OF SOCIAL EVOLUTION:
Negotiating the Last Rapids, Perhaps
Spencer Heath MacCallum
The Independent Review
A Journal of Political Economy
Vol. II No. 2 (Fall 1997)
(Revised by the author 2011)
The Quickening of Social Evolution
Spencer Heath MacCallum
Years ago I read a translation, supposedly true, of an early Egyptian sequence of hieroglyphs that said in effect that the world was going to the dogs. After listing a number of lamentations, including the disobedience of young people and how they no longer respected their elders, it ended with the observation that “everybody’s trying to write a book.”
So it always seems to every generation that the world is disintegrating. There is a good reason why it should appear that way, a very understandable reason. The world is in flux, with new forms always evolving from the old. We are familiar with the old patterns because we have lived them, but not with the new, emerging ones that have never been part of our experience. Consequently we can rarely recognize the new patterns that are in process of forming. Knowing only the patterns that were, all we see in change is disintegration—patterns being lost. This is particularly easy to see in language, in the losing efforts of pedagogues to train the young to speak ‘grammatically.’ But the same phenomenon occurs in all areas of our experience. So the disintegration lamented by the Egyptians and probably every generation before and after is, for the most part, appearance only. It might just as well be called integration as disintegration, except that we don’t have the evidence before our eyes. We must take it on faith.
The same is true of societal change—the broad sweep of human social evolution. Only evolutionary change isn’t gradual but seems to be punctuated by abrupt shifts from one plane of comparatively stable forms to the next, yet always preserving and building on what went before. It’s like a stair consisting of treads and risers. The treads are the broad planes of comparatively stable institutions while the risers are periods of turbulent change and instability which must be negotiated before the next broad tread is reached—just as the spawning salmon must negotiate the steep rapid or rocky waterfall before reaching the next comparatively calm stretch of river. The salmon leaps and falls back, leaps and falls back, but each time it progresses farther and falls back not quite as much, until it has negotiated the rough water.
Mankind has been negotiating a rapid for at least nine thousand years. That is an exceedingly brief period in the eons that man has occupied the earth, but his leaping and falling back again throughout that era is the pattern recounted in history textbooks and archaeological reports, the repeated rise and fall of civilization.
The previous broad tread on the stair, the calm stretch of water we have now pretty much left behind us, was that of tribalism, or kinship society, characterized by dependence on systems of kin status for sorting out all the customary roles and activities in society. Now relying less on kinship, humankind is experimenting with a wide assortment of contractual relations. Sir Henry Sumner Maine was sound when he observed more than a century ago in his classic, Ancient Law, “We may say that the movement of the progressive societies has hitherto been a movement from status to contract” (original emphasis)(1986: 141).
I suspect that we salmon people have now reached a point where, as we leap, we can begin to see over the top of the falls or rapids to the next calm stretch in our river. We can just begin to discern and make some judgments about what the nature of human society will be as it stabilizes once again on the next broad tread of evolution. I’m going to take the risk—I don’t think it’s a very great one—of making some predictions about human society as it settles into comparatively smooth sailing somewhere in the twenty-first century and, probably, for quite some time beyond.
Tribalism versus Nation States of Today
Consider first where we’ve been. As an anthropologist, I’ve focused a good deal of my attention on tribal societies. In many ways the era of tribalism, as compared with today, was a golden age, to be exceeded only by what is yet in store for us. That is not to be blind to the fact that tribal life left much to be desired. Tribal man’s technological proficiency was so limited that he was constantly at the mercy of nature. This limitation was most gravely serious with respect to health; general life expectancy of less than 30 years barely permitted biological replacement. A second grave shortcoming under tribalism was that human social life coalesced, as it were, in antagonistic droplets scattered over the globe with little communication or cooperation between members of one and those of another. Opportunities were essentially limited to the circle of face-to-face acquaintances into which one was born.
