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State Monopoly + British Imperialism = the Emergence of Land Inequality: Aspects of the Socio-Economic Legacy of Muhammad Ali Pasha’s Mercantilist Policies Post by Ramses H Abul Naga, Reader in Economics, University of Aberdeen,  2018-2019 IMéRA fellow  in partnership with AMSE – Aix-Marseille School of  Economics. Ramses Abul Naga IMéRA research project and biography here. Weakened byBonaparte’s expedition, the Mamluk armies no longer held control of governmentin Egypt. The vacuum of power following the defeat of the French armies during the final siege of Alexandriaof August 1802 saw the return of Egypt under Ottoman rule, and paved the wayfor the rise of Muhammad Ali of Kavala. The successes and failures of thePasha’s rule over a period covering 43 years (1805-1848) were intimately related to his management of thepublic finances, and to his ability to align his personal interests with those of the Ottomans and theGreat Powers. We reflect on some aspects of the socio-economiclegacy of his mercantilist development policies for contemporary Egypt. Mercantilistre-organisation of agriculture and tax revenuesThe Pasha sought to enrich himself by taking completecontrol of Egypt’s natural resources. As a mercantilist, his plan was to imposea state monopoly over export cash crops, use the income from agriculture tobuild a modern army to enable him to conquer new colonies, and hence furtherexpand his export market and command over productive resources.Muhammad Ali Pasha ruled Egypt as Ottoman Viceroy between 1805 and 1848Muhammad Ali inherited the old form of Ottoman government,and was keen to replace it by a modern structure inspired mainly by the Frencharchitecture of state institutions. He was keen to undertake a cadastralsurvey, which he launched in 1811. Alongside, he abolished the old Iltizamtax system, thus depriving his Mamluk and Ulama rivals of income and politicalpower.&#160; To replace the&#160; Iltizam tax, a new Kharaj tax onfarming land was introduced and implemented by 1813.&#160; The resulting tax rate varied according toland quality and the type of crops grown, with the intent purpose of increasingstate revenue. It is not entirely clear what the resulting tax rate amountedto. However, the Egyptian historian Al Jabarty (Al Jabarty, 1879) was keen toemphasize that the levied tax was unsustainable: “When this was done [the cadastral land survey] they reckoned the land in the new faddan [1], showing an increase in the area, and proceeded to tax it at the rate of 15 or 14 or 12 or 11 or 10 riyals per faddan, according to the nature of the region and the quality of the soil. The result was an enormous increase: thus a village which had formerly paid 1,000 riyals in taxes—a sum that had given rise to complaints on the part of the multazims and of the peasants and had resulted in uncollected arrears—was now assessed at between 10,000 and 100,000 riyals, more or less.” In comparison, the tax on cultivable land in Upper Egypt waslower, as Al Jabarty provides a figure of 7 riyals per Feddan which he yetqualifies as very high. A further reform of the Pasha was to confiscate the Waqfland (land that consisted of mosques, hospices and other charitableendowments). Between 1809 and 1815Muhammed Ali transferred &#160;the Waqf land to the state, and the government took up the obligation ofthe up-keep of the mosques and charitable endowments, thus depriving the Ulamaof the right to collect taxes. Perhaps the most important source of tax income was tocome via the organization of Egyptian agriculture as a state monopoly, and viathe reorientation of farming to cash crops. By 1816 the Pasha was supplyingfarmers with capital and was purchasing their crops at government controlledprices. By exporting these crops to the West, Muhammad Ali was able to generateincome to finance his new governmental bureaucracy as well as the creation ofEgypt’s modern conscript army.The new army was not only serving the imperial interestsof the Pasha: the control of the army placed and maintained Muhammad Ali abovethe law. Thus, the army was called upon in domestic affairs in order to pushthrough coercive measures ranging from land confiscation, the imposition of newtaxes, conscription, the corvée, and the fixing of arbitrarily low prices forcash crops. The Pasha did not take a light heart approach either to hesitanttax collectors:&#160; “Ordered to kill arecalcitrant tax collector if he would not cooperate, Ibrahim&#160; [Muhammad Ali’s son] allegedly did the jobwith his own hand” Hunter (1984, p. 27.)The lack of output diversificationThe Jumel long fibre cotton variety was introduced forcultivation in 1821, in order to raise Egypt’s income from exports. Jumelexports provided up to 25% of government income in years of good harvest andhigh world prices. The sale of Jumel cotton on world markets would contributeto the rapid expansion of Egyptian agriculture in the 1860s (that is, duringthe American civil war), and to bust later when the terms of trade were nolonger favourable to Egypt, especially so in the aftermath of the GreatDepression. It is also the case that commodities such as cotton, sugar