The Dead Hand Twitches
Alex has an interesting entry on studies of poor South Americans who get titled to land on which they’ve squatted, and what it does and doesn’t mean for their economic progress:
The good news: Poor people with secure title to their land do indeed invest more in improving their homes than poor people without secure title to their land.
The somewhat dismal news from the dismal science: It’s no silver bullet. Poor people with secure title still face a rough climb. No surprise there, but worth keeping in mind. There’s an understandable tendency to look at good ideas, especially good free market ideas, and assume that they’ll solve all problems.
Comment by Hesiod —
August 29, 2006 @ 7:50 am
There’s an understandable tendency to look at good ideas, especially good free market ideas, and assume that they’ll solve all problems.
…if you’re a libertarian.
He forgot that part.
Non libertarians already know this.
Comment by Jim Henley —
August 29, 2006 @ 8:29 am
I think you give non-libertarians way too much credit. There are some libertarians who present market solutions as utopian. There are many, many nonlibertarians who judge market solutions by utopian STANDARDS and pronounce them wanting. I can’t count how many times some statist has argued that a libertarian solution was no good because this bad thing or that bad thing could still happen.
Comment by Ray —
August 29, 2006 @ 10:17 am
Sure, this is about people having property rights, but it’s also about squatters becoming better off when the state awards them property. As the article intro says “the provincial government passed a law expropriating the land from its rightful owners so that the squatters could enjoy formal ownership of it”, but this is about market solutions to economic problems?
Comment by neil —
August 29, 2006 @ 10:46 am
In Chile they’re doing something similar to this — they’re taking the squatters’ land and building public housing on it, and allowing the squatters to buy the housing preferentially — from what I’ve heard, they basically have to open a bank account and add to it every month, but not very much, maybe a hundred dollars.
I live right next to a former squat-cum-government-constructed-housing and it seems to be working quite well. In particular, the new homeowners have been adding onto their houses like there’s no tomorrow, and in ways which suggest that owning the property gives them more respect for it. (I was nervous when the first few clapboard fences went up, but they have already come back down.)
Comment by Tim Ross —
August 29, 2006 @ 10:57 am
Ray, since I’m not a libertarian, take this with a grain of salt: while property rights are seriously important, and expropriations generally give me the willies, there’s a point where the scale of the problem (in the article’s case, 1800 families) becomes more important than allowing a single consideration (property rights) to trump all the others.
1800 families is a lot of actual people living in actual squalor. Not to get all utilitarian and stink up Jim’s site, but this non-libertarian can’t be thrilled about a hypothetical state that would be in practice totally indifferent to that kind of dreariness and stagnation.
(It wouldn’t be a great sell in those slums, either.) “Objectively pro-misery” is not a position I will endorse, however attractive I find libertarianism.
And “market solutions to economic problems” doesn’t quite capture the scope of de Soto’s project. It’s aimed at improving both individual and society-wide conditions. The “social” aspect of de Soto’s vision, I think, is ultimately aimed at replacing the stasis of wacky hybrid feuo-statist economies & societies with a more dynamic, growth-oriented ones. The proximate goal is start by getting 1800 families off of dirt floors and onto concrete ones. It’s a classic 19th-century liberal project for societies that don’t just need a coat of fresh paint here and a new couch over there - instead they need repairs to the foundation, the floors, the plumbing, the wiring and the leaky roof so that they’re actually decent places for human beings to live.
Comment by Steve —
August 29, 2006 @ 1:06 pm
(Another statist weighing in.) Ray, also, part of De Soto’s claim is that frequently no clear legal title exists — in an interview in Reason, he notes “none of the state systems in Asia or Latin America can gather proof of informal titles. In Peru, the informals have means of proving property ownership to each other which are not the same means developed by the Spanish legal system. The informals have their own papers, their own forms of agreements, and their own systems of registration, all of which are very clearly stated in the maps which they use for their own informal business transactions.”
