How governments steal land and stop foreign investment

Dateline: Kuala Lumpur, Malaysia

For years, land sales from the white minority to the black majority in South Africa have been governed by a “willing buyer, willing seller” approach.

Such was the decision of the ruling African National Congress when apartheid ended in 1994. Call it a sort of “Don’t ask, don’t tell” style compromise designed to allow the free market to work out the issue of more inclusive land ownership in a post-apartheid era.

A similar scheme was laid out years earlier in Zimbabwe, where the government attempted to encourage white landowners to sell their farms to the ethnic population.

In Zimbabwe, the program started when the British government offered to pay half of the cost of any land purchase upon granting the country independence in 1980. Eventually, though, funds ran out and the government started stealing land through expropriation.

While the communist set applauds the expropriation program, even the communists at the United Nations have criticized it for unnecessary violence and lack of compensation paid to ousted landowners.

When even the United Nations is against a racially-charged, pro-government redistribution program, you know you’re doing something wrong.

It goes to show how governments act against private property rights when it suits their political needs. And that governments only obey the free market so long as the market returns their desired outcome.

Now, South Africa is changing its more relaxed stance on the land ownership issue and gearing up for a campaign of expropriation.

In a new proposed law, no one individual will be able to own more than 30,000 acres of land. Anything above that will be “purchased” by the state (for whatever amount they deem fit, of course) and redistributed.

Additionally, foreigners will no longer be able to own land in South Africa, a nod to the country’s increasingly anti-foreigner positions and an indicator of their slowing economy.

Yes, heaven forbid a bunch of rich foreigners bring their cash to drop on South African shores.

In short, the South African government’s position on reversing discrimination is to discriminate against property rights and capital investment. That’s all most governments know how to do when they want to pander to the electorate… steal stuff under a cloak of nobility.

This is not a commentary on apartheid, nor an endorsement of it. Countries like the United States have an equally dismal history when it comes to colonial expropriation from natives. It’s shameful.

That said, I imagine if you owned a factory on lands that once belonged to the Cherokee tribe, you’d be a little worried if the government said they were going to take your land and redistribute it.

I am not a commentator on how to solve ethnic feuds, but I do know that politicians can’t be trusted to usurp private property rights, no matter how noble the cause.

We frequently discuss how politicians accomplish all sorts of unjust goals simply by saying it’s “for the public good”. In fact, government’s very existence is based on this premise.

For all of the animosity toward whites in South Africa for controlling most of the land, where is the animosity toward a group of elite central bankers in Europe that decided to raid the current accounts of thousands of small businesses in Cyprus?

Where is the animosity against the elite group of wealthy politicians who decided to steal wage earners’ pension funds in countries throughout Europe.

Where is the animosity toward the Federal Reserve for trashing the US dollar for so many years, causing the price of everyday staples to as much as quadruple in less than a generation?

The people who cry out against those atrocities deserve even a fraction of the credit of those who sought the release of Nelson Mandela.

Until that happens, you must be prepared and know your property rights.

If you own property in some country that hates wealthy people or has a political vendetta, you ought to be a bit worried. Just as in South Africa, governments may claim to allow the free market to sort things out until the free market no longer suits their purposes.

The ways governments expropriate property

1. Simply take it from you.
Just as legalized theft from retirement accounts has been called “pension reform”, governments dream up all sorts of names for expropriation of private property. Countries like China and Cambodia have used “land reform” or “agrarian reform” to move ownership of property to the hands of the state. Most western governments won’t use this tactic because they’re too clever.

2. Claim they really, really need it for something good.
How many times have you seen a political ad saying such-and-such politician wants to throw granny down a well, or isn’t “for the children”? That same tactic is used to expropriate property. In many countries, you know it as “eminent domain”. In the United States, courts had to step in to stop the government from redistributing land to their cronies to build big business projects under eminent domain. Don’t think one political party is on the side of property rights; in The Land of the Free, Republicans are fighting for crony capitalism all the time.

3. Tax the hell out of it.
Greece recently did this by raising property taxes 700%. I called this “back door expropriation” because so many people lost their homes simply for an inability to pay. A few wound up in jail.

There are plenty of ways government can take your property. This is why owning property in a place that values property rights is so important.

How to find a safe haven for owning property

There are several countries that don’t impose any property taxes on real estate. That is one good sign.

Peaceful, openly diverse countries are also a good bet. While Norway offers “every man’s right” to access nature even near private homes, Norway’s status as a peaceful, non-interventionist country gives me reason to believe property ownership is safe there, even if taxes may be high. The same can be said about here in Malaysia and Singapore.

And, of course, open foreign ownership of property is a good sign. Why trust a country that doesn’t want money from people that don’t carry their passport?

When I speak to finding a “safe haven”, I reference a country that understands what makes it succeed. This can be from a country like Singapore that has to be free market in order to be wealthy, or a country that has seen adversity and doesn’t want to return.

Finding your private property safe haven is an important step not just for owning real estate, but for banking and doing business as well.

You never know when the government you trusted all of your eggs with decide to embark on a political agenda for their own benefit, leaving you with nothing.