Chapter Eighteen
During the twentieth century, many countries adopted different aspects of the Prussian experiment in building a corporate state. The example of Bismarck’s welfare provisions carried particular weight in Scandinavian countries, and in the 1950s military governments in Latin America and the Middle East repeatedly tried to develop industry by government direction in a List-like manner. Most common of all, nearly every government, apart from those in Communist and private property societies, adopted its policy of taxing agriculture to finance industrialization. But nowhere was the Prussian example followed more slavishly than in nineteenth-century Japan.
The similarities of a militaristic society—samurai landlords in place of Junker nobles—shocked by the revelation of outside superiority—the arrival in 1854 of Commodore Matthew Perry’s steam-powered fleet having the same effect as the defeat at Jena—might seem to have dictated Japan’s adoption of the German model. And the outcome in the 1930s, when each country experienced terrorist assaults on fragile democratic structures that brought to power aggressive governments intent on war, offered a still more striking resemblance But the differences were more revealing. Above all, nothing could be less like the flat expanse of Prussian grassland than the rugged territory of Japan.
Roughly the size of California, almost three-quarters of the mountainous country tilts at more than fifteen degrees from the horizontal, and even with terraces cut into the slopes less than a fifth of it can be cultivated. Under the shogunate, the government of Japan was divided among almost three hundred lordships, or daimyo, who allocated the fragmented soil to their samurai warriors, the only class permitted to own it. The samurai in turn authorized peasants to work the tiny plots—three quarters of the farms measured less than three acres—in exchange for payment in rice and labor.
When an oligarchy of Japanese nobility expelled the shogunate in 1868 in the name of the Meiji emperor, they began their reforms with the dissolution of these feudal divisions. The daimyo were transformed into salaried governors of prefectures, soon reduced in number to fewer than fifty, and their samurai swordsmen either recruited into the imperial army or into other areas of government service. In effect the feudalism of the Tokugawa was nationalized by the Meiji emperor’s new central government.
Like the Junkers, Japan’s former landowning military caste was induced to identify its interests with those of the imperial government, partly through foreign wars in China and Korea and more insidiously through the creation of a nationalist ideology based on the kokutai, or “national community,” that melded samurai values with either Shinto morality or the nationalist precepts of Nichiren Buddhism. The focus of the drive for communal unity was embodied in the person of the emperor.
This strategy was incorporated into the new constitution that took force in 1890. It prescribed an elected diet, or legislature, and an executive government headed by a prime minister that was responsible not to the Diet but to the emperor, or in practice to a group of aristocratic officials deemed to be expressing his will. Quite deliberately, the constitution was modeled on that of the German empire. Alternatives from private property societies, such as the American Constitution and the British parliamentary system, were rejected precisely because they vested too much power in the people. The Meiji economy was to be directed from the top.
For similar reasons, Japan’s new code of civil laws was built round Germany’s Bürgerliches Gesetzbuch. As in Germany, the rights of property owners were guaranteed by civil law, but the rights were restricted to Japanese, and in the name of the kokutai, courts consistently upheld the needs of government against personal claims and supported more powerful classes over someone of inferior rank.
With the uncertainties of samurai violence removed, the population of Japan, virtually static at around thirty million throughout the shogun period, grew by almost half to forty-three million between 1852 and 1900, and the number of peasants seeking land to farm soared in proportion. Rice yields doubled under intensive cultivation, rents tripled, and owners grew wealthy, not by investing and increasing the value of their properties, but as moneylenders and sharecropping landlords to some six million hard-pressed tenants.
In the 1870s, when the samurai were deprived of their power, the Meiji government issued land certificates to peasants, giving them nominal ownership of the land they worked. This halfhearted attempt at social engineering on the Jeffersonian pattern quickly failed since landlords found it easy to use peasant indebtedness backed by legal bullying to force them to hand over the certificates. Almost half of Japan’s farmland ended in the hands of village landlords, often enough descendants of the samurai.
The submissiveness of Japanese peasants was legendary, quite unlike the resentful, often violent resistance offered by their German equivalents to their landlords. Their behavior was prescribed by Nihon-shugi, the defining ideological statement of Shintoism, “agriculture is the base of the country and everyone should play his part according to his station for the good of the country.” And the precept was routinely reinforced by physical beatings, a practice that continued when peasants became soldiers in the imperial army. Thus the effects of the Meiji land reforms were to tame the samurai landlords but to leave the pattern of land holding virtually unchanged.
