Since the early 1990s, the majority of large forest products companies in the US have restructured, resulting in a mass sell-off of land and a major shift in who owns private forests in the United States. The biggest shift in ownership has been from corporate to financial ownership, with pension funds and other institutional investors becoming major players in forest-dependent communities over a relatively short period of time. In this talk, I focus on the historical precedents that allowed this “financialization” of forests to become possible, arguing that it is necessary to contextualize this process within a longer lineage of US fiscal policy. I focus on three major watershed moments in timber taxation: the Clarke-McNary Act of 1924, the addition of Section 117(k) to the US Internal Revenue Code in 1943, and the US Real Estate Investment Trust Act of 1960. Each moment highlights not only a major shift in how timber is conceptualized as resource, but also marks attendant major shifts in nature/society relations. While early industrial logging was linked to settler colonial westward expansion and the perception of land as both available and disposable, Clarke-McNary creates the first incentives to replant cutover land, locking industry in place and sinking fixed capital in ways that reverberate into the present. Decades later, corporate paternalism and strong unionization is disrupted with the amendment of the Internal Revenue Code to allow profits from timber sales to be taxed as capital gains, rather than income. This reframing of standing trees as capital is an important precursor to the financialization of timberland that comes with the conversion of many timberland owners to real estate investment trusts (REITs) and the huge transfer of ownership that comes with it. The argument is supported by archival materials collected at the Forest History Society, participant observation at four investor conferences, and semi-structured interviews with economists, investment managers, foresters, activists, and community members.
Kelly Kay is an Assistant Professor in the Department of Geography at the University of California, Los Angeles (UCLA). She completed her PhD in Geography at Clark University in Worcester Massachusetts, and prior to UCLA, she held positions at the London School of Economics and UC Berkeley. Kelly is a political ecologist who draws heavily from geographical political economy and legal geography, and her work tackles questions of natural resource management and governance in North America. With funding from the American Council of Learned Societies, she is currently writing a book on the impacts of financialization on timber-dependent communities, and her published her work in a range of geography and environmental studies journals, including the Annals of the AAG, Progress in Human Geography, Environment and Planning, Geoforum, Antipode, and Nature Climate Change.