Odious Debts

Introduction – The Tragedies of the Commons

The Tragedies of the Commons

BEFORE THE WORLD BANK and other international institutions came to bring development to the remotest corners of the globe, the millions of villagers living along Northern Thailand’s swiftly flowing rivers understood that they depended upon one another. Each community needed its river to irrigate its crops, water its animals, and provide for its members’ personal needs. To ensure clean water for all, the communities negotiated rules governing who received how much water and when, and implemented those rules through adjustable weirs made of bamboo and teak poles: by adding or removing poles, by raising or lowering the weirs’ height, by scouring the river and irrigation beds, they rationed water among its many claimants with uncanny precision.

Housekeeping and farming practices along the river were everybody’s business because they affected rates of erosion, and thus contamination of the river and irrigation systems. Upland forests, vital to bringing the rains each season and controlling runoff, couldn’t be cut without permission.

Upkeep of the 1000-year-old muang faai water manage-ment system, as it is still called, was proportional to landholding. Taxes to maintain the system were paid in the form of labor. Newcomers bought into the system through sweat equity — they needed to put in twice the labor to compensate for the past efforts of others. Absenteeism was penalized, volunteer work rewarded with extra water and sometimes with gifts of rice from neighbors.

The principle that everyone receive enough water to survive — an ancient version of the modern day “social safety net” — was paramount. In dry years, those with distant plots difficult to irrigate would receive water first; rice, a subsistence crop, had precedence over cash crops.

Out of this shared sense of dependence came a political structure that provided what would be called “due process” by modern-day legal theory: elected irrigation committees, guided by a duty to preserve the river for existing and future generations, had formal responsibility for monitoring water distribution and administering weir and channel maintenance. Theft of water and unauthorized cutting of forests were punishable by fines which, having a social stigma attached to them, were never treated as a mere cost of doing business. While these elected officials were responsible for administering justice, all community members, as proprietors of the muang faai system, were expected to enforce the rules. With everyone’s side-channels in plain view of commuters between village and fields, weed buildup in the waterways or illicit tree cutting never went unnoticed.

Muang faai — which survives in much of Thailand — amounts to a system of property rights in which private rights and responsibilities have been finely tuned over the centuries to maintain equity, protect the environment, and promote prosperity. Though hardly idyllic, frequently conflict-ridden, and constantly adapting through trial and error and discussion, the system worked well to protect those who lived along the river, and the river itself. From such an accountable environment came a degree of security that allowed all who were governed by it to produce amply and diversely for their families, enriching their communities in the process.

Then came progress. Thai government officials, armed with foreign money, concrete, and plans for a made-over agricultural system, started arriving in the 1950s, engineers in tow, to replace the old-fashioned bamboo weirs with the concrete barrages foreshadowing the Green Revolution. Those dependent upon the river could no longer regulate it along its path — a giant dam and reservoir upstream would now control the flow through a less intensive system of irrigation canals. How much water would flow down the river, and where it would go, would henceforth be determined by officials in the Royal Irrigation Department. The informal governments of riverine communities and their complex set of laws were thus emasculated.

The behavior of the river, and of the inhabitants, would change too. Traditional crops, found in ecological niches along the river valley and dependent upon timely irrigation, were no longer manageable by the riverine farmers. Too risky to invest in, they soon fell into disuse, ending the extraordinary diversity of old seed varieties that had been engineered by generations of farmers as insurance against blights. Modern varieties, well suited to the new centrally controlled water regime, were now sold by large seed companies or state agricultural boards. But these new seed varieties, which depended on the unknown and unknowable government authorities providing water at the right time, also required fertilizers, pesticides, and herbicides to protect them. To buy these, the government offered farmers credit, and the farmers soon fell into debt.

As the riverine communities of Thailand lost control over their environment, they also lost control over their economy. Remote government officials at the Royal Irrigation Department were now in charge, dispensing contracts to dam rivers and log watersheds for their own rhyme and reason. Though the Royal Irrigation Department hoped to benefit the villagers, their concrete weirs were too blunt to allocate water reliably or equitably, and they themselves were too remote to police the river’s uses. Since despoilers of the watersheds (often state officials and their friends who benefited personally) went unpunished, use of watersheds became a free-for-all.

The once lawful riverine communities, witnessing the government’s arbitrary licensing of logging, soon took to logging the forests as well. As the complex, self-regulated property rights regime disintegrated, so too did the economy and the environment: with deforestation, silt clogged the rivers and irrigation canals, reducing them to sludge in the dry season and causing them to flood in the rainy seasons. With water so uncertain, many farmers gave up growing rice. What had once been a river ecology whose use was regulated in common purpose, became a lawless commons to exploit.

HUMAN BEINGS DO NOT WILLINGLY DEGRADE their environment. No farmer dreams of leaving his children a ramshackle farm, top soil swept away, eroded gullies pock-marking the terrain; no community willingly subjects itself to hazardous wastes. Passing on an environmentally sound world to the next generation is part of the moral code of all cultures.

People usually exercise similar caution in their personal finances. Most parents strive to leave their children wealth, not liabilities: to do so they try to maximize their assets and minimize their debts.

To ensure children don’t inherit the excesses of their parents, most societies require debts to be extinguished upon settlement of the debtor’s estate: societies that allow debts to be passed on to future generations are condemned by the United Nations for practising a form of debt bondage.

But all societies tolerate debt bondage when the creation of the debt is once removed: the state can and does borrow collectively on our behalf, and we then leave this collective debt to our children, often deluding ourselves that someone else’s children will be responsible for repayment. Through this mechanism, and this mindset, is the financial commons created.

A commons need not lead to tragedy. The Thai river communities managed their common rivers and streams to their personal and communal benefit; the Thai government officials, managing the same resources, didn’t. But tragedy will surely occur, whether in a financial commons or an environmental commons, when the beneficiary and the victim are obscured by space, time, and loose accounting. As long as they need not face each other on the street, along the river bank, or in the town hall; as long as they are remote and unidentifiable, the perpetrators of financial or environmental liabilities will escape an accounting, the victims will be denied a voice, and just about any practice will be justified in the name of the national interest or in the name of progress. As long as borrowing occurs on the environmental or financial accounts of everybody yet nobody, rights will be unhinged from responsibilities and the debts of the nation will grow.

Sources and Further Commentary

For a wonderful description of the complex functioning of the muang faai system see “The Muang Faai Irrigation System of Northern Thailand” by Chatchawan Tongdeelert and Larry Lohmann, in The Ecologist, vol. 21, no. 2, U.K., March/April, 1991. Also see Thai Peasant Social Structure by Jack M. Potter, Berkeley, 1976. For further information on debt bondage see the excellent work of Anti-Slavery International for the Protection of Human Rights, London, a group which traces its origins to William Wilberforce and the movement to abolish slavery in the 1800s. According to the United Nations Supplementary Convention on the abolition of slavery, the slave trade, and institutions and practices similar to slavery (1965), debt bondage is defined thus: “the status or condition arising from a pledge by a debtor of his personal services or of those of a person under his control as security for a debt, if the value of those services as reasonably assessed is not applied towards the liquidation of the debt or the length and nature of those services are not respectively limited and defined.”

Categories: Odious Debts

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