cane andrice are associated with volatile world prices in comparison to crops such aswheat or maize. Thus, as a widely cultivated export crop, cotton was to furtherincrease Egypt’s vulnerability to international price variability.The introduction of Jumel cotton would also entail longerterm political consequences. Specifically, the orientation of farming towardcotton cultivation made Egypt’s economy totally dependent on Britain’s textilemarket. Thus, Egypt’s attempts to obtain genuine independence from Britainduring the Liberal Years (1922-1952) were compromised due to the alignedinterests of Egypt’s parliamentarians (consisting mainly of large landowners)with London. It is worth noting that today Egypt remains one of the world’sleast diversified countries as measured for instance by the Herfindahl Index ofConcentration of Exports.&#160; It is also thecase that as in much of the Middle East and North Africa, Egypt’s present dayexport sector—with the exception of energy—consists mainly of few traditionalproducts associated with little potential for technological progress (WorldBank 2007).&#160; The neglect of the Fellaheen [2] Historians often refer to the Muhammad Ali with praise forhis visionary transformation of Egypt from an Ottoman province to a modernstate. But those who have paid the bill for the Pasha’s ambitious modernizationprogram are less often mentioned, and the extent of their sacrifice islessdocumented. Radical historians nonetheless are keen to emphasize that MuhammadAli liberated the Fellaheen from Mamluk feudalism, in order to subject them toa harsher conditions under his state monopoly system. In this respect, the Soviet historian Lutsky writes in his ModernHistory of the Arab Countries (1969, p. 53),“Mohammed Ali, however, did not abolish the feudal mode of production. The liquidation of the iltizams and the sharing out of the common land, begun in 1813, undoubtedly altered the conditions of the fellaheen. But the fellah was still exploited by the feudal lords, although he now worked for the feudal state as a whole, not for an individual lord.”  The Fellah was not free to choose which crops to grow, and at what price to sell his produce. Instead,&#160; he was obliged to sell his output to the state monopoly at dramatically low prices, that barely ensured&#160; survival.Mahmuddiyya canal at the turn of the twentieth centuryOther sources of hardship included the introduction of an annual compulsory sixty days of corvée&#160;&#160;&#160; on the estates of the Pasha, or in the development of public works such as canals and barrages (Bent, 2015). This corvée labour was on distant projects, often resulting in the break up of families, and offered little monetary compensation. The construction of the Mahmuddiyya canal (the canal that first brought Nile water to the city of Alexandria) involved for instance no less than 12’000 death casualties over a three-year period, with some estimates rising to 100’000 (Bent, 2015) [3]. To rapidly expand his modern army, the Pasha subjected theFellaheen to long and harsh periods of military service (a duty Egyptians hadbeen exempt from in the times of the Mamluk.) To avoid conscription, Fellaheenresisted by rebelling, fleeing Egypt for other Ottoman provinces, andmutilating themselves. The most common forms of self-inflicted injuriesincluded blinding one eye, amputating index fingers and the removal of frontteeth (Richards, 1982).Egypt’s independence in 1922 did not bring an end to theneglect and contempt toward the Fellaheen. In this respect, Al-Sayyid&#160; Marsot (1985, p. 86) observes that theelected parliament of the liberal years banned the Fellaheen from organizinginto worker unions, and that it was not until the early 1950s that a minimumwage for rural workers was instituted.Shifting incentives: the Uhda system and the origins of wealth inequality In the aftermath of the unsuccessful military campaign of 1839 against the Ottoman ruler, Muhammad Ali was forced to give in to British pressure to end state monopoly over agriculture, in return for a hereditary right for his family to rule Egypt as Ottoman Viceroys. In order to mitigate the resulting revenue losses, the Pasha began confiscating land and granting it to his family and protégés. These concessions, known as Uhdas, granted the right to administer farm land in exchange for paying arrears and the obligation to meet future tax obligations.Rural Scene in Upper EgyptIn practice however, Muhammad Ali was able to dictate overUhda land crop choices, and&#160; purchaseoutput at prices he determined himself, much the same way as he had done in hisearly years of tenure. For this reason, the Pasha had the incentive to grant vastamounts of land to himself, his family and entourage. The break up of MuhammadAli’s state monopoly and the resulting introduction of the Uhda system may wellhave largely contributed to the famously large levels of land and wealthinequality, still persisting in contemporary in Egypt.