Is Chavez the new Mugabe?

Over on the great Venezuelan Politics blog Tomas Sancio writes in Your land is worthless about a little reported but probably disastrous problem with Hugo Chavez land reform policy:

There’s something that’s really not working in the so-called war against large estates. The government’s idea is that by delivering land to peasants, the production is democratized and social peace is achieved. There’s a not-so-small practical issue with this theory: land by itself is worthless (at least in Venezuela). If you don’t have money to buy cattle or seeds and pay workers (before-hand) to produce for you, you will not be able to make a nickel. To achieve the minimum scale to overcome poverty, you need to request a medium-sized loan.

And he knows what he talks about:

I personally visited two important Venezuelan banks and offered my family’s land as a guarantee for a cattle loan that we want to request and said guarantee was rejected. Although I have all the documents that show our ownership of the land, both banks were requesting bank deposits or a property such as a house that we could mortgage. The explanation is fairly easy: it’s much easier to sell a house or apartment than land. The government has increased the land supply (and thus lowered its value) by creating at atmosphere in which people with ownership documents have to justify (and fight) for the right to keep their land. If you add all the unused land in both the State’s hands to the idle land in private hands, you will see that the buyers have too much to pick from (i.e. a buyer’s market). What would a bank do with more acres to sell?

Anyone who has read “Hernando de Soto”: will immediately know that our friend Hugo is doing here. He is creating new Dead Capital which is according to De Soto the real reason for poverty in the developing world.

Property law is what makes the market economy work. It is property law that provides the framework of rules that organizes the market, the titles and records that identify economic agents, the contractual mechanisms that allow people to exchange goods and services in the expanded market. It is property law that provides the means to enforce rules and contracts along with the procedures that allow citizens to transform their assets into leverageable capital. Therefore, those who are excluded from the legal system, mainly the poor, are also excluded from the legal market economy.

Think about it. Mugabe started the same project in Zimbabwe years ago and has evicted most of the productive farmers as part of a genocidal land reform program. What has he achieved with this? Famine. Where Zim was a food exporter before. Now rather than attack the root causes of the problem, he has started clearing out with force the biggest symptoms of Dead Capital the shanty towns. Will Chavez start doing that soon? I think his new constitution (the favorite of lefty intellectuals everywhere) would allow him to do so. See article 82:

Artículo 82. Toda persona tiene derecho a una vivienda adecuada, segura, cómoda, higiénica, con servicios básicos esenciales que incluyan un hábitat que humanice las relaciones familiares, vecinales y comunitarias. La satisfacción progresiva de este derecho es obligación compartida entre los ciudadanos y ciudadanas y el Estado en todos sus ámbitos.

Article 82. Everyone has the right to a adequate secure, comfortable and healthy home with basic essential services, which include a humanizing habitat for family, neighbor and community relations. The progressive completion of this obligation is shared between the citizens and the state in all its forms.

This sounds pretty innocent to your average person, but this could allow him to send the army in to clear shanty towns for reasons of public health. Of course I understand that Hugo has a lot of support currently in Shanty towns. But imagine how this could be used against an anti chavista barrio.