Why Venezuela Won't be the Next Zimbabwe

Simon Romero has a reasonably balanced feature on Venezuelan land reform in today's New York Times. Land reform is one of those dreams which never seems to work. The dream never loses its strength (cf 40 acres and a mule), but the reality never seems to pan out.

It's not just socialists who don't understand this. Organic farmers in Vermont or Yorkshire who complain that they can't make a living from their smallholdings are in much the same boat as their counterparts in Jamaica who have lost the artificial subsidies they used to get from Europe. I once spent a couple of weeks on a farm in Tuscany which had magnificent food, but which realistically could barely feed itself, let alone any of the surrounding population. Yet the owners passionately defended their agricultural subsidies on national-security grounds: what would happen to Italy if the rest of the world stopped exporting food to it?

The fact is that these days efficient agriculture is big agriculture, and any attempts to give small amounts of arable land to large numbers of people are liable to end in something which is very economically inefficient.

In any event, Venezuela stands at the end of a very long history of land reform in Latin America, whereby huge estates were taken away from the landowning elites and given to the people. Bolivia, Cuba, Ecuador, Mexico, Peru – what's going on in Venezuela is nothing new. So when Matt Cooper says that "once the land grabs start, they take on a life of their own," and immediately starts comparing Venezuela to Zimbabwe, I'm tempted to tell him to slow down a bit. Land grabs happen in different countries with different regimes for different reasons: in the case of Peru, for instance, it was a military junta which confiscated the land, not a socialist idealogue.

And as Robert Waldmann notes, sometimes land reform even, you know, actually works:

Latin America is not the whole world. Consider some countries which have had massive Top-down land redistribution projects : Japan, Taiwan, South Korea and Italy. Italy might seem to be l'uomo dispari fuori (odd man out) but experienced an economic miracolo from the year of the reform 1953 through 1962.

Waldmann also notes that Venezuela's current landowners are far from being economically efficient themselves, which gives the land reform greater upside and lower downside. (The Rhodesians, by contrast, were generally efficient farmers, on a purely economic level.)

My gut feeling is very much that Venezuela is not Zimbabwe. Yes, Hugo Chavez is making very bad economic decisions -- but then again, his elitist predecessors were hardly much better. And very bad economic decisions don't in and of themselves lead to Zimbabwe-style disaster. For that, you need a power-mad lunatic like Robert Mugabe. And while Chavez might be distasteful to many Americans, a Mugabe he is not.