&#160; By 1920, half the farming land was owned by 2% of thepopulation and cotton accounted for over 90% of exports (al-Sayyid Marsot,1985, p. 86). The emergence of the Izba model of agriculturalorganizationWhen forced tobreak the state’s monopoly over agriculture, Muhammad Ali in effect created aland aristocracy in parallel with a landless peasantry. By the turn ofthe twentieth century, a quarter of agrarian workers were made landless, andwere employed mainly on the large cotton estates. By 1950, landless ruralhouseholds accounted for 50% of the farming population. To insure a long term relation between Fellaheen and land owners, Egypt saw the emergence of a new model of agricultural organization; the Izba model [4]. Due to scarcity of farming labour throughout the second half of the nineteen century, land owners experimented with various schemes to encourage retention of rural workers in long term contractual relations. One scheme that was to prove successful in this respect, was to provide each agricultural worker within the estate a small landholding, the Fellah was free to cultivate and dispose of its produce. This type of contractual relation was new to Egypt and to cash-crop farming more generally, and became known as Izba farming (Richards, 1982).&#160; Egyptian agriculture under the Izba system remained firmlycontrolled by the colonial powers: while the majority of landowners wereEgyptian of Turkish and Circassian origin, the providers of capital were mainlyof European origin, dictating all aspects of production and trade, ensuringthat cotton exports found their way in the textile mills of Lancashire.There were nonetheless several factors that may havecontributed to the decline of Izba farming during the twentieth century. First,in the wake of independence, the industrialization of the country found a newimpetus during the 1920s, and thus shifted capital away from farming. Thismigration of capital contributed somewhat to the dismantling of large cottonestates.&#160; The process of decline may havefurther accelerated due to the collapse of foreign demand for cotton in theaftermath of the Great Depression. Furthermore, during the Second World War,the needs of the British armies facilitated the diversification of output awayfrom cotton and in favour of cereal, a crop whose growth did not require thecomplex contractual arrangements of cotton farming.ConcludingcommentsThe economichistory of Modern Egypt is rife with census data,myths and paradoxes. Benevolent reformer, illiterate tyrant or greedymerchant, the legacies of Muhammad Ali’sreforms persist in many facets of contemporary Egypt, beyond those touched uponhere. Nasser’s nationalist government attempted to end social injustices byfirst instituting a 200 Feddan upper limit to Izba holdings, then reducing thelimit further to 100, and finally 50 Feddan, by 1969. &#160;It was also saidthat Nasser had introduced a mighty 90% marginal tax rate on large incomes, butthat “...few however reported receiving such incomes, so taxes were neveradequately collected” (al-Sayyid Marsot, 1985; p. 121).Today, Egypt’s foreign debt is in the order of 35%of gross domestic product, and approximately one third of the statebudget isallocated to servicing the public debt. The debt crisis, compounded withausterity measures dictated from a consortium of international creditors, haveresulted in one out of three Egyptian households living in poverty by 2018.There is a sense, upon reading the history of modern Egypt, that the lack ofoutput diversification, the general neglect of the Fellaheen, and the rise andfall of Izba farming may have all contributed to this reality. ReferencesAl-Jabarti (1879) -Abd al-Rahman al-Jabarti cajaib al-athar fil-tarajim wal-akhbar, Cairo.Bent P. (2015):“Agrarian Change and Industrialization in Egypt, 1800-1950”, presented atthe Paris Colloque International Recherche &#38; Règulation. HunterF. Robert (1999): Egypt Under the Khedives, 1805-1879: From HouseholdGovernment to Modern Bureaucracy. Lutsky V. B. (1969): Modern History of theArab Countries, Progress Publishers, Moscow for theUSSR Academy of Science. Richards, A. (1982):Egypt’s Agricultural Development, 1800-1980: Technical and Social Change. Boulder: Westview Press.al-Sayyid-Marsot A. L. (1985) A shorthistory of modern Egypt, CambridgeUniversity Press.World Bank (2007): Export Diversification in Egypt, Lebanon, Jordan,Morocco and Tunisia, Social and Economic Development Sector Unit Middle Eastand North Africa Region. Unpublished manuscript.[1] Prior to Muhammad Ali’s cadastral survey, the area of a Feddan was defined to be 400 squared units of sugar cane sticks of length. To increase tax revenue, the Pasha ordered that a Feddan would be redefined as an area of 333 squared sugar cane sticks. In contemporary Egypt, a Feddan amounts to 4200 squared meters. [2] Agriculturalworkers of the Nile Valley have historically been referred to as the Fellaheen.[3] It is interesting to note that in his travel to Egypt (chronicled in his Rihla), Ibn Batuta (1304-1369) mentions passing through a canal that brought Nile water to Alexandria. There is therefore some historical disagreement about whether the Mahmuddiya canal was really constructed at the initiative of the Pasha, or if instead it had been renovated or further expanded.[4] Izba, signifying a large rural estate in the Egyptian use of the Arabic word.