In the absence of any movement by Japan’s landed interests to assert claims to political power, the Meiji government deliberately taxed agriculture heavily in order to finance industrial development. Up to 80 percent of the revenues that kick-started Japanese industrial growth in the 1890s came from land taxes and were channeled either into military expenditure for Japan’s successful wars with China and Russia, or into railroad construction and shipbuilding.
Yet for all their political impotence, the values of Japan’s landowners, inherited from the samurai, became the standard for Japan’s new industrialists, even though by the 1920s their manufactured products were three times as valuable as those grown on the land. Business pioneers such as Shibusawa Eiichi, founder of the First Bank of Japan and of some two hundred other commercial enterprises, constantly urged the once-despised merchant class not just to think of profits, but “to place the cloak of the public-spirited samurai on [their] shoulders.” Giant conglomerates known as zaibatsu, such as Mitsui, Mitsubishi, or Nissan, which grouped the disparate activities of manufacturing, mining, and textiles under a single family ownership, expected from subsidiaries and workers alike a Shinto loyalty to the core company, and to the founding family, with each person contributing according to his or her particular position to the good of the whole.
Paradoxical though it might seem, the basic difference between imperial Germany and imperial Japan after industrialization was determined by the shape of their land holdings. While Prussia’s land revolution was still underway when industrialization took over, Japan’s industrial power was constructed over what remained an unmistakably feudal pattern. When the onslaught of the 1930s economic depression struck, the response of each country was determined by that fundamental distinction.
In Japan, popular resentment at the failure of the government to deal with unemployment was centered in the countryside. Secret nationalist societies proliferated with the aim of reasserting the independence Japan once enjoyed from the outside pressures, and in the army, rival military societies, known collectively as the Young Officers, aimed at the restoration of military influence over government. These forces exploded into a campaign of terror in the 1930s that included the assassination of two prime ministers, two abortive military coups, and the murder of numerous lesser officials, and it led to the end of party politics in government.
In contrast to this rural-based terror, Germany’s version came out of the cities. The dedication of Mein Kampf to the sixteen Nazis killed in the failed 1923 Munich uprising offers a snapshot of Hitler’s followers at the time: six were junior employees, restaurant workers, or bank staff, six were self-employed, traders, craftsmen, and store owners, one was a student, one a retired soldier, and just two, a trained engineer and a senior civil servant, belonged to the white-collared middle class. Until the financial crash of 1929, the composition did not really change—most Nazis were young, about half were working class, and the rest were largely shopkeepers, artisans, and the unemployed. They stood outside Germany’s directed economy that, despite the removal of the emperor, Wilhelm II, survived the First World War, and they evidently shared the rage against democratic society that permeates Mein Kampf.
So long as the Nazis remained outsiders, the immature democratic structure of the Weimar Republic coped more or less with the challenge of a party clearly intent on its destruction. It only became vulnerable following Hitler’s crucial decision to alter one clause in the twenty-five-clause program that constituted the Nazi Party’s bedrock of political beliefs. Clause 17 called for the expropriation of landed property—a leftover from the party’s Socialist origins—and, like the rest of the program, could not be altered. But in 1929 Hitler publicly gave it a different context, explaining that in fact it only referred to the confiscation of Jewish land.
Immediately, the party’s struggle with the more powerful Social Democrats for the left-wing vote shifted in perspective. The street violence of brown-shirted Nazi thugs continued as before, but now the party portrayed it as necessary to preserve national order and the security of property against Socialists, Communists, and other agitators, usually portrayed as Jewish. Endorsed by funding from business leaders eager to quell labor unrest, the Nazis were brought inside Weimar’s political structure and began to win respectable support. Small farmers were recruited through an amorphous reform program known as Blut und Boden, or blood and soil, that promised to free them from the exactions of Jewish-owned banks, and attacks on Junker superiority gave way to praise for Junker values.
Nevertheless, the surge in the party’s popularity was short-lived, and its share of the vote was already declining by January 1933. The appointment of Hitler as chancellor in that month was anything but inevitable. A delay of several months, with the economy no longer deteriorating and criticism of Nazi tactics growing louder, might have made the transition to power infinitely more difficult.
In retrospect, the crucial element that the Weimar Republic lacked was an embedded tradition of individual rights. In 1931 a young lawyer, Hans Litten, used Weimar’s twelve-year-old system of legal rights to force Hitler to appear in court in 1931, and crossexamined him mercilessly about his complicity in Nazi murders. That heroic achievement, for which Litten paid with his life in a concentration camp, showed what could have been done to expose the party’s criminal underbelly had the courts inherited a robust ethos of individual entitlement to justice.
