Volume 4, Number 103
31 May 2004

Note: Today is Robin's and my 51st wedding anniversary! I continue with my biographical sketch, on how I learned economics after I had left Harvard. — Jack

Land Reform, 1965

Dear Friends,

Covey Oliver, the U.S. Ambassador to Colombia, had a great idea, which he explained to me in the car on the way from Bogotá to Girardot. He had invited all the groups in Colombia that normally would not speak to each other — peasants, landowners, employers, priests, unions, professors, and women — to a conference at a top resort. "This is the sort of thing an American Ambassador ought to do," he explained. I was to be the kickoff speaker.

The Ambassador ticked off what he considered the most important national problems. At the top of the list was land. He had invited me because I had written a book on Latin America, in which land tenure was a major subject. Land in Colombia was held in large estates called haciendas, owned by hacendados, who were effectively governors. The hacendados employed peons, who were little more than slaves. Most were uneducated and did not even know they were Colombians. "I belong to (name of hacendado)," they would answer if asked where they were citizens. Usually, they could not leave the hacienda without permission.

I was a strong advocate of land reform. So, when I gave my kick-off talk (in Spanish), listing what I thought were the problems facing Latin America, I began with land. I pointed out that, the world over, small-scale farming was more productive than large, because the small farmer paid close attention to his land, whereas large hacendados were more careless. This was not just my idea but came from research by the Food and Agriculture Organization of the United Nations. In the Soviet Union, the small private farms that citizens were allowed to "own" produced, in aggregate, more than the vast lands on all collective farms.

You may think we have large farms in the US, but they are small compared to the haciendas of Latin America. One hacienda in pre-reform Bolivia cut the country in two, stretching from the eastern border to the western. The Bolivian ambassador to the United States once told me (in Washington) that he did not know where the borders of his hacienda were (another one, not the one just mentioned) because, while he lived on the hacienda he had not traveled that far from home.

I did not mention Colombia in my talk, since I have made it a point not to speak of the country I am in at the time. But the Colombian hacendados reasoned that I was talking about them.

Manuel Castellanos, the head of the gremio (confederation) of hacendados, was in the audience. When I had concluded my talk, I said I hoped I had raised some challenging questions for the smaller discussion groups that were to meet after lunch. Catellanos piped up from the last row, "You certainly have!" He then gathered the other hacendados at his table for lunch, and after that he left the conference, even though it had one full day and a half yet to run.

It is now thirty-nine years after the event, and I am thumbing though some yellowed newspaper clippings. Within two days after I had returned to the United States, the newspapers of major cities in Colombia carried such headlines such as "An American Official Proposes a Marxist Thesis for Colombia." El Pais (Cali) wrote that "it is inexplicable that a man as qualified as Professor Powelson should come to preach doctrines of the Marxist-Leninist type . . ."

La Republica (Cali) carried the following editorial: "According to Mr. Powelson, Castro is right, and the other countries of Latin America are spinning out of orbit. [NOTE: I had not mentioned Castro.] If this is the case, our government should solve the fiscal/economic crisis by expropriating all goods, stockholding, and property held in Colombia by citizens and businesses of the United States. If rural farms can be expropriated without compensation, there is no reason whatsoever why the same cannot happen to urban property, banks, and all capital goods. ... We feel certain that neither the Ambassdador, nor the US Information Service, nor the people of the United States [share these ideas]. The Ambassador should complain to the University of Pittsburgh that Powelson should be fired from his professorship. ... If this is what thousands of Latin American students will learn at the saxo-american (sic) universities, it would be better that they should be trained in Russia ..."

Other newspapers reported the contents of my talk more accurately — they weren't all accusatory — and when I sent a reply to all the newspapers, they printed it. There I reiterated that I had not mentioned Colombia in my talk, and I was merely presenting some factual knowledge about the productivity of different farm sizes all over the world. Land was but one small topic, and my talk also covered inflation, unemployment, and economic planning. I also pointed out that income distribution in the more developed countries was much more egalitarian than in the less (it still is, as all statistics show). For details, I referred to my book, Latin America: Its Economic and Social Revolution (McGraw-Hill, 1955), which had been translated into Spanish.

