Poverty and Greed in a Land of Plenty
James L. Busey
[A detailed analysis of the political and economic
situation in the countries of Central and South America. Reprinted
from Land & Liberty, September-October, 1984. At the time,
James Busey was professor emeritus of political science at the
University of Colorado. Tables included in the paper are not avialable
in this online version.]
PART 1: INTRODUCTION
TWO generalisations can be confidently made about the twenty
countries of Latin America.
One is the prevalence of intense poverty. Average
per capita income is $1,500, which compares with $11,107 for
the U.S. (1982).
Very large numbers of people subsist entirely outside the market
economy. This means, for example, that for Brazil the per capita
income is $1,523; but that only applies to people who realize some
sort of reportable income. Millions more live by direct subsistence
farming, beggary or worse, and so have "incomes" that are
Moreover, even so modest a figure as $1,500 must be seen in the light
of the gross disparities between the incomes of people who are
incredibly poor and those few who are grotesquely wealthy.
Also, such an average includes relatively "fortunate"
places such as Costa Rica ($2,238), Argentina ($2,331), Uruguay
($2,780), Venezuela ($3,639) and Puerto Rico ($3,865). This tells us
something about the situation of people at the lower end of the scale
in such countries as Haiti ($260), Bolivia ($510), El Salvador ($639),
Peru ($665), or Cuba ($840).
No sensitive person who has been to the region can fail to be
dismayed by the immense slums in the large cities, the millions of
wretched shacks housing large families, the absence of adequate
sanitation which can lead one by odor alone to the poverty-stricken
shantytowns, and the unbelievable living conditions that prevail
throughout most of the countryside in all but a very few countries
such as Argentina, Uruguay or Costa Rica.
All this contrasts sharply with the rich splendor enjoyed by a tiny
minority of unbelievably wealthy individuals.
The second generalisation is that natural resources are grotesquely
misallocated in favour of a small minority.
The result: most farmers eke out an existence on impoverished land,
on the margins of society and nature.
Yet, given its natural resources, Latin America could be a continent
of prosperous peoples.
LATIN AMERICA TOP TEN [not provided]
The reasons for abject poverty, then, have to be found in the
For no other part of the world demonstrates more clearly that
profound economic dislocations may have absolutely no relationship to
presence or absence of resources, density or sparsity of population,
geographical features or anything else outside of social malfunction.
Bolivia provides us with a startling example. Only 5,600,000 people,
or about one-tenth the population of France, occupy 424,165 sq. miles,
almost exactly twice the area of France. Thus, the population density
of Bolivia is 13.2 persons per square mile; in France, it is 252.
Descend from the high Bolivian altiplano toward the tropical
lowlands to the northeast, and you find 8,500 square miles of rich
soil where agriculture readily flourishes in the subtropical climate.
There are farms which successfully cultivate potatoes, sugar, coffee,
barley, rice, corn, bananas and citrus fruits.
But large parts of these sections have been given over to coca, which
enters into the drug trade and is dominated by ruthless individuals in
league with local officials and leading military and political
More significantly, high mountainous plateaux of Bolivia are
extraordinarily rich in almost every mineral -- tin, antimony,
tungsten, silver, copper, lead, zinc, gas, gold, iron. Her crude oil
reserves are thought to come to about 150 million barrels. But next to
Haiti, Bolivia is the most destitute country of Latin America, with an
average per capita income of $510 annually (1979). By
comparison, that of France is given as $8,980 (1980).
Behind the catalogue of statistics,
then, lie social factors which need to be uncovered so that the
policy-makers -- given the will -- can transform the societies of
Tyranny and Misery - Who's to Blame?
PART 2: THE U.S. CONNECTION
POLITICAL instability and personal dictatorship are characteristic of
most of Latin America. During the past decade, 14 of the 20 republics
have endured violent political coups, personal dictatorships of long
or short duration, or both.
This omits Mexico, which has been ruled by what amounts to a
one-party dictatorship with some ineffective minor party participation
since at least 1928; and by one-man caudillo rule back to the
1911-1917 revolution and before that to her independence from Spain in
1821; and Brazil, where military rulers have rotated in office since
1964 under a constitution or institutional acts that they imposed.
Bolivia, where no less than 190 different attempted coups d'etat (golpes
de estado) have occurred during her 157 years of independent
history, provides an extreme example. In the 15 years since 1969, nine
different golpes have thrown governments out of office.
If one goes back 35 years, Mexico is the only country in Latin
America that has not undergone some sort of violent political
upheavel. Even Costa Rica, renowned for its relative political peace
since at least 1902, had a brief revolt in 1948, as well as a
short-lived unconstitutional regime during 1917-1919.
Military or other types of non-constitutional dictatorship are
common. Some really famous, brutal dictators include Juan Vicente
Gomez (1908-1935) of Venezuela, notorious as "tyrant of the Andes";
Porfirio Diaz (1876-1911) of Mexico; Rafael Leonidas Trujillo
(1930-1961), bizarre and ruthless "benefactor" of the
Dominican Republic; the Somoza family (1933-1979) of Nicaragua; the
dreaded Francois and Jean Claude Duvalier, father and son (1957 to the
present) of Haiti; and Alfredo Stroessner (1954 to the present) of
Nor should we omit Cuba's Fidel Castro (1959 to the present), who
functions under rather different slogans but whose tenure and methods
do not depart substantially from those of the others.
These are but a few of the most notorious such personalities. But
they by no means exhaust the list.
Who, for example, has ever heard of Mariano Melgarejo, who ruled
Bolivia from 1864 to 1871, was illiterate and often in a drunken
stupor? A companion who may have helped to fill in some of the gaps in
his administration was Juana Sanchez, his mistress, said to be as
cruel as he was, though sober more of the time.
HOW DO WE explain both the distressing economic conditions of Latin
America and the endemic political disorder and penchant for illegal
dictatorship, usually under military auspices?
