The first 5 posts in this series on ranchitos, looked at the centuries-old history of land ownership in Venezuela (and in much of Spanish colonial America, including parts of what became the United States). One aspect of landholding, consistent throughout the centuries, up to the late 1950s, was a respect for private property, whether it belonged to small landholders or large.

This changed dramatically with the first democratically-elected president of Venezuela, Rómulo Betancourt. (For more on Betancourt, see here and here.)

In 1958, Venezuela had the 4th highest per capita GDP in the world, despite being governed by military governments since the turn of the century. Its monetary policy was stable and property rights were respected and honored. 

Marcos Pérez Jiménez went into exile in early 1958, and a new democratic regime was installed under Mr. Betancourt. His government, and that of his successors, completely overthrew the mostly non-interventionist political order that, with fits and starts, had ruled the day for over a century. This is not the place to discuss the Punto Fijo Pact, which, in effect, ultimately centralized political control in two major parties. But it is necessary to note that both parties were socialistic and interventionist.

To quote a Venezuelan writer: “In 1958, Venezuela became a democracy when the dictatorship was overthrown. With that came all the usual benefits of democracy such as freedom of the press, universal suffrage, and other civil rights. Unfortunately, these reforms came along with … destruction of our economic freedom.”

In the matter of landholdings, the land reform launched by Betancourt, with the support of the Punto Fijo Pact signatories, redistributed property holdings. Although the state compensated the owners for the expropriations, it was a “taking” nonetheless. The recipients of the parceled out land did not have actual title to their land, but only the right to work it. Or, in those cases where they were given title, they lacked the expertise, technical know-how, and the necessary infrastructure to make a go of it. In fact, 90% of distributed lands were transferred without title. It was actually a transfer of tenancy, not ownership. In other words, from being working tenants of large, productive haciendas, the peasants became failing tenants of small parcels owned by the state. 

To put it simply: in most cases, ownership of land was transferred from private citizens to the state.

To get an idea of the radical nature of these actions in Venezuela’s history, consider: no tax had ever been imposed on land until the latter half of the 20th century.

As we have seen in earlier posts on ranchitos, historically, land was often ceded, or sold for nominal price, by hacendados to men, or families, or widows, who had lived and worked it. These cessions or sales were duly notarized and recorded in municipal or city records. In many other cases, records reflected men who claimed ownership on the basis of decades having lived and worked on sections of land whose original owners and families had been killed or dispossessed during the great bloodlettings of the 19th century. 

Excerpts of one such record reads, “….Carlos Durán, citizen of the State and neighbor of the San Juan Parish, I direct myself to you [governor of the state] to justify my right to title: I have lived and worked a small part of the land called “La Angosturita” in my Parish where, with great effort and sacrifice, I have built an inheritance on which I depend for the sustenance of my family. I am now aged and infirm as a result of the vicissitudes and desolation of the federal revolution [one of many 19th century uprisings] to which I contributed with my insignificant personal efforts in the army….”

The excerpt goes on to describe and delineate the parcel, including its boundaries, “[bordered to the east by land owned] by Juan Manuel Durán, to the north and west by Carlos Herrera, to the south by Mrs. Carmen Betancourt de Otero….” On this basis, which, however pitiful, is very detailed and straightforward, title was granted.

In the case of land reform, as with any socialistic endeavor, the impulse was not only to “take”, but also to somehow modify behavior. For example, to quote an Acción Democrática (Betancourt’s political party) technician who, thirteen years later, analyzed land reform’s unkept promises, wrote with a measure of despondency: “It was necessary to create technicians who would understand [agricultural] processes, it was necessary to prepare administrative and managerial personnel, and to educate and equip the laborer in new disciplines with which he had never had any experience. These are some of the elements that hindered the success of our agrarian reform.”

Necessary to create…necessary to prepare…. How? Ex nihilo? Wasn’t this what the former landholders hacendados had been doing for centuries? What gargantuan conceit made the Socialists think they’d do a better job of this than the prior owners? The state rails against the evil landowners. But is the state composed of heavenly angels? Fifty years later, land reform had become a weapon with which to punish the state’s enemies and reward its acolytes. Hacendados were not known to do that.

Part of the problem is that the state (any state) does not like competition. In its view, the greatest Competition, of course, is God. Hence the state’s animosity. However, large landowners are also a form of competition and so must be opposed as well.

What typical “land reform” fails to take into account are the eternal verities. If the state would merely begin with a half-serious consideration of the Ten Commandments, it would hesitate before taking anyone’s land. Naboth’s vineyard comes to mind.

Almost overnight, Venezuela’s agriculture went from 22% of GDP to 5% and its agricultural labor force went from 60% to less than 10%. Only 4% of the land in Venezuela is under cultivation and food must be imported. 

Peasants had been given the right to farm land when they knew not how. Or they had been given land they knew little about. They had also been given loans to buy equipment and infrastructure, much of which was defaulted. Knowing there was food and patronage in Caracas, they did what most folks who are averse to starving would do: they abandoned the land and fled to the capital. And not having housing there, they built their own ranchitos. 

And they are there still.