After I had returned to Pittsburgh, Chancellor Litchfield called me into his office. He had just read a letter to the editor in the Miami Herald, which had been forwarded to him by the Gulf Oil Company, a financial supporter of the University. . The letter reported the following: "Recently, in Colombia, Professor John P. Powelson of the University of Pittsburgh ... addressed a seminar of farmers. ... Here is what the professor said: "All agricultural lands ... should be divided into small plots and distributed to the landless peasants. ... When our government recommends the tactics of Fidel Castro, can we blame Latin Americans for doing business with him?" Gulf wanted an explanation, or otherwise they would withdraw their support.

After a brief conversation, in which I explained to the Chancellor what I had really said, he wrote to the Gulf Oil Company that "Powelson is an independent professor who may say what he likes. The University neither endorses nor denies his message." Gulf accepted the explanation and did not withdraw its support. Two years later, Chancellor Litchfield and his wife were killed in a private airplane crash over Lake Erie. The United States lost one of its outstanding university administrators.

Only years after that did I begin to feel some sympathy for Manuel Castellanos and the hacendado gremio. In Kenya in 1972 I began to wonder what really caused economic development, and I felt the answer must lie in history. While studying the history of the world, I concluded that land ownership was an important factor. So, before finishing Centuries of Economic Endeavor, I had to research another book, which became The Story of Land: A World History of Land Tenure and Agrarian Reform. But when I got to modern land reforms, the book was already too large, so I had to write still a third one. Thus Book 3 had to be written before Book 2, which had to be written before Book 1. Now they are all published (hardback and paperback).

For Book no. 3, I co-opted a graduate student (Richard Stock) to help me do the research on twenty-six countries. With only two exceptions (Taiwan, and Kerala in India) all these land reforms harmed the peasant. The government confiscated the lands, and if it gave them to the peasants at all, it put severe restrictions on them (such as, they were forced to sell their output to the government at low prices and buy all their inputs from the government at high prices. In that squeeze, all profits went to the government. The land earned nothing for the peasant, and therefore it had no value. My opinion at Girardot had been based on ideology and compassion. I soon discovered that before speaking anywhere, I should know what I am talking about. Policy for economic development should not be based on compassion alone. One reviewer, as strongly ideological as I had been, recommended against publication of Book No. 3 — not for any errors of fact but because the prevailing ideology was pro-land reform. However, there are always other publishers, and the book was finally published as The Peasant Betrayed: Agriculture and Land Reform in the Third World. I had learned much from the whole experience.

Sincerely your friend,

Jack Powelson

Readers' Comments

Fascinating story!  Similar to my own experience in the USSR 1962 in finding that the Soviets had a much higher production on the little plots of land they owned than did the collectives on which they worked (I was in Moldavia on a collective farm for three weeks).  They were immensely proud of their little gardens by their houses. Why?  Ownership and vested interest vis-as-vis the right to sell the produce from their tiny little plots — the old enlightened self interest and profit motives at work.

I'm not entirely clear about your conclusion for this TQE.  Land reform doesn't work, except in rare situations (because the state screws it up), but small is still more productive than large in many/most cases (US?) because....?

I assume you believe land production is related to ownership by the farmers as well as to the conditions of a free market economy (such as Lancaster, PA, where the Amish claim — or did when I was PA Secy of Commerce — the most productive non-irrigated farmlands in the world).  And this is where your economic development policy comes into play?

A short, definitive statement of your current/emergent views in your concluding paragraph might by helpful to those of us who are enthusiastic readers of TQE but haven't read the three previous JP volumes on the subject — yet.

A pleasure to read as always.

— Norval Reece, Newtown (PA) Friends Meeting.