It would be fortunate if we could find some common element which is
at least partially responsible for both. This is not an impossible
chore. In the process we may even be able to offer some tentative
explanations for the Costa Rican exception to the Central American
A colonial tradition of exploitation and authoritarianism has had
influence on contemporary conditions.
The Spanish and Portuguese colonial systems of the sixteenth to
nineteenth centuries were not known for any special emphasis on
popular participation in government or economic egalitarianism.
However, most of Latin America has been free from colonial control
for over a century and a half; and the same colonial system that
produced Paraguay, Peru, Guatemala or Nicaragua also produced Costa
Rica and Colombia -- or even Chile and Uruguay in happier times than
Also, other countries of the world have known previous economic and
political miseries (e.g., Finland, Singapore, Botswana, Baltic states
except 1918-1940, etc.), and have been able to evolve into more
felicitous forms in less than 150 years.
It is a popular theme, especially among Marxists, to blame the United
States, and occasionally other foreign countries, for the ills of
By turning the whole hemisphere into a sort of factory scene where
the owner-employer sucks in surplus value from the exploited working
classes, and borrowing from Leninist theories on imperialism as the
advanced stage of capitalism, Marxists postulate that the "imperialist"
nations (today, usually meaning the United States only) grind down the
workers and peasants of Latin America -- indeed, whole countries -- by
taking in far more than is ever paid out in wages or investment. This
is presumably managed by offering the lowest possible prices for
imports, paying the minimum permissible wages where there is direct
foreign investment; and then charging the highest possible prices for
exports and services.
Thus, it is argued, Latin America is kept in awful misery; and,
conversely, the relative prosperity of the United States (or of other
"imperialist" countries) is explained in terms of the
poverty of the exploited countries of Latin America and elsewhere in
the Third World.
In the sense that U.S or other foreign companies in Latin America
tend to go along with local practice and pay lower wages than they
would in their home countries, there is no doubt. Thus, the practices
of foreign countries in Latin America reflect the milieu wherein they
However, it cannot be demonstrated that conditions under U.S. or
other foreign employment abroad are worse than those prevailing in
locally-owned industries or agricultural labour, and considerable
argument on this may be made to the opposite effect.
What is certainly clear is that miserable economic conditions
prevailed in Latin America before the United States existed. Large
scale U.S. investment did not begin in Latin America until nearly the
end of the nineteenth century, well after conclusion of the Civil War,
and Latin America had suffered from wretched conditions, civil war,
revolution and tyranny well before that.
Furthermore, nations which have heretofore undergone comparatively
little U.S. or other foreign investment (e.g., El Salvador, Paraguay,
Haiti; and Ecuador until recently) suffer from every bit as much
economic deprivation as do others where such foreign investment is or
has been more prominent (e.g., Costa Rica, Honduras, Peru, Bolivia).
Indeed U.S. economic investment in Canada in 1982 ($44,509m) was
greater than that in all Latin America put together ($3 3,039m) and
this pattern has prevailed for many years. With respect to trade, in
1982 U.S. exports to Canada ($39,564m) were greater than those to all
twenty republics of Latin America ($30,086m) and the same pattern
applies to imports from Canada and from Latin America, respectively
($46,477m vs. $32,513m).
Thus, if U.S. investment and trade practices are responsible for the
ills of Latin America, then Canada (with less than one-tenth
the population of Latin America) should surely be the most wretched
and poverty-stricken as well as politically chaotic country on earth.
However, her per capita income for 1982 is reported as $10,193 and
that for the United States, $11,107 -- a difference which confirmed
Marxists will no doubt argue is the result of U.S. exploitation of the
THE ARGUMENT about U.S. exploitation of Latin America as a cause of
her economic deprivation may be politically expedient for some
circles, but comparative analysis fails to support it.
In terms of a deleterious U.S. impact on political events, the
evidence is mixed. One may argue about possible U.S. influence in the
Brazilian revolt of 1964 or the Chilean of 1973, but it should be
noted that effective U.S. military or diplomatic interpositions have
generally been confined to northern Latin America.
There, the marines presided over an uneasy peace in Nicaragua from
1912 to 1933, broken only by attempts of followers of Augusto Cesar
Sandino to throw them out; but then, the rise of Anastasio Somoza to
power in 1933 and his ascendency to the presidency in 1936 followed
upon the heels of the departure of the U.S. Marines.
There is less obvious .connection between the emergence of Rafael
Leonidas Trujillo as tyrant-dictator in the Dominican Republic in 1930
and the departure of U.S. Marines from that republic in 1924; but both
Somoza and Trujillo received training from the marines, and a lot of
unseemly coexistence prevailed between the two dictators and U.S.
diplomatic personnel following their rise to power.
In the case of the Dominican Republic, the return of the marines in
1965 was followed by the longest period of constitutional stability
and more or less democratic peace in the history of the republic.
Thus, the U.S. may have redeemed itself in some small measure for
whatever hand it had in the persistence of the gruesome Trujillo
More to the same effect could be said about the dictator Fulgencio
Batista of Cuba, in and out of power at various times from 1940 to
1959; and in a sort of perverse way, the United States probably
contributed to the rise to power of Fidel Castro (1959 to the present)
as well as of the Sandinistas of Nicaragua (1979 to the
There is no evidence that U.S. occupation of Haiti from 1915 to 1934
had either positive or negative effects on a republic which quickly
resumed its more normal practices of chaos alternating with brutal
Of course this omits other direct and indirect U.S. impositions, as
in Panama, Mexico, Guatemala and elsewhere.
Also, there have been intrusions by other foreigners in both northern
Latin America and South America.
For example, there was very direct and quite demanding British and
French intervention into Argentine affairs during the earliest years
of her struggle for independence and union, from 1808 to at least
1838. The French did not help Mexican tranquility when they invaded
the country during 1838-1839, and in 1864 imposed the so-called
Emperor Maximilian on a fabricated Mexican throne.
