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Contents
UNVEILING THE MYSTERY Roots of the Argentinean Crisis
The Argentinean miracle of the 1860's
The issue of land and the Argentinean collapse
Land rent grows unceasingly
Who produces land rent
Land rent and the price of land
Who approprietes the land rent in Argentina?
Multiple content of realty rights on land property
Land rent and lease
Shares, currencies, securities and realty deed
The privatization of rent is a doing of the system
Effects of the appropriation of land rent by individuals
Privatization of the land rent reduces wages and interest
Cheap lands invite immigration to Argentina
Juridical order causes disorder
Private appropriation of land rent ruins society
Effects of speculation on land at the end of the 19th century
Privatization of land rent generates violent systems
Erroneous theories cause deep social conflicts
Production increases , but we have richer and poorer people.
If land rent is not collected it is necessary to create taxes
What should we do?
Bibliography
UNVEILING THE MYSTERY
Roots of the Argentinean Crisis
Héctor Raúl Sandler, Argentina
In memorianTo my dear friend Bob Andelson
The Argentinean miracle of the 1860's
North American economic growth was of more magnitude at the beginning and at the end of its quickest expansion. But, in accordance with the traditional standards of growth - those that are centered on the proportions or percentages of change- the Argentinean economic growth registered higher values than that of North America and it has been the subject of numerous studies.
What's fascinating with the Argentinean case doesn't only reside in its astonishing initial success, but also in the fact of its relatively recent classification as land of colonization and of exportation economics. This last factor has provided the base to establish comparisons with other countries of recent colonization, especially the United States, Canada, Australia and New Zealand. Most of these comparisons, at least those that date from 1960 on, have been unfavorable to Argentina, because they have been centered on the lingering stagnation of its economics in the last half of the century.
As result of comparisons, a comprehensive bibliography proliferated by means of the question, "What went wrong? " is attempted to be answered. Or, as W. W. Rostow's aphorism asks, why did Argentina smash after taking off? (paraphrases of Tulchin, Joseph S. [24]).
The issue of land and the Argentinean collapse
The law of Emphyteusis of the Revolution of May was used for federal and unitary leaders "in fraude legis" , so that few monopolized the whole available land of the native territory. It was revoked on September 16 1857, being considered "communist" (sic), among other things. (Bartolomé Mitre [14, p.17]. Soon after, the right of property was regulated by Civil Code, authored by Vélez Sarsfield and approved at closed book by both houses. It is not necessary to make a great investigation to notice that the right of land property was, from then on, regulated by laws quite contrary to the progressive and popular vision of the men of May of 1810. A mere glance at the signs left by the own author of the code , presently standing , is enough to be convinced of it.
In according the principles of May Revolution of 1810 , land could not be sold except by exceptions positively allowed (1st Article of the Ordinance of July 1st, 1822, in Andrés Lamas [12]). On the contrary , by Civil Code, on 1865 land became goods in comercio. With it disappeared all distinction of juridical treatment between what was given to mankind to live and to produce and things produced by men by means of their work involving nature (articles 2311 and following and 2336 of Civil Code [4]).
This was the necessary consequence of having discarded the innovative right recently mentioned, to put in its place "the pure right of the Romans" (5th Paragraph of the note to the art. 2503 of Civil Code [4]).
With the acceptance of such a right it was consolidated, not only the robbery of land done until that moment, but rather it threw out the basis of a social order which was the exact repetition of the unfortunate history of old Rome. The words of the author of the Code when he argues on the foundations of property were and are purely rhetoric. It sounds quite good , because it is a serious truth , that property "should be better defined according its economic relationships: the right to enjoy the fruit of their toil, the right of working and of exercising their abilities as each one finds it better" (art.2506, 2nd paragraph of the note). However, this is the least effective right in today's Argentina. Our country has 36 million inhabitants. In spite of being a relatively uninhabitad country, there are almost 4 million unemployed or badly employed and about 3 million émigrés. What causes these effects? A legal mechanism because of which, men without any other resource to earn a living than their ability to work, are handicapped by their inability to access the land - rural and urban - because of its high market cost. When land owners are allowed to keep legally increasing its value, first an economic order and later a cultural order is generated. It works in such way that, in fact, there is no place to work. Of course, the national territory exists. But this land isn't accessible in most men's daily life. The current legal system has transformed land into the base of any speculative business, because it, instead of being at disposal of work and investment of capital, was and is object of an obscene speculation. Today, as it happened almost one century and a half ago, just 1% of the population owns more than 95% of the lands (Jacinto Oddone [33])
It is astonishing that foreign eyes are those that denounce what is at full sight of every one who wants to see. This general blindness comes, partly, from interests and ideologies that, on purpose or indirectly, maintain standing such an inhuman situation. Its effects can be seen in hundreds of "shanty towns" (in Buenos Aires, its peripheral districts or in the big cities), taken houses, clandestine hotels and in thousands of homeless families that must resort to charity. The density of Buenos Aires is about 15,000 p/km2 and Great Buenos Aires (Capital´s outskirts) is about 4,500 p/km2. The rate of population density in the rest of the country hardly reaches 5 p/km2. But this is just a relative amount, because there are provinces so rich that their natural resources are equivalent to those of entire countries while their population density doesn't even amount to 2 p/km2. To make matters worse, most of the population in these areas lives off public employment or public "plans of subsistence."
Although vested interests work to prevent the raising of the veil that hides the cause of such irrationality, such ignorance and lunacy must be trailed to the contents of the study plans, at all levels of education, especially Economics and Law studies, that have so much influence in the formulation of diagnoses and the adoption of government policies. In fact, except for individual exceptions that don't bear weight on the constitution of dominant knowledge, only in foreigners' works are there thoughts like the following:
The process of colonization of the pampas was already very advanced before government tried to correct the tendency towards the concentration of properties and tenancy, sanctioning laws whose objective consisted on the creation of a Jeffersonian standard of ownership of land. Laws were late and they never were supported. At the time of the centennial, the Government's surveys carried out by the Ministry of Agriculture confirmed what was already known: most productive land in the pampas was in relatively few owners' hands and there was in the whole country a wide class of lessees that worked under miserable conditions and who had little or no hope of being able at some time to own their own land.
