From Agrarian Reform to Command Economy

As Alan Garcia is getting ready to celebrate his victory in the runoff presidential elections in Peru, Jefferson Morley at the Washington Post ponders whether the influence of the Left, particularly Hugo Chavez, is dwindling in Latin America. With Peru seemingly rejecting any serious reversals from the course of free market reforms, the attention is now switching to Mexico:

The next big test of Latin America’s political direction will come in Mexico, where conservative presidential candidate Felipe Calderon has pulled even with leftist Andres Manuel Lopez Obrador in opinion polls by linking him to Chavez in campaign ads. AMLO, as he is known, denies any special connection to Chavez but says he is serious about helping the poor. Mexicans go to the polls July 2.

Some Peruvian officials are outraged by Chavez’s involvement in the country’s presidential elections, and they voiced their concerns yesterday at the General Assembly of the Organization of American States (OAS).

Meanwhile, in Bolivia, a movement is growing against a proposed land reform, which seeks to redistribute agricultural land. Opposition is in the minority and the first serious redistribution moves were made this weekend despite protests and experiences of the past, which suggests that such programs have not delivered in Latin America:

In a landmark study for the World Bank, scholars at the University of California at Berkeley found that land reforms in Latin America had “a poor record in solving the poverty problem” because they had remained incomplete. While peasants were given land, they were not given the means to use the land efficiently, according to the 2002 study. As a result, “the total number of rural poor has increased in … Guatemala, El Salvador, Costa Rica, Paraguay, Panama, Honduras, Nicaragua and Bolivia.”

..and not only in Latin America. Noone would dare to call redistribution of land a success in Zimbabwe, for example. But Zimbabwe’s crisis is not stopping some nations, like Namibia, from attempting to do the same; just as Bolivia is not discouraged by the experience of its neighbors. One would hope that land nationalization is not going to spark acts of violence, as land owners are forming committees to defend their property.

The fact brought up in Bolivia is that 50,000 families own about 90% of the land, while millions of others are simply excluded, partly due to unsuccessful agricultural reform of 1953. This figure is being used by Morales and his administration to illustrate that the majority is left out of the system and is ‘exploited’ by the minority, thus justifying the redistribution effort.

However, if Bolivia is willing to call itself a democracy, and wants the world to recognize it as such, it should keep in mind that democracy is not about the majority ruling the minority. As Michael Novak warns in the “Universal Hunger for Liberty” what really defines democracies is not the ruling majority but the ability to protect the rights and the interests of the minorities. A functional democracy’s great feature is the rule of law, which prevents the “tyranny of the majority” – clearly a problem in many emerging democracies – and protects and secures the rights and freedoms of all the citizens.

Redistribution by authority reminds me of Russia – where the intentions were in fact to give the excluded majority ownership titles…through redistribution. However, intentions do not always align with the outcomes. And we all know of the outcome of land redistribution in Russia in 1917.

Note that in Bolivia, some of the titles are going into the hands of communities, not individuals!!! Does it bring the memory of collective farms for anybody? How quickly we forget. Is command economy in the works in Bolivia? It certainly seems so, and, as a person who has lived to see the fruits of economic planning in Russia, I do hope that common sense prevails and economic freedoms for all come out on top.

Published Date: June 06, 2006