Marginal Revolution: Ordem e Progresso, part II

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Ordem e Progresso, part II

Property rights are evolving, and rapidly:

Vigilante militias are alleged to have taken over Rio de Janeiro slums, ruling as feudal lords and imposing taxes, as a result of the collapse of legal policing in these areas.

The vigilante militias are made up of off-duty police officers and former police officers. They work to expel drug traffickers and other criminals from favelas, known as Brazil's poorest and roughest neighborhoods, to set up protection rackets themselves.

According to Rio De Janeiro's public security department, 92 favelas are now controlled by militias, up from 42 in April 2005. They take over a new neighborhood at an average of 12 days.

Sociologist Ignacio Cano, who works for the Rio de Janeiro State University, said that the root of the phenomenon is a quest by corrupt police officers for more money, against the backdrop of falling drug profits and a drop in bribery.

These officers have decided to take direct control of the areas and seek other ways to extract cash from Rio's poorest, he said.

Militias then demand protection money from the neighborhood they have captured: taxing residents five to seven U.S. dollars per head for living in the area; demanding two dollars for each tank of natural gas, the most common source of heat for cooking; and charging local taxis for entering the area.

I read many articles on this topic but the most insightful is this Chinese source, consistent with what I heard from Brazilian friends.

Two questions: first, which groups are the most efficient "bandit-controllers" of the favelas? Should it be someone who will continue to live there, or someone who owns land there (informally perhaps), or someone altogether different?

Second, would drug legalization do much to limit crime in this setting? If a group can create a territorial monopoly on selling drugs, and drugs cease to be very profitable, cannot that same territorial monopoly be transferred to other goods and services, as we seem to be observing? In Rhode Island the vending machine business was long corrupt. It may be claimed that the illegality of drugs makes them a special target, but keep in mind the laws are not and cannot be enforced inside the favelas. It is the favela boss who issues the relevant dictates.

As for Rio, here is what went on earlier this week. I am happy to report that all three of us are back home safe and sound.

Posted by Tyler Cowen on December 30, 2006 at 07:25 AM in Travels | Permalink

Comments

Man, those Rio slums sound like a libertarian utopia! The "dominant protection agency" has established a monopoly on the use of force and everything. How could anyone object?

Posted by: Matt at Dec 30, 2006 10:55:20 AM

What really amazes me is that anyone could go to Latin America, observe the chaos and poverty… And then advocate Open Borders here in the USA. Exactly how much intelligence does it take to recognize the uncontrolled migration from Latin America will make our country into a northern version of the same thing? Don’t believe it can happen here? Here are a few quotes from a family that moved from Los Angeles to Kentucky

“The police control the streets. It's clean, no gangs. California now resembles Mexico—everyone thinks like in Mexico. California's broken.”

“The girls right here in Los Angeles are like in Mexico. There are girls that are 14, they got kids”

The words of some right-wing immigration restrictionist? No, actually these are quotes from illegal aliens who fled Los Angeles seeking a better life in Kentucky. It tells you something that immigration has turned Los Angeles into such a hell on earth, that Kentucky is now the Promised Land.

See 6 + 4 = 1 Tenuous Existence An illegal immigrant couple with six children were already living in poverty. Then the quadruplets arrived. They're still in a daze. for the entire sad tale.

Please don’t tell me how well assimilation is working. Next time you see bilingualism spreading into some heretofore untouched domain, try to convince yourself that you still believe it. The reality is that a country dominated by the ideologies of “diversity”, multiculturalism, bilingualism, identity politics, “group rights”, welfare state dependency, etc. can’t assimilate anyone who isn’t highly motivated in the first place.

Of course, a 48% illegitimacy rate combined with a 50+% dropout rate don’t exactly facilitate assimilation. Nor does coming from a neighboring country with irredentist claims on our own nation.

Posted by: Peter Schaeffer at Dec 30, 2006 1:23:02 PM

TC, What's the size of these militias? $210,000 is a lot of money but what's the divisor? Are there any costs to these militias?

Posted by: lee at Dec 30, 2006 1:36:06 PM

Peter needs to read and recall before writing. I don't advocate open borders and have said as such in print a few times.

Posted by: Tyler Cowen at Dec 30, 2006 2:37:14 PM

But, Tyler, when are you going to draw the logical conclusions from your travels South of the Border and call for stronger border control?

Posted by: Steve Sailer at Dec 30, 2006 2:50:01 PM

The biggest problem with Brazil is informality of real property onwership and informality of employment, both of which have a basis in over-regulation and government red tape.

The U.S. is moving into more labor informality due to the illegality of hiring undocumented workers in the formal sector (i.e. over-regulation and government red tape).

Posted by: Mr. Econotarian at Dec 30, 2006 4:05:28 PM

What is with the racist hate speech? I thought this was an economic blog, not a neo-nazi rally.