The pattern of holding of the land was such that the organization of production allowed the maximization of the owners' earnings without necessarily implying the increase of production or the benefit for public welfare, not even the presence of an innovative managerial initiative. As answer to these surveys it was pointed out - in an accommodating way - that even when the presented facts could be precise and although it was lamentable that the original objectives had not been achieved, the great success of the development pattern was so evident that it didn't really suit to worry society with these results and that the surveys weren't to be taken as advisors of perfection. The taints of the pattern of growth were as evident in the city as in the country and they stood out as clearly in official reports as at the Congress, the press, and in a long series of works of social analysis. The usual answer professed that the "social problem " - as they denominated these difficulties - was the result of nefarious foreign influences, that a wrong type of immigration was allowed into the country, and that slumming and other evidences of social inequality would be eliminated in due course of time, together with the antisocial influences of the political body, to grant time to the wonderful and reestablishing process of growth to increase national wealth, thus solving the social problem. Anyone that thought otherwise was unpatriotic. The vast majority accepted the idea that export of meat, grains, wool and leather would guarantee the golden future of the country [paraphrases of Tulchin, J.A, [24] p.79 and following].
What follows is a new intent of mine to stimulate the scholars and people who worry about social problems in Argentina and Latin America, to devote themselves to examining the legal character of the main cause that generates them. This perspective, although it was quite well-known by the first centennial, has been forgotten by academic, political, social leaders and common people. An intellectual fog covers this cause and, consequently, public opinion is wrong when articulating on the problems society suffers.
Land rent grows unceasingly
Of the land and on the land, wealth assets (production assets) that men need to live and to develop are created with the individual and community effort. Scarce from its origin, land is - relatively - scarcer and scarcer due to population growth, investment necessities, and multiplication of individual activity. Those who believe that with technological progress the importance of the land diminishes are sorely wrong; it happens exactly the other way around.
In the complex division of work in a society in which it would be senseless, if everybody did the same thing, not all need to access to territorial space in a direct way to produce and to work; but everybody needs it equally to live. Partly they need it to reside; but in a fundamental way because to fulfill their necessities they require production values in exchange for products. And everything men produce is manufactured land. We are indirect consumers of land. Thus, the economic sphere of a people is neither an issue of country people nor of city people, neither of industrial workers nor of white collared workers; neither of old men nor of children; neither of men at the farm nor of women at home.
It is absolutely everybody's problem. However, paradoxically, it is the issue less mentioned by scholars, intellectuals, social and political leaders and the government. It is possible, that being such a transparent fact it is invisible to men and, consequently, everybody thinks that the way in which the actual law is regulating access to the land is the only correct way of doing it. This is a grave error.
An inappropriate way of legally ordering the direct and indirect use of the national economic territory determines most of our social problems. The reason why many people in the world cannot populate our empty country and why not few children of our homeland emigrate in search of better horizons has it's origin in the current system of property in conjunction with the system of resources of the State. (according to Juan C. Zuccotti, 10 in each 100 Argentineans live abroad [25]).
Because of the same reason that the value of the land increases with population, investment and development, the empty economic expanses - whatever the reason - are of littler value than those more populated. From their own experience everyone knows of the biggest land price in Buenos Aires than in any city of the provinces. He/she also knows that at the commercial areas of an one of those cities , the land is more expensive than in the periphery, and in the periphery, land is more expensive than in the open fields. He/she also knows that being of similar natural conditions, better located plots or those of easier access or those nearer to production centers are of greater value. An acre in Buenos Aires’ downtown would demand a figure with many more zeros than those we habitually see in the price of an agricultural acre in the best areas in the country.
In recent surveys carried out during the years 1998 and 1999, the value of the whole area (200 km2) of the City of Buenos Aires has been measured along with the appraisement gradient between each measurement, with these results: July/98, u$s 109,000 billion; Dec./98 u$s 111,477 billion (+2.2%); May/99 u$s 115,077 billion (+ 4.6%); coming July of 1999 it would be about 118,000 billion. That is to say that the value of the land has grown in one year around 9,000 billion dollars!
When Juan of Garay (the Founder of Buenos Aires by 1583) made the city plan and distributed the plots, they were not worth anything. By 1605, a plot in the neighborhood of the Council House (today the Plaza De Mayo) the same property was worth about $300 and by 1750, in San Miguel neighborhood ("the outskirts") a poor house was worth some $1800 (Juan Agustín García [27]).
Who produces land rent
The national economic space - that is, the space on which our ancestors have deployed, the current inhabitants deploy and our descendants will continue deploying their activity, is the Argentinean territory. Land rent extends as a mantle over the whole of that surface. Measuring its value on each point you could trace a peculiar topography. Contrary to the natural topographic that is permanent, the topography of the land rent varies as much as its producing agent varies: social development. If we delineate the mapping of land rent we would draw the topographic map of national land rent. Some few peaks would be as low as hills and they would correspond to the principal domestic cities. Their hillsides would descend abruptly in each periphery to become the lingering pampa's plateau. Depressed valleys corresponding to most of the lands that integrate the rest of the country. But at a point, on the edge of the Río de la Plata, the line would rise logarithmically up: value of the land corresponding to Great Buenos Aires. This malformation would powerfully get attention. On a surface hardly 0.1% of the native territory, more than 40% of the population's is settled, and 90% of the financial and cultural activity of the country takes place. Its value approaches 120.000 million dollars, equivalent sum to the external debt.
The unity of this mantle would put in evidence the continuity without cuts of the whole national economic space and its land rent, at the same time that it would show the lack of foundation, from economics point of view, of the habit of dividing the Argentinean surface in rural and urban land. This differentiation - that exists and it is useful to other ends - lacks interest in connection with the problem of land rent and social order. On the contrary, it muddles the vision of the problem and it has driven to terrible solutions (Carlos P. Carranza, The Agrarian reform in America).
Two outstanding aspects characterize land rent: a) it doesn't depend on the activity of an idividual proprietor and b) it exists depending of the cooperative activity of society as a community. A downtown parcel won't be worth a cent less if its proprietor has never done anything on it; its value will be given by the average value of the land for the area in that the parcel is. On the contrary, it doesn't matter what efforts the proprietor makes, their real estate value won't increase in a single cent.
Land rent accumulates on each parcel that integrates the economic space under pressure of the demands of society, which to satisfy its necessities should invest its work forces and its real capitals on that space. As regards economics, it was initially appreciated as a differential rent, in the sense that if the same quantity of work and capital is invested on two different parcels of land, and they give different yields, the difference is characteristic of the condition of each parcel (as said by the French physiocrats and David Ricardo, Principles of political economics). This condition can derive of endogenous causes (natural quality of the land, as described by François Quesnay) or exogenous, if it results from its location inside a bigger space, as Heinrich von Thünen, Alred Weber among others pointed out ( August Lösch, Teoría económica espacial, El Ateneo)
Land rent and the price of land
It must be observed that those monopolized lands, as long as they're excluded from the trade, don't have a price, but they have the value called land rent. In countries in which sale and purchase are forbidden, as in collectivist systems, land would equally exist, although - in this case - it could not be measured by the price neither could be known.