These were serious drawbacks. But there was a positive side. Within each of those antagonistic droplets, social relations had an orderliness and sense of fair play almost incomprehensible to us today. Society consisted of small management units, quite human in scale, and relations among the members (at least the men) tended strongly to be egalitarian, fair, and just. The headman of a village, for example, while he enjoyed influence and prestige, exercised no authority over the persons or property of anyone else in the village. He had the same authority in kind as that exercised by the humblest member. There was no conscription of persons, no taxation. Tribal society was consistent in this respect throughout. In the juridical sense of freedom, one is free when he enjoys full integrity of his person and property. Tribal society was free.
Let me tack on a caveat. The generalization doesn’t include transitional forms on the boundary between tribes and states. When tribes cross that boundary and become states, they may retain many of their tribal characteristics for a long time. We know we’re dealing with a state, however, when force has become institutionalized and is accepted as proper conduct within the cooperating group. In The Art of Community (1970: 98-99), I described the example of the Cherokee in 1761 forming themselves into a state. The moment of transition was definite, although many tribal characteristics persist to this day. The Cherokee fell within our generalization before 1761, but not after.
Modern society under the sway of political governments is the reverse of tribalism. Imagine humankind as a great bird attempting to fly. Whereas under tribalism one of its wings dragged on the ground, preventing it from rising into flight, now that wing is up and the other drags. In science and technology we’ve made enormous gains; we’ve better than doubled our average life expectancy within a few generations and may do so again. We can enjoy virtually unlimited opportunities for communication and exchange with other human beings anywhere on the earth. That much is progress. But in our political life we have regressed. More than three hundred million people in the United States are ruled as a monolith from the top, and their chief executive is a warrior, the commander-in-chief of the armed forces. He regularly exercises an authority that differs absolutely in kind from that exercised by private citizens in their daily affairs. Subjected to that authority, people largely become ciphers, their individuality erased. Our gains even in science and technology are endangered by the uncontrolled and seemingly uncontrollable growth and spread of institutionalized force.
The prospect of life under the rule of the nation state is bleak indeed if seen only from the viewpoint of the disintegration of the institutions and lifeways we grew up with or know from our grandparents’ accounts and from our reading. But change, as I have said, is characteristically not only from but toward. It has two aspects, one of them quite invisible until we almost bump up against it. Patterns newly forming are not encompassed within our experience, hence all we can see is the disintegration that change brings. What of the future? Will humankind ever get both wings aloft at the same time?
Past experience should reassure us that in the broad picture, at least, change is more integrative than disintegrative. It is demonstrable that this is true, for in the long run if health were not more catching than disease, to use a homely phrase of my grandfather’s, none of us would be here today. But happily we salmon people have gained a point, almost at the top of our rocky waterfall, where we need not rely on philosophic conjecture alone. In our mind’s eye, at least, we can begin to see over the top of the falls—and with that glimpse of the future we can begin to recognize and interpret events that are happening all around us. We can begin to perceive basic evolutionary changes taking place in the structure and function of our social organization, changes that we may soon be able to recognize as part of an emerging pattern.
The Change that is Gathering Speed
How can such change be happening? Let’s review some basics. Certainly one of the most significant differences between tribalism and society today is man’s vastly greater facility with numbers. The ability to manipulate numbers makes possible on the one hand the whole world of science and its applications and, on the other hand, that of modern commerce, both utterly strange worlds to tribal man. Facility with numbers is not by itself a sufficient cause, but it is prerequisite. Without it there could be no science or extensive commerce, but with it, given the right conditions, science and commerce will evolve. Science becomes possible because at bottom it involves comparisons of quantities, and every ratio is a number—hence the ration-ality of science. Likewise, world commerce becomes possible, because it depends upon numerical pricing and accountancy of debt, credit, inventory, and trades. The changes that regularly occur in pricing coordinate the whole world of economic activity.