While the Nazis’ urban-based terrorism succeeded, Japan’s rural version failed. The assassinations and attempted coups were certainly triggered by fury at a government incapable of dealing with the economic crisis, but the makeup of the secret societies, their constant reference to the past glories of Japan, and their choice of political targets demonstrated that this was more broadly a backlash by the grandchildren of the samurai against the Meiji rulers who had dethroned them. Consequently the campaign lost its impetus in 1937 when the government enlisted the army’s support, with the agreement of zaibatsu and landlord interests, and allowed it to select its own prime minister. The cost of buying the generals’ participation was a program of military spending that benefited the zaibatsu and a policy of expansion across the Pacific and into Indochina to secure strategic supplies of oil and rubber. By 1945, the price had risen to include the outbreak of war, the bombing of Hiroshima and Nagasaki, and unconditional surrender.
Given the close ties between Japan’s feudal landlords and the army—a large majority of senior officers in the imperial army came from landowning families—American plans for introducing democracy to the conquered country in 1945 also required the elimination of Japan’s existing pattern of land ownership. Reading from their own history, the officials of General Douglas Macarthur’s administration aimed to replace feudalism with a society of owner occupiers.
In Europe, the U.S. War Department held an almost identical belief that government was shaped by the way land was owned, and in 1944 called for “the dissolution of the Junker holdings. Their continuation would constitute one of the most formidable obstacles to the establishment of a lasting democracy in Germany, for the holders of these estates have been consistent and active opponents of democratic government.” But while this analysis misjudged Junker influence, the land reform program carried out under Macarthur in Japan was not only based on an accurate diagnosis but achieved a real cure. To a large extent this was due to the galvanizing influence of one man, Wolf Ladejinsky.
Born in 1899, the son of a wealthy flour miller, Ladejinsky had been raised in a shtetl in a part of western Ukraine that until the release of serfs in the nineteenth century had been owned by Russian-Polish landlords as Gutsherrschaft land. Within living memory, however, the region had been transformed into a private property, Junker-like society. In 1922, after five years of civil war that ended with the Bolsheviks nationalizing the land, Ladejinsky escaped to the United States. He took with him the profound certainty that, as he later said, “The foundations of the social structure must stand or fall in the countryside, and [so] the peasant and his interests and aspirations must be placed at the center of the piece.” In the long, unwritten history of peasant farming, its concerns had never been taken so seriously.
In the 1950s, almost two thirds of the world’s population and 70 percent of people in Asia were still living on the land, and this was where Ladejinsky’s interest was directed. His enemies used to criticize his lack of direct farming experience, pointing out that his degree from Columbia University was in economics, but they overlooked his determination to learn directly from people on the ground. The plan for redistribution of feudal land in Japan was built on months of painstaking interviews with peasants, landlords, and village elders across the country. Even in old age and almost blind, he would insist on flying to a remote airstrip in Bengal, then being driven further in a jeep, so that he could finally stumble into the fields to talk to the people actually working there. As a young man, the practical experience he had acquired from peasant farmers in Asia led to his secondment from the Department of Agriculture in 1945 to work for General Douglas Macarthur’s military government in Japan.
Referring back to the Meiji government’s issue of land ownership certificates in the 1870s, Ladejinsky always insisted that “the reform idea was Japanese in origin” and the United States simply acted as “midwife” to its execution. The drastic measures recommended by his plan could, however, only have been put into effect by an occupying force that faced no opposition.
Under the land reform program, no absentee landlord could own more than about nine acres, or three cho. (In the forested northern island of Hokkaido, the limit was raised to thirty-six acres.) Every acre of ground above that maximum had to be sold to the government at a set price—one three hundredth of the market value in 1939—and, since the sum was paid in fixed interest bonds whose value was quickly destroyed by inflation, the compulsory purchase amounted to near confiscation. But in the course of little more than three years, about six million acres, one third of all the farmland in Japan, were taken from 2.3 million landlords and sold to the 4.7 million farmers who worked them. By 1950, 90 percent of Japan’s farmland was owned by the people who cultivated it.
In typically extravagant style, Macarthur hailed the transformation of “several million tenant farmers, traditionally vassals of feudalistic landlords, into ‘capitalistic’ owners of the land they long have worked” as the most far-reaching act of social engineering that had been undertaken since the redistribution of land “in the days of the Roman empire.” This was hyperbole—most farms were too small to act as rural capital—and missed the political significance of the change.
