This is the second in a series of posts on the Venezuelan ranchitos.

In “Venezuela, ranchitos (or barrios) are like Brazil’s favelas, the shanty towns which grew around Rio de Janeiro and now are ubiquitous in metropolitan areas throughout country. Argentina has Villa Miseria or asentamientos; Chile has campamentos; Colombia, tugurios; and so on.

“To generalize, these are ‘informal settlements.’ Man-on-the-street terms range from slums to shacks to squatter settlements, etc.”

The approach of politicians to this phenomenon is to assume “they’ve always been there” and then to figure out how to get rid of them or how to induce the millions of people living in them to leave for other, more conventional housing.

However, politicians have been “attacking” the ranchitos for generations now, and all with no success. I believe the lack of success is at least partly due to the modern affliction that causes folks to believe that history began with yesterday’s newspapers. In the case of the ranchitos, it might be helpful to look at the background and approaches to land ownership throughout the American Spanish colonies and subsequent generations.

Our prior post dealt with the encomienda system, whose intention was to protect, catechize, and instruct the native population. This system did not include a transfer of land ownership to the Spanish encomendero, but was rather a trust of limited duration, at the end of which formal, legal title to the land would be granted to the Indians (read here for more Ranchitos I).

Seeing its limitations and perverse incentives, the Spanish crown, after several unsuccessful attempts to abolish it, finally succeeded in ending the encomienda system by royal decree in 1717. However, it continued in use till the early 19th century.

What followed the encomienda system was the equally-maligned hacienda system, which was an improvement, and whose success, including the treatment of laborers and native population, depended much on the character of the hacendados. When researching this system, the student will often come across charged and provocative terms like, oligarchs, feudal lords, and absolute power. Such terms deserve to be accompanied by a couple boulders of salt.

In some cases, but by no means all, the encomenderos under the encomienda system became hacendados under the hacienda system. 

Hacienda often refers to a vast landholding producing agricultural products for export. That’s a concise, but too limited definition, as haciendas could also refer to mining areas and even factories. In many cases haciendas included several commercial activities.

The principal distinction between an hacienda and an encomienda is the fact of land ownership. The hacendero was granted title to the land by the crown (land grant). In addition, the natives on an hacienda were considered free labor and many haciendas had families who had worked faithfully for the hacendero family for generations. 

The origin of the hacienda concept goes back to the latifundium of ancient Rome. In fact, large landholdings in Venezuela are (were!) known as latifundios, whereas small ones are called minifundios. These range from vast cattle ranches or commercial agricultural concerns, to small, family, subsistence farms, also called conucos. But, generally, the Roman latifundium is known as hacienda in Spanish. 

The administration of haciendas or latifundios in Venezuela depended on the character of the hacendero. Depending on your sources, you’ll read that the holdings were run based on slave labor where the hacendero had the power of life and death over the laborers, a wholly negative view. However, you’ll also hear of great men of business whose character commanded unflinching loyalty by his laborers, who were paid their daily wages, and who remained with their employers for generations, a wholly positive view. Could it be that, like much in life, the truth is somewhere in the middle? 

As with ancient Rome, latifundios were considered “spoils of war” or great grants which recognized some achievement or service to the king or to the realm. These reflected great private power and in many cases were also the backbone, or part of the backbone, of the region or area in which they operated. They created wealth, stability, and continuity, not to mention the projection of the area’s production to other parts of the country and to foreign lands. In sum, these were large, successful business enterprises. For example, the Puerto Rico haciendas were known for their sugar cane and coffee and whose crops were exported.

What is usually heard about the land grants system is that it eventually resulted in 2% of landholders owning 80% of the land (figures vary, but not by much). Such government statistics are notoriously unreliable, but let us stipulate them as correct for now. Their own figures also tell us, in the case of Venezuela, that as late as the 1930’s agriculture accounted for 22% of GDP and 60% of labor, including exports of crops. After “democratic” land reforms, agriculture accounts for about 5% of GDP and 10% of employment and all food is imported.

We can debate the impact of “modernization” on those figures, but our debates must not ignore the effects of “land reform”, which also coincided with the rise of the ranchitos. 

Was this coincidental or is there a causal conjunction?