Tuesday, October 21, 2003

Interview with Michael Hudson on Chile: "SS: Regarding land distribution, some historians on both the left and right point out that Allende had attempted land reform, angering owners. Is this the case essentially?

"MH:Allende's attempts at land reform were half-hearted. He focused on urban problems, not agriculture. Chile's problem was vast underutilized tracts of land ­ the latifundia I mentioned earlier, which were ruining Chile just as Pliny the Elder said that they had ruined ancient Rome. Allende did not have a coherent economic program to provide this land to smallholders who would use them. He was so anti-business that he did not think of opening up rural credit banks to finance agricultural modernization.

"It does not seem to have occurred to Allende that rather than threatening to nationalize these estates outright, he could have used the tax system to break them up. He could have proposed a rent tax on the potential value of this land. That would have obliged the large landowners either to use their land efficiently or pay the government a tax as if they had done so. The landowners might have yelled 'confiscation,' but a property tax is normal for any country to levy."

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