What struck the sociologist Ronald Dore, who visited scores of villages where committees decided whose land should be redistributed, was “the democratization of the villages.” In place of the old paternalist order that regarded the gulf between landlord and submissive peasant “as a hallowed part of the order of nature,” he detected a sense of empowerment as farmers once liable to be evicted for voicing their opinions learned to take charge of village affairs. As he noted on return trips, “redistribution of wealth [has] brought greater equality of opportunity to those who occupy positions of leadership.” His subjective impression was confirmed by the results of an opinion poll in the early 1950s revealing that fewer than one in three of the new proprietors still believed in the deferential precepts of Nihon-shugi.
The abolition of “landlordism” is rarely seen as relevant to the phenomenal forces that within a generation catapulted Japan from nuclear-bombed defeat to the second largest economy in the world. But its role was essential at three different levels. The most fundamental was that the allocation of property to the peasants ensured their unwavering support for the constitution adopted in 1947 guaranteeing both property and human rights. More immediately, the change from tenancy to ownership brought an accompanying need to maximize profits rather than rents, leading to an exodus of rural inhabitants, as many as ten million in fifteen years, who might once have found some activity in the fields but who now left the countryside to find work in the cities. They went to swell an urban population that numbered just twenty-four million in 1945, about one in three of the population, but rose to more than sixty million by 1965. Finally, although this was not Ladejinsky’s intention, an urban land market was created. Prominent in the balance sheets of postwar conglomerates and those of construction companies, banks, and other financial institutions, was a portfolio of office blocks and building land whose rising value helped boost their borrowing power.
Amazingly, Wolf Ladejinsky achieved his goal of land redistribution in two other countries before he was reined in. Indeed, the most compelling evidence in the modern era that a more equitable pattern of land ownership was integral to social and economic revolution comes from his success in two other tiger economies in the region, Taiwan and South Korea. In both countries, the agenda was driven by Ladejinsky’s single-minded belief that “land ownership . . . is the real vehicle of security and opportunity upon which a more resourceful economy can be built.”
Undoubtedly the most violent change occurred in Taiwan. In 1949, Chiang Kai-shek’s government arrived from mainland China with two million Kuomintang supporters and brutally established its rule over the indigenous Taiwanese inhabitants in a colonizing process known as the White Terror. The island, a hundred miles from the mainland, had been a Japanese colony since 1895, and their expulsion left a power vacuum that the Kuomintang filled, but during more than four decades of martial law, up to four thousand people were executed and as many as 140,000 were exiled or imprisoned for opposing their rule. Some of the fiercest opposition flared up over the redistribution of land.
With the backing of the United States, a five-man Chinese-American Joint Commission on Rural Reconstruction that included Ladejinsky began the process of redistribution in 1950. The measures were as draconian as in Japan and bore Ladejinsky’s unmistakable imprint: absentee owners limited to a maximum of three acres, compulsory purchase of all property above the limit, paid for with bonds backed by revenues from industry; and sale of these surplus lands at low prices to those who physically worked the soil.
Despite ferocious resistance—one Taiwanese peasant told the commission that getting land from a landlord was like “negotiating with a tiger for his fur”—the popularity of the program and the abandonment of large estates by their Japanese owners ensured that redistribution would be a success. By the time the process was complete in 1956, land had been taken from 106,490 landlords and transferred to one million new owner occupiers, representing almost 60 percent of Taiwan’s farmland. The island’s hierarchical, landlord-dominated society had been levelled to one where 90 percent of its near five million rural inhabitants lived on farms that they owned.
Millions of dollars of government and American aid were also directed to improve access to markets, make credit available for fertilizer and higher-yielding crops, and, since the average holding measured barely two acres, to set up cooperative purchasing and marketing organizations. The result was a striking increase of 50 percent in rice yields between 1949 and 1960, and a tripling of farmers’ incomes with the abolition of oppressive rents. In 1960, farm produce, especially Taiwan’s highly prized rice, made up 86 percent of the island’s exports, a measure of how much its economy depended on rural prosperity.
