Monday, January 31, 2005

delusions of property

John Gravois has written a cogent and much-needed take-down of Peruvian free-marketeer Hernando de Soto. De Soto's books The Other Path and The Mystery of Capital did much to call attention to the promise and possibilities inherent in squatter communities and they garnered great press in the U.S.. But his simplistic mechanism for empowering squatters -- providing title deeds and stepping back to watch their communities become wealthy -- has a spotty record where it matters most: in the squatter communities themselves.


Yazad Jal said...

Came to your blog via Dilip

There's an interesting critique of Gravios on Tom Palmer's blog. Read the comments as well.

rn said...

I recently posted this on hit and run:

As someone who lived in squatter communities around the developing world for most of two years (I just published a book about them, called Shadow Cities), I'd like to offer this:

In Turkey, squatter communities have been able to grow, improve, and become permanent not because of property rights but because of political rights. Squatter areas are protected by two laws. First comes the gecekondu ('it happened at night') law: if a family builds a habitable dwelling under cover of darkness, or before the authories can find it and stop construction, they cannot be evicted without due process of law. Second, once there are 2,000 people in a squatter area, they can apply to become recognized as a legal sub-municipality. Then the squatters can organize elections and begin to raise money to provide municipal services. These laws, rather than any system of distributing private title deeds, have enabled scores of squatter communities in Istanbul to thrive.

On the other side, I met many squatter families in Turkey who went the property rights route. The problem is this: the government charged them for the piece of paper entitling them to their land. Some families are now so deeply in debt from the purchase price that they no longer have money to improve their homes or educate their kids. In the long run they are secure, but the title deed may in fact have retarded the development of their communities.

And think about this: around the world, there's a vibrant economy of people buying and selling and renting homes and businesses in almost every squatter community in every country (I rented in each community I lived in). That market exists without title deeds. People determine value and turn deals all without formal rules or pieces of paper.

Title deeds can be part of the way the informal city and the formal city choose to interact. But let's not confuse wealth building with community building. Private deeds may help some former squatters build wealth. But they won't necessarily improve the communities in which they're distributed -- and if they do, as Gravois notes, it may not benefit the original residents.

Some of my squatter friends desperately desire title deeds. Others prefer to keep the less formal rules they have thrived under for years. What they all want is a form of security -- a guarantee that they will not be summarily evicted. This can come in many ways -- through a political writ or a property deed or any number of other devices. The decision of what type of community to have and how to engage in social relations is complex and it should rest with the people who live in each squatter area.

Yazad Jal said...

I read you comment on hit and run ( . If you follow that blog, you'd have read Ivan Osorio's piece on TCS.

rn said...

I did see Ivan Osorio's piece. As you know from my post on Hit 'n' Run, I have seen first-hand that where it counts -- in the squatter communities themselves -- establishment of political rights and community organizing creates security and removes the threat of eviction. This means that communities can grow and thrive without title deeds. Once squatters establish political rights and permanence, they can begin discussing all sorts of legal structures, including the trade-offs involved in carving up their communities into private plots.

Anonymous said...

David Brooks in his February 8 New York Times column cites de Soto's ideas regarding squatter communities as validation of Bush's drive to privatize Social Security.

Are we all squatters in the eyes of the marketplace?


rn said...

I like the idea, B. Kind of Biblical: We are all squatters in Moab. That being said, Brooks sure crams lots of things that don't go together into his stew. He gets the chronology of the Homestead Act wrong. People squatted all across the U.S. long before the Homestead Act became law in 1862. The Act simply recognized and legitimized the reality that had been around for decades. The point is this: squatters thrived because they established permanence and political rights. Squatter communities don't need property rights to thrive and become empowered citizens.