January 2014
1526, Hungary, and All That
A holiday detour through history
LATIFUNDIA. Now, there’s a word that made us stop and Google it.
The holiday season is usually a great time to catch up on one’s bedtime reading. In keeping
with this, last month we gifted ourselves (probably overriding Santa’s naughty list in the
process) with Francis Fukuyama’s 2011 work The Origins of Political Order: From Prehuman
Times to the French Revolution, a gripping page-turner for nerds (like yours truly) and
particularly for wannabe political scientists (again, like yours truly).
This was the book in which we had encountered that wonderfully delightful word,
latifundia, which caused us to repeatedly utter it aloud one night – apropos of nothing – to
the mystification of our TV-watching spouse, who thereupon braced herself for what she
assumed was a husbandly onset. (Think John Cleese speaking in Italian and Russian to Jamie
Lee Curtis in the movie A Fish Called Wanda.)
She had little to be concerned about in the event, as Dr. Fukuyama’s book proved
thoroughly engrossing – in fact, far more satisfying for both halves of our brain than
Acemoglu and Robinson’s more-recently published Why Nations Fail, which this (lazy) critic
found somewhat repetitive and a chore to read.
As some of you know, and others may have guessed, the term latifundia is of Latin origin,
and refers to large agricultural estates typically amassed by members of favored groups
such as aristocracies, or military veterans, or religious organizations. The Romans were
famous for the practice of awarding tracts of freshly-subjugated hinterland to loyal generals
and centurions.
The caesars were neither the first nor last to incentivize an elite class using agrarian
resources, i.e., both the land and the peasants. The Romans were pre-dated in this by the
landholdings of bureaucrats of the Zhou and Han Dynasties, and were followed by medieval
Europe’s feudal manors, Ottoman sipahis’ (cavalrymen’s) dirlik system, Spanish
conquistadores’ encomiendas and haciendas (implemented in Latin America and
Philippines), and many more. Fukuyama observed that “there is something like an iron law
of latifundia in agrarian societies that says the rich will grow richer until they are stopped.”
The flip side of this is the likewise-iron, inescapable plight of the peasantry, serfs, or slaves.
We are reminded of the befuddled refrain in the Ray Charles song Them That Got:
©2014. The opinions expressed herein are the writer’s own, and are not necessarily official positions of Angeon Advisors
Ltd. Neither the writer nor Angeon makes any representations or warranties as to the accuracy or reliability of the
materials contained herein.
Page 1 of 4
“That old sayin’ ‘them that’s got are them that gets’
Is somethin’ I can’t see.
If ya gotta have somethin’
Before you can get somethin’,
How d’ya get your first is still a myst’ry to me.”
It is truly fortunate that we live in an age where there are many ways for hard-working but
otherwise ordinary folk to reach for a better life. However, the blessings of modernity
remain uneven. Poverty and disparities in opportunity stubbornly persist, within both the
developed and emerging worlds. Ray Charles sang plenty else1 that resonated with the
urban underclass inhabiting the cracks of the late-20th century’s pre-eminent democracy.
This is an important point to make for the benefit of those who think that Philippines and
similar countries are the only ones with room to improve. As Fukuyama noted, even mature
democracies cannot afford the hubris of switching to autopilot, because change is constant.
Institutions are prone to decay, and mighty empires may hasten to join Ozymandias in the
dust, if succeeding generations of citizens become apathetic and lose their cohesiveness.
(Note to the Hyperpower: the balkanization of public debate is symptom Number One, in
our view.) Ultimately, it is people who animate their institutions. It is people, through both
individual and collective decisions and actions, that preserve, tweak, or supplant these over
time.
Fukuyama identified as essential three political institutions: (1) a strong state; (2) an
exogenous legal framework (a “rule of law”) such as a constitution interpreted by
independent courts; and (3) the vigilant enforcement of accountability (especially with
respect to rights and freedoms, and public finance) upon the state. Per his framework,
which he has applied (to see “whether the shoe fits”) to ancient China, ancient India, the
Islamic world, and various countries in Western and Eastern Europe, any society prospers
and endures based on the interplay (or failure thereof) among said three institutions.
Dr. Fukuyama is one of the more colorful figures in today’s pantheon of big thinkers. He
started out as a protégé of the late Samuel Huntington (he of the clash-of-civilizations
worldview), and then became one of the leading lights in the Neoconservative movement,
which made itself most felt during the Reagan and Younger-Bush administrations.
Fukuyama made a splashy debut on the public stage in 1992, when he published the
triumphalist The End of History and the Last Man, which viewed the collapse of communism
in the Soviet Union and Eastern Europe as both validation and evidence of exportability of
American-style democratic and governance institutions.
What makes Fukuyama interesting is that he is capable of changing his mind – a skill he
probably was forced to learn when public opinion turned against his 1992 book, when
1
Any canonical Ray Charles set on the angst of the marginalized must include: It Should’ve Been Me (on envy of others’ conspicuous
consumption); Living for the City (written by fellow visually-impaired artist Stevie Wonder on the prohibitive cost of urban living for the
blue-collar sector); and I’m Gonna Move to the Outskirts of Town (on dreams of suburbia).
©2014. The opinions expressed herein are the writer’s own, and are not necessarily official positions of Angeon Advisors
Ltd. Neither the writer nor Angeon makes any representations or warranties as to the accuracy or reliability of the
materials contained herein.