Despite all this, it seems likely that the overall turbulence and
authoritarianism of Latin America would proceed along quite nicely,
with or without help from the United States or other foreign powers.
In most countries of Latin America, the absence of any U.S. or other
foreign intervention for long periods of time has done nothing to calm
or regularize their political habits.
THERE CAN BE no doubt that turbulence itself, as well as long periods
of grasping tyranny, have been disadvantageous to solution of economic
problems, as well as conducive to more of both turbulence and tyranny.
Also, the immense contrasts between the poor multitudes and the few
who are enormously wealthy cannot but contribute to the turbulence.
Generally low levels of education are certain to have negative
effects on either economic development or political stability and
constitutional government. Outside of Costa Rica, illiteracy afflicts
at least 50 per cent of the Central American population.
In Costa Rica, schools are everywhere and 90 per cent of her people
are reported as literate. Aside from Argentina, Cuba, Chile and
Uruguay in the rest of Latin America, no other republic can claim so
high a level of education.
The more usual rate of literacy in Latin America ranges around 60 per
cent of the population, but of course all such official figures, Costa
Rican or otherwise, are open to question. Low levels of education have
their impact on economic levels; and in reverse, may themselves result
from economic maladjustment and political disorder.
Other factors too numerous to delineate here probably play their
roles in specific instances -- cultural barriers between European and
Indian, climate in some cases, geographical barriers in others, past
battles and deep hatreds inspired by previous events, perhaps an
influence of religious philosophy or Spanish-Portuguese traditions in
some instances, and so on.
However, for each of these possible factors one may find one or more
Latin American republics whose conditions are not improved by their
absence -- or, conversely, are making remarkable economic and
political progress despite the presence of one or more of these
Therefore, we have to analyze the possible impact of one factor,
prevalent almost throughout Latin America, upon both economic
deprivation and political unrest combined with persistent
authoritarian rule: land monopoly.
Monopoly Landowners Wield the Real Power at the Expense of Others
PART 3: THE LAND FACTOR
LAND monopoly, especially in Third World countries largely dependent
on agriculture, has been identified as keeping down wages among both
agrarian and industrial workers.
 Furthermore, land monopoly
creates a special class of extremely wealthy, powerful, nonproductive
individuals who come to play dominant roles in any sociopolitical
Traditionally, and to a large extent to the present day, these
theoretical formulations describe almost exactly the condition of most
of Latin America.
In Argentina, some 6% of the total number of properties contain over
1,000 hectares (2,470 acres) each and cover about 75% of the total
cultivable land of the country. What is perhaps even worse, this
extremely rich black soil is largely given over to extensive cattle
grazing rather than to food crops. The land monopolists find it easier
and less expensive to utilize their vast holdings in this manner, and
have by now developed an important world market for their beef
For the most part, the same general pattern prevails throughout the
In Brazil, less than 1% of farm properties have over 1,000 hectares
each, but occupy 40 per cent of the cultivable land. In Chile, the
figures are given as 1.3% of properties having over 1,000 hectares and
occupying 72.7% of the land; in Peru, 0.3% of such properties covering
60% of the land; in Uruguay, 5.2% on 58% of the land; and in
There were sweeping transformations of this pattern in Mexico
beginning in the 1930s and in Bolivia after 1952, as well as the
programme of land collectivization in Cuba after 1959 and that of
distribution of land previously held by the Somozas in Nicaragua.
There are some other less significant modifications of the old
colonial-tenure system in Venezuela, Colombia, Chile and Peru. One may
question whether land monopoly by the political state in Cuba is an
improvement over the previous system.
In any event, to a large extent the same semi-feudal features still
prevail in most of Latin America as did a generation ago, when a
United Nations estimate in 1951 reported that only 1.5% of the total
number of farm properties, averaging more than 15,000 acres each,
contained half of the total agricultural land in Latin America.
The exact statistics have changed somewhat, more in some countries
than in others, but the fundamental generalisation is still valid: a
tiny majority not only pockets the economic rent produced by whole
nations, but also controls most of the socio-political centres of
power and makes impossible the development of stable constitutional
In some instances, so-called "land reform" may not have
fundamentally changed anything, except to transfer power from
landholders into other tight circles.
In Cuba, previous monopolization by a few Cuban and foreign owners
has been changed into monopolization by the political state or class,
wherein the National Institute of Agrarian Reform (INRA) manages huge
haciendas now called "people's farms".
receive credit from nationalized banks, especially the banco
ejidal, to say nothing of marketing services such as roads and the
nationalized railroads, all of which are not only subject to central
political control but also to immense corruption.
PATTERNS of land distribution in most of Central America are similar
to those for the rest of Latin America.
For purposes of closer analysis of this region, we will turn our
o The percentages of surface occupied by the great estates;
o The proportions given over to tiny properties of five hectares
(eleven acres) or less which are normally inadequate for family
sustenance and, more significantly:
o The proportions of farms of five to 500 hectares, which are of
moderate to large but not enormous size, and are usually sufficient to
provide both for sustenance and for commercial crops, and thus some
promise of adequate human life.
Because of certain unusual features, analysis of Costa Rican land
distribution will be postponed until we can review patterns of land
tenure in the other four republics of Central America. First, they
will be seen in conjunction, and then briefly described separately.
The dictum of Henry Clay, that "statistics are no substitute for
judgment" should serve as a warning as we approach statistical
reports from Central America. Though compiled by the most reputable
and competent institutions and individuals, they are drawn from
reports of official government sources, or from UN data which are
themselves largely dependent on the same governments for their
information. Especially outside of Costa Rica, government agrarian
enumerations can be easily influenced by political considerations
favourable to dictatorial regimes, and in any event may be less than
totally accurate. Their tendency might be to present their
countries' situations in the best rather than the worst light.
