Analysis of the Pastoral
Letter “The clamor for land”
Birgit Gose*
This analysis is based on the Pastoral Letter “The clamor for land” published by the Episcopal Conference of Guatemala
in 1988. The basis of the claims and proposals presented on that letter are
discussed briefly and are subsequently subjected to a critical review according
to current economic and political thought and theories.
On this letter the Bishops state the claim that historically in
Among the factors that would require immediate attention and remedy as
presented by the pastoral letter, are the precarious living conditions of the Guatemalan
rural population. These are the result of inhumane poverty levels which are
reflected in high levels of illiteracy, mortality rate, malnutrition, unemployment
or sub employment, and no adequate family housing. There exists a huge gap
between the rich and the poor people. The fundamental problem seen by the Bishops
is that the farmers don’t have their own land to cultivate their crops. The origin
of the problem lies in the days of the Colonies. Since colonial times, the land
has been held in the hands of a few privileged landowners who have enjoyed
arbitrary laws, and this unequal and unjust distribution has remained to our
days.
The pastoral letter attacks the law of offer and demand as being unjust
and inhumane. It states that the work of men is not simple merchandise, and the
Bishops ask for minimum wage raises and improvement of working conditions. To
escape the unbearable condition on the countryside, the agrarian people are
either migrating to the capital or to the
Within the conclusions of the pastoral letter there is an invitation to
solidarity for the landowners and government of
However, despite the good intentions of the Bishops within the pastoral
letter, following their advice to land confiscation and redistribution would
have dire consequences and would be detrimental to the very people that they
are trying to help. The main aspects which are ignored by the Bishops are the
desirable organization of a state and the very necessary separation of church
and state functions. Having exposed briefly the claims and suggestions within
the pastoral letter, I will now proceed to analyze human action, and clarify
the origin of the state and its functions.
Mises claims that society is concerted action.[1]
Should anyone direct this cooperation? The
church? The State? The choice of religion and of one’s beliefs is very personal.
The church as an institution guides
through the understanding of its texts and its task is to provide spiritual guidance. Historically the church’s functions
have been mixed with the ones of the
State. Mises clearly points out that there needs to be a division of State and
church. In most Islamic countries the political leader is the spiritual leader
as well. Here we encounter conflict
of interests for a healthy market economy and for liberty of the people. There is a gap between a
society ruled by the Rule of law and the one ruled by a religious doctrine. In order to comply with religious
requirements Mises says that individualists
might be lead to “master selfishness” and to sacrifice of what is perceived
as egoistic wants for the benefit of
society. [2]
This is the point where belief is twisted from its true search for spiritual fulfillment to blind following, accepting and
obeying of some authority, which
could carry any superhuman name. It reminds of primitive man who was not able to understand his
environment and who needed some outside explanation
by a greater spirit.
Early 1800 Frederic Bastiat concluded that certain nations seem particularly liable to fall prey to government
plunder. [3]
They are those in which men, lacking
faith in their own dignity and
capacity, would feel lost if not governed and administered every step of the way. On the other side of
the equation one could ask whether a State is necessary and if yes, which functions should be assigned to it.
Let us now analyze the origins
of the State. Understanding how States came into existence will help to determine which functions they should
fulfill. There are two main theories on this regard, one referred to
as the contractualist or exogenous theory, and the other one referred to as the
endogenous theory.
The first view, known as the contractualists or the exogenous origin of
the State, is associated with Hobbes, Locke and Rousseau. [4] It proposes that the state originated from a
contract to protect men from outside threat and war. The second theory is
presented by Rothbard and is known as the endogenous theory. Rothbard states that
the State has never been created by a social contract but rather that it has
always been born in conquest and exploitation. [5]
The creation of the State reflects a
mutual winning of two parts. The inhabitants receive their personal security, minimizing
pressure and creating conditions to encourage production, savings and
investment. Whereas the aggressive armed group receives permanent and
“confiscated or taxed” income from the inhabitants. The individual can choose
between constant conflict and an order that guarantees security of one’s
rights.
Every step a government takes beyond the fulfillment of its essential
functions of protecting the smooth operation of the market economy against
aggression is a step toward loosing one’s freedom.[6]
Freedom being defined as that state of
affairs in which the individual’s discretion to choose is not constrained by governmental
violence beyond the margin within which the praxeological law restricts it anyway.
Society is a product of human action, the human urge to remove
uneasiness as far as possible. It is man’s innate nature that seeks to preserve
and to strengthen his life. He is in
constant search of what may be called happiness. For human action to take place
the individual needs to act in a conscious, voluntary, real and rational
manner. According to Ludwig von Mises there are two ways to understand reality.
The first one is based on the principle of cause and effect which helps define
the person’s ends. The second one allows an outside agent to create the
person’s reality.
