I would avoid making too much of the peculiar land arrangements in Hong Kong. I certainly wouldn't attribute any great countercyclical power to them.
One thing they do show is that the system of private property is really a complex spectrum with a lot of intermediate cases out there. Given the length of the land leases involved and the very free market in them, Hong Kong is very far in the direction of market capitalism in land, despite the juridical state ownership of land. The PRC also has leases, but is not as far as the leases have tended not to have the same length.
BTW, I note that one finds Hong Kong arrangements in sections of London. For example, most of the hotels on Gower Street are technically owned by the Crown. But there are long-term leases on them that are bought and sold regularly. Very capitalistic.
The values of those leases in Hong Kong can go up and down just as the value of land itself can. There is no guarantee against bubbles or any of that. Barkley Rosser On Wed, 29 Jul 1998 07:26:06 +0100 Chris Burford <cburford at gn.apc.org> wrote:
> Very many thanks to Michael Hoover for the fascinating information. For
> several years I have been wondering whether my amiable friend in the
> cooperative movement was eccentric or whether he had a point underneath the
> way he kept banging on about Hong Kong.
>
> I think these exchanges do demonstrate that Hong Kong is an anomaly in more
> than one way. Certainly it has had the great advantage for capitalist
> accumulation of large inward migration of a vast surplus army of labour.
> But I think the information Michael gives does confirm that tight control
> over finances probably has contributed to the ability of the Hong Kong
> dollar to avoid devalutation in the current Asian crisis.
>
> More interestingly it confirms that a highly competitive position in the
> global capitalist economy is possible without the private ownership of
> land. Clearly this was not introduced for socialist reasons but for
> imperialist reasons, and I see no reason to contest Michael's observation
> about the great class differences in housing, although presumably without
> also the major housing programme he describes, many more of the population
> would be living in the equivalent of barrios.
>
> I am pointing out that while socialists cannot expect to control the market
> in commodities overnight, there is room for serious exploration of ideas of
> bringing finance under greater social control and of bringing land under
> greater social control, challenging or even abolishing bourgeois right to
> the private ownership of land. Certainly it seems that the example of Hong
> Kong may make it easier in the People's Republic of China whatever other
> market reforms are under discussion, to resist the idea of the
> privatisation of land.
>
> There was one detail of the Hong Kong system that I have not been able to
> confirm, and which I cannot pin my cooperative movement friend down about:
> the idea that the social ownership of land provides counter-cyclical
> methods of managing the capitalist economy.
>
> It seems to be that since there is no private market in the ownership of
> land, the auction price of leases for land that comes onto the market, may
> rise of fall promptly according to market demand. Therefore when the
> capitalist cycle is slack, the marginal cost of leasing a bit of land is
> much lower, and cushions the prospects of starting up new economic
> activity. In a way this is a reserve army of land. In formal marxist terms
> I submit that it allows the ready destruction of a portion of capital, that
> represented in the capital value of the leases for new land, to be
> discounted promptly in a recession. As the destruction of a proportion of
> capital is virtually essential in any recession for the economy to get
> going again, this provides a speedy and flexible means of doing so that is
> directly relevant for economic activity.
>
> Adapting this reform for different countries, would require complex debate,
> but seems to me to have the possibility of attracting support from a wide
> range of classes and interests, and not be objectionable to industrial and
> commercial capitalists. In Britain there is a Labour Land Reform Campaign.
>
> Chris Burford
>
> London.
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu