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A discussion about underdevelopment in latin america

The relationship between shifts in the world market and ideas on economic development in Latin America contrasted sharply with that in Romania before the First World War. In the latter country, market failure, social upheaval, and access to the continuing Russian debate led to new theoretical responses, in both Marxist and non-Marxist discourses; in Latin A discussion about underdevelopment in latin america, the perceived success of the export-driven economies, combined with institutional factors and the absence or feebleness of certain critical traditions known in Romania, resulted in a prolonged inability to mount a theoretical attack on the "outward-directed development" prescribed by the Ricardian thesis of comparative advantage.

Thus in Latin America, with which this essay is principally concerned, both Marxist and non-Marxist challenges to the region's place in the international division of labor were relatively ineffective before the War's end. The larger part of the paper deals with intellectuals and their ideas, and includes explicit comparisons with Romania, the eastern European country with some important similarities to, and instructive differences from, Latin America; it was also the one whose intellectual traditions had a direct impact on Latin America, through the works of Mihail Manoilescu.

In the years from independence down to the Great Depression, Latin America was subject to three Kondratieff waves. Howerer others, such as Argentina, had already contracted loans and were now defaulting. In fact, except for the years 1823-24, Spanish and Portuguese America received very modest amounts of European investment during the whole first half of the nineteenth century.

The period 1825-50, when such investiment might have occurred, roughly corresponds to the "B" down-swing phase of the Kondratieff wave.

Chile established a stable constitutional regime in 1833, and was widely admired in Spanish America for its stability.

Brazil had done so earlier 1824but only overcame a discussion about underdevelopment in latin america fissiparous tendencies of its agrarian elites after 1848. Mexico and Argentina would not know stable regimes until the 1860's. Many exports that helped make stable polities possible had their origins in the colonial period, but new ones developed in the middle decades of the nineteenth century in response to Europe's industrial and consumer needs.

Yet it was the last quarter of the century that witnessed a real transformation of the region's export economies. The so-called Second Industrial Revolution, associated with technological change in the production of capital goods and with the application of science to industry, brought unprecedented investiment, technological innovations steamships driven by screw propellers, railroads made of Bessemer steel, refrigeration, barbed-wire fencingand above all a huge new demand for capital goods inputs e.

In terms of sheer growth, the region benefited immensely more from the second Kondratieff cycle, peaking in 1870-73, than from the first; in fact, Latin America continued to receive significant amounts of foreign investiment through the long depression of 1873-96.

  1. Justo, and Italian sociologist Enrico Ferri over whether socialism had a present, as well as future, in Argentina Romero, 1983. In many countries there was no large peasantry, in the sense of freeholders; nor, in most nations, was there a primitive commune in any way comparable to the Russian obshchina.
  2. Does the capitalist mode of production prevail in this country?
  3. As noted, many parts of Latin America were profoundly and positively affected by Ricardian prescriptions of export-driven growth. Relatively inefficient compared to "overseas" grain exporters to Europe, Romania could not compete in the British market with Argentina and the Dominions.
  4. Kennedy not only described the need, he also advised on the steps to be taken. The period 1825-50, when such investiment might have occurred, roughly corresponds to the "B" down-swing phase of the Kondratieff wave.

Chile was affected by overseas demands as early as the 1850's copper exports to Europe, wheat to Californiaand Argentina and Brazil followed in the 1860's. But the period 1870-90 provided a much more rapid ascent.

These countries, plus Mexico, now felt the full impact or the combined effects of the European economic expansion, which, in the Argentine and Brazilian cases, brought in its train unprecedented levels of European immigration.

Formal political unity was achieved in 1859-61, with the accession of Buenos Aires Province to the Argentine Federation. But the governance issue was resolved only in the following two decades, whith the closing of the Indian frontier in Patagonia; the suppression of the last regional revolt; and the creation of a Federal District, separating the city of Buenos Aires from the province of the, same name 1880.

Argentina's economic growth was spectacular. Profiting from the invention of refrigerated shipping, Argentina began to export frozen beef in 1885, sending abroad 328,000 tons in 1914, in which year chilled beef a higher-grade commodity not produced in 1885 accounted for 41,000 tons. Overseas sales of canned meat in the same interval expanded ten times. Meanwhile wheat exports increased twenty-three times in value from 1880-84 to 1890-94.

Transatlantic sales of both wheat and maize rose so rapidly that they had replaced beef as the chief exports by value on the eve of the First World War Glade, 1986: In the words of Diaz-Alejandro, "From 1860 to 1930 Argentina grew at a rate that has few parallels in economic history, perhaps comparable only to the performance during the same period of other countries of recent settlement" 1970: Brazil's gross domestic product, for example, grew at a faster annual rate 2.