Posted by: Francois Tremblay at Dec 30, 2006 4:48:54 PM

Schaeffer and Sailer demonstrate the lunacy of the American anti immigration mind. Again.

Posted by: shecky at Dec 30, 2006 5:45:28 PM

Isn't this post essentially describing a Mafia takeover? Why would that be any less pernicious in Brazil than it was in Sicily (or Chicago, for that matter)?

Posted by: Tom T. at Dec 30, 2006 11:01:07 PM

This takeover of the favelas by local mafia/slumlords is not unexpected is it? A pretty much similar thing is in place in slums in Mumbai, only without the drugs angle. I dont think drug legalization would help control this. In Mumbai at least, the economic opportunity is created because slum dwellers cannot easily obtain basic resources to live (electricity, clean water, security of the land they occupy) because they dont have ownership/title to land which is recognized by the state. Slumlords and mafiosi provide these services for a premium, while ensuring that their control is protected by appropriate understandings with local politicians. It seems to me that the problem is rooted in lack of clear property rights for slum dwellers, as well as poor law regarding rent, and property ownership in the city (this is at least true in Mumbai, i dont know about Rio).

I think the anti-immigration rants are a bit disgusting, especially given the speciousness of the argument behind them. The favelas/extortion/crime are a consequence of local economic and civic conditions, not of inherently vile attributes in the people themselves. The anti-immigrant argument is implicitly based on the latter, and appears racist.

Posted by: krishna at Dec 31, 2006 4:15:52 AM

Krishna:

You write that ”The favelas/extortion/crimea are a consequence of local economic and civic conditions, not of inherently vile attributes in the people themselves.”

It is a legitimate question how much of institutions are on papers and how much are in people’s minds. Nothing speciousness about that. In fact, some might call it economics (others call it “racist hate speech”, which I guess demonstrates their interest in intellectual discourse).

Would you deny that a lot of undesired cultural patterns follow immigrants into their new countries? The Sicilian Mafia, Middle Eastern Honor killings, Roma disregard for the law of obvious examples.

Now I agree with you that not all the problems are cultural, and that the culture might change over time in a new institutional setting such as the US, where the external incentives are different. The Sicilians adjusted, eventually. With Hispanic communities in the US today in general tend to have a lower amount of ‘social capital‘ than Anglo neighbourhoods, but it is nowhere near as bad as Mexico.

A place like California will have higher crime, worse schools, and some favelaish places that seem distasteful to visitors, but California is still an American state, so that the external legal and economic institutions are still Anglo. Therefore the place does fine, everything considering, even with 30%+ Hispanic population.

The big problem with the latest wave of migration is twofold:

• Much lower external pressure to adjust to American culture.
• Numbers that risk altering the external institutional structure.

40 years from now Hispanics will be a quarter of the US population. Their political norms are radically different from Americans, and not adjusting (or adjusting extremely slowly). Populism, Latino Identity based politics and demands for bigger government are dominant issues among these voters, according to polls.

What happens when Hispanics start altering both the informal cultural norms of their neighbourhoods AND the formal political institutions of the US towards Latin American ones?

The irony here is that Libertarians refuse to even acknowledge this dilemma, and instead prefer to attack anyone who points out the dilemma of being fascist.

It has nothing to do with “racism”. I would be delighted if millions of Mexicans and Brazilians wanted to come to the US to take after the American creed, Anglo-Saxon norms such as individualism, trustworthiness and limited government. But they clearly are not. Instead the majority proudly keeps the same norms that ruined the southern part of the continent.

Posted by: Teller at Dec 31, 2006 4:55:39 AM

One thing is not clear yet: what are the objectives of those behind of the recent surge of violence in Rio ?

When there was something similar in Sao Paulo, it was clear that the criminals were making a point against changes in prison's regime.

These days, in Rio, some are expeculating that violence is a reaction against drug dealers loosing territory to the "milicias".
If this is true, drug dealers would be shooting at their own feet. Milicias dont have incentives to change their behavior when drug dealers attack the general population. So, drug dealers are not rewarded this side.
At the same time, State authorities have to strengthen their fight to drug dealers ( or whoever is making the attacks).

The timing of the violence seems to be picked carefully: it is when the city is full of visitors and needs peace, so the authorities would be eager to comply with reasonable demands.The only explanation is that drug dealers are assuming the milicias are controled by the authorities. As many of the milicia's men belong to the police force, it is easy to see why enemy gangs would make that assumption. But it is a mistaken assumption, nevertheless, and I think leaders of the gangs involved in this violence surge will pay dearly for the mistake.

Posted by: optimist at Dec 31, 2006 8:57:45 AM

Mr. Cowen,

In prior posts (June 2006), you appear to have argued that land use controls constitute a sufficient restraint on immigration that other controls are not needed. In my opinion, this thesis would be viewed as advocacy of Open Borders by both restrictionists and immigration supporters. In other words, arguing that land use controls are a sufficient barrier to entry, that other impediments are not needed, would be seen as support for unrestricted entry.

