The idea is that just as the Homestead Act turned people into pioneers, we would turn more people into capitalists if we distributed capital more broadly.
The idea, which he apparently pulled from here, may merit discussion (certainly more than the President's lame proposal). But I've got big problems with the metaphor.
The Homestead Act was enacted in 1862. At that point Euro-Americans had been pioneering for over 200 years. They didn't become pioneers because of a government program.
Furthermore, from 1861-75 farmers received less than 100 million of the 600 million acres sold or given away by government. Much of the land went to large corporations as a subsidy for building railroads. In his biography of John Wesley Powell, "A River Running West," historian Donald Worster notes that homesteading laws had always been "poorly drawn, easily subverted, and hopelessly incongruous." (p. 340) The homesteading process was full of incompetence and venality. You could pull a boat on wheels across your land and call it a swamp, thus getting it far cheaper than farmland. Worster writes, "All one needed to make a claim good were the right kind of witnesses, the right amount of bribe proffered to a land-office recorder, the right friends in high places."
Big ranchers would "homestead" government land adjacent to their spreads to squeeze out the little guy. Sure, there were plenty of little guys who homesteaded as well, but as Jonathan Raban demonstrates in "Bad Land," in places like eastern Montana they were doomed to failure, because the government program didn't give them enough land to live on.
But the worst effects of the government's homesteading ideology came in efforts that tried to use the government policy to change people's culture -- to turn them into pioneers when they didn't necessarily want to be. The Dawes Act of 1887 insisted that Indians should not live on reservations; instead they should each get 40 acres of land. That would turn them into farmers. So reservations were cut up and sold off. The "extra" land was made available to whites.
The well-intentioned plan was a disaster. Most such land was not suited to small farming, and many Native Americans lacked the training or the will to succeed. Their homesteads, too, fell into the hands of rich white people, and many years later government policy shifted back to the notion of reservations.
Perhaps the same nightmares wouldn't happen with "capital homesteading." But it sure seems odd for me, of all people, to have to play the libertarian and ask: How is it that you expect a government program will make people good by law?
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