Science is not my focus here; it’s not the wing that is dragging. Our dragging wing is that of our interpersonal relations, and a fundamental part of those relations—the healing and growing part—is commerce. Do you recall the passage from the Psalm about how the stone the builders rejected became the chief cornerstone? Commerce is that cornerstone. We appreciate it far too little, and we deprecate it far too much. Alfred North Whitehead once characterized civilization as the “victory of persuasion over force.” He elaborated, saying, “Commerce is the great example of intercourse in the way of persuasion. War, slavery, and government compulsion exemplify the reign of force” ( 1967: 83).
Commerce developed as people learned to balance their accounts numerically, making it possible to do business with strangers: people of another lineage, clan, or village. Without numbers, which make it possible to balance and complete a transaction, there is always something left over on one side or the other. When dealing with familiars (the language under tribalism, incidentally, is that of gifting rather than buying and selling), the imbalance doesn’t matter; over a lifetime or some similarly extended period of reciprocating, it all evens out. With accountancy, however, transactions can be complete in themselves. The parties can depart satisfied, even where there is no expectation that either will ever see the other again. So for the first time we can do business with people we don’t know. This dissolves the surface tension of the antagonistic droplets of tribal society and makes possible the worldwide system of reciprocal services that today gives us an ever lengthening and more comfortable and creative living.
Land as an Object of Commerce
Commerce is central to the line of thought unfolding here, but not just commerce in any of the usual array of things we find in the market. More specifically, I want to focus on commerce in land. We’re all familiar with the growth and development of other kinds of commerce, but commerce in land has lagged behind in comparison with most other areas of the market. One of the reasons for its lagging may be that in Europe before the revolutions of the eighteenth and nineteenth centuries land wasn’t free to any great extent, not generally so, to become the object of commerce. It couldn’t readily be bought and sold in the marketplace. That situation changed only when those revolutions brought about a separation of land and state. This change, though little noticed by historians, is arguably one of the most important events of modern times. Until it happened, land in Western Europe was not free to be traded as other things were but was tied up in primogeniture and entail and was part of the administration of government. Only when the revolutions that swept through Europe divested the titled nobility of all of their political power and trappings without divesting them of their ownership of land could land become a commodity like other things.
The titled nobility as a class, however, tended not to be entrepreneurial; they had previously been the government, and their ethic militated against sullying their hands with trade. Jane Jacobs, in Systems for Survival , clarifies beautifully why this ethic prevailed. So a truly businesslike approach to landownership got off to a late start, and a slow start at that. Even today the vast majority of landlords carry on their business as a sideline, often to supplement a pension or other retirement income, and have little understanding of the business they are in.
The Business Rationale of Landownership
The business rationale of landownership was first elucidated by Spencer Heath (1936) and derives from the fact that public services, things we enjoy in common rather than separately and apart from one another such as streets, public safety, and other community amenities, are environmental features. Unlike other goods and services which can be delivered to individual consumers wherever they might be, environmental goods and services pertain to sites, and individuals gain access to them through their occupancy of those sites. That is why location is the determinant of site value. Public services being a component of the environment of any given site, when landowners lease or sell sites, they are functioning as the market purveyors of those public services, packaged with other locational advantages.
Only in this way can public services be distributed as other goods and services are, that is, through the conventions of the market place. Only through the institution of property in land are they distributed freely and equitably by contract, which is egalitarian in the free tradition of tribalism, instead of through favor and privilege, forced levies, the corrosive relationship of ruler and ruled by whatever name. This distributive function is the minimal service performed by the landowner, for which he is recompensed in land price or rent. Traditionally landowners have done little more; they have distributed politically provided public services and amenities, such as they are, but not produced them.
In a burgeoning sector of the market, however, this is changing, as private landowners undertake the production as well as the distribution of public goods. For example, instead of continuing in the old pattern of subdivided lots on Main Street, the majority of retail shops and stores in the United States have moved into situations where land is organized and managed under single ownership and the landowners (of whom there may be many by way of undivided shares) provide many of the services such as streets and parking, sewerage and power distribution, policing, landscaped public areas and so forth that government previously provided. These shopping malls are only the most prominent examples of what real-estate professionals call “multi-tenant income properties” and this writer prefers to call “entrepreneurial communities,” shortened to “entrecomms,” since the public services are provided privately and competitively in the market as a profit making enterprise. Retailing has not been alone in adopting this formula; the same thing is happening across a wide spectrum of land uses—recreational, industrial, professional, medical, and even some residential.