Economics has revealed a great truth about the natural law of human
interaction, that not only production is essential to man’s prosperity and
survival, but also exchange. Another fact of human action is the possibility to
specialize and exchange for mutual benefit even if one of parties is superior
to the other in both lines of production. David Ricardo calls this discovery
“The Law of Comparative Advantage”. It means that in a free market of voluntary
exchanges, the “strong” do not devour or crush the “weak”, contrary to the
common assumptions reflected in the Pastoral Letter about the nature of a free market
economy. [7] In
a similar fashion, German sociologist Franz Oppenheimer shows two ways of
attaining wealth in society: a) by production and voluntary exchange with others
– the method of the free market; and b) by violent expropriation of wealth produced
by others. The latter is a method of violence and theft.
As Rothbard points out, there are two types of ethically invalid land
titles: “feudalism”, in which there
is continuing aggression by titleholders of land against peasants engaged in
transforming soil; and land-engrossing, where arbitrary claims to virgin land
are used to help first transformers out of that land.[8]
He calls both aggressions “land monopoly” in the sense that arbitrary
privileges to land ownership are asserted in both cases.
In the popular use of the word “unjust” it means that some suffer and
others enjoy, that some win and others loose. In this sense injustice is what
“should not be”, a statement loaded with subjectivity. In the Pastoral Letter
the use of just is “should be”. However, a program to transfer land would be unjust
in the sense of criminal confiscation of property if the landlord’s title is
just. The land problems can only be solved by applying the rules of justice –
inquiry into present titles of land. The inequality with regard to wealth and
income is an essential feature of market economy. [9]
Henry George asked the following question: How can I justly say of a
thing “It’s mine”?[10]
The church is asking the State to interfere and decide what is “mine”. The land
is supposed to be divided into equal parts among an equal amount of people. Who
determines that amount? Each person works on their cell of land – equally.
There is no room for division of labor and specializing in processing trades.[11]
Mises points out that it is a serious mistake to call for such an agrarian
order or agrarian socialism. Giving a gift of land to a group of people will
privilege them. Let’s wait one generation and some farmers will do better than
their neighbors, because of their size of family, their physical strength, or because
of their own initiative, hard work, foresightedness, risk taking and sense of
responsibility. They might decide to trade, to exchange and offer crops where
there is a higher demand. Shouldn’t we set an arbitrary date on which we will
redistribute again? Clearly in the course of time some were more successful and
had acquired more wealth than others. Or should we help the less fortunate
farmer with further gifts of in form of subsidies? All paid for by the
government, which means by each tax payer. The cost of the subsidies will be added
to the price of the agricultural goods, so the consumer gets punished twice. What
is the government doing to the entrepreneurial farmer? He won’t need to strive for
improvement, doesn’t need to fear competition, because the paternal State will protect
him. It is a form of socialism which history has shown led to the collapse of
its system.
Adam Smith summarizes the main functions of the state the following way:
provision of security, justice and provision of public well being. Mises
narrows them down even further, justice and liberty and allowing for peaceful
coexistence. Nowadays the State performs many important functions. In
Mises argues that for every unprofitable project that is realized by the
aid of the government there is a corresponding project, the realization of
which is neglected merely on account of government intervention.[12]
On the same topic Bastiat states that the government offers to cure all the ills
of mankind.[13] It
promises to restore commerce, make agriculture prosperous, expand industry,
encourage arts and letters, wipe out poverty, etc.. All that is needed is to
create some new government agencies and to pay a few more bureaucrats. This
claim to government forgets that the state has no resources of ifs own; it has
nothing, it possesses nothing that it does not take from the workers. When,
then, it meddles in everything, it substitutes the deplorable and costly
activity of its own agents for private activity.
The State is not the source of wealth. It can only give what it has
previously taken. Ideally it would work with a responsible conscience without
passing privileges. Let’s allow the natural order improve everyday living
thanks to non-intervention of the State. Also a State does not create
employment. Frederick Bastiat states that one can’t obtain something in
exchange for nothing. The public sector spends the money, and the private
sector has not had a chance to show which places of employment it would have
created or which investments it could have done.
As an example of government intervention is the setting of a minimum
wage. It prohibits the employer to pay less than an established price. The wage
is the price of the product of work. It is a misinterpretation to think that
the worker is being bought like merchandise. In the free market economy there
is respect for the worker, whose work is paid for according to his or her
qualification and skills. The product receives a price which depends on offer
and demand on the employment market. If the price is set higher than the market
rate, it means that the difference of price will be added to the final product.
Then the product won’t be competitive and the consumer will buy less or look for
a substitute. The final result is that the unproductive company might hire
fewer workers, might invest into more than necessary machines or that it will
close its operation. These effects will cause unemployment of the very people
which the government intended to protect.
This boils down to what Hernando
According to
Mises calls the vehicle of economic progress its accumulation of
additional capital goods by means of savings and improvement in technological
methods of production.[16]
It has also been called the circle of progress.
Douglas C. North, Nobel Prize
of economy in 1993, looks at economic change as an ongoing process.[17]
It’s the consequence of choices of individual actors are making every day.