Demand determines the existence and value of land rent on each parcel of the space; but, in certain circumstances, when the land demand is increased not only by economic necessity but for the pretense of protecting the value of the money (inflation), as we have just advanced, it usually generates "false rent" that incorporates to the sale and purchase price without reflecting, in consequence, the effective land rent. However, false rent blocks -just the same and sometimes worse than true rent- the access of workers and investors. That's why their practical treatment should not be different.
Who approprietes the land rent in Argentina?
When Civil Code established the tradability of the acreage of territorial expanse (except for specific exceptions like lakes, rivers, etc. (articles 2340 and correlative), it identified land with goods, that is to say, with things produced by men, meaning production values. Therefore, according to Civil Code, the landowner benefits from the greater value land acquires; that is to say, he/she appropriates the land rent. We call it privatization of land rent.
There are mainly two roads for the appropriation of land rent by the landowner: the sale contract or the lease contract. In both juridical businesses we always refer only to actual space, that is to say, the land free of improvements. Improvements are wealth, things produced by men.
In the first case ,sale , the proprietor transfers the title that contains the realty rights, with that he receives a price. This price , with the exceptions before mentioned, is land rent capitalized on the tract at the time of sale. In the case of leasing, the proprietor just releases a personal right of use on the land in the tenant's favor, for which reason he receives a rent. This rent is a percentage of the land rent capitalized . The proprietor regards the "value of the tract" as capital, and he charges the rent as the "interest" of that capital. In both cases the proprietor is beneficiary of the biggest value of the land, that is to say of the land rent accumulated by social work.
Land rent depends on the social development variable. There are country's general variable, region's variable and local’s variable. The proprietor, according to the velocity of that development and the intensity of capital investment and other people's work, can have modest or extraordinary revenues without doing ever minimum effort. The coincidence of the juridical ability of being able to sell and to lease , tradability of land, with the constant increment of land rent because of social development, encourage the business known as speculation on land. By means of the privatization of the rent land several families have kneaded fantastic fortunes at the end of the 19th century and the beginnings the 20th . These immense fortunes have left their trails in the city, such as the old San Martin Palace (Foreign Relations Ministry), the splendid palace that houses the embassy of Brazil, the magnificent palace that houses the embassy of France or the palace that serves as the seat of the archbishopric of Buenos Aires. All were private family houses.
Multiple content of realty rights on land property
The thoughts of the real estate agent in our example and of Mrs. Alvear's (if it is true that she said it) are true for several reasons. It is the best business because, the realty rights of property not only facilitate the use and fruition of the land, but also facilitate the pocketing of land rent once, in the event of sale, or continuously in the event of lease. There will be business that equals it, but not that overcomes it. Secondly, it is a business of in crescendo earnings, because as land rent grows through time, aided by social development that is impelled by population's increase, technological advancement and investment, it is only necessary to bide time. Finally, it is the surest. The advantage over production values - things made by men - is evident, because these things decay because of science and technology advancements, fashions and marketing. Things created by men are not eternal, they don't keep their initial utility and they stop being tempting to consumers for the most varied and sometimes capricious reasons. How different it is with the luck of land! Because of population's increase, because of bigger investment demands, because of the exponential increment of human necessities impelled by the desire of a greater well-being for a bigger number and even for the tendency to consumerism, land demand is constant. But it is not a commodity, neither created nor buildable by men, finite and unreplicable. There is not a man who can live without land, be that he consumes it directly or indirectly. Land is the base of the right to life, that's the reason why its value doesn't decrease with time, but rather it increases until humanity disappears from the face of the Earth.
The awareness of this fact is acquired occasionally, because of environmental pollution, the oil shortage or, what is worse, the threat of the lack of drinkable water. However, human intelligence instead of being aware of the necessity to approach the problem that Civil Code addresses, gave birth to "environmentalism" and environmental rights. This fragmentation of the reality draws paradoxical results: the environmentalists usually suffer for whales or oiled penguins, but they don't even see the connection of these catastrophes with another even bigger - beggars, street children, emigration, homeless people and other wounds of modern Argentinean society. The land expropriation is allowed by our legal system because of public need. But this is one of the most absurd juridical phenomena in jurisprudence: to force the whole of society to pay the proprietor the rent that itself had generated.
Land rent and lease
Shares, currencies, securities and realty deed
The realty deed is assimilated to currency because it is a security. It is not common, but a debt can be paid totally or partially by transferring that deed title of property to the creditor. If these things are regarded without specialist's prejudice and it is remembered that land value constantly increases, it is clear that realty deeds are a "currency" that not only keep their value but rather increase slowly but constantly. Even if the increment of their value is slow compared to other securities, including legal currency, all of them will "depreciate". When this process of unilateral increase of realty deeds is accelerated by some vast public or private building boom, or simply by general economic reactivity, a well-known "real estate boom" happens. It ends, unfailingly (in the current legal system) in a financial and economic "crisis", which drops to the bottom in an economic recession. The case of Japan which started at the "real estate boom" crisis about ten years ago is a clear example (Joseph Stiglitz [22]).
The privatization of rent is a doing of the system
To attribute the bad effects to the "system" doesn't mean ignoring that the interests vested in that system oppose resistance, in same occasions a strong resistance, to the changes in order to put an end to that way of obtaining earnings without working. The most remarkable example of this, while not very well-known, happened during the dictatorship of Rosas. It is known that the House of Representatives, his government's legislature, not only was "of a feather" with him but rather on occasions it showed submissiveness. However when Rosas, under the pressure of certain financial urgencies in 1838, presented a bill to increase the emphiteutic canon, legislature rebelled, forcing the powerful dictator to reverse (John Lynch [13]). As to the rest, Rosas soon agreed because he was the biggest landowner in the country.