Comment by Ray —
August 29, 2006 @ 1:32 pm
Not a libertarian either here. I’m just gobsmacked by the idea that the lesson here is about the efficiency of markets. It’s like discussing Robin Hood and talking about what the poor bought with the money he gave them.
Comment by Tim Ross —
August 29, 2006 @ 4:22 pm
Steve’s comment is a lot more on point than mine, which came off as more combative than necessary. Too much coffee today.
Ray, your reservations make sense, but it seems to me that de Soto’s Big Idea is less about “efficiency of markets” and more about properly functioning legal systems.
Plus, I don’t think it makes sense to indirectly compare de Soto-style projects to Robin Hood.* For example, in Buenos Aires, the government didn’t take the land, and then turn it over to the squatters. It acted in response to the reality of the squatters’ squatting. Probably no one, not even the rightful landowners, was seriously interested in evicting that many people. They would have simply moved somewhere else, but the problem would remain. So the government could have just shrugged and allowed the status to continue to quo, until along came this Hernando fellow who suggested an alternative to deal with intractable realities.
This is way less a clear-cut Robin Hood scenario, then, say, Milton Friedman’s version of a negative income tax or Charles Murray’s “In Our Hands” solution, both of which basically involve shipping money from the rich to the poor.
So, I continue to see de Soto-type solutions as political-economic reforms to empower individuals and to deal with some pretty intimidating social, infrastructural, and humanitarian realities.
* Especially in light of the competition. If de Soto is Robin Hood, who exactly is Chavez? Castro? Lopez Obrador?
Comment by Andy —
August 29, 2006 @ 8:06 pm
Did anyone have a chance to read de Soto’s “Mystery of Capital” book? Its structure is pretty telling - about 2/3 consists of an interesting analysis of “dead capital” and rights to real property, while the remaining 1/3 presents a (to me) very bureaucratic proposal for developing a national titling system. It left me with the impression that he was proposing a very big public mandate - one that would consume a great deal of political capital and cost a whole lot of public money.
I just mention that to reinforce what folks are already saying here. De Soto’s into pretty grand public policy, in my opinion. So’s the Economist, for that matter, whatever their talking points may be.
Comment by Lawrence Krubner —
August 29, 2006 @ 8:26 pm
Chris Bertram, before he started writing for the blog Crooked Timber, used to have his own blog, and on it he asked how libertarians felt about property initially grabbed in a criminal manner, ownership of which eventually gains the patina of respectability through generations of holdings. I tried to use Google to look up the exact post I’m thinking of, but couldn’t find it. Bertram was thinking specifically of military generals who seize control of the government in an oil rich nation, and who are then considered, by the international community, valid entities with whom to sign contracts regarding that oil.
One could ask the same of most land in Latin America - brutally siezed by European conquest some centuries ago. Do the great-great-great-great-great-great-great grand children those who commited mass genocide have a rightful claim on the land they possess? Is there room here for, perhaps, competing claims of justice?
Comment by Ray —
August 30, 2006 @ 7:52 am
One could ask the same of practically any land, anywhere. Dig deep enough into a claim and you’ll find a guy with a bloody sword.
Comment by Bruce Baugh —
August 30, 2006 @ 11:41 pm
Lawrence hits on the point I was going to make: there’s a lot of South American land in estates whose claim to ownership runs very directly back to straight imperial conquest, and whose improvement (to the extent there is any) hinges on slave labor and labor that might as well be slave. This isn’t the relatively complicated case that might arise in much of North America or Europe, where assets have been through many hands, many of which have done something noticeable to the stuff as they held it. This is just one generation after another living on stuff their ancestors take and that they have relied on slaves, serfs, and other legal victims to take care of.
Squatting started when the central authorities lost interest and/or ability in killing every laborer who got uppity. So there’s been a limbo in which all kinds of awkward compromises has development. Even in my most libertarian days, de Soto made a lot of sense to me, and more so now: getting title clear and not rewarding the legacy of conquest both strike me as mighty good things.