Latin America has repeatedly failed to achieve the kind of settled distribution of property that could support a middle-class society.  This is a disjunction of subtle but increasing cultural importance as the United States becomes more of a Latin country.  With Jeb Bush running for the 2016 Republican nomination based in part on his ties to Latin America, it’s worth considering some of the more arcane history of why Anglo America and Iberian America diverged so sharply.

While trying to explain Latin American underdevelopment in 1912, American journalist Albert Edwards pointed out that a system designed for conquistadors ill served modern capitalists, who are emboldened by trustworthy land titles: “Frequently the original land grants read ‘from the sea back to the mountains.’  When the hinterland had no value this was a satisfactory description, but it is now a fruitful source of dispute.  Very few landholders know definitely how much they own.”  Recognizing the problems caused by massive land grants, the newly independent government of Mexico limited them to 11 leagues, or about 75 square miles.

Still, as late as 1845, almost the entire San Fernando Valley, 183 square miles (where I and about 1.5 million other people now live), was sold by Pío Pico, the last governor of Alta California, to his son-in-law.  The Valley is small, though, compared with the Maxwell Land Grant of 2,679 square miles accumulated in northern New Mexico by an American adventurer who married into a network of Mexican families.

Lawsuits over these grandiose but ill-defined colonial land grants still occasionally plague real-estate values in New Mexico by casting doubts on security of title.  For example, as recently as 2013, hundreds of homeowners near the Taos ski area found themselves unable to refinance their mortgages or sell their houses because of a lawsuit filed by descendants of beneficiaries of an 1815 gift by the Spanish crown.

The reforming Peruvian economist Hernando de Soto Polar has called attention to how much the typical lack of a clear title retards broad-based capitalism in Latin America.  Many of the poor have a customary right to the land they live on.  Yet if they try to put their land up as collateral for a loan to launch a small business, they may find that, legally, their family has been squatting, perhaps for generations, on some rich family’s land grant.

Even if politicians pass land-reform legislation, the devil remains in the details, as establishing clear title often means incurring daunting legal and bureaucratic expenses.  De Soto pointed out an odd chokepoint in his own country: “Usually the resistance comes from those who have a monopolistic position.  In Peru, it’s the notary publics, because there are only 40 of them and they have to check every document.”  The wealthy business owners of Latin America don’t mind the perplexity of the masses, as this makes the poor less likely to rise up and compete with them.

De Soto recounted to me that when he had first visited the leading economists of North America, they had assumed he wanted to discuss with them contemporary economic controversies such as budget deficits and privatization plans.  They were baffled by De Soto’s request for technical advice on how to set up the equivalent of a county registrar of deeds office.  “Everybody in America who truly understood property rights died 100 years ago,” he laughed.

Even when land was near at hand and had been carefully surveyed, the traditional European “metes and bounds” system of idiosyncratically identifying real estate by verbal description of borders makes dealing in land slow, expensive, and worrisome.  The Virtual Museum of Surveying explains that

To describe land by “Metes and Bounds” is to have a known landmark for a place of beginning, and then follow a line according to the compass-needle (or magnetic bearing), or the course of a stream, or track of an ancient highway.  This plan has resulted in endless confusion and litigation . . .

Albert Edwards argued that “the uncertainty of title” was a leading reason Central America was so underdeveloped:

There are a dozen large estates which would be bought up and developed at once if titles were clear, which are tied up in litigation. . . . There are almost no accurate surveys and the records of the land office are in a mess.  In Honduras an American once found a deed which recorded the corner of the property as marked by “a dead mahogany tree, with two ravens on the branch.”

In Latin America, what could have been business tended instead to turn into zero-sum politics.  And politics turned into multigenerational feuds over legacies among branches of old families.  Edwards complained, “Always some of the heirs are obstructing a settlement, in the hope that the next turnover in politics will put some of their friends on the bench.”

Property-registration laws may seem to 21st-century Americans an arid and tedious subject, but that’s because we can take them for granted.  They are of greater interest to people in countries with less farsighted founders.

