Tuesday, September 13, 2005

The New Feudalism

Venezuela is going the way of Zimbabwe. Chavez is actively destroying private property and effectively running foreign investors out of the country.

Over 300 ranches have been taken over by the state. They have been broken up into 37 acre parcels and then redistributed to others. Who owns these parcels?
Mr. Pimentel, who is charged with doling out the confiscated land parcels in his territory, is greeted everywhere by men in beat-up cowboy hats and worn clothes, all seeking pieces of land.

He argued that the huge land holdings do not legally belong to the families that work them, but were taken illegally in the 1930s—in one case as far back as the 19th century. The land, he says, belongs to the nation, and thus to the people.
The state owns the land. Those given parcels to work are merely tenants. Some would call this socialism, but in effect it is a new feudalism. The state is king, the bureaucrats are petty lords, and the farmers merely modern serfs. When many of them fail to manage their farm properly, they will lose their land in the next series of reforms.

Even those who receive parcels will have a hard time of it. 37 acres is more than enough land to subsistence farm. It is even enough land to grow high commodity niche crops upon, like organic foods. But when you discuss modern farming practices used for mass farming production, you aren't talking about parcels of 37 acres. By going that small you have destroyed the economy of scale. Maybe they can get some of that economy back by sharing resources among parcels. I doubt it will be enough to bring it up to previous levels when those parcels collectivised by being owned by the same guy.

Chavez next initiative is to sieze underutilized factories. Many of which are underutilized or vacant for good economic reasons. I predict disaster here too.

As much as I dislike Pat Robertson and what he said, sometimes I wonder if he wasn't right. A lot of people will die because of this.

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