Land tenure patterns changed in response to international demand, and it is abundantly clear that estate owners were generally responsive to price signals see, e. II, 43-51; Jacobsen, 1984: The first victim of estate-owner's land-hunger after 1850 was the Catholic Church, controlling as much as a third of the rural real estate in early nineteenth-century Mexico.

Yet peasants suffered too. Even in remote Andean villages, peasants began to lose their land as high prices for sheep and alpaca wool brought about a diminution of peasant holdings referring to southern Petu, facobsen, 1984: For Spanish America a discussion about underdevelopment in latin america a whole, Bauer remarks, the rural population "probably underwent a greater change [in 1870-1930] than at any previous time.

Labor systems associated with the export boom varied widely, but often involved coercive elements. Elsewhere in Brazil the condition of rural labor was considerably worse. In Argentina, where the "Mesopotamian" region north of Buenos Aires became one of the world's great wheat granaries, the land was subdivided and leased to Italian tenant farmers. In the Argentine case, and to a lesser extent in southern Brazil, there was a low labor-to-land ratio that resulted in relatively high rural wages.

  1. Rather, it provided the opportunity for the full use of existing capacity, involving in some plants three shifts a day, as the hulls of North Atlantic suppliers failed to ply Latin American waters over a five-year period.
  2. We just giveand give and this is what they do to us. It seems clear that however backward were Russia's society and state, Russian intellectuals participated in European social movements and social theorizing in ways not possible for Latin Americans.
  3. Is there a "conquering bourgeoisie," or can one be created? Mexico was spared political upheaval, perhaps because of the growing consolidation of the revolutionary regime after the founding of the official party in 1929.
  4. My own answer is socialism.
  5. Communist leaders in the 1920's, it is true, began to pose these questions, but the issues would not be addressed with a sense of urgency and investigated with sophistication in Latin America until after the Second World War. In the view of one student, Chile followed the "Junker route" to agricultural capitalism in the nineteenth century.

In Chile, a rising demand for labor in the wheat farming area of the Central Valley coupled with the expansion of large estates led to a; worsening of the peasant's lot in tenancy arrangements inquilinaje in wheat farming, and to an increasing proletarianization of the inquilinos and other peasants Kay, 1980: Vagrancy laws forced the proletarianization of Indians and mestizo peasants in Central America and parts of Mexico.

Thus, Latin American rural labor systems became much more highly differentiated as a result of the transformations after 1870. Whereas "parts of Latin America, like eastern Europe, experienced a sort of second enfeudation with the spread of a capital market" Glade, 1986: A great contrast existed between the rural labor a discussion about underdevelopment in latin america of Chile and Argentina, despite their common export booms in wheat though the timing and markets were differentand despite Chile's impressive advance in manufacturinf see below.

In Chile, the population-land ratio was considerably higher than in Argentina, the latifundist elite probably more unified, and land rents less differentiated. The lastnamed element was related to the striking differences between the relative independence of southern European immigrants many of whom were literate in Argentina, and the dependent inquilinos in Chile, where deference to the landlords was demanded and rendered. In the view of one student, Chile followed the "Junker route" to agricultural capitalism in the nineteenth century.

The nature of the process of production during and after this period is the subject of much controversy today; those who denned a feudal" interpretation of the production system usually have in mind manorialism, which, as Marc Bloch pointed out, antedated feudalism and survived its demise 1961: I, 279; II, 442.

Yet Latin America before 1930, like some regions of eastern Europe, was not simply an exporter of primary commodities with variegated labor systems. Recent research has established that manufacturing in Chile, Argentina, Mexico, and Brazil was well established before the First World War; thus, contrary to received wisdom, the War did nor create Latin American industry ex nihilo.

  • Let me now include the amount of public capital—again the figures are from the U;
  • Can a reformist state create a capitalist economy?
  • For Spanish America as a whole, Bauer remarks, the rural population "probably underwent a greater change [in 1870-1930] than at any previous time;;;
  • Formal political unity was achieved in 1859-61, with the accession of Buenos Aires Province to the Argentine Federation;
  • While the Western bourgeoisie had to fight for the creation of liberal institutions, they were subsequently imported into Romania by a process in which the local bourgeoisie "played the smallest possible role.

Rather, it provided the opportunity for the full use of existing capacity, involving in some plants three shifts a day, as the hulls of North Atlantic suppliers failed to ply Latin American waters over a five-year period. Yet the War may have on balance inhibited industrialization as opposed to raising industrial output because of the inability of industrialists to import capital goods during the conflict.