The Author Replies:

On your second paragraph: Yes, it's a tough world, and not entirely consistent. I did say that even "large" farms in US were small compared to the haciendas. — Jack

You were clearly handicapped in your career by not having had the opportunity to do apprentice work as a Peace Corps volunteer (Peace Corps did not exist in 1948).  When Peace Corps sent me to Zanzibar as a B.A. anthropologist with socialist leanings and a six week training in forestry, I got a quick education of the sort that you mention at the end of Letter 103.  There, the Revolutionary Party expropriated the clove plantations from their Arab overlords and gave small portions of these to each family on the island.  However, harvested cloves could only be sold to the National Clove Export Agency which bought them for pennies and sold them on the international market at monopoly rates.  By the time I arrived people were cutting down their clove trees to make charcoal and international clove production had shifted to Malaysia.  This experience brought home to me the importance of open markets and competition and set me on a course to study economics.

— Robert Wieland, attender at Third Haven Meeting, Easton, MD.

Jack — I hope you keep writing for a long time.  I learn so much.  My attitude was always, "Don't know much about economics, but I know my Quaker values, and that's good enough for me."  Now, retired and with more time, I am learning everything I can about economics.  It's a big job, and I value your contribution.  You have shown me the importance of knowing how things work.  Thanks.

— Pat Schenck, Annapolis (MD) Friends Meeting

Happy 51st Anniversary, Robin and Jack! Compared to us you are still newlyweds, but I suspect the marriage will last. So while the rest of us are sobered by the Memorial Day weekend observances, you can add a cheerful note as you reflect on 51 years together, not to mention your experiences leading up to the marriage.

I'm enjoying your autobiography, Jack.  I'm just finishing reading James Michener's "The World is My Home."  You and he have similar stories to tell, and even similar story teller writing styles.

We wish you continued happiness as you (and we) are "aging gracefully" together.

— Wil (and Lorna) Bernthal, Boulder CO.

Jack, I have just picked up Jane Jacobs' book on The Nature of Economics, and would be interested in your take on it.

— Steve Birdlebough, Sacramento (CA) Meeting.

The Author Replies:

I have read two reviews of this book, but not the book itself. Mostly, I agree with her ideas. I have always admired Jane Jacobs. At 88, she's four years older than I am, and still producing.

For those who wish, the reviews may be found at these links: Quebecois Libre and the Ludwig von Mises Institute. — Jack

I was in Colombia in the USAID mission as a public finance advisor and later program director from August 1965 to the end of 1969.  I benefited from your escapade, for the Embassy never pressured us to push for more land reform in Colombia!

— William G. Rhoads,  Germantown (PA) Meeting

Did you read about the latest "land reform" in Zimbabwe. "In its latest crackdown on democratic freedoms, the government announced Tuesday that all farmland would be nationalized and private land ownership would be abolished.  All land — including more than 5,000 formerly white-owned farms handed over to blacks since a violence plagued land distribution began in 2000 — will become state-owned and subject to state-isssued leases.  Title deeds of the properties will be scrapped and replaced by 99-year leases with rent payable to the government." Looks like another case of "The Peasants — and former land owners — Betrayed" as future profits will surely go to the government, not to the lessees.

— Wink Halsted, Racine, WI


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Publisher and Editorial Board

Publisher: Russ Nelson, St. Lawrence Valley (NY) Friends Meeting

Editorial Board:

  • Chuck Fager, Director, Quaker House, Fayetteville, NC
  • Virginia Flagg, San Diego (CA) Friends Meeting
  • Valerie Ireland, Boulder (CO) Friends Meeting.
  • Asa Janney, Herndon (VA) Meeting.
  • Jack Powelson, Boulder (CO) Meeting of Friends, Principal Editor
  • Norval Reece, Newtown (PA) Friends Meeting.
  • J.D. von Pischke, a Friend from Reston, VA.
  • John Spears, Princeton (NJ) Friends Meeting
  • Geoffrey Williams, Attender at New York Fifteenth Street Meeting.

Members of the Editorial Board receive Letters a week in advance for their criticisms, but they do not necessarily endorse the contents of any of them.

Copyright © 2004 by John P. Powelson. All rights reserved. Permission is hereby granted for non-commercial reproduction.

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