Page 2 of 4
subsequent events in the ex-Soviet bloc slouched messily in unexpected directions, and as
the rise of communist China became increasingly harder to explain away. By the second
Iraq invasion, Fukuyama had already distanced himself from some of his earlier positions
(and from the Neocon wing in the Bush White House), notably regarding how readily
transplantable Western political institutions really are into places where the historical,
cultural, political, social and religious development paths are totally alien.
We find Fukuyama’s survey of political institutions convincing for the most part. As a matter
of fact, we feel his book ought to be designated by the Philippines’ Department of Education
as a mandatory high school textbook (maybe for Grades 11 or 12?), as a key toolkit for every
would-be citizen, voter, and taxpayer. (And we keenly look forward to his post-French
Revolution sequel, due out in 2014 and supposedly to be titled Political Order and Political
Decay, nearly as fervently as we yearn for the final part of The Hobbit trilogy.)
If the Fukuyama hypothesis on institutions is indeed valid and sufficiently comprehensive,
what does it mean for Philippines, looking forward? Well, we found his evaluation of
Hungary’s experience particularly instructive and cautionary.
Everyone knows about the Magna Carta, which rebellious English barons had imposed as an
early form of a Bill of Rights on King John at Runnymede in 1215. However, we’d bet that
fewer have heard of the Golden Bull, negotiated merely seven years later between King
Andrew II of Hungary and his own upset constituency of hereditary noblemen. (Some
historians think the English had regaled their Hungarian friends with tales of King John’s
submission as they rode together on the Fifth Crusade. Ah, the benefits of shop talk!)
The subsequent paths of England and Hungary proved extremely different, as we all know.
Whereas the Magna Carta posed an effective check against a capricious Angevin monarchy,
the Golden Bull of 1222 overly sapped the power of the Hungarian state (i.e., starved it of
the needed tax revenues and provincial warlords’ automatic military cooperation), such that
by the time the Mongols came a-pillaging in 1241, there was inadequate political unity and
military force to prevent the decimation of as much as 50% of the kingdom’s population and
the destruction of up to 80% of all settlements and villages (both upper-end estimates).
Although the Mongols did not linger long, the haplessness of Hungary’s central government
in the face of squabbles among latifundia-saturated barons got decisively demonstrated
when the Ottoman Empire caused the dismemberment of the country into three separate
territories after the Battle of Mohács in 15262. An independent Hungary was thereby
effectively erased from all maps for a number of centuries. In that particular game of
thrones, it was the imbalance of power between a supine state and powerful elites which
proved to be the existential determinant. That, in turn, went down to key differences in
content (i.e., the nature of the obligations and the severity of the implications thereof)
between the 1215 English Magna Carta and the 1222 Hungarian Golden Bull.
2
Trivial Pursuit: Interestingly, Hungary’s turning point occurred only five years after Ferdinand Magellan got whacked by Lapu-Lapu in the
surf off Mactan Island.
©2014. The opinions expressed herein are the writer’s own, and are not necessarily official positions of Angeon Advisors
Ltd. Neither the writer nor Angeon makes any representations or warranties as to the accuracy or reliability of the
materials contained herein.
Page 3 of 4
And so our mind wanders back to the familiar archipelago of our birth. Latifundia may no
longer be a central issue in Philippines in this day and age, but wealthy and powerful elites
are still very much an obstacle to inclusive growth, equality of opportunity, internal peace,
and, if you think about it, even national defense. On the bright side, we take as
institutionally-constructive the fact that of late civil society has been energetically probing
how government, and the elites who have captured it, have been misusing our taxes.
But on the other hand, we Filipinos badly need to accelerate the shoring up of our political
institutions, because external and internal challenges will not wait. Super-typhoons can be
expected to recur more frequently henceforth (perhaps at least twice a year?). The regional
hegemon can be conservatively assumed to further escalate its provocations within the
West Philippine Sea (that’s just realpolitik; like medieval Hungary, Philippines today just
happens to be a buffer state caught between larger powers; it needs to rapidly beef up so as
not to get pushed around any longer). And worst of all by far: the current bumper crop of
youth could become disillusioned and apathetic toward how they are governed, if we, their
elders, continue to fiddle to the crackling of the flames (with we and our children being the
lechon).
Taxation, the proper use of public monies, the strengthening of the state vis-à-vis the local
elite, and other lessons from The Origins of Political Order are all matters that lie at the very
heart of this nation’s survival.
Well, that’s enough intellectual self-gratification for the time being. We’d best get back to
our day job, which by the way is professional private equity for mid-cap businesses.
(Hmmm… now, that’s just the kind of elite-disrupting activity that we like and our country
needs.)
May everyone have a very busy and happy 2014!
----- o ----- O ----- o ----About the writer: Gerald B. prepares coffee for visitors at Angeon Advisors. He remains happily wedded to a
medical doctor, and is resigned to driving the family van for his three children until they are old enough to
move out. Antarctica is on his bucket list, as he doubts there would still be any polar icecap to view, much less
stomp on, in the northern hemisphere by the time he can afford the cruise.
Angeon Advisors Ltd. is an independent alternatives manager specializing in private equity and venture capital
growth themes in the Philippines and other markets in Asia. For further information or feedback, kindly visit
www.AngeonAdvisors.com, or send an e-mail to [email protected]. Follow Angeon Advisors in
LinkedIn, and Like our posts if you do like them.
©2014. The opinions expressed herein are the writer’s own, and are not necessarily official positions of Angeon Advisors
Ltd. Neither the writer nor Angeon makes any representations or warranties as to the accuracy or reliability of the
materials contained herein.
Page 4 of 4