Also, even the most dependable reference (Statistical Abstract of
Latin America) must depend on sources that are two decades or more
out of date -- e.g., El Salvador, 1971; Guatemala, 1964; Honduras,
1966; Nicaragua, 1963. There may be some merit to this, in that at
least they purport to show conditions of land tenure prior to current
disturbances. Finally, such statistics tell us nothing about
conditions of individual properties in terms of fertility, location,
use, topographical conditions, altitude, prevailing weather or types
Table 1 presents a summary of the reports from each country, with
percentages corrected in a very few instances.
The table tells us nothing about the numbers of plots owned by
individual owners. For example, the figures for Nicaragua (1963) were
gathered during the Somoza dictatorship, when the Somoza family was
reputed to have bought up over a quarter of the cultivable land, and
was not highly renowned for statistical reliability.
The figures for El Salvador were obtained in 1971, during the
administration of Colonel Fidel Sanchez Hernandez, when the Salvadoran
military establishment was undertaking some mild social reform or at
least trying to gain a reputation for doing so. Also, El Salvador has
been long regarded as a country where a few individuals are likely to
own large numbers offincas and haciendas around the
Assuming there is any validity to the above statistics, an important
step at this stage is to add the hectare areas of all four countries
and take averages of percentages, as in Table 2.
This at least gives a summary of the overall situation thought to
prevail in the four republics of Central America above Costa Rica, at
the same time that reports for individual countries permit an analysis
of each. It will be seen that in the larger area summarized, about
0.35% of the total number of farms are thought to occupy 35.73% of the
cultivable area. Of course a very few immense haciendas can be
expected to occupy a huge portion of a national domain, so it is even
more significant to determine how the rest of the land in the region
At the other end of the scale, 774,007 microscopic mintfundia
below five hectares in size constitute 79.7% of total number of farms,
though only 11.41% of cultivable land (1,363,000 hectares out of a
total of 11,943,000). So, of the total number of farms in the four
countries, how many and what percentage are what might be called
viable but not immense economic units, that is, fincas with at
least five hectares but not over 500 hectares each? Not more than 20%
(193,013) of total farms can be said to be in this category. The
remainder are either enormous haciendas employing thousands of
campesinos (peasants), or little plots insufficient for a
family to keep body and soul together. Their owners must in most
instances find other employment or live in hopeless penury.
Thus, the countries of Central America illustrate the significant
role played both by land monopoly and by skewered distribution
patterns in distorting what might otherwise be satisfactory economic
as well as political conditions.
TABLE [not provided]
If more evidence is needed, it is provided by Costa Rica.
FOR VARIOUS historical reasons, but largely because the Indians of
the area were too ferocious to be enslaved, and valuable mineral
resources for export were nonexistent, early settlers on the meseta
central of Costa Rica had to do their own work, so the land became
better distributed than elsewhere in Central America.
As in the rest of Central America, agriculture is still the most
important economic activity and directly involves about one third of
the population of 2.3m; also, as elsewhere in the region, a farm of
five hectares (eleven acres) is usually the minimum needed for basic
support of a family. Here we find a pattern that has similarities to
those we have already reviewed, but close examination (Table 3)
reveals differences important enough to suggest some explanation of
Costa Rica's rather unusual economic and political characteristics.
At first glance, this seems familiar to other tenure arrangements in
Central America, in that 795 haciendas (mostly cattle ranches
on the Guanacaste Peninsula and some fruit plantations on both coasts)
constitute about 1 % of the total number of farms and occupy 36% of
Costa Rican agricultural territory.
However, in contrast to much larger percentages in other Central
American republics, averaging 79.7 (Table 2), the tiny minifundia
of Costa Rica comprise 46% of her total number of farms.
When we come to the small-to-large fincas of between five and
500 hectares, the differing pattern of Costa Rican agricultural life
is immediately apparent. In contrast to a norm of about 20% in the
rest of Central America, in Costa Rica some 40,960 such farms
constitute 53% of the total number. In this comparison, the figures
reported from Nicaragua could be troublesome, but as we have
explained, are not likely to provide an accurate portrayal of the pre-Sandinista
situation in that country.
Also, most of the Costa Rican small-to-medium sized and therefore
economically-viable farms are family-owned affairs, not a matter of
several properties under one owner such as the Somoza family. After
recognizing that the immense haciendas do occupy a large part
of Costa Rican territory, the Biesanz team reports:
One must recognize, nevertheless, that between these two
extremes there exists a very large number of properties of medium
size. Fifty-three per cent of agrarian properties consist of fincas
from 5 to 500 hectares; 39% are in fincas of 5 to 50
hectares. The most productive type of property is the family finca;
it utilizes a minimum of paid labour except perhaps a few dozen peones
during harvests; it is dedicated to a type of cultivation that
requires intense labour; it uses fertile soil and produces for its
owners some cash profit.
From other statistics offered by Biesanz, we can assume an average of
six persons per family, so that something like 240,000 people are
dependent on largely family-owned and operated farms. These constitute
about one third of the some 700,000 to 800,000 Costa Ricans who are
dependent on agriculture for their livelihood, who themselves make up
about one-third of the population.
Similar ownership patterns may be found in other sectors of the
economy, where over a fifth of the population are patrones
(employers) or working for themselves. Over half of Costa Ricans own
their own homes.5 For Latin America, this is phenomenal.
At its base lies a distribution of land ownership which, while not
perfectly equitable, is at least an improvement over that of most of
the rest of Latin America.
It is quite likely that the rather more equitable distribution of
land in Costa Rica contributes in some degree to the unusual political
stability of the country.
