FROM LIBERALISM TO REVOLUTION

1. FROM LIBERALISM TO REVOLUTION Osvaldo Jordan September 3, 2009

2. THE LAND QUESTIONLAND KING CHURCH HACIENDAS/FAZENDAS Spanish Towns Indian Towns

3. AN IDEOLOGIAL RIFT IN THE AMERICAS CONSERVATISM - Maintaining the existing colonial order (ancien regime), including the large estates (=latifundia) of the Landed Elite (ARISTOCRACY), the Catholic Church, and the Spanish Crown. LIBERALISM - Transforming existing society towards free trade, republican government, and technological innovation (BOURGEOISIE)

4. EXPORT-LED (OUTWARD) DEVELOPMENT Beef and Wheat. Argentina. Coffee. Brazil, Colombia, and Central America. Guano (Nitrates). Peru, Bolivia, and Chile. Minerals. Bolivia, Chile, Mexico, and Venezuela. Sugar. Brazil, Cuba, Dominican Republic, and Peru. Bananas. Central America and Colombia.

5. LIBERAL OUTCOMES Latin American countries became producers of raw materials and importers of European and North American manufactured goods. Dispossession of Peasants and Indigenous Peoples. Latin American countries became dependent on foreign governments and corporations. Immigration transformed national identities and social relations. The formation of a middle-class and of an urban lower class of workers (PROLETARIAT).

6. THE LIBERAL COLLAPSE The Great Depression in the 1930s exposed the vulnerabilities of export-led economic growth. An international crisis could stall the national economies. - Boom-bust cycles. Mono-culture bias and enclave economies. Food insecurity. Dependence on foreign capital and markets. Social dislocation of subsistence farmers. Environmental damage.

7. AN ERA OF ECONOMIC NATIONALISM • Nationalistic governments took over power with the support of the middle class and the workers (mass parties). Getulio Vargas (Estado Novo) in Brazil, Lazaro Cardenas in Mexico, and Juan Domingo Peron in Argentina. • Between the 1930s-1970s, many of these Latin American governments sought self-sufficiency and a diversified economy. They looked for national development through: Import Substitution Industrialization(ISI). Replacing foreign imports with nationally produced manufactures.

8. AN ERA OF ECONOMIC NATIONALISM Argentinean Economist Raul Prebisch (ECLA) gave theoretical support to these policies by arguing that the prices of manufactured goods always increased more rapidly than those of raw materials (Prebisch Thesis). ISI policies, including trade barriers, government subsidies and state capitalism, were usually supported by strong governments that also invest in social welfare and public infrastructure. All of these governments would be interpreted as pro-communists by the United States after 1948.

9. ISI OUTCOMES • Formation of a domestic industrial elite. • Strengthening of the working class and labor movement. • Migration and urbanization. • Enlargement of the public sector (social welfare, populism and political cronyism). • Increased dependence on foreign capital and investment. • Public indebtedness.

10. ISI SHORTCOMINGS • Neglect of agriculture. • New dependencies (machinery, fuel, technology, investment). • Limited domestic market. • Capital intensive (=unemployment). • Low quality industrial production. Although Mexico and Brazil experienced a Golden Age of spectacular economic growth in the 1960s and early 1970s, ISI was completely discredited and abandoned by the 1980s.