The formula is for the owners of a tract of land to invest in improving it in ways that create for each of the leased sites into which it is parceled an optimal environment for its intended use. Competing managers of the properties then bid down the rents asked while competing prospective tenants bid up the rents they are willing to pay. To the extent the owners succeed in creating desirable environment for the sites they offer the public, the rents not only finance the common or public services in that place but return a profit. Because these entrepreneurial communities, or entrecomms, yield a market revenue, they are self-sustaining; they never need become obsolete, like the ruins of antiquity. Because they produce income they will be maintained; they will be renovated or rebuilt as required to keep them competitive and productive.
Entrecomms are newcomers in the evolving world of business. They represent an even thinner slice of recorded history than recorded history represents of the total period of man’s life on earth. Evolving in a rudimentary way in the nineteenth century, they blossomed in the twentieth. From the second quarter of the nineteenth century and accelerating especially after World War II, they evolved and proliferated in number, kind, size and complexity as entrepreneurs in this new kind of business created myriad environments tailored to clientele with specialized wants—merchants, travelers, manufacturers, residents and professionals of every variety. Each specialized type of environment that met with success in the market defined a new economic niche. Thus in succession we saw the rise of hotels, apartment buildings, office buildings (“skyscrapers”), luxury liners, shopping centers and malls, mobilehome parks (now becoming landlease manufactured-home communities distinguished by long-term leases that can be individually mortgaged), marinas, research parks, professional parks, medical clinics, and theme parks—as well as, increasingly, integrations and combinations of these to form properties more complex and, over all, less specialized. As they become more generalized, they approach what is commonly thought of as a community.
The rapidity, moreover, of this development has been dramatic. By way of illustration, the shopping center at the close of World War II was experimental. Fewer than a dozen existed anywhere; even the name had yet to be coined. Today there are more than 50,000 in the United States alone, where they accommodate more than half of the retail trade of the nation.
Each type of entrecomm has specialized management needs determined by the particular market to which it caters. The shopping center, for example, must forge an effective retailing team. Every team needs a coach, and in the shopping center the manager is it. His role includes maintaining peace and fostering cooperation among a highly competitive group of merchants. The merchants recognize that he is uniquely positioned to fill such a role since he represents the land interest and consequently is both impartial and vitally interested in the whole center. Unlike the tenants whom he serves, who inevitably are partisan and to that extent have incentive to exploit the center as a commons, he has a direct and personal business interest in the success of the whole.
From the viewpoint of one looking at societal evolution, it is intriguing that the management requirements of entrecomms are so similar in principle as to be indistinguishable from the administrative requirements of what we customarily think of as communities. Basically, entrecomms differ from communities in the common sense only in the greater specialization, the lesser heterogeneity, of their membership. Rates of population turnover and richness of interaction are not consistently different. Moreover, the unmistakable trend over the last half-century has been toward increased size and complexity—moving in the direction of becoming communities in the accepted sense of the term. It would hardly be a radical departure today, tax laws permitting, for an enterprising real-estate developer to develop a new town on a land-lease basis as a long-term investment for income. Rather than being structured politically, i.e. funded from taxes, this community would be wholly self-supporting from voluntary market revenue, its public administration yielding a profit for its investors.
Spencer Heath once reasoned that if a new town were developed under unified ownership and its land parceled by means of long-term land leasing rather than subdivided, we would have an proprietary community in principle resembling a hotel extended out-of-doors and writ large. Like the hotel, it would have a concentrated entrepreneurial interest in the whole. In view of the size and complexity of some contemporary hotels, his suggestion that hotels might be prototypical of cities of the future is more credible today than when he wrote more than sixty years ago. The MGM Grand in Las Vegas, not by any means the largest, promotes itself as a self-contained city, and it does approach a truly generalized community. It includes shopping malls, professional offices, convention facilities, restaurants and cafes, chapels, theaters and art galleries, medical services, a security force, a monorail station, and the list goes on. Its registered guests, professional and retail tenants, service staff, and visitors make it significantly larger than the city of Boston at the time the United States gained its independence from England.