As I discussed in “Benjamin Franklin’s American Dream” (Views, January), Franklin had pointed out in the 1750’s that the immense agricultural potential of the Mississippi River Valley promised not only to make the government that possessed it preeminent in international affairs but, more importantly, to liberate its people from the Malthusian trap by lowering land prices and raising wages.  A generation later, Thomas Jefferson took the lead in bringing about the rapid middle-class settlement of the Midwest.

Jefferson thought about land for most of his life, from his boyhood as the son of a frontier surveyor to his old age when he laid out the campus of the University of Virginia.  As a young attorney, he specialized in land law, especially “quieting of title”—searching government records to ensure there are no conflicting claims to a piece of property.  This set him thinking about how the new government might devise a way for unsophisticated buyers to minimize the number of billable hours they would need from expensive professionals such as his father and himself.

Jefferson had an opportunity to put his ideas into action when the Continental Congress drafted him to lead a committee to distribute the land acquired from Britain in 1783 in the southern half of the Great Lakes region and the eastern half of the Mississippi River Valley.

Famously, Jefferson added the western half of the Mississippi watershed two decades later in the Louisiana Purchase.  But he already had in operation in Ohio by 1785-87 a futuristic system for selling federal land directly to would-be yeoman farmers.  Jefferson’s system curbed expensive squabbles over who owned what and cut out the justification for the huge landlords that has so often been seen in Latin America.

English historian Paul Johnson has declared, “In the entire history of the United States, the land-purchase system was the single most benevolent act of government. . . . In the years after 1815, more people acquired freehold land at bargain prices in the United States than at any other time in the history of the world.”

One distinctive aspect of this benevolence was the low price charged by the federal government, as little as $1.25 per acre in the 1830’s, falling to nothing in the Homestead Act of 1862.  Another important aspect is subtler: Jefferson’s committee developed an abstract but practical method for delimiting the plots of land for sale to allow average citizens to buy and sell land cheaply.  You can see the results even today from a transcontinental jetliner, as you look down on the vast rectangles of Midwestern fields.

To get some sense of the uncertainties inherent in early property sales in the New World, consider the most famous real-estate deal in American history, Jefferson’s acquisition of the Louisiana Purchase from Napoleon Bonaparte in 1803.

Neither side knew precisely what land was being peddled.  Vast and vague, the western side of the Mississippi watershed had seldom been explored, much less surveyed.  When U.S. diplomat Robert Livingston asked Prince Talleyrand for guidance regarding America’s murky new borders with the Spanish Empire, the French foreign minister replied with a Gallic shrug, “I do not know . . . I can give you no direction.  You have made a noble bargain for yourselves, and I suppose you will make the most of it.”

The unmapped Louisiana Territory had been cleverly defined in the mid-18th century to get around the problem of drawing borders in the blank spots on the map.  It was agreed by treaty that Louisiana consisted of all lands to the west of the Mississippi that drain into that river: in other words, from the Mississippi to the Continental Divide.  Where exactly the Continental Divide might be remained a mystery, but at least its existence was certain: It had to be out there somewhere between the Mississippi and the Pacific.  (Jefferson soon dispatched Lewis and Clark, and Zebulon Pike, to find out just what he had bought.)  This degree of geographic uncertainty made buying and selling the interior of the New World a game best suited for high rollers like Bonaparte and Jefferson.

During colonial days, land grants made by monarchs to insiders were often of a magnitude to stagger the modern mind.  In 1681 King Charles II paid off a debt to William Penn’s father by giving the Quaker leader 45,000 square miles, essentially contemporary Pennsylvania and Delaware.  After all, what did King Charles know, or care, about the Alleghenies?

Penn remains famous today because he proved an exceptionally skilled proprietor, but most beneficiaries of huge land grants did not provide the local attention needed to maximize the value of their new holdings.  The enormous acreage bestowed on owners allowed them to live well even if their land and tenants remained in poor condition.

For example, the Spanish conquered Aztec Mexico in 1521, but when the great Prussian traveler Alexander von Humboldt depicted Mexico 290 years later, he wrote, “Mexico is the country of inequality.”  In 1910, only 2.4 percent of households in rural Mexico lived on land they owned versus about 75 percent of country folk in the United States.  (Not surprisingly, the catastrophic Mexican Revolution started that year.)  Even in rural Argentina, which geographically and ethnographically resembled an upside-down Louisiana Purchase, only about one quarter of farm families in 1895 owned land.