TABLE [not provided]
It is notorious that in all of Latin America, constitutions were
borrowed wholesale from the U.S. Constitution of 1789 -- with
presidential system, the so-called checks-and-balances among the three
branches of government, statements on civil rights, and in some
instances (Mexico, Brazil, Argentina, Venezuela) even the federal
system, which had emerged in the United States out of controversies
between small and large states, and perhaps even from practices of the
Iroquois Indian nation, neither of which were to be found in Latin
In Argentina, constitutional farmers even borrowed the unworkable
notion of an electoral college -- now substantially defunct in the
United States -- for the indirect election of their presidents, and
their renowned Constitution of 1853 contains important phrases and
paragraphs lifted directly out of the U.S. Constitution.
Such constitutions were total misfits in nations having none of the
social features of the United States, and dominated by tiny minorities
of landowning elites.
Costa Rican constitutions, providing as they do for a presidential
system, have always borrowed from the U.S. The Constitution of 1949,
now in effect, goes farther and through a system of decentralized
authority, largely dilutes the role of the president to a much less
significant one than is found in presidential systems, especially in
Latin America. Its famous Article 12 provides that "the Army as a
permanent institution is proscribed". The constitution contains
all sorts of ingenious sections designed to protect the sanctity of
elections, to guard against tyranny, and to guarantee that all civil
rights shall be observed. In many ways, the Costa Rican Constitution,
even more than others before it, reflects rather accurately the
relatively egalitarian and sociologically democratic nature of the
If there is validity to this theory that constitutions and laws
incongruent with socio-economic and that harmony between the two
elements minimizes disorder, it means that there are three possible
ways to avoid hopeless conflict between constitutional aspirations and
One is to adjust the legal-political system to the actual economic
and social configuration, as was done with remarkable success during
the reign of Pedro II of Brazil from 1840 to 1889 -- the longest
period of constitutional tranquility in the history of Latin America.
The monarchy under the Portuguese Braganc. a family accorded with the
political experience of Brazilians as they had known it under
Portuguese rules, and while governing in as enlightened a manner as
possible, it let itself be guided in large measure by the economic
A second device is to disregard constitutions and laws, rule by naked
force, and change government in the same manner. This has been the
pattern throughout most of Latin America.
A third is to have the good fortune to have a socio-economic system
that is not too far out of line with the aspirations of the
constitutional system. This is largely the case in Costa Rica, where
peace and constitutional democracy usually prevail.
Fred Harrison points quite rightly to the inadequacies of almost any
programme of simple, immediate land distribution.
It does not take care of new members of the society who can make their
claim to land already in private possession, it does not adequately
answer the question of justice, it does not assure that lands may not
again fall into fewer hands through sale, and it is only over a very
long period of time that such division can overcome the new problems
of marketing, roads, adequate machinery and technical competence,
credit, and all the host of other needs formerly adjusted to a system
of immense hacienda agriculture.
However, such a system might be more workable if deeply entrenched
for long periods of time, with all the habits of inheritance,
transportation and marketing which may be developed over many years.
In Costa Rica, a system of rather better distributed land than usual
has been in existence since settlers first came to the region in 1560.
Of course it is not fully just, because many participants in the
system can make a just claim, either to a piece of land or to a share
in the unearned value arising from both rural and urban lands.
However, the phenomenon of more or less accidental distribution of all
types of land means that a very large number of people cannot be
easily pushed around, and this can have an important impact on the
rights of all.
In any event, our examination or land tenure systems elsewhere in ,
Latin America suggests most strongly that they are a large part of the
explanation for both extreme poverty and for almost continuous
political disturbance. If confirmation were needed, it is provided in
part by the exceptional socio-political system of Costa Rica, which
also displays an unusual though by no means perfect pattern of land
Marxism and Corruption
Just Two Obstacles to Land Reform
PART 4: GEORGIST CHALLENGE
THE BEST remedy for countries suffering from land monopoly is a
system which collects for public use the unearned values arising from
land ownership, without disturbing possession or use of the land by
its present owners.
This would relieve the productive forces of society, including
farmers, of the burdens of other tax impositions. The prescription, as
one sloganeer once put it, is that "instead of paying taxes to
the state and rent to the landlords, let's pay rent to the state and
In theory, this is certainly the remedy for Latin America. Whether it
can ever be accomplished is a question which deserves serious
consideration. There are obstacles. One is Marxism.
REVOLUTIONARY movements and young idealists offended by social
inequity are dominated by Marxist theory. The
fidelistas of Cuba, the Sandinistas of Nicaragua and
the Frente Marti de Liberacion Nacional (FMLN) of El Salvador
illustrate the point.
In Peru, a violent Marxist-Maoist type of movement called Sendero
Luminoso (Shining Path, of all things) utilizes extraordinarily
violent terrorism to play havoc, especially in the southern parts of
the country, and threatens to tear the republic apart. Whether we
refer to the Montoneros of Argentina or the Tupamaros of Uruguay, both
of whom had a lot of responsibility for the military suffocation of
democracy in those countries in the 1970s, we are talking about
In Colombia, the sickening violence wrought by the PARC (Fuerzas
Armadas Revolucionarias de Colombia) and M-19 (Movimiento 19 de Abril)
is the work of Marxists.
During 1970-1973, it was hoped by many that the problems of Chile
would be corrected under the presidency of Salvador Allende, leader of
the Chilean Socialist Party, actually an extreme Marxist party
somewhat to the left of the Communist Party of Chile.
In 1965, rebels overthrew an illegal civilian junta in the Dominican
Republic. Soon after, the country was occupied by OAS forces composed
primarily of U.S. Marines. The rebels themselves were soon overrun by
Marxists, and their leader, Caamano Deno, fled to Cuba.
In each country, parallel examples are available. Wherever profound
movements for social transformation are in progress, they are either
Marxist or soon overwhelmed by Marxist leadership.
The apristas of Peru (APRA: Alianza Popular Revolucionaria
Americana), who emerged in the 1920s from Marxist origins, might be
said to have become an exception; but, compared to what they were in
the days when they were led by the electrifying Victor Raiil Haya de
la Torre, they have now become a pusillanimous adulteration of their
Despite their cries of "Land for the Landless", Marxists
are never satisfied to distribute it to needy peasants, much less to
just collect its economic rent and free the productive elements of
society of burdensome taxation.