Theory of Entrepreneurial Community:
Henry George, Ebenezer Howard, Spencer Heath
No established body of theory yet addresses the proliferation of multi-tenant income properties with their intriguing promise of maturing into full communities. Such theory as exists was developed during the nineteenth and early twentieth centuries by people outside of academia whose work and writings are little known. Among the most prominent of these were Henry George (1839-1897), Ebenezer Howard (1850-1928), and Spencer Heath (1876-1963).
Henry George, a truly remarkable economist, political scientist, and orator made a major contribution at the end of the nineteenth century. He had distinguished predecessors, including among others William Ogilvie, Thomas Spence, Patrick Edward Dove, and the early Herbert Spencer. But none approached the forcefulness with which he publicized the idea that ground rent—revenue from land—constitutes a “naturally ordained” fund for financing all public services. Unfortunately, the method he envisioned for applying the principle was for government to collect those rents, leaving landowners out of the picture. Thus Georgist communities in theory would not have been proprietary nor in any sense competitive or entrepreneurial. His reliance on the coercive powers of government, his ”going political,” may account as much as any other single factor for his land argument falling into obscurity. Economist Fred Foldvary in his Public Goods and Private Communities: The Market Provision of Social Services has only now, a century later, begun to reintroduce into academic and public discussion the relationship between land rent and public services.
Ebenezer Howard was a practical and unassuming Englishman and yet, like Henry George, a social dreamer of extraordinary vision. Despite his modest personal means, he founded England’s Garden City movement and was responsible for the successful development of two cities outside of London on what previously had been rural land. Letchworth and Welwyn today are small but prosperous cities financed by ground rents, and to my knowledge not a penny of taxation has been levied in either. On the contrary, the British Labor government, upon nationalizing both in the post-World-War-II years (a private company owning a town was out of line with the political ideology of the time), was embarrassed by the flow of income it found itself receiving. Not being entrepreneurially inclined, it didn’t know what to do with it. Although Howard did not see eye to eye with Henry George and steered clear of government so far as he could, he nevertheless considered his “garden cities” to be the natural application of the Georgian ideal of freeing production from all taxation and funding public services with ground rents.
Strangely, this most significant part of Ebenezer Howard’s work has fallen into eclipse even more than Henry George’s ideas. The innovation of financing the community from the private return to land and thereby dispensing altogether with local taxation has been forgotten in the literature of city planning. His book, Garden Cities of Tomorrow ( 1965), has joined the class of pedestaled but unread classics. The purely physical innovations of his cities, on the other hand, such as design and density control, functional zoning, and greenbelt are remembered and widely copied. But what he himself may have expected would be his most remembered contribution is forgotten.
Howard at first was uncommitted as to whether his Garden Cities should be structured as entrepreneurial ventures or, alternatively, non-profit trusts. But to secure the good will of the Fabian Socialists like George Bernard Shaw, who were among his foremost promoters, he chose the latter course. Nevertheless his accountant, C.B. Purdom, writing in later years, attributed the slowness of the two cities in getting off the ground and the general lack of vision of their subsequent management to the absence of any provision for equity in the ventures (1949: 345). Mediocrity of management may explain why the two cities remain obscure today. They have failed to do much more than provide an attractive residential environment for 80,000 people! As a supporter plaintively writes:
Howard and his associates made one propagandist mistake in siting Letchworth and Welwyn—building them in England within an hour’s journey of London. One should have been built on some remote island like Mauritius, and the other in the Soviet Republic of Uzbuzchakistan. Planners and journalists would then have visited them and written them up, and we should have had lots of illuminating books on them. Also we should be excited about them as wonderful achievements, and be wanting to know why we can’t have new towns of the same type in Dear Old Stick-in-the-Mud England. (Osborne 1946: 36)
Spencer Heath was an engineer, manufacturer, horticulturist, poet, and ultimately philosopher of science and social thinker who did his main work during the years of Roosevelt’s New Deal, an age of ascendant government in America. That he was not an academic and was “politically incorrect” may help explain why his social theories gained little hearing. The turning point in his thinking occurred in the early 1930s, when he concluded that proprietorship was the evolving alternative to politics. In 1936 he self-published a monograph, Politics Versus Proprietorship, in which he set out for the first time in print the rationale for the entrepreneurial community.
