, Mlolongo was booming, while officially continuing not to exist.

Even today, it is useless to try to locate Mlolongo on a map. An interesting phenomenon is that neither politicians nor street preachers, not even NGOs, find a ready audience in a fully employed population. And the inhabitants do not look forward to having such operators in their midst.

Why?

Henry George (1839-97) used to say, capitalist A and worker B do not divide between themselves the wealth produced by B. They divide what is left to them after landowner C rakes in his rent, usurer D his interest, tax collector E his extortions, and a whole line of parasites from F to Z their more or less visible cuts.

It is evident that the Mlolongo dwellers avoid, or evade, some of that. Not all, for sure, otherwise the place would not differ much from an earthly paradise. A tentative, necessarily incomplete, analysis follows.

What strikes a visitor first is the difference between the north side of the new Mombasa road where Mlolongo lies, and the south, which spots a few buildings and a vast expanse of undeveloped savannah. The difference is land speculation.

Land is not free on either side of the road, but the system of tenure is leasehold in the North and freehold in the South. Result: the lease price paid to the Mavoko Municipality would be wasted by anyone not developing the land paid for.

Hence the booming construction.On the south side, the landowner sits on his daily appreciating but empty property, unwilling to sell and waiting to make a kill.

The perverse system of taxation that Kenya has inherited from the British rewards the idle landowner’s sloth, while punishing the working people’s industry. The perversion consists in the fact that the value of the idle property increases by the day not because of what its owner does, but because of what the people on the other side of the road do.

If the attention of tax collector E was diverted away from the fruits of Mlolongo people’s labour towards the immoral (but legal) earnings of that representative of class C, Mlolongo would take off economically way beyond the dreams of every academic economist....

The absence, or inconspicuousness, of so many eaters of labourers’ wages goes a long way to explain the unusual prosperity of Mlolongo, but it does not mean that people there wallow in opulence. There is no poverty in the sense of destitution, but wages are low. The population is big enough to have attracted there the power company. It has connected the place to the national grid, but since the water supply is a municipal monopoly, they are still without water. Every family needs 40 litres a day, which they buy from vendors at 2 shillings a litre.

And there is no sewerage system. Every shop-cum dwelling space owner has built his own septic tank under the property, but in the outlying areas north of the road, there are still open sewers waiting to be dealt with. Somehow.

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