The other side of the coin is that, except for Argentina and the
Dominican Republic, and despite all the clamour for land reform,
almost no one in Latin America has ever heard of the ideas of the
physiocrats and Frangois Quesnay, or Henry George and his single tax.
Until his death in 1982, Mauricio Birabent led the Social Agrarian
Party of Argentina, which espoused doctrines based on single-tax
ideas.2 Today, a distinguished Argentine architect, Juan Carlos
Zucotti, represents the same point of view and has important contacts
among journalists and followers in Argentina; but as a consequence of
earlier exile, he still resides in the United States, where his
efforts are concentrated on correspondence with Argentine leaders and
an influential role among Argentine exiles abroad. Dr. Hector R.
Sandier is an Argentine Georgist who directs an Argentine newspaper
called Democracia, and leads the new Party of the People.
In the Dominican Republic, it is conceivable that some real progress
may occur. There, the vigorous and able Lucy de Silfa is director of a
Henry George School that since 1966 has graduated at least 9,000
students, many of whom are influential in public affairs.
However, the movements that make the headlines in Latin America are
Marxist. Even in the Dominican Republic, the Communist Party occupies
one of the most prominent party headquarters in the country, a block
from the Sheraton Hotel.
For almost all Latin Americans, Marxism provides; the only path to
social transformation. It is the only known message.
This has serious security implications for the United States, because
Marxist movements invariably invite collaboration from Marxist allies
abroad, notably the U.S.S.R.; but even the United States has had the
wit to search for alternative solutions to the horrendous problems of
American and British single taxers, like others in the United States
and United Kingdom, are not often familiar with Latin America, much
less adept at Spanish or Portuguese. There is a very small group of
Georgists in Spain, remnants of an earlier period when they were led
by Bias Infante Perez (1885-1936), who combined the idea of an impuesto
unico with that of autonomy for Andalusia; but they have all they
can do to keep from disappearing entirely, let alone make contact with
their counterparts in Latin America.
Therefore, and despite the apparent applicability of the impuesto
unico to Latin America, a first problem is to carry the message
over the shouting of the Marxist revolutionaries, and to find the
people who can do so. Also, of course, Georgists or physiocrats of
today, whether in the United States or elsewhere, tend to be hampered
by a certain mental paralysis when it comes to taking political
CORRUPTION is the next obstacle to reform. Even assuming that some
sort of single-tax programme could be adopted anywhere in Latin
America, the problem of corruption could easily subvert it.
Many years ago, Professor Rosendo Gomez aptly referred to the
phenomenon as "the concessionary view of public office" --
that is, that public office is occupied for the personal profit of its
holder, not for any particular service that might be performed for the
In Argentina, there is a popular saying among office-holders: "Don't
be a fool! Take advantage of your opportunities while they are
available!" Attitudes of this type abound, and are confirmed by
personal observation. In Latin America, I have seen, drivers who,
having violated the law, hand over wads of money to police agents, and
have been told by border inspectors, "Nos entendemos, no!" ("We
understand each other, don't we!) -- which means a tip is expected. At
one time at the border station at Nuevo Laredo, inspectors posted
signs in English which said, in effect, that they were only earning so
many pesos per day, so help would be appreciated.
o Jose Lopez Portillo of Mexico rose from his earlier post as a
professor of economics to become Minister of the Economy under
President Luis Echeverria Alvarez and then president from 1976 to
1982, and left that high office as one of the richest men in the
o Adolfo Ruiz Cortines, president of Mexico from 1952 to 1958,
carried on a campaign against corruption; but it is widely reported
that when he left office, his wife owned most of the dime stores of
o When Jacobo Arbenz of Guatemala was overthrown by followers of
Carlos Castillo Armas in 1954, he took refuge in Mexico -- but not
before loading a truck with $3m in gold ingots, which were transported
to the Mexican Embassy for later shipment, along with Arbenz and his
wife (and, presumably, a cut for the Mexicans).
o Not to be outdone, Juan Domingo Peron of Argentina is reported to
have transferred $800 million to Spain in 1955; and Marcos Perez
Jimenez, $500m from Venezuela to Florida in 1958. Perez Jimenez was
later extradited to Venezuela, where he was tried for plundering the
public treasury, and sentenced to a luxurious suite in Caracas.
o In 1973, Argentines showed their gratitude to Peron by re-electing
him by a 62% majority, and he returned from Spain to the hysterical
huzzas of his massed supporters; but on July 1, 1974, had the good
grace to die before again emptying the treasury.
What we call corruption arises from a colonial experience upon which
we cannot dwell here; but the point is that an effective single-tax
system requires equitable assessment procedures, freedom from coercion
by owners of the land, impartial preparation of tax notices,
collection which is impervious to threats, bribes or other pressures,
and finally that the money itself goes into the public treasury, not
into the private accounts of individual officials. This is a
stupendous problem which lies in ambush to thwart the best possible
reforms in the realm of single-tax theory.
ANOTHER problem is the political chaos already discussed. Before a
suitable system of single-tax reform can get off the ground, there can
be one or more revolutions which can sweep the whole thing out the
door. How, for example, can one imagine adoption of a tax shift from
production to land values, in a country such as Bolivia?
If we reflect on the confusion of assessment procedures among the
various local governments of the United States, we cannot but wonder
what would happen if a single-tax reform were to be adopted almost
anywhere in Latin America. In most of the region, for example in the
Dominican Republic or Peru, there is no such thing as a property tax
of any kind. How does one introduce scientific assessment of land
values only, to a country that has never heard of a property tax?
Furthermore, in Latin America outside of a few republics (e.g.,
Mexico, Colombia, Brazil, Argentina, Chile), there is no fully
developed merit system or protected civil service in any modern sense.