Spencer Heath’s genius was to see that Henry George’s program, which would do away with all taxation of private production and finance public services from ground rents (hence the name “Single Tax”), was profoundly in the interest of landowners. For if landowners assumed all of the cost of public administration and freed private production from taxation and burdensome regulation, productivity would soar, sites and resources would come into high demand due to increased business activity, and the resulting higher location rents would cover the costs of government with a margin of profit to landowners. He believed enlightened real estate interests ultimately would take the lead in un-taxing private industry and, in their own self interest, shoulder the costs of government. Heath completed Howard’s concept by providing it with an entrepreneurial engine. By envisioning landowners assuming full responsibility for governmental functions, he anticipated the public business becoming private business—a wholly new field for entrepreneurial investment and enterprise.
Paradigm of the Evolved Society
If we paint pictures of the future with a broad-enough brush, we can often cover the entire subject and find ourselves “right on.” The more interesting predictions, because more difficult, are those that get into specifics. I’m confident in predicting that entrepreneurial community administration will replace political, and although timing isn’t to be construed as part of the prediction, I wouldn’t be surprised if it happened within the lifetime of some who are living today. Timing aside, however, the broad picture I envision is one in which self-sustaining communities will be the norm—entrepreneurial enclaves with land-leasing rather than subdivision as the land tenure of choice for most commercial, industrial, and residential uses. Taxation, licensing, regulation, and other restrictions on enterprise will belong to the past. The state will have withered, to borrow Marx’s image, unable to survive its functions being progressively better served in an ever-evolving marketplace.
More detailed predictions are apt to carry me onto the shoals. Mindful of the danger, however, I am willing to venture answers to these frequently asked questions:
What will happen to national boundaries?
Already losing prominence due to the growth of cyberspace, I see national borders becoming relics of the past. For the sake of convenience, titular boundaries between federations of autonomous communities might arise following natural features such as bodies of water, or mountains, or cultural, linguistic, or other interfaces. Jane Jacobs’ insight that the natural collectives of society are cities rather than nation-states will become increasingly self-evident.
Will communities be all alike?
More than likely there will be variety far exceeding anything seen today, as communities specialize to appeal to every taste, each discovering its ecological niche in an ever changing and evolving economy. Even today, entrecomms vary widely within even a single type. Count up, for example, the different kinds of hotels. We find residential, resort, transient, ethnic, dormitory, casino, luxury or budget, and others, with subcategories and hybrids of each.
How big will communities be?
Size necessarily will be determined by market considerations. Except perhaps for some highly transient and other specialized situations, I suspect that, as in tribal society, “optimal size” for management reasons won’t be larger that the largest “face-to-face” community, that is to say, not more than a few thousand persons, in which a manager can recognize all of the members at sight. At successive levels, such entrepreneurial communities will associate, informally or otherwise, as chain or franchised businesses do today, to accomplish functions that are better handled by cooperation at higher levels. Consumer preferences will always determine. Some communities will clump up together, resulting in high-density urban aggregations of population, while others will be rural. Inevitably there will be elaborate composites of communities of different types and specialties, smaller ones sublet within the matrix of progressively larger ones, very much as different kinds of atoms are mutually attracted to form complex molecules, and those molecules cells, and so forth.