It is necessary now to ask another question: If proprietors don't sell nor lease the land they own, do they enjoy the benefits of land rent? At first sight it seems that the answer is no. However, it's appropriate to make some explanations. First, it is true that they don't obtain any monetary benefit if they never sell nor lease. But if they themselves toil the tract of land, they have a benefit: they don't have to pay for the use of that tract, the biggest value, in land rent. Although it is clear that that land will be worth more and more because of the increasing of rent, proprietors won't suffer the impacts of that increase. These values will be calculated just on their accountants speculations to appreciate the profitability of their business. That is to say, they will reassess, just for them, the increase of the property value. In consequence, they will increase their costs as markets allow it. So, when selling their goods they will receive another bonus equivalent to the appropriation of land rent charged on the price to consumers. It is often seen in the center of the cities that owners can sell their products at lower prices than those who lease. Likewise, it can be seen how needing to rent a place in short time leads young and venturesome enthusiast commerce men to bankruptcy, because this kind of business has to settle in places where a lot of people converge, that is to say, in places where the land is more expensive. The legion of young and even not so young doing "business on the sidewalk", street vendors, extensive fairs of crafts and many "locations", in squares and public walks, has been caused by the impossibility of paying the rent (Héctor R. Sandler [19])
This commercial benefit of being proprietor, is one of the reasons that there exists the persistent tendency to be a real estate proprietor, although this means a large payment of money at the beginning. This is a waste, because it could be applied to improving their facilities or to having money ready for doing business. It is preferred to expend this money (that is frozen financial capital, so necessary for managerial money transactions) to avoid the risk of leasing instead of taking advantage of the land rent. This tendency is against the mobility that should prevail in a social economics system and represents, as we have said, a waste to which producers and merchants resort because of the system.
Building companies usually cause the "building crisis" because of their activities. This issue was clearly seen every time building was appealed as “economic motor” of economy. Mass building of housings or roads leads to an immediate increase of the value of the land. The building companies soon see their earnings diminished every time they have to build a new series of buildings, because land that they should acquire to be able to continue with their activity have increased in price. In the 1960's the great impulse given to building under Frondizi's government, ended in phenomenal crashes of the companies. These effects are also cumbersome for the normal functioning of general economy G. As land rent, a result of social development, continues increasing inexorably, many business people, after years of work and sacrifice in the country or in the city, notice that in selling their property they can earn in an instant a lot more than they have earned in decades of toiling. Enterprise discouragement is then generated and it spreads. Producing stops being interesting. A public test of the advantage of being proprietor on that of being an industrialist was made recently visible. An old mill company (Mills Morixe) called a creditors convocation.
In spite of the acceptance of their reduced payment offers, their debts could not be paid with production. On the other hand they could be paid thanks to the price of the land where the mills were. A block, bought for peanuts at the beginning of the century, over time had increased its price to such a point that with its sale or transfer, bills were paid. The land was as it was at the beginning of the century; the only difference was that nowadays it was surrounded by a high-class neighborhood.
Enormous quantity of people in full youth entered economic life with entrepreneurial impetus; but the system transformed them into land speculators. What teachings can be drawn by the new generations of this practical lesson of their elders? The lesson is as simple as it is harmful for society and its members: that there are better forms of getting rich than working to manufacture or trade what people need. Regrettably, without a layer of enthusiastic entrepreneurs no social economics system can be powerful. And without a vigorous economic order, a country lives in constant prostration.
Summing up: land rent is created by the whole community; but because of our juridical order, its destination is to benefit those who are land proprietors. The benefit is perceived at the moment of selling the tract of land; during the time it has been leased or during the time it is used. As lack of usage of the land neither causes end of propriety nor does it bring any other negative consequences, the right of property also serves as a savings account for its owner. This consequence happens inside an organism that is called society. Just as a single sick organ has catabolic effects for the whole organism, one poor agreement between law and property, leads to social wreckage.
Effects of the appropriation of land rent by individuals
But there are worse effects than economic uneasiness. The appropriation of land rent by individuals not only ruins the economic order. It imposes salvage maneuvers to all the individuals, be they company owners, producers, merchants, professionals, active or retired, but most of all to salary paid workers and youth that year after year enter to social activity. Those salvage maneuvers change all the spiritual values necessary for leading a civilized life. As a consequence of this reversal of values, political life, law and even the most sublime orders in human life, religion, art and science, decay. In the midst of this general decay of spiritual values, it isn't surprising that social life is dehumanized and that economic activity, instead of favoring cooperation, is source of raw selfishness. Not only is it a narrow and coarsely materialistic vision that dominates, but social pustules also appear such as vandalism, delinquency, professional beggars, and corruption in all levels of the society, particularly in the sphere of public affairs.
When these pustules appear to light, they cause first stupor and later bitterness. It is true that they also summon solidarity towards some of those who suffer most. But to tell the truth, it could be said, that the growth of fraternal organizations and behaviors is directly proportional to the absence of a healthy organization of the social economics system. On the other hand, it is only a partial aid: thousands of frustrated minds, millions of émigrés don't receive any benefit of solidarity. It is disregarded that the economic order is the only place where men can exercise the effective fraternity that the human condition demands. Neither the cultural order nor the political-juridical order demand in the same way fraternity.
The different activities in the cultural order require, in a main way, an individuals' freedom to develop their personality; the political-juridical order demands equality practices. Only the social economic order demands, without exception, the existence of cooperation among men. This cooperation can be achieved and in fact it has been achieved and is still achieved today, forcefully, that is to say in a forced way. But this type of economics doesn't serve society nor does it serve a person's development. Healthy economics should be bolstered by fraternity, because economic activity only occurs at the same time as that of men. (Rudolf Steiner [17]).
To make matters worse, the lack of knowledge about the original cause makes it so that many demand a firm attitude of the authorities and even a frank repression to put an end to over-abundance of beggars, street vendors, usurpers of homes, pestering picketers, corruption in the handling of social subsidies, etc. They aren't wrong when they sustain that such facts are not characteristics of a healthy social life. But they forget that Argentina has lived the failure of the forcefully imposed solutions very painfully.
What deserves attention is that Argentina is now living the painful failure of its contrary: democracy reinstalled in 1983. Although it seems absurd, those evils are indifferent to any political order and to those who occupy the positions that it offers. That is a clear sign that the cause of so many evils must originate in a less visible point of the Juridical. Less visible not so much because it is hidden, but for not having the vision to see it (Héctor R. Sandler [20] See paper in this Congress)
Privatization of the land rent reduces wages and interest
In Roberto Cortés Conde's research, when he analyzes the cause of the agricultural expansion from 1890 to 1910, he says:
“Rural population's expansion toward areas more and more far away was carried out because of two factors: the continuous population increase that found best lands already occupied, and on the other hand the biggest benefits that new lands promised because of being cheaper”. This sentence points out an economic phenomenon forgotten by our specialists and statesmen: the cheap country lands - this always happens with new lands - in which land rent is low or non-existent, allow bigger exploitation profits, to the agricultural companies. In spite of that price of cereals in the world were low, higher wages were paid in our country.