A useful note is that the current immigration is breaking down traditional (legal) controls on land use. The media regularly reports housing violations by illegals and the reticence of the authorities to respond to these offences against the law. Attempts at enforcement are met with cries of “racism”.

Of course, land use/zoning are not the only set of laws falling in the way of immigration (legal and illegal). It appears that hospitals have stopped enforcing statutory rape laws with respect to Hispanics because it wouldn’t be “culturally sensitive”. See Saturday’s Letters: A North Carolina Reader Exposes A Hospital’s PC Agenda.

Mr. Econotarian.

In my opinion, language matters. Referring to “undocumented workers” is wrong. They are not missing documents, that they somehow dropped or other otherwise lost. They are illegally residing and in some cases working in the USA. Would you call rape “undocumented sex”? Bank robbery “undocumented withdrawal”?

You are perfectly free to advocate legal and illegal immigration into the United States. However, you should also be willing to use the correct words to describe the policies you prefer. By the way, perhaps 1/3rd of illegals don’t work (children, dependents, etc.).

Mr. Tremblay,

You appear to be a contributor to The Radical Libertarian. Over at TRL you argue

“Everyone stop talking about immigration. Most of you are !@#$%^& racists and have no idea what you're talking about. There is no such thing as an "illegal". The "country" is not legitimate, any more than state or provincial lines are legitimate. It makes no sense to prevent people from traveling from one country to another any more than it makes sense to prevent people from crossing a side of the street or from one city to another. It is racism. NOTHING MORE.”

You are quite free to promote a world without nations, borders, etc. However, as you know many people disagree with this position. That doesn’t make them neo-nazis or racists.

Shecky,

Reasonable people differ on immigration policy. Please attempt to refute views you disagree with via logic, data, facts, etc.

Krishna,

Others, including Mr. Cowen, have suggested that unrestricted immigration into the US would create shantytowns here. It is not absurd to suggest that similar patterns of crime, corruption, and violence would emerge here over time. I would suggest you research the growth and activities of MS-13 before dismissing such concerns. Please note that shantytowns are already appearing in the US. In Texas, they are called Colonias.

Teller,

I recently communicated some of my concerns to a resident of Los Angeles. Her reply was “yes, it is true, but if you live on the West side you are insulated from it”. No doubt she is mostly correct (she allowed that immigration driven population growth had diminished mobility). However, the illegals I mentioned above don’t enjoy that privilege. They are living in the US, in a world all too much like Mexico.

Posted by: Peter Schaeffer at Dec 31, 2006 11:54:31 AM

"You are quite free to promote a world without nations, borders, etc. However, as you know many people disagree with this position. That doesn’t make them neo-nazis or racists."

Yes... yes it does.

Posted by: Francois Tremblay at Jan 1, 2007 4:16:48 AM

Mr. Schaeffer,

I live in Jackson Heights, NY, probably one of the most ethnically diverse communities in the world. It's largely Colombian, Ecuadorian, Bolivian, and Peruvian with pockets of Brazilians, Argentinians and Uruguayans.

It's a clean, safe neighborhood where my wife and I feel no need to worry about walking around at night.

No worries about crime here at all.

Posted by: Randy Paul at Jan 1, 2007 10:19:38 PM

Randy Paul,

History shows that problems with immigration don't always show up in the first generation. Europe was gushing with enthusiasm about Muslim immigrants a generation ago. The relevant statistic here is that the crime rate increases 8X between first and second generation Mexican immigration and ends up 3/4X the white/asian rate.

Posted by: Peter Schaeffer at Jan 1, 2007 11:45:00 PM

We're about three generations into it in my neighborhood. In fact, nothing in what I wrote indicated that it was "the first generation." Prior to the Latin American immigration in my neighborhood, there was a large number of immigrants from Galicia in Spain. There have been about 5 generations of Hispanic immigrants in my neighborhood. On balance, it's very safe.

Posted by: Randy Paul at Jan 2, 2007 12:25:58 PM

BTW, when I visited Belize in 1992, there were members of the Crips and Bloods there. LA has a significant Belizean immigrant population and it seems that one of the things that they imported were the American-based gangs from LA. Interesting.

Posted by: Randy Paul at Jan 2, 2007 12:28:57 PM

Randy Paul,

I am glad your neighborhood is safe. So is mine. Check out Seeing Today’s Immigrants Straight for a useful discussion of the current immigration. Not a pretty picture.

You are right about the impact of U.S. gang culture in Latin America. Certainly a vile export of the U.S. The combination of American social decay and Latin American poverty has produced harrowing results in several countries. See Gang linked to Honduras massacre for a tale of woe. Note that criminals deported from the UK back to Jamaica have proven to be similarly destructive.

Posted by: Peter Schaeffer at Jan 2, 2007 1:02:39 PM

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