Will society be democratic?
The word democracy, as ably summarized by E.C. Riegel (1978:77-81), has two meanings. It can mean individual autonomy where all are equal in their authority over their own person and property, or it can refer to a political decision-making process whose outcome is determined by voting. Jonathan Swift is said to have commented on the latter kind of democracy, wryly saying that “some people have no better idea of deciding right from wrong than by counting noses.”
Political voting, while its intent, and very often for a time its effect, is to moderate autocracy, nevertheless entails people ganging up against one another. It is not a proprietary process. Rule by a voting majority can be as oppressive to the losers as the most autocratic regime. In land subdivision, where lack of responsible authority due to fragmentation of titles often leaves residents no option but to resort to a vote, we find the seed of the state.
Subdivisions governed by a homeowners’ association contrast starkly with entrecomms. The association board is charged with maintaining the streets and other common areas and amenities as well as enforcing a common lifestyle of the residents according to a pre-set standard. A major part of its role is to enforce the restrictive covenants in the deeds. Aside from maintenance, it is fundamentally a policing arrangement. The entrecomm on the other hand seeks to foster an attractive living environment that draws patronage. Compliance and patronage are very different goals, and the psychology varies accordingly. In the one the residents are subject to the deed restrictions and therefore, quite literally, are subjects. In the other, the residents are customers—indeed, patrons. Moreover, the association board must be rigid if it is to be effective, whereas the entrepreneur within his framework of rules must be flexible and accommodating, judging cases individually on their merit.
Owners’ associations are often called democratic, inasmuch as decision making is accomplished by voting. But entrecomms are not any less democratic; their residents vote each time they pay their land rent. A difference is that in the former, each individual casts votes not only for himself but also for others, determining matters that affect those others as well. In the latter, each casts votes only for herself or himself. These contrasting usages reflect very different meanings of the same word.
Subdivision and leasehold will doubtless coexist well into the future, and therefore so will both kinds of democracy. While the outcome between the two will be determined by market preference, the wholly proprietary, nonpolitical form will likely prevail. One good reason is that leasehold permits flexible and continuous redevelopment even to the layout of streets and other common areas without infringing property rights, and this is an undoubted advantage in a world of rapidly increasing technological change. The more basic reason, however, is that land-leasing allows a community to be a business entreprise. Dependence of a business enterprise on profit affords an important measure of protection against arbitrariness not present in the subdivision arrangement (MacCallum 1996, 18: II.D.6 and footnote 6), and it brings to the provision of public services a dynamic altogether lacking in subdivided communities.
What about individuals who might prefer a subdivision lot to a ground lease?
At least at present and for who knows how long into the future, the idea of owning one’s own plot of land appeals to many people. Where there is a demand, the market will usually find a way to provide. Some communities doubtless will offer approximations of subdivision through the use of long-term leasing, including perpetual leases, paid-up leases, and life estates. But as a practical matter, something like fee-simple probably will be available in most parts of the world for as long as anyone cares to look ahead.
Will this be like feudalism?
Not feudalism, but manorialism; the terms are often confused. Manorialism is a form of agrarian social organization, whereas feudalism is a military order imposed on it, often by conquest, the two then becoming largely fused. Norman feudalism was imposed on predominantly manorial England after 1066.
If the question is whether entrepreneurial communities would resemble manorialism, the answer is yes, but with an explanation. For although it was similarly structured, manorialism did not progress. The reason, presumably, is that it was before its time.
A professor of mine at the University of Chicago, Sol Tax, once did fieldwork in the highlands of Guatemala and wrote a book called Penny Capitalism. He described a system of Indian markets that were purely laissez-faire in the best tradition of Adam Smith and apparently had been since pre-Spanish times. The question he asked was, if these people have such freedom, why aren’t they rich? The answer he suggested was that significant wealth creation takes much more than just freedom from constraints. It requires the complex institutional development of a market society. In Guatemalan native society, the firm had yet developed, lacking the array of supportive market phenomena on which it largely depends such as a world pricing system, banking and finance, insurance, and so forth. The unit of production was the family.
