In Caracas, Venezuela an abandoned skyscraper has become a prime example of the power of spontaneous order.
Intended as a temple of white-collar affluence (the roof has a helipad for executives), the Centro Financiero Confinanzas was abandoned in 1994 when the government took it over after a banking crisis. Several years later as Hugo Chavez increased the government’s control over the Venezuelan economy, Caracas experienced a worsening housing crisis. In 2007 the city’s poor took over the building. Now known as the Tower of David, the skyscraper houses over 700 families.
Not only are thousands of people making new homes for themselves, many are finding the demands of the market and responding accordingly. Shops dot the 28 inhabited stories, including a beauty salon, a dentist, and several grocery stores. My economist-in-training side sees a fascinating example of how market forces make can make a bad situation better. Those who live in this tower are certainly better off than they would be in the hillside slums, otherwise they wouldn’t have moved here.
Especially interesting are the interviews with some of the residents. While many claim that the tower is a hotbed of drugs, gangs, and violence, the people moving here often have no other option except homelessness or even worse slums, and both options are more dangerous than the Tower. And the residents themselves tell a different story. As Daisy tells the documenters, “in reality, me, I’ve lived alone here and nothing has ever happened to me. Never ever.”
Another resident, Hipolito, has an apartment as nice as anything you’d find in the states. “I got here three years ago,” he says, “There was nothing but mountains of dirt. There were no walls like the ones you see now.”
Guillermo Barrios, a professor of architecture at the Central University of Venezuela has different vision for the Tower:
“The right path would be to relocate these families into adequate residences, adequately planned around a vision of habitat, of housing with integrated public services. And then return that tower to its original use. That is what is really needed.”
What Barrios fail to understand, is that the Tower is demonstration of both the failure of governments and the success of markets. Failure, because without the Venezuelan government acquiring private housing there wouldn’t be a housing crisis in the first place (if you know the government can take your new set of apartments you won’t even build them). And success, because this is exactly what the market is: individual people bettering themselves in the face of scarcity. As Hipolito tells us, “A lot of people from different slums come here. Not because of the government, but because that’s the nature of life.”