Observations on Private Property, or the Lack Thereof, in Latin America

By: Contributor - Oct 21, 2013, 12:23 pm

EspañolRecently, Americans for Tax Reform published the International Property Rights Index (IPRI), which measures nations in terms of three core components: legal and political environment, physical property rights, and intellectual property rights. The index exposes a glaring lack of protection for these rights in Latin America, since most countries of the region appear at the bottom of the ranking.

The results correspond with the Doing Business Index 2013, which considers the merits of and difficulties associated with starting a business in a country, including registering property and enforcing contracts. The consistency continues with Heritage’s 2013 Index of Economic Freedom. That is to say that Latin America’s regimes are not just restricting economic freedom through taxes and inflation, but also with bureaucratic procedures that demotivate private initiative.

Political movements that seek to restrict individual liberties and subjugate citizens to state power in Latin America are most notable in Venezuela and Cuba. Venezuela holds the second-to-last place in the IPRI for the world, and Cuba did not even make the analysis. While Cuba has held the same obsolete ideas for fifty years, Venezuela has followed Cuba’s lead since Chávez came to power in the late 1990s. As a result, the values exalted by statists and their views concerning private property can be found in both constitutions.

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North Korea


Cuba does not recognize private property except for small farms, cooperatives, small businesses, and the like. The state has a strong hold on transactions, and at best the private sector represents around 25 percent of the island’s economy.

There is a curious expression in the Cuban constitution called “personal property” (propiedad personal). It claims to protect all regular possessions of an individual: one’s house, goods, and labor income. It also includes the “means to serve personal or family work.” However, neither a natural nor legal person can own means associated with hiring labor — pure Marxism, in order to prevent supposed exploitation of man by man.

Many thought that the reforms advanced since 2011, with the government of Raúl Castro, meant Cuba would start progressively to let go of communism. However, the extension of cuentapropista work, granting loans to these workers, and permission to trade in cars and immovable property proved that the anticipated liberalization of the Cuban economy consisted of just “patching the Revolution.” The reforms seemed important but were far from the pursuit of liberty and dignity for the Cuban people, seeking rather to sustain the Castro regime and prevent it from failing under the weight of its own policies.


The chavista government in Venezuela and its constitutional reform attempts generated heated debate on property rights and its boundaries. “Life, Liberty and Property,” however, do not appear in the 21st Century Socialism vocabulary. Instead, these words represent the basis of a bourgeois system that must be removed.

It may seem incredible that there are places on earth where property as a right, given how natural it is to human trade, is an argument up for discussion at all. Consider that Chávez started this debate by softening his speech before the 2007 constitutional referendum — since not the whole population would never agree to give the government the power to expropriate private houses without limits. We also know that not even Fidel Castro, as a leader of the Cuban Revolution, came to power recognizing — at least not publicly — that he would lead a communist revolution.

Curious items with regard to private property and its conception under a socialist state already appeared under Chávez in the 1999 Constitution. That included a participative health care system, unable to be privatized under any circumstance, and “collective property.”

While the Constitution still guarantees a property right, at least on paper, it “will be subject to contributions, restrictions and obligations established by law for public utility or general interest. Expropriation of any kind of property may be declared only for reasons of public utility or social interest, by means of final judgment and with timely payment of fair compensation.” Unfortunately, terms such as “public utility” and “social interest” are vague, and they lead to the inevitable use of power against private property on a discretionary basis.

In order to make a comparison, here is the corresponding article — Section 17 — regarding property rights in the Argentinean Constitution:

Property may not be violated, and no inhabitant of the Nation can be deprived of it except by virtue of a sentence based on law. Expropriation for reasons of public interest must be authorized by law and previously compensated.

Thus, the limits set on the government are intrinsically different, more stringent, and leave much less room interpretation. In contrast to the Venezuelan article, the interests of the Socialist Homeland are not always in first place.

No a la Reforma Constitucional en Venezuela 2007
Venezuelans marching against Constitutional Reform in 2007.
Source: Resistencia Santiago de Leon de Caracas

In 2007, Chávez made an attempt to reform Constitution but this reform but the population rejected this in a referendum. During the political campaign, the president presented the project, explaining it in detail. Regarding private property, Chávez tried to include in the Constitution new forms of property, aiming to diversify the economy and promote a fairer economic development, according to his speech. The different forms of property included private property but also:

  • Public property, belonging to State (propiedad pública);
  • Social direct property, belonging to and managed by people (propiedad social directa);
  • Social indirect property, belonging to people and managed by State (propiedad social indirecta);
  • Collective property, belonging to a social group but neither private nor social (propiedad colectiva).

Venezuelan people probably realized that this supposed amplification of property would lead to discretionary management of private property. Collective and cooperative properties could have been fomented and guaranteed using the concept of private property itself, with no need to reform the Constitution.

Chávez said openly when addressing the Popular Assembly that the aim of the constitutional reform was to have property not serving capitalism. That means cooperatives would supposedly organize themselves without falling into the traps of competition and the exploitation of man by man. What a success that has been in Cuba, where productivity has “grown” to US$19 per month.