The distinction between firm and family is crucial. Firms are impersonal in the sense that they have specialized, well defined goals, recruit on the basis of ability and experience, and are single-mindedly market oriented. Families, on the other hand, have necessarily complex agendas in which, for example, recreation, marriage, or paying respects to deceased members might outrank everything else. They cannot recruit or fire except in a limited way through marriage or divorce or by recognizing extended family ties; they must accommodate old Aunt Flora and irascible Cousin John.
Manorial arrangements were family ventures and unbusinesslike from today’s perspective. Because of its more evolved nature and the fact that it will operate in an altogether different environment, a competitive, global economy with interlocking and supportive financial and service institutions of every description, an entrepreneurial community will do things the medieval manor could not have dreamed of. We make a fundamental mistake if we attempt to understand the whole of the entrecomm in terms of the medieval manor or the tribal village.
What will keep managers of entrecomms from becoming tyrants?
Look around us, and what do you see? If we searched the records of the hundreds of thousands of entrecomms in business today, we might find horror stories, but they would be exceptional and short-lived. Years ago I made a field study of the kinds of trouble situations that arise in mobilehome parks and shopping centers and how they were handled (1971). In the course of the study some highly entertaining case histories turned up, but none was a horror story. The fact is that businesspeople for the most part look out for their customers, for that is how they stay in business. If they get lax, they go out of business or someone buys the business and restores its profitability.
By contrast, we need not wonder a great deal about political communities; we pretty much know what we can expect there. But we should not look for perfect consistency in either category, political or nonpolitical, for even heaven had its Lucifer. What counts is the characteristic behavior we can expect of business enterprise, which is premised on service, as contrasted with political enterprise, which is by its nature predatory. Either may step out of character on occasion, but such exceptions only point up the rule.
How will decision making take place at the global level?
Envision a deployment worldwide of entrecomms as autonomous communities of small to moderate size, many here and there clumping together in a great variety of ways to form denser aggregations of population. They will resemble what are called in anthropology “acephalous” or “stateless” societies, cooperating rather informally at various levels by networking. For this view I am indebted to the late anthropologist Virginia H. Hine (1977: 1984).
But isn’t profit the incentive driving all of this?
Yes, it’s the incentive that makes any enterprise self-sustaining—enduring because it serves. Commerce is much undervalued and underestimated. The great and growing trend today is for land to be administered as productive capital, and in this process we are witnessing the natural evolution of leasehold land tenures—precisely what Henry George, Ralph Borsodi, and others proposed as the cure for excessive speculation in land. But they didn’t see that cure coming about as a spontaneous market process, powered by ordinary business—profit—incentive. It is strange that no one before Spencer Heath anticipated it happening this way.
Why should such radical changes be happening quickly now,
rather than gradually over a long period?
We know from history that when conditions are right for a new kind of development, that development can come about very rapidly. In this case we need only recall the crucial role of numbers in enabling us to develop science and commerce, and then observe that something spectacular is happening today. The use of computers has increased our ability to manipulate not only numbers but information of all kinds by orders of magnitude, and this capability is progressing at an exponential rate. Moreover, the laptop computer and e-publishing, by creating a viable alternative to reporting downtown for work and bringing all the world’s libraries into the home, is empowering people as individuals and enabling an exodus from the regimentation of the work force. Here is a decentralizing process within the marketplace of awe-inspiring magnitude.
For this reason among others, provided humankind survives in the near term, the entrecomm might become the community form of choice within a few generations. At that time, should this happen, we will not have overthrown but simply, without fanfare, we will have outgrown government as we know it today, and government personnel will become absorbed into more productive employment. Human society, which on the tribal level manifested the normal, healthy societal pattern albeit at an immature stage, will have matured and come into its own. Humankind will have negotiated at last this riser in the stair of societal evolution. It was surely a doozer.
Spencer H. MacCallum
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