Even where these do exist, they may be swept away by sudden shifts in
the patterns of political power.
Though there are many highly competent and dedicated people in the
civil services of Latin America, in many instances working against
formidable odds, there is but little assurance of continuity in
office, much less the educational preparation needed to perform such a
specialised role as that of tax assessor or appraiser, tax collector
or the treasurer or auditor who controls accounts. This is not to say
that such people do not exist, and I happen to know several of them
whom I greatly admire; but the assurance that they exist in sufficient
numbers in each country, or can stay in office long enough to put any
sort of long-range single-tax programme into effect, is open to
considerable question. Of course this does not preclude such a
possibility from occurring in specific countries where very able civil
service people are available, such as Argentina, Uruguay, Costa Rica,
and perhaps others including Venezuela or Colombia.
FINALLY, the very oligarchies that reforms would be designed to root
out would pose the most threatening obstacles to their implementation.
These rich and powerful individuals can threaten or bribe officials,
and as we have witnessed in El Salvador, are not above murder if it is
thought to suit their designs.
These are precisely the persons who are likely to be most
influential in political circles.
It seems clear, then, that land monopoly lies at the root of much of
the economic tribulation as well as socio-political chaos of a large
part of Latin America. It is also theoretically likely that a shift to
a physiocratic solution would help to resolve many of the most
grievous problems of the area. It is by no means clear that such
solutions can be put into effect, except possibly in the Dominican
Republic where many influential people understand Georgist proposals
and where a number of very dedicate^ and competent individuals, some
of them under Georgist influence, may be found at various levels of
Once such a programme could be put into effect in one Latin American
republic, and kept in place long enough to have a beneficial impact,
it is conceivable that others of the more advanced countries would
take interest and try similar experiments.
Otherwise, it would appear that the obstacles to such a turn of
events in Latin America require much more discussion among advocates
than they have thus far enjoyed.
Landless Go Hungry
FROM 1838 (break-up of the Central American federation) to at least
1920, political life in El Salvador was marked by struggles between
the so-called liberals and conservatives, which kept the country in a
state of almost chronic agitation and produced no less than thirty
different presidents, some of them at the rate of two or three per
Between two short intervals of relative peace (1919-1927 and
1945-1979), Maximiliano Hernandez Martfnez ruled from 1931 to 1944 as
an unusually brutal dictator who also dabbled in superstition and
After 1950, a sort of semi-constitutional stability interrupted by
one successful revolt turned military presidents in and out of office
every six years until 1979, when everything went to pieces because of
elections which were unusually fraudulent, even for El Salvador.
Currently, of course, the country is being even more drastically torn
apart by civil war which is characterized by extraordinarily vicious
violence from both the extreme left and the extreme right.
In 1980, the transition government of Jose Napoleon Duarte
ley basica (basic law) which was designed to get one third of
El Salvador's 1,715,000 hectares of cultivable land into the hands of
210,000 landless peasant families. The civil war and socio-political
turbulence have thrown the whole reform programme into chaos.
Utilizing terror, violence and murder, former landlords have tried to
reoccupy "their" estates, and the frightening conditions of
the countryside drive peasants off their new lands and into either the
arms of the Marxist guerrilas or into the cities.
Until recently, there was much truth to the popular; conception that "fourteen
families" -- of course, each one encompassing many people --
owned most of the land and therefore ruled the republic through their
military surrogates. The rest of the population of four and a half
million could either come to terms with one of those families, or
survive by begging, brigandage, or emigration.
In a valuable study. Professor William H. Durham argues that the
so-called Soccer War of 1969 between El Salvador and Honduras was not
necessarily caused by a scarcity of land which impelled Salvadorans to
flock into Honduras, but by the distorted distribution of land in El
Salvador.1 More specifically, his point is that with introduction of
coffee and cotton as commercial crops in the late nineteenth century,
land became more monopolized than previously, Indian communal land was
absorbed into the .big new estates, and that this transformation
converted agriculture from basic food needs to export crops.
In the middle of this century, the effect has been to drive landless
and hunger-stricken Salvadorans into other countries, especially
adjacent Honduras; but for precisely the same reasons. Honduras was
not better able than El Salvador to take care of these thousands of
Violence, Bribery and Land Monopoly
FROM 1838 to 1933, Honduras underwent almost uninterrupted turbulence
among military and other factions calling themselves Liberals and
Then there was the sixteen-year dictatorship by General Tiburcio
Carfas Andino (1933-1949), followed by three civilian presidents
(1949-1963), with an intervening revolt and military junta in 1956.
This period was followed by the dictatorship of General Osvaldo L6pez
Arellano, who seized power in 1963. He was overthrown in 1975 "for
the honour of the nation" when it was revealed in the United
States Senate that he had accepted a bribe of $1,250,000 from the
United Brands Company (formerly United Fruit) to keep down the export
tax on bananas.
Had not this indiscretion become so well known abroad, he might still
After another military regime. Honduras has been under constitutional
civilian presidency since 1982. But this was increasingly subject to
military control by the commander-in-chief. Colonel Gustavo Alvarez
Martinez, until he was ousted from his position under orders from
President Roberto Suazo Cordoba, sent into exile on April 1 of this
year, and replaced by none other than Brigadier General Walter L6pez
Reyes, a nephew of Osvaldo Lopez Arellano.
Honduras has acquired something of a reputation for less than usual
land monopoly in her almost inaccessible hill country, where very poor
farmers are said to depend for their livelihood. However, fewer than
one third of all farms contain between five and 500 hectares, to
provide some sort of decent living for their owners. This is
admittedly a better situation than those in Guatemala or El Salvador,
but one which is far from providing satisfactory sustenance for more
than a small portion of her agricultural population.
