A O U





A Russian Land Lottery


The USSR has two fundamental problems regarding its land. It does not produce enough food to feed its population. And what it does produce does not get efficiently distributed. Both problems can be directly traced lack of individual incentive. Ownership of land, and the fruits of its production, provide incentive. One has only to look at the great agricultural producers in the world to see the evidence of that. In the United States, each farmer feeds an average of 124 people.

Up to the mid 1800's, the USA had a similar problem. It was solved by the "land rush" of the 1850's when the government gave 40 acres (roughly 25 hectares) to anybody who settled the land in the Midwest. Thousands of people left the cities and rushed to stake out a claim in the hope of a better life. Soon tens of thousands of others followed to support the farmers who worked their 40 acres. The farms generated a lot of jobs (income) off the farm as well as food for a growing nation. Transportation, towns and factories sprang up to support the farms who grew the food to supply the cities.

This was all done because the government "gave" away "its" land. In fact, what the government really had done is transferred the responsibility of providing food for its population to a more efficient means of production (via individual self interest) while retaining control (via regulation) and realizing greater social benefit (via cheaper and plentiful food; and increased tax revenues for social services) for all its people.

So the problem in the USSR can be readily (if not easily) solved by conveying ownership of the land to the people. How to do that fairly and efficiently in a country where there is no history of ownership has got to be a nightmare. A lottery could solve that problem.

****(Please note that in the discussion that follows that all numbers are used for illustrative purposes only and may not have any bearing on real values. The discussion uses the term "ruble" without the author having any idea of the value of a ruble in the USSR. It would probably be more appropriate to substitute the formula (10 rubles = the value of one hour's labor). All numbers should be considered relative rather than absolute.)***

All agricultural land under State control (i.e., communes and cooperatives) in the USSR would be broken up into 10 Hectare parcels (It could be almost any size, but generally the smaller the better.). Each parcel would have a Temporary Land Title (TLT) assigned to it. (The TLT is described later.)

The government would then hold a series of weekly lotteries with each lottery drawing based on 1,000 tickets for each TLT yielding a reasonable chance to win for each participant.

At 10 rubles a ticket, the State would realize an immediate infusion of 1,000 rubles per hectare less any cost of the lottery (printing, distribution, etc.). Further, as the lotteries gain acceptance, several exceedingly beneficial results will become quickly manifest:

As is done throughout the world, all Lottery numbers would be drawn on USSR television to impart and ensure a sense of fairness to all participants as well; and let the population vicariously participate in the process.

Following is proposed framework for the Land Titles:

The TlT would be subject to several restrictions:

If the TLT owner does not exercise his option to buy the land covered by the TLT, the land would then either go back into the lottery or preferably go on the auction block. An open auction would serve to establish true value for the land.

It doesn't take too much imagination to see TLT owners banding together to form cooperatives on their own, with each member contributing. Members from the city taking over the transportation and marketing while the more experienced farmers do what they do best... tend the land (including the parcels of the transport and marketing members).

Almost overnight an impoverished nation will create much of the wealth required to build a civilized nation. And it only takes a tad more imagination to envision a similiar scheme to turn over the stores and factories of the USSR to the people.

Certainly any mechanism for redistribution of wealth on such a grand scale is going to be subject to skepticism and even ridicule. It's the easiest thing in the world to say why something won't or can't work (apparently a necessary trait for government service), but it's a lot more productive making it work. One thing is certain - What's being done now doesn't work.

(Written August - September 1991)



End of Russian Land Reform


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