The fact is sufficiently important and illustrative of what we are talking about, and it deserves to be examined with some care, because, at first sight, it seemed impossible that with cereal at lower prices, benefits were higher and also - correlatively - the wages. However, it is product of a logical law that experience corroborates and that the present thinkers ignore. This Argentinean experience, told by Cortés Conde, should be branded with fire letters in the minds of all those that care about the destiny of the country. Under the light of that experience the fall of prices in agricultural production is in no way the most important cause of the agrarian uneasiness. The examination of the situation must begin revising the internal system that, in spite of the fecundity of the lands, doesn't allow production with world market's competitive prices. It 's true that North American and European "protectionism" is a barrier too, but its cause is just the bad system of the of land treatment in both regions.
The economic production of goods - beyond the economic complexities imposed by the growing social division of work and the sophistication that modern technology demands - fundamentally is the application of human work to the land aided by goods of real capital. We can illustrate this thought with a simple formula:
Production should pay each of these factors ( W, C, L) . Then,
If proprietor of land collects Rent, the effect is
If the quantity of things given to the proprietor increases, what is given to workers and investors diminishes. At the point of the curve in that all P is given to landowners, there's nothing to distribute among workers and investors. At the point where circumstances exempt giving anything to landowners (frontier of free lands), the produced total P is distributed exclusively among workers and capital investors. This point is called point of maximum revenues for work and capital.
This equation explains what got Cortés Conde's attention. In Argentinean history, in the case of very cheap lands, that is to say, with scarce or non-existing land rent value, the revenues (called by him “benefits”) must be high. The cheapness of the land allowed the paying higher wages (or salaries) in spite of sale prices of grain being lower compared to those in other places of the world. The crops had higher prices than those in foreign places, but the benefits were smaller, because land rent of those lands was higher and the owners absorbed a great part of the product. This even happens today. If the European Common Market and the USA close their doors to Argentinean agrarian products by means of customs protectionism, it is because, in spite of our faulty system, our products continue to be cheaper. And if in both markets the State should subsidize the agrarian producers, it is because landowners pocket a big portion of the land rent, to such extent that if not being subsidized, the prices for the internal consumer would go up. Let us say that, to remember that the land property system and tax system are not quite good in the USA nor in Europe. The formula [3] reveals another very important fact, forgot by political slogans. Against what habitually is sustained, there is not a necessary contradiction between work and capital, but between both of them and land rent.
It should be noticed also, that from the work of Cortés Conde arises the fact that those wages were higher than those that were paid in other very productive and more advanced areas of the world. Indeed, the years taken into account by the said historian were those of massive immigration to Argentina from overseas countries: Spain, Italy, Austria, Prussia, France, Poland, among others. None of these countries could be considered underdeveloped in the way term is used today. All of them had a millennial culture and we had obtained our own cultural wealth out of some of them. Spain, among others, continued to be an imperial country and until one century ago it governed a great part of the world. However, their inhabitants didn't hesitate to abandon those "cradles of the western culture”. Untying ancestral roots and family knots, traveling towards the unknown, most times under inhuman conditions, they preferred to immigrate to our country. The reason was simple: there they were part of the army of reserve workers; here they hoped to be free men. That is to say, to live of their work.
Argentina in those times, as all new countries with abundant and cheap lands, offered the possibility of higher wages than those old and developed countries, including powerful imperial England.
Cheap lands invite immigration to Argentina
It could be said, that in those countries the population was excessive and workers abundant, while in ours manpower was scarce. I agree, but abundance and shortage related to what? If it is said to be related to the territory - as geographical dimension - the statement lacks value. It is undeniable that that relationship continues showing today when our country is still absolutely empty. In more than 2.7 million square kilometers - taking as data the population density of any of those population supplier countries - Argentina should have between 200 and 600 million inhabitants. With just 36 million, immigration should not have ceased, mostly keeping in mind that "there are more than enough" people in most of the European countries and others in the world.
But if, instead of considering geographical dimensions, we keep in mind the economic value of the land, then we come to another conclusion. Keeping in mind this factor, it could be said that indeed conditions have changed radically compared with those of that time. The vertiginous increase of the value of Argentinean space, because of the massive presence of new populations and investment of real capital, according to the formula above mentioned, generated from the start the tendency to stop the entrance of workers and investors. The stoppage was applied automatically because of the authorized appropriation of land rent by landowners plus the system of taxes created to pay State expenses.
Juridical order causes disorder
Today the real wages of workers are so depressed that they are inferior to most of most developed countries of the world under comparative conditions similar to ours. The values of land have continued growing at the same time with the tax burden. In consequence, workers, investors, firms, and consumers are crushed between two brakes: the growing value of the land push from below; from above the burden of growing taxes.
Turning away from to the problem of the land rent’s destination and its consequences, workers and capital investors, entrepreneurs and salary earners, are condemned to fight like dogs and cats, in a vain dispute over the remnants of production. There won't be workers’ unions nor employers’ unions that can avoid this. As the ignorant litigants of the cause that confronts them, instead of using their democratic power to give it a fair solution and be able to establish the cooperation that economics demands, they endeavor to endorse separate alliances with the government to forcefully improve their pitiful situation. Some of them are able to impose, by means of labor laws, some sectarian improvements that general economics ends up destroying. The other ones search a thousand ways to achieve privilege laws for not paying taxes and, if it is possible, for achieving a monopoly situation in the internal market or even in the regional market, if it is established. Governments, ignorant even of the central question, are not able to solve it. According to circumstances and persons, Argentinean governments swing between an irresponsible populism and an insensitive tightening of the citizens' belt. This intrinsic weakness transforms the country into free field for multinational exploiters. With their economic base in less deteriorated regions, they use their financial force to manipulate governments, higher education and public opinion and to finally do here the kind of business that they could not do in their native countries.