1. James W. Wilkie and Paul Turovsky,
eds., Statistical Abstract of Latin America, 1984 (22nd ed.;
Los Angeles: UCLA Latin American Center, 1983).
2. Argentina, Chile, Cuba, Bolivia, Ecuador, El Salvador, Guatemala,
Haiti, Honduras, Nicaragua, Panama, Paraguay, Peru, Uruguay.
Exceptions are Costa Rica, Colombia, the Dominican Republic and
3. It is told that one day when the British Ambassador called on
President Melgarejo to present his credentials, the dictator was
sitting at his desk, beside which stood his burro. Melgarejo, being
quite drunk, told the ambassador to present his credentials to the
burro, which the diplomat hesitated to do. So, the story goes,
Melgarejo had both the ambassador and the burro led outside to the
plaza in front of the presidential palace, where the surprised
diplomat was compelled to ride around the plaza several times on the
burro, facing backwards. That over, he packed his bags and returned to
Britain by the first available means, and reported the incident to
Queen Victoria, who asked, "Where is Bolivia?" "Here it
is, Your Majesty," replied the ambassador, pointing to a map. The
Queen picked up a chalk, crossed out Bolivia, and announced, "Bolivia
does not exist!" Bolivians get quite indignant about this story,
and take pains to deny it ever happened. In 1955, one H Vazquez
Machicado published a book in La Paz, entitled La leyenda negra
boliviano: La calumnia de la borradura del mapa ("The
Bolivian Black Legend: The Calumny of the Erasure from the Map").
4. For more details on this, one may consult Thomas L. Karnes, Tropical
Enterprise: The Standard Fruit and Steamship Company in Latin America.
(Baton Rouge: Louisiana State University Press, 1979).
5. Fred Harrison, Land Reform or Red Revolution (London: Economic and
Social Science Research Association, 1980).
6. Derived from James W. Wilkie and Stephen Haber, eds. Statistical
Abstract of Latin America, 1984 (Vol. 22; Latin American Center
Publications, University of California at Los Angeles, 1983), Table
502, p.56. There are some limitations to this type of analysis, and it
is also important to know how many properties of what size occupy the
remaining portion of the land of a given country - assuming there is
enough remaining portion to be significant. However, if doubts remain
on this score, one should consult Solon Barractough, Agrarian
Structure in Latin America (Lexington, Mass: D. C. Heath & Co.,
1973X which utilizes seven case studies (Argentina, Brazil, Chile,
Colombia, Ecuador, Guatemala, Peru) and confirms that this pattern of
concentration of land ownership prevails almost throughout. Of course
there are special cases such as Cuba or Mexico - or Haiti, which is
plagued, not by land monopoly, but by microscopic properties called
minifundia, as well as forest removal and devastating land erosion, to
say nothing of 90% illiteracy and unremitting tyranny.
7. See R. Bruce McColm, El Salvador: Peaceful Revolution or Armed
Struggle (New York: Freedom House, 1982); Thomas P. Anderson, The War
of the Dispossessed (Lincoln: University of Nebrasks Press, 1982);
William H. Durham, Scarcity and Survival in Central America:
Ecological Origins of the Soccer War (Stanford University Press,
8. Richard and Karen Biesanz, Los costarricenses (San Jose: Editorial
Universidad a Distancia, 1979), p. 142.
9. Ibid., pp. 138, 289. In 1959, I carried out research in
Costa Rica which depended on documents and studies made in the country
by official agencies and scholars. Though the results differed in
detail from contemporary findings, the overall patterns were to
exactly the same effect: more land and other property is owned by a
larger proportion of the population than elsewhere in Latin America.
Busey, Notes, pp. 60-72. More recent research in Costa Rica provided
further confirmation of these findings. Without any statistical
backing, simple observation of town and countryside, where separate
family homes are to be seen everywhere, . indicates a unique style in
Costa Rican life. Since at least the eighteenth century, travellers
have reported to the same effect.
10. Harrison, op.cit., pp. 15-18, 22-23 et passim.
11. Actually, the first measure among ten advocated by the Communist
Manifesto of 1848 was, "Abolition of property in land and
application of all rents of land to public purposes". (New York:
International Publishers, 1948), p. 30. This was curious since land
itself was only rarely mentioned elsewhere in the Manifesto, which
instead stressed industry, the "bourgeoisie", "capital",
the "proletariat", and other concepts that remained
undefined. Despite their lack of any introductory explanation, Marx
and Engels thought it important to focus on land as Priority No. 1.
12. The term "single tax" was used by Robert Turgot
(1727-1781; impot unique), Bias Infante Perez (1885-1936; impuesto
tinico), Henry George (1839-1897) and all other leaders of the
movement when it had its greatest impact in the United States and
around the world. It does seem to express the idea that there should
be only one tax, on land values, not just the addition of such to all
13. See Luis E. Aguilar, Marxism in Latin America (Rev. ed.;
Philadelphia: Temple University Press, 1978); Donald L. Herman, ed.,
The Communist Tide in Latin America (Austin: University of Texas
Press, 1973); Rollie E. Poppino, International Communism in Latin
America (Glencoe, 111.: The Free Press [Macmillan], 1964); William
Ratliff, Castroism and Communism in Latin America, 1959-1976
(Stanford: Hoover Institution Press, 1976); William E. Ratliff, ed.,
Yearbook of Latin American Communist Affairs (Stanford: Hoover
Institution Press, annual); Robert Wesson, ed., Communism in Central
America and the Caribbean (Stanford: Hoover Institution Press, 1982).
14. R. A. Gomez, Government and Politics in Latin America (New York:
Random House, 1962), p. 19. 5. On Mexico, more in the same vein may be
found in Kenneth F. Johnson, Mexican Democracy: A Critical View (Rev.
ed.; Praeger, 1978), pp. 166-167, 236-237 et passim. 6. Busey, Latin
American Political Guide, 3rd ed., 1958; 16th ed., 1975. 89