Jefferson’s committee that wrote the land laws of 1784 and 1785 reconceived real estate from something obviously tangible and idiosyncratic to something abstract and commodifiable.  They did it by imposing upon the blank slate of the Midwest a universal grid based on latitude and longitude.

Ancient Greek astronomers first conceived of latitude and longitude.  While the former is easy to measure (for example, by the angle of the North Star above the horizon at the spring and fall equinoxes), developing more convenient ways to determine longitude was one of the great enterprises of the 18th century.  The British government offered a prize in 1714 for inventing a reliable method of determining longitude at sea, which was finally paid out in 1773 to John Harrison, inventor of the marine chronometer.  Jefferson’s protégé Meriwether Lewis spent $250 on a chronometer before heading for the Pacific, but it frequently malfunctioned under the difficult conditions.  Jefferson himself studied astronomical methods for ascertaining longitude.  He invited President James Madison to Monticello in 1811 to help him measure his home’s precise longitude during a solar eclipse.

Government surveyors used astronomical instruments to locate a baseline latitude and a prime-meridian longitude, and then employed Gunter’s chain, a surveyor’s tool 66 feet in length, to mark out a township’s 36 sections of a single square mile each.  The government would then offer each 640-acre plot for sale.

This 36-square-mile township system had been used to set up new communities in New England, but Jefferson’s committee made two important changes.  First, while new townships in New England were typically organized for groups setting up entire communities, Jefferson’s system accommodated individuals buying a family farm.  Second, the Public Lands Survey was based on the assumption of a global system of latitude and longitude rather than just local surveying.

Jefferson’s latitude and longitude approach turned the metes and bounds system on its head.  Instead of waiting for parcels of land to be described in adequate detail before they could be readied for sale to the public, the federal government simply assumed that the land had to be out there at the latitude and longitude specified.  The surveyor’s job was to mark this conceptual grid on the landscape.

Since the grid existed abstractly, bound by ideal concepts of latitude and longitude, Congress could divide the size of parcels offered for sale to the public at will.  By the time that Jacksonian democracy began to flower, the federal government was selling plots as small as 40 acres, allowing a farm worker to become his own proprietor for as little as $50.

The Jeffersonian rectangular system of land demarcation worked best in the flat lands of the Midwest where there was enough rainfall to grow crops without irrigation, making land close to a commodity.  (The Spanish legal tradition had advantages in the American Southwest, where water was relatively scarce.)  Compared with the eccentricities of the metes and bounds system, Jefferson’s rectangular landscape proved less charming.

But this public good proved efficient for the citizenry.  A 2011 study by Gary D. Libecap and Dean Lueck studied a region in central Ohio that was excluded from the Public Lands Survey because it had already been divided up by metes and bounds.  Compared with the surrounding land, among the first sold under Jefferson’s rectangular system, legal disputes in the 19th century were 18 times more common in the metes and bounds section of Ohio.  Even in 2000 in central Ohio, flat land that had been delineated by Jefferson’s system had twice the population density and sold for about 25 percent more than nearby land with irregular borders.

Strikingly, the housing bubble during Jeb Bush’s brother’s administration inflated primarily in just four states, with seventh eighths of losses in property values in 2008 occurring in California, Arizona, Nevada, and Florida.  These were all states targeted by the financial industry, egged on by the Bush administration, for increased mortgage lending that followed the rapid growth of the Hispanic population.  The extremely high rates of default among Latino borrowers may be related to a Latin American culture that failed to inculcate a tradition of savings and shrewd property dealings among its landless masses.

Latin Americans have long congratulated themselves on their lack of the distinct color line that seem to moderns to render hypocritical Jeffersonian claims of having achieved a workable balance of freedom and equality.  However, at least when it comes to the distribution of property, the multiracial Latin system seems to generate predation and passivity.

Notoriously, Jefferson’s public-spiritedness extended mostly to whites.  And yet it may be that the ties of blood and culture among white Americans helped facilitate the fair-mindedness and trust required to make Jeffersonianism work.