Economic history is about the performances of economics through time. North
defines institutions as the humanly devised constraints that structure human
interaction. They are made up of formal constraints (rules, laws, constitutions)
and informal constraints (norms of behavior, conventions, and self imposed codes
of conduct). If institutions are the rules of the game, organizations and their
entrepreneurs are the players. They are the underlying determinant of economic performance.
Time as it relates to economic and societal change is the dimension in which the
learning process of human beings shapes the way institutions evolve.
Since 1995 the Heritage Foundation has been producing an index of
economic freedom of 161 countries as a tool for policymakers and investors.[18]
It is a careful theoretical analysis of the factors that most influence the institutional
setting of economic growth. The countries with most economic freedom also have
higher rates of long-term economic growth and are more prosperous than those
with less economic freedom. The analysis is divided into 10 broad factors:
trade policy, fiscal burden of government, government intervention in the
economy, monetary policy, capital flows and foreign investment, banking and
finance, wages and prices, property rights, regulation and informal market
activity.
Private property of the means of production is the fundamental institution
of the market economy.[19]
Ownership means to have full control. One can decide to merely look at the
land, leave it wild, grow trees or build a house. The freedom to decide what
one wants to do with one’s property. Mises writes that various schools of
Christian socialism see the institution of private property preserved only in a
“formal sense, while in fact there will be only public ownership.” Private
property has existed through man’s history. It has been fought for in robbing
it and robbing it again at a later stage. Private property as mentioned earlier
in this paper was the incentive for the creation of the state, which can legally
formalize it. For a non manipulated market society the consumer decides on a
daily basis who should own what and how much he or she should own. Ownership is
an asset only for those who know how to employ it the best possible way for the
benefit of the consumer. Private property is a social function.
Mises summarizes that interventionism needs to end based on three reasons.
First: Any restriction will limit the possible gain which can be reused for consumption,
savings or investment. Second: Any interference will continue with further
interferences until finally complete control has substituted a free market economy.
Third: Interference aims at confiscating the “surplus” of one part of the population,
but this surplus won’t last forever and if people have not been prepared to rely
on their own inventiveness for solving problems, prosperity will stall or go backwards.[20]
Men must choose, and most men have chosen a market economy, particularly after
the collapse of the Soviet Union and the fall of the
Based on the arguments presented on this analysis, in order to truly
improve the living conditions of the rural population and of all Guatemalans,
the well intended remarks and proposals of the Pastoral Letter should be replaced
by a concerted effort to strengthen the freedom and legal framework of the
country. Thus, by reducing and refining the roles and functions of the state to
the ones which encourage and guarantee the freedom of action of its citizens,
including the very important right to private property, prosperity and justice
would be improved for everyone.
*Profesora de la Facultad de
Arquitectura de la Universidad Francisco Marroquín
Bibliography
- Ludwig von Mises, Human Action,
- Ludwig von Mises, Socialism,
- George Roche, Frederick Bastiat – Free Markets, Free Men,
The
- Hans-Hermann Hoppe, Article: Natural Elites, Intellectuals, and
the State, Ludwig von Mises Institute
- Murray N. Rothbard, The
anatomy of the State, Mises Institute, 2000
- Murray N. Rothbard, The ethics of liberty, New York Press,
1998
- Henry George, Progress
and Poverty (originally 1879),
Robert Schalkenbach
Foundation, 1990
- Hernando
- Hernando
- Douglas C. North, Nobel Prize lecture,
http://www.nobelprize.org
- Heritage Foundation,
http://www.heritage.org/research/features/index
[1] Ludwig von Mises,
Socialism,
[2] Ludwig von Mises,
Human Action,
[3] George Roche,
Frederick Bastiat – Free Markets, Free Men, The Hillsdale College Press, 1993,
p.159
[4] Hans-Hermann Hoppe,
Article: Natural Elites, Intellectuals, and the State, Ludwig von Mises
Institute
[5] Murray Rothbard, The
anatomy of the State, Mises Institute, 2000, p.56
[6] Ludwig von Mises,
Human Action, p. 281-283
[7] Murray Rothbard,
Chapter 7, Interpersonal relations, voluntary exchange
[8] Murray N. Rothbard,
The ethics of liberty, New York Press, 1998, chapter 11 on Land monopoly, past
and present
[9] Ludwig von Mises,
Human Action, p.288
[10] Henry George, Progress
and Poverty (originally 1879), Robert
Schalkenbach Foundation, 1990
[11] Ludwig von Mises,
Human Action, p. 805 Land Reform
[12] Ludwig von Mises,
Human Action, p. 659
[13] Ludwig von Mises,
Human Action p.161
[14] Hernando
[15] Hernando
[16] Ludwig von Mises,
Human Action p.257
[17]
[18] Heritage Foundation, http://www.heritage.org/research/features/index
[19] Ludwig von Mises,
Human Action, p. 682-685
[20] Ludwig von Mises,
Human Action, p.858-861