Unlike Japan, where land rights and democracy had to be created within an existing industrial economy, Taiwan’s industry grew out of the network of privately owned properties scattered across the countryside and supplying their own regional markets. More than two-thirds of farming families depended on a second job to supplement the earnings from their tiny plots of land, and banks reported that 80 percent of the start-up loans for new businesses in the 1960s used these same small fields as collateral. At the same time, almost 60 percent of the Kuomintang government’s investment in large-scale manufacturing in 1960, especially electronics, was derived from taxes and forced savings levied on agriculture.
Although Ladejinky was not physically present in South Korea, his reforming zeal and the presence of experts who had worked with him allow this to be counted as his third success. In 1945, three-quarters of the population lived in the countryside, and almost 70 percent of them were peasants paying more than half the value of their crop to absentee landlords. Under the direction of the U.S. military governor, General John R. Hodge, the redistribution of land after thirty-five years of Japanese occupation followed Ladejinsky’s formula for capping the maximum holding at about seven acres, expropriating the surplus and redistributing it at low cost “to the tiller of the soil.” The result allowed for a direct comparison with North Korea, where the Soviet-backed government also confiscated all farms of more than seven acres, but redistributed them as collectives, a form of landholding that eventually applied to all land beyond a family’s immediate vegetable plot.
After the Korean War, President Synghman Rhee’s autocratic government in the South continued to apply the Ladejinsky policy in a manner that strongly resembled the Soviet pattern, by forcible purchase with the price being paid in bonds whose value diminished so rapidly that the majority of dispossessed landlords went bankrupt within five years. Neither in the North nor the South was the government democratic or its policy fair, but while the centralization of land rights laid the foundation for famine, the dispersal of rights led directly to individual autonomy and unprecedented wealth.
Within ten years, the bulk of South Korea’s farms were privately owned, intensively worked smallholdings of less than five acres whose new owners supplemented their earnings from other village employment. Not only did rice yields more than double from just over one ton per acre in the next twenty years, so too did the area farmed to about 2.5 million acres. And among a population that remained predominantly rural until the 1980s, South Korea’s often repressive government retained its legitimacy as the creator of a relatively egalitarian, property-owning economy.
In both countries, significant political change only occurred when the children of the original property holders, wealthier, more assertive, and above all better educated than their parents, came to maturity. In Taiwan, 96 percent of farmers’ children attended school in 1959, a rise of almost one-fifth from the days before the land revolution. Chiang Kai-shek’s death in 1975 marked the start of reform, with the development of civic independence at local level. Pressure from agriculture and industry alike brought an increasing degree of representative government that by the 1990s had developed into genuine democracy.
In South Korea dictatorial government lasted longer, until the 1980s, and change occurred more rapidly when the children of the original landowners took to the streets in massive numbers to demand political and civil liberties. The nature of the democratic government that emerged in the 1990s was expressed in a constitution that combined commitment to human rights and a distinctive Buddhist stress on social harmony.
In all three countries affected by Ladejinky’s program, redistribution was manifestly unjust to the landlords. But the fundamental justification was still John Locke’s argument that there was a moral basis for regarding the person whose labor improved the ground as its owner. It was not a complete defense, but the increase of personal liberty that it created, together with the impulse it gave toward economic prosperity and democratic government, made a compelling case. That achievement was the more striking when viewed within the wider context of the Cold War.
The prize in the competition between capitalism and Communism was the political loyalty of almost two billion people elsewhere in the world, known variously as campesinos in Latin America, fellahin in the Middle East, ryot in India, as well as a thousand other local terms, and generically in English as peasants. In order for them to become capitalist or communist, the land they cultivated had to be removed from a myriad different forms of ownership that were deemed “feudal” and transformed into private or communal possession.
In Japan, Taiwan, and South Korea, the west had for the first time a pattern of development to set against the gigantic system of communal ownership that was rolling across northern Asia, replacing the Romanov dynasty’s post-serf economy in Russia and the Qing Dynasty’s bureaucratic landlordism in China.
In the long and distinguished line of rulers stretching back at least to Tiberius Gracchus who attempted to shape people and society through the distribution of land, by far the most effective in terms of scale was Vladimir I. Lenin. Eventually his policy of collectivized ownership covered some three million square miles of arable ground, woodland, and steppes in the Soviet Union, and became the basis for similar systems affecting an area almost as great in China, Vietnam, Cuba, and eastern Europe.