Why This Matters

Within these contrived forms of property, the basic fundamentals get lost. To ensure liberty, a legal system must not only guarantee a free disposition or use of property, but additionally the right to voluntarily contract between persons. Socialism for the 21st Century dismisses this surplus value in voluntary agreements as exploitation of man by man — although in reality it is mutually beneficial and fairer than any kind of imposition emanating from the state.

As the IPRI report states correctly, the guarantee of private property is the basic principle for the peaceful development of any society. It generates the fairest conditions for the exchange of goods and the consequently economic growing. In other words, observing property right allows the poorest classes to overcome poverty, the nation to grow, and all people to live in freedom — a far cry from what is happening in both Cuba and Venezuela.

Solo sucede en Venezuela

By: Carolina Jaimes Branger - Oct 21, 2013, 10:50 am

El 17 de octubre se celebró en Argentina el “Día de la Lealtad Peronista”. Miles de simpatizantes de la Presidenta Cristina Fernández se reunieron en Plaza de Mayo – histórica plaza de la capital del país - a reafirmar su lealtad a la causa peronista. Parece el mundo del revés: a principios del siglo XX, Argentina era una de las primeras economías del mundo; ahora, un siglo después, los argentinos le juran lealtad al hombre que destrozó a su país. Hace algunos años estuve en Buenos Aires. Mi estadía coincidió con las elecciones legislativas, durante las cuales no pude evitar notar que todos los partidos eran peronistas. No importaba la tendencia: fuesen de izquierda, de centro o de derecha, todos se declaraban herederos de Perón: “Vota por Juan, el peronista", “Vota por Pedro, el peronista de verdad", "Vota por José, el más peronista de los peronistas". Entonces, me pregunté si luego de cincuenta años sucedería lo mismo con el chavismo en Venezuela. Hace ya cinco siglos que se dice que “América Latina es el continente de la esperanza”. Llevamos casi el mismo tiempo deshaciendo con los pies lo que hacemos con las manos. Sin embargo, hay países que han logrado superar escollos y parecería – solo parecería - que van por el camino del desarrollo. Otros parecen suspendidos en un limbo – no van “ni para atrás, ni para adelante”. Y, en lo más bajo de esta lista, encontramos a Venezuela retrocediendo a pasos agigantados. Es que las cosas que pasan en Venezuela no pasan en ningún otro lado. Maduro, que aparentemente es colombiano, jamás hubiera sido presidente en Colombia. ¿Es posible imaginar a alguien con doble nacionalidad (una venezolana) asumiendo el cargo de Presidente de Colombia? La respuesta es un rotundo “no”. Tampoco es posible imaginar que el Congreso, la Corte, la Fiscalía y el Consejo Nacional Electoral de Colombia no hubiesen ya pedido y hecho pública su acta de nacimiento (no de la forma que lo hizo la señora Lucena en Venezuela, por cierto). Solo en Venezuela. Solo en Venezuela el Presidente garantiza combatir la corrupción de la mano de los militares cuando lo que debe hacer es combatir la corrupción en manos de los militares. Hay militares de todo rango, involucrados en todo tipo de corrupción: cobro ilegal de peajes, permisos, licencias. Hay militares involucrados en el tráfico de drogas, de armas, y quién sabe qué otros tráficos. Sobre todo, aquellos militares que contradictoria e irónicamente tienen el honor como divisa. Al igual que en la época de Pérez Jiménez, cuando la gente habla de ellos lo hace en voz baja: tienen miedo a denunciarlos por las represalias. Solo en Venezuela el Presidente solicita una Ley Habilitante para luchar contra la corrupción y crea instrumentos “legales” ad hoc para arremeter solo contra empresarios, diputados, alcaldes y gobernadores de la oposición, como denunció Nelson Bocaranda la semana pasada. La consigna parece ser “quien es aliado, no es corrupto”. Y por estos exabruptos, es que ocurren otros: solo en Venezuela una Ministra se permite declarar públicamente que sabe quiénes son los ladrones pero que “por respeto” no los nombra. Señora, eso no es respeto: eso es complicidad. Solo en Venezuela pueden embarcarse 1.382 kilos de cocaína en un avión sin que nadie se de cuenta, y no solo: el gobierno osa acusar del delito a “mafias” que no aparecen y hasta insinúa que la DEA está involucrada en el asunto. ¿Por qué no se llega al fondo del asunto? ¿Será porque las autoridades competentes - que para encubrir sí son competentes - conocen el fondo del asunto? Solo en Venezuela pueden eternizarse en el poder individuos perniciosos, amorales y, como si esto no fuera poco, ineptos. Sólo en Venezuela se otorgan dólares preferenciales “para importaciones navideñas” - léase whisky – mientras se vive una de las peores crisis de escasez de la historia del país. De más está aclarar que no necesitamos tener imágenes de San Nicolás ni árboles de Navidad en el hogar si no tenemos antes, ni papel higiénico ni pasta dental. Es que en Venezuela todo se traga con whisky. Sí, solo sucede en Venezuela. El artículo original se encuentra en la página del El Universal.

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