Private appropriation of land rent ruins society
It's often sustained that Argentina organized its production exclusively for the external market, which is relatively false, because otherwise it would have been impossible to supply to the millions of beings that settled in the country. Nevertheless the said conditions build the kind of country that is "producer for the international market". Already in 1900, Argentina walked strongly in the world's market of agrarian products, which doesn't mean that all of its society had enjoyed that status. It is not surprising, then, that when the crash of the international market took place, first in 1914, but substantially starting from the crash of 1929, our country was left a private economic order that lacked its fundamental sense. That's why the milestone of the Argentinean growth process standstill is marked at 1930. However, if we think of the effects of the price rise of the economic space at the end of the 19th century, it is necessary to suspect that manpower surplus, a fall of the wages and the interests of investment, and consequently, a standstill of development, should have taken place much sooner.
To begin, it cannot be left aside that there was a great crisis in 1873 caused by a speculation that "went mainly towards real estate, rising fabulously its price " (José Panettieri [15]). It was followed by the noted crisis of 1890 to which real estate speculation was not unconnected (José Panettieri [16]). But on the other hand, there are important studies that reveal that the crisis began much before 1930. In 1923, Alejandro E. Bunge, discovered fifteen years of paralyses previous to the study date: Although the population's growth was remarkable then, that of economic factors overcame it almost four times.
That is to say that at the beginning of 1860 with each immigrant society incorporated, production multiplied by four. On the other hand, he adds, In these last fifteen years the equivalent of the population grows side by side with that of production, which represents an effective paralyses. Bunge discovered that effective paralyses had begun fifteen years before World War I. He marked it around the years 1907/1908. What had reduced population's and capital's yield?
Capital had not stopped arriving and even less the immigrants. But they yielded less and less. The economic cost of the land - because of land rent - it was producing its fateful effects. In 1907 a tenants' strike explodes in Buenos Aires motivated by the high price of rent (Juan Suriano [23]). In a few years (1912), in the country, the “Outcry of Alcorta” would be heard. This was a massive rebellion of farm lessees in Alcorta, a town in the Province Santa Fe, stifled by the high prices of leases that the proprietors asked (Plácido Grela [8]). Not much later the country would suffer the industrial worker strike of the factory Vasena in Buenos Aires, with the bloody repression remembered as the Tragic Week (1919). There was a surplus of urban workers in the country. Hardly had the decade of the 1920 begun, when the dramatic actions described by Osvaldo Bayer in his saga on the rebellion of wool workers in Patagonian happens. It ended with most of them being shot. In 1923 a strike of agrarian worker break out in the north of the country (Daniel Santamaría , The sugar strikes of Tucumán [21])
Is it true to say that one Argentinean crisis began with the world crisis of 1929? It is true that with the vertical fall of exports the main revenues of the national treasure made by Customs duties will fall. The nation, let's say, appropriated them definitively - deteriorating provinces treasures- by the 1866 Amendment of the Constitution (Ruiz Moreno [18]). But Argentinean prostration had begun a half century before, with the avalanche of immigrants and the enormous investment of capital, possible thanks to the incorporation of millions of hectares after the Campaign to the Desert commanded by General Roca (1870).
The country was territorially enlarged by more than 15.000 square leagues. A square league is 1600 hectares, which is to say that the territory enlarged by about 24 million hectares. Given the control of the market and colonization, the "boom" of real estate values wasn't avoidable. Those values are not wealth - as we have seen - but credits that people should pay to access to the land for purchase or lease. These effects can't be understood without, at least, giving a glance to prospering Argentina of 1910.
Effects of speculation on land at the end of the 19th century
To appreciate a city like Buenos Aires - the editorialist narrates - it is necessary to know that in 1870 it didn't have more than 175,000 inhabitants while today it has 1,300, 000. The most common anecdotes and the background of every conversation, refer to the fortunes made in ten years, to yesterday's emigrants - today millionaires, to the vast regions that are to deforest ... to the lands you can purchase with 20 pesos per hectare which will be worth 200 in four years. The penetrating columnist does not let go of what is happening: Almost all big fortunes have, indeed, their origin in the bigger value of plots... At present time, those which get rich sooner are not manufacturers, but proprietors, speculators and banks. This is so true that any merchant, who got rich doing business, hurries to buy land. If he is clever, in a very few years he doubles or it triples his fortune ([10]p. 577/578).
But the banquet is not for all: The worker's neighborhoods are made up of miserable houses... that are called in Argentina "conventillos"... dark airless dumps are the rooms. The truly scandalous thing is the rent the 50 unhappy souls that live in such holes pay ([10] p.137).
However there are poor people that live worse. In this city that for thirty years keeps progressing, they are still many things to be made. San Cristóbal’s neighborhood, called the neighborhood of the Frogs, it is a persistent vestige of the Buenos Aires of past times. There the refractory to public welfare wretches take refuge, the liberal ones that prefer misery and independence... The architecture of their housings is of "oil can style"... The Standard Oil Trust has provided almost all the building materials... ([10] p.78). You can see that whole population made up of pimps and prostitutes sitting down at their hovels' doors drinking mate and around them mountains of refuse and garbage that horse-driven carts will empty there unceasingly ([10] p.79).
But very close to this neighborhood (no more than twenty blocks) at San Martin Square, it looks like a neighborhood of sumptuous residences of Buenos Aires’rich people, of the aristocrats, as they say here: mansions of the Alvears, Barys, Anchorenas, Cobos, Casares, Unzués, Quintanas and Pereyras. ([10 ]p.89).
While profiting of the land as a trade object and not collecting land rent, property rights become a mechanism to live off other people's work. J. Huret illustrates this phenomenon to us when he narrates the case of former Vice-president of the Republic, Victorino de la Plaza. He bought 20 leagues of land to the South of the province of Buenos Aires for 2,000 francs. Then he went to England where he remained for some years. During his absence the neighboring lands were cultivated and some railroads were built. When he returned to Argentina he was offered 150,000 francs per league. Italian farmers and English capitalists had worked for him ([10] p.580)
We have reproduced Bunge’s research and a foreign visitor's assertions because - one from the research field and the other from the witness view - demonstrate the cancer that eats away Argentinean society from the times of national organization.
Privatization of land rent generates violent systems
A surplus of workers appears that cannot contribute their abilities to the productive process. The new generations or the new immigration waves of workers find that they can't access the land easily.
Immigration ceases. But the vital forces that govern human behavior determine that new beings continue coming to this world and although the rate of births decreases drastically, while abortions and infantile death increases, the net balance of population growth reaches 1% yearly. For a population of 36 million it means that every year about 360,000 children incorporate to our population, and because of the diversity of sex, in two decades they will form about 150,000 homes. Though this rate is minimum, given the barrier that constitutes land rent, that modest growth is a tremendous force that, like Boyle-Mariotte law, though the volume is fixed (economically reachable space), it will cause an increase of social pressure (dormant conflicts) that will cause explosions on social order (demonstrations and violent crashes).