Despite Marx’s cautious endorsement of the mir, Lenin quickly dispensed with any thought of retaining small peasant strips. Learning from the mechanization of the American prairies, he argued in his 1899 text, The Development of Capitalism, for the creation of large farms that could be mechanized and fertilized on an industrial scale, and for communal ownership to give poor and landless peasants a share in the means of production. Middle peasants, those working their own small plots, might be allowed to keep them, but Lenin had an almost superstitious fear of the social impact of land ownership. “Small-scale production,” he declared, “gives birth to capitalism and the bourgeoisie constantly, daily, hourly, with elemental force, and in vast proportions.” Thus the wealthiest peasants, the kulaki, who employed waged labor on their farms, were to have their land confiscated by the state along with the emphatically capitalist estates of aristocrats.
Following their coup d’état in 1918, the Bolsheviks immediately began to put these plans into operation and “socialized” Russia’s land, in effect asserting the claim of the Romanov tsars that the earth belonged to the rulers of the state. News that kulak farmers in Ukraine had responded by joining the White counterrevolution against the Soviet government drove Lenin to near-hysterical fury. The two million kulaki, he said, were “avaricious, bloated and bestial,” they were “leeches,” “spiders,” and “vampires” who had to be exterminated. But rage could not save Muscovites from having to survive, as the writer Maxim Gorky remembered, on “bread that’s half straw, on herring heads, cotton cakes and the like.”
The threat of continuing starvation forced Lenin to conciliate the food producers. Reversing itself, the Soviet government announced its New Economic Policy, leaving in place privately owned property, and permitting marketplace pricing to continue, apart from a compulsory quota of grain to be sold at fixed prices. It was not until 1929 that Josef Stalin, as general secretary of the Communist Party, called for the elimination of kulak farmers by death or exile and the enforced collectivization of all farms—“the last, decisive battle,” as Lenin had described it, in the war to establish Communism.
Over the next three years, the entire families of more than half a million farmers identified as kulaki were killed or expelled from their farms, but resistance to the collectivization of livestock and fields caused such disruption across the richest farmland in the Soviet Union that the harvests of cereals and potatoes dropped to half the level they had reached in 1914. International agencies fed as many as ten million more on imported food, but the famine was so extreme that the American Relief Agency reported many cases of cannibalism among the survivors. As many as seven million died from famine and disease during the early 1930s.
By 1936, however, 90 percent of the land was farmed by collectives, or kolkhozi, measuring on average about six thousand acres, whose workers were either paid by the state or out of the farm’s earnings. The new face of the Soviet Union was displayed in the posters of the period depicting a strong-armed, golden-haired boy or girl riding a tractor through a grain field stretching to the horizon. The traditional image of rural life where gnarled peasants tilled pocket-sized strips of land by hand had been consigned to the graveyard.
The new Soviet method of possessing and working the land was untried. It had no other rationale for its existence than Lenin’s belief that collective ownership must breed a collective mind-set in place of bourgeois individualism. But for almost forty years, there was good reason to think that collectivization might work, whatever the human cost of its creation.
Mechanization and irrigation enabled collectives to increase production of cereals above 1920s levels, although supplies of meat and milk lagged until after the Second World War, and improved transport put more calories on Soviet plates than had been available before the collectives. In the 1950s, as the Soviet Union recovered from the destruction of the Nazi invasion, Nikita Khruschev, the dynamic secretary of agriculture, launched the Virgin Lands program that brought into collective cultivation ninety million acres of steppe in Kazakhstan and on the Altai plateau beyond the Urals, and the size of farms rose to around fifteen thousand acres. By the early 1960s, the Soviet Union was exporting grain, more than three million tons a year, for the first time since before the First World War.
The profits made by the government from the difference between the low price paid to the collectives and the steadily rising price in the shops allowed it to invest heavily in industry and technology. Farming efficiency encouraged a migration of labor from the country where five out of six people lived in 1923 to the factories that surrounded the Soviet Union’s new concrete towns where two-thirds of the population dwelled in 1970. As a result the Soviet economy grew more rapidly between the low point of 1928 and 1970 than any other except the Japanese, with personal incomes rising nearly five times from $1,200 to $5,900 a year. Its success, symbolized by the launch of the Sputnik satellite in 1957, was founded on collective farming. And the process had required no foreign investment or outside aid.
Thus, when Mao Zedong, Che Guevara, Ho Chi Minh, and others nationalized the land and collectivized its cultivation, they were following an apparently successful model. Indeed the effectiveness of collective ownership in delivering economic muscle and social justice left the West floundering in search of an alternative. The only capitalist solution that worked depended on the forcible expropriation of property and, to Ladejinsky’s dismay, would soon be deemed politically unacceptable.