Below is an interesting article on Haiti, which is most appropriate given the debate that is raging on about the future of the Haitian people.
by Garrett Glass.
The troubles of Haiti are once again making front-page news all over the world. Every expert from Amnesty International to French Foreign Minister Dominique de Villepein has an opinion about what needs to be done to fix the problems. There are some fundamental issues, however, that often go ignored in all the demands for foreign military intervention and financial aid.
Property Rights
In Haiti's 200-year quest for freedom, one of the most crucial components of freedom, which leads to prosperity, has never been effectively implemented or even seriously tried (much less respected). The Haitian system of establishing property rights is so convoluted, complicated and corrupt that to the average citizen of Haiti owning any property will always remain just a dream. The connection between poverty and the lack of property rights is often overlooked.
Haiti's history of abusing property rights traces its roots back to Jean-Jacques Dessalines when he declared himself emperor for life in 1803 and nationalized almost all the French plantations. He employed "communist" ideas almost fifty years before Marx wrote the Communist Manifesto. Sadly, Haiti's record of protecting property rights hasn't improved much since.
Hernando de Soto in his insightful and accurate book "The Mystery of Capital" discovered that to obtain a legally recognized title to property in Haiti takes over 11 years and 111 bureaucratic steps involving 32 separate offices and countless forms to be filed. The CIA world factbook estimates Haiti's adult illiteracy rate is 53%. Anyone that has purchased property knows that the requisite forms can be confusing for even a fully literate person. The government's attempt to intentionally maintain a cumbersome system of owning and registering property keeps the underclass impoverished and the wealthy in control.
De Soto estimated in 1995 that the total value of untitled, extralegal property in Haiti is over 5.2 billion dollars. To put that number in perspective, according to de Soto that is greater than the total value of direct foreign investment to Haiti from 1804 to 1995.
Why are property rights so important for alleviating poverty and ensuring freedom? It establishes a system of accountability and trust that makes trade, finance and commerce possible. When property is protected, capital can be accessed through collateral. That capital can in turn be invested in businesses or education or hospitals or farms. The simple truth is that the Haitians have all the capital/money they need right now to make their country prosperous; what is required is a streamlined system of property rights that gives access to the wealth under their own feet. The poor of Haiti can rise up out of their poverty by accessing the "dead capital" in their homes and businesses and using that capital to grow and attract investment. The Haitian people are creative hard workers, but without property rights, the only capital they have is their hard work.
According to de Soto, one of the impediments to accessing the capital value of land is an objective system that evaluates and trades on the capital worth of land. In the United States, a property owner can sell property in California and almost simultaneously buy a new piece of property in New Jersey because there is an established and ubiquitous system of property rights that objectively values property.
In many countries that have property rights structures similar to Haiti, people are forced to do business with people they know. Since it is often unclear exactly who owns a piece of property or a business, any capital investment or loans are typically only transacted between known acquaintances, family or friends. It is highly unlikely that an unknown foreign capitalist would invest in any business if the real estate connected to that business is not protected. The current property rights in Haiti do not protect owners from government seizure, looters or competing claims to ownership. An insurance company would certainly be unwilling to insure a business or home if a clear title to the property is not available.
A fair impartial judiciary upholding a fair and non-discriminatory civil code of law ensures property owners that their property will be protected and their investments will be free to yield profits.
Protecting Property
Amnesty International recently released recommendations for solving the crisis in Haiti. One recommendation calls for a commitment to disarming the rebel forces and the militias, but what Amnesty should be calling for is a reform of the system that causes crime and lawlessness. A disarmed Haiti would not only be at the mercy of criminals, it would lose the only form of political discourse that seems to have an effect on its leaders. Many citizens carry guns for personal protection, as do foreign humanitarian workers. Haitians, with a poorly funded and inadequately trained police force, simply cannot and do not depend on the local police forces for protection from crime.
It should be underscored that the militias and rebel forces are the people of Haiti. Citizens are out of patience with ineffective, corrupt and selfish leaders who have repeatedly neglected to protect them. Since the electoral process has failed over and over again, armaments are one of the only effective tools citizens can use to defend their rights and bring about political change.
While on a trip to Haiti, Jon Smorenborg, a Dutch man who runs an orphanage, told me he never leaves the grounds of his orphanage without his pistol and keeps armed guards for security. A recent Wall Street Journal article described the story of an American woman who runs a school and hospital that experienced the theft of over $7,000 worth of donated food and supplies from their warehouse in City Soleil. People don't necessarily break in to steal TVs and stereos; more often than not they break in to steal food and medical supplies.
Nearly every home in Port-Au-Prince is surrounded by a high fence topped with spikes or broken bottles (for those that can't afford expensive iron work). These fences are not simply a part of their indigenous culture; they are there to keep burglars out of their homes. Crime is a primary form of sustenance for some Haitians. In the confusion following the fall of Saddam Hussein in Iraq, the men of many villages armed themselves and took up the responsibility of protecting their own and their neighbors property from roving bands of looters because there was no police force, or it what remaining forces there were after the fall of the Ba'athist regime could not be depended upon to protect the people.
Haiti desperately needs to reform their laws, their judiciary and their property rights system. The spirit of these reforms will take time to have a positive effect on the actions and the attitudes of the people and must be more than just words on paper. Just as the world has witnessed the impracticality of installing an instant democracy in Iraq, Haiti will have to experience growing pains if they ever to hope to call themselves free. Even though they liberated themselves from the shackles of slavery 200 years ago, few have enjoyed freedom.
The ideas are simple, but never let it be said that they are easy. A system to establish ownership without excessive hindrance and a code of laws that vigorously protects ownership are a good start
March 3, 2004
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