Real capital also lacks new investment opportunities and its revenues diminish with wages of the workers. Starting from that point, forces tending to assure the survival of members of society suffocated by the system quickly operate. The structure of society flagrantly changes from a reasonably open society it turns to a more and more closed one; their members don't find horizons to develop according to their natural inclinations.
The phenomenon of power begins to dominate in each one of the social relationships. The cleverer people soon notice that only a high concentration of power in their hands, the enjoyment of special privileges, the monopolizing dominance of the market and, if it is possible, the seizure of the apparatus of the State, by them or by similar elements, can assure them revenues that allow them to carry on their plans and to live in the most luxurious ways according to the civilization of their time. Giving due respect to the system of private appropriation of land rent, the companies and capital tend to have a monopolizing power in their field; same as the salaried workers, with the difference that the organization of those latter is usually slower and they sometimes have to overcome the repression of the government. Giving due respect to the privatization of land rent the entrepreneur's benefits are achieved trough the workers' cost; capital in its form of financial capital is slippery. As the cutting falls on the workers’ wages, these enter in open conflict with entrepreneurs and capitalists in general, because in them they visualize the source of their wrongs. All in all, they lack a theory that is able to disclose to them the real root of the conflict. Workers don't distinguish between entrepreneur, capital investor or capital in a monopolizing position and who profits with land rent.
Many times it is the same people exercising those different roles. The exploitation of salaried workers is evidenced in the fall of their income, moreover when unemployment emerges as the worst threat that lies in ambush. Labor relationships, that must be cooperative, become potentially and permanently conflicting. Things worsen when a "friend or foe" conception of the world settles into society. On the side of the fortunate ones, ideologies are created to confirm their own superiority, justifying enormous revenues, thousands of times higher than those of the unhappy ones unable to leave poverty. As for them, they also create deleterious prejudices for achieving a social cooperative order.
The limit is reached when in each opposed field they end up thinking how much better the country it would be without "the other ones", those visualized as the born enemy. Such prejudices, as bad or erroneous as they are, are the operative thoughts that condition reality. At the end of a relatively long process, the confronted classes remain established in the social reality (David Bohm [1]).
On the side of the salaried workers, which is most of the population, many deformities are generated; from refusal to working to regarding work as an instrument to earn the daily bread. A deep dislike towards entrepreneurs in general dominates the soul of most of the workers, even when they consider them "work givers". This latent dislike is like wound that can be infected at any moment, which makes labor relationship constituted this way somewhat conflicting by nature, a fact that slowly undermines social economics. Another effect is the belief on the part of the salary earners - belief is disseminated on the whole of society - that the work by means of which one earns a living, should be "given" by somebody. It is not strange that workers fabricate the illusion that the State is the most important "work giver".
This has fateful consequences not only on economics but in the style political order takes and in the degradation of social morality. The deep hostility of common workers against everybody that performs a managerial role is a bad moral environment, not very favorable to the development of a powerful managerial youth, indispensable to establish a self-sustainable market economic. We can't avoid mentioning a universal hope placed in another title: "the diploma", obtained after studying long careers, not completed for the sake of knowing, but to obtain a better living opportunity.
Erroneous theories cause deep social conflicts
Salaried workers were organized from the start and they constituted unions and labor organizations with the objective of enjoying an equivalent power to that of the capitalists and industry owners and with the purpose of improving their wages and work conditions. This reaction is clear if one keeps in mind the violent relationships that have formed because of the monopolizing of lands and the private appropriation of land rent. These are extremely violent acts. It's enough to imagine the structural violence that would arise if somebody could monopolize the air that we breathe to sell it us in the market (Ian Lambert [10] and Fred Harrison [9]). But the serious thing is that very few, if any, are aware that the violent relationships between capitalists and entrepreneurs on one hand, and salaried workers on the other, have their origin in the system of real estate property. Who think about the relation between the growing violence in argentine society (murders, robberies, kidnappings, and briberies) and the system of real estate property? Nobody know this scientific thought:
“Whence shall come the new barbarians? Go through the squalid quarters of great cities, and you may see, even now, their gathering hordes! How shall learning perish? Men cease to read, and books will kindle fires and be turned into cartridges!” (Henry George [32])
The company owner/worker confrontation was due to the progressive concretion of harmful doings that both parties caused to each other (and still cause), but on a greater degree because of the erroneous visions about the deep causes of the conflict. None of them, especially in urban sectors, kept in mind the issue of the monopoly of land, the private appropriation of land rent and the State tax spoliation.
The economic theory to which each one of the parties appealed as a catechism, played an important role in creating tainted visions. The economist explained to economy, at a first stage, from the point of view of the Wealth of the Nations by Adam Smith (1853/1930). In a second stage (1930/1950), from the J.M Keynes point of view. From 1960s they were every time closer the neoliberal perspective stated by Alfred Marshall and cultivated by North American economists all which are characterized by disregarding, disdaining or ignoring completely land issues, rent of the land and taxes (So did Peter Schumpeter [29], and the general literature used at the centers of high studies; see this corruption in M.Gaffney - F.Harrison (7). These were the thoughts among entrepreneurs and capital investors.
Argentinean workers, at first (1890/1945) saw things from the point of view of Karl Marx's Das Capital, following, from l945 on, from the point of view of the speeches and doings of president and leader Juan D. Perón. Perón sustained that capital and work could conciliate by means of the strong State action transformed into the third vertex of a triangle. For all sides, those three questions (the monopoly of land, private appropriation of land rent and tax exaction by the State), were not operative.
With such conceptions of social life, it is not possible to expect a change that ends chronic disorder, as usual called a “crisis”. Social peace in which human cooperation takes advantage of the enormous natural resources of our territory is not possible.
Production increases, but we have richer and poorer people.
Not only, does this happen because landowners appropriate the land rent; but also because all kind of monopolies, privileges and preferential places that are generated on this legal basis. Because of the complexity of the organization of the human society, it is impossible to determine individually with accuracy if each one receives what corresponds to him or her in regards to what each of them contributes with their work or capital to the production of wealth. However, taking into account big groups, if the society gross product per capita grows and, instead of a general improvement of everybody's life, what appears is a group of opulent people distanced from another much bigger group of hard-working but needy people, it is necessary to suspect the existence of some structure that imposes that chronic unfair distribution of wealth.
It is important to make this reality clear if what is aspired is to have a bigger national consumer market. A reduced number of owners, the beneficiaries of land rent, no matter how much they consume, is not a dynamic force for the economic process. They can be an economically and politically powerful class; but it isn't enough to constitute a national consumers' market to which the products the country produces are directed toward. As much as that opulent class makes enormous expenditures, the rest of the population - numerically much more important - with their depressed wages, conform an internal consumer market of scarce purchasing power. In consequence, the productive apparatus will turn to external markets, making Argentina a substantially exports-based country. This bias has dominated, and still dominates today, Argentinean history.
This cultural badge, of material foundation, is so deep that the dreams of Argentina’ growth are always tied to the exports of goods, as if it were Hong Kong or another similar port. In spite of Argentina has 2,700,000 square kilometer, its Capital Buenos Aires (200 sq/km) is inhabited by 3 million, and half of its total population (more than 15 million) is concentrated on the narrow fringe that runs from Buenos Aires to Rosario (hardly 30,000 square kilometer). This is the cause that Argentina has to depend on exports. It is not a country, it is a port.
The situation is characteristic of all Latin American countries with the only exception, according to some, of Costa Rica, set apart in the continent by an acceptable distribution of land (James Busey [2]). Because of the eagerness to export what their own people cannot consume, each Latin American country believes that "the grass is greener on the other side of the frontier". The outcome of this is that their diplomats thoroughly work to fabricate arbitrary markets such as MERCOSUR. For these makers of regional markets it seems not to be important that in Brazil 20 million hungry, landless people wander about, that in Argentina a third of the population is below the level of extreme poverty, that in Uruguay half of the population is disseminated around the world or that Paraguay swarms with big landowners as much as impoverished people. It is understandable that industries born and protected in countries under such inhospitable conditions look with true desperation for the protection of the States to be able to place their products.
It is not understandable the non perception of this reality, that I have just described, when the Church made public an important documents - The Challenge of the Agrarian Reformation - issued by the Papal Council of Peace and Justice [28]). The people of Latin American countries are majority Catholic. The lack of reaction of political, social and religious leaders proves that dominant economics doesn't allow people to see the reality.
If land rent is not collected it is necessary to create taxes
The world's crisis was not the cause of the ramshackle course of later Argentinean economic; but it increased the perverse consequences of the structure land monopoly / privatization of land rent. Confronted with financial crisis, the government had to choose between two roads: 1) start collecting land rent and so legitimately obtain resources, which at the same time would begin to reorder the social economic structure of the country(as president Roque Sáenz Peña [30] in 1912 and the congressman Carlos Rodríguez in 1919 had projected [31]), or 2) instead, to protect individual beneficiaries of land rent opting for imposing taxes on production, work , investment and consumption to obtain resources.
Because of the government's nature in those days, (it had emerged from a conservative army coup d'état, linked to the families that formed the native landowner nucleus), it chose the later of the two: the creation of taxes on all those economic activities. With this decision begun the Argentina’s downfall.
The present Excise Taxes, Income Tax and Gross Revenues Tax - nucleus of the so-called "genuine" financing - plus the old Import and Export Tax, and myriad of other taxes invented to satisfy a continuous, and pitiful, public expenditure, the State has become a highwayman. From legal point of view, government enacts tax laws. But from materialistic perspective, it plunders firms, workers, investments and consumers. Argentina is a country governed by a principle that in a few words says: "work, invest or consume and perish". Private appropriation of land rent plus collection those taxes, take charge of executing this sentence.
From 1943 until the mid 50's there was a gigantic change in the Argentinean economic an social order that rebounded on other spheres of social life. The military governments of 1943 and especially the mass democracy that followed, eager to make a fair society operative once and for all, practically didn't leave a thing without change. But here it is necessary to echo the final words of Alexis de Tocqueville in Old Régime and Revolution: "The French Revolution changed everything, even the names of the months and the calendar, everything, except for the worst in the old régime".
The government of the times (presidency Juan D. Peron, 1946-1955) we speak of also changed almost everything in the country, including the National Constitution in 1949. It changed everything, except for the worst in the old régime: the system to access the land, the privatization of land rent and of tax systems. As it had to satisfy demand of social justice without changing these basic structure, it did the worst: demagogy plus inflation.
What should we do?
Arturo Frondizi (1958/62/66), Arturo Illia (1963), Hector Cámpora (1973), Juan D. Peron (1973/74) never thought about this problem. These governments represented years of false stability, years of open and bloody conflicts, years of pseudo pacification. To made matters worse, strong dictatorship (1966-1973) and later a genocide tyranny from (1976 to 1983) ruled our country.
Argentinean people pined for a return to democracy. It finally returned in 1983 with the election of Raul Alfonsin (1983-89), and continued later with Carlos Menen, (1989/99), Fernando De La Rua (1999/2001), Eduardo Duhalde (2001/03) and Nestor Kirchner (2003/). All of them were different in many respects. But, with respect to the question of land rent and tax, they were the same. There was no difference between extreme right, conservative, radical or extreme radical parties. None of them think about this fundamental question.
The fervor for democracy in the 1980's was beyond description and its impulse, although diminished, has lasted until our days, though it is quite subdued in regards to hope in its outcome. The skepticism is justified in people's general opinion because they have the feeling that beyond political rhetoric and the brainy theories of the specialists in economics, " Argentina stays just the same".
We talk of that luminous stage of the 1860's, with which we started this work, as a miracle that must be repeated. But, the writer Humberto "Cacho" Costantini was a pessimist in 1970. In his play "Chau Pericles!" (Good bye, Pericles!) [5] expressly shows that Pericles, Plato, and Aristotle were representatives of Greece. But today a Greek dealer in sweets (many Greeks trade sweets with Argentina) is not equal to them. Today´s Greece is not equal to ancient Greece. This was a “miracle”. Was Argentina in 1860 also a miracle like ancient Greece? Is it not, therefore, repeatable?
It may be that our poet is mostly right. But if one loves Argentina and wants with full good faith for it to recover for itself and for the world, as once everybody hoped with absolute security, it is necessary to be convinced of one thing: that such a recovery is impossible if the issues of land rent and tax are not dealt with intelligently and fairly. Argentineans should realize that land rent cannot be in private hands, because it is the basic underside of public treasure. If land rent is collected, it is possible to eliminate the taxes that hinder work and investment. This is not all of it; but without this there will never be a new Argentinean miracle.
Buenos Aires, mayo, 2004
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http://www.earthrights.net/docs/sandler-unveilingmystery.html