Output and capital investiment had different rhythms until the late 1930's, when the larger Latin American countries began to produce capital goods in significant quantities for the first time. True enough, these were the halcyon years of "outward directed growth," based on Chile's fabulous nitrate fields, many of them wrested from Bolivia and Peru in the War of the Pacific 1879-83. In the succeding years the elite introduced a fiscal system that was heavily dependent on export taxes, and government services were tailored to the needs of latifundistas and mineral exporters.

He also found a correlation between export growth and the growth of manufacturing before the First World War, but not later. Palma argues for Chile, as Dean does for Brazil, that export expansion was a precondition of industrialization Palma, 1979: Later than Romania by five years, Chile was nonetheless the first Latin American country in which the state extended credits to manufacturers, beginning in 1928.

But more meaningful aid only came after 1939 see below.

Latin America and Underdevelopment

The First World War caused serious disruptions in the Latin American export economy, and grave problems followed the War in certain commodity markets, but the export boom continued in phase with the third Kondratieff wave.

A major structural shift in the postwar era was the growing displacement of Great Britain by the United States as chief lender and investor. Great Britain exacerbated its problems in the region by overvaluing the pound through deliberate deflation. In any case, U. For instance, the Americans sent 3. Great Britain led the United States in the other three countries considered here in 1913, but by 1927 the latter had dislodged Great Britain as the leading trading partner in Chile and Brazil. In Argentina, Great Britain clung to its lead by a single percentage point Thorp, 1986: Though Great Britain's overall capital investiments in the region were still larger in 1929, the U.

  • Vagrancy laws forced the proletarianization of Indians and mestizo peasants in Central America and parts of Mexico;
  • A major structural shift in the postwar era was the growing displacement of Great Britain by the United States as chief lender and investor;
  • Agriculture, Stere contended, citing Karl Kautsky, Germany's leading Marxist theoretician, was not subject to Marx's laws of the concentration and centralization of capital.

Unfortunately for Latin America, U. The United States remained highly protectionist, while North American banks "pressed loans on unwary governments" in Latin America Thorp, 1986: The problem was insufficient means for repayment, since the U.

Argentina especially found itself in straits, since it sought both American investiment and industrial goods notably motor vehiclesbut could not sell to the U.

If the displacement of Great Britain was one structural change after the War, another was increasing commodity export instability. This problem was no less than a disaster in the case of rubber, which briefly rivaled coffee as Brazil's leading foreign-exchange earner in the prewar era.

Brazil not only lost its place as the world s leading suppler, but ceased even to be a consequential supplier between 1912 and 1920, when southeast Asian plantations went into high gear. Violent price fluctuations on world markets also afflicted Argentine wheat and wool.

Another a discussion about underdevelopment in latin america problem was self-inflicted: On top of these problems came deteriorating terms of trade after the War. On the average the terms of trade for all primary products in 1926-29 had significantly dropped below their levels in 1913 Thorp, 1986: The impact of the Great Depression was severe.

In Argentina, the dollar value of exports in 1933 was one-third the 1929 figure, and Chile's export performance, if anything, was worse. The depression unseated governments in all three countries. Mexico was spared political upheaval, perhaps because of the growing consolidation of the revolutionary regime a discussion about underdevelopment in latin america the founding of the official party in 1929.

The 1930's were a period of significant structural change for the larger Latin American economies: Convertibility and the gold standard were abandoned early in the depression in Argentina, Brazil, Chile, and Mexico. In those countries, the rise in prices of importables, because of a fall in terms of trade and exchange devaluation, encouraged the substitution of domestic manufactures for imported goods, as did expansionary fiscal and monetary policies.

When war came in 1939, manufactures in international trade became scarce again, permitting industrial advances to the extent that capital goods, fuel, and raw materials were available. II The preceding survey of economic transformation, however brief, provides a foundation for understanding the ways in which Latin American social thinkers and statesmen of the era conceptualized their nation's place in the order of things.

It will be argued that the perceived success of the "open economy" strategy, beginning in the mid-nineteenth century with rising levels of exports in Chile, Argentina, and Brazil, shaped the terms of ideological discourse even into the 1940 's.

However, before preceding to the ideologies that attracted Latin Americans and were in turn adapted by them to local conditions, it is necessary to consider the sociological situation of the intellectuals who were the bearers of such ideas and values.

The intellectual traditions of Latin America revolved around the pensador lit. He often wrote as readily about contemporary sociology and politics as he did about literature, and his studies frequently crossed disciplinary lines.

The pensador's vehicle was the essay, a literary form that in Latin America retains the prestige it has all but lost in the English-speaking world. His judgments tended to be definitive; his treatment, historical. Before 1900, and even later, few Latin American essayists were academics, and fewer still had studied in Europe.

If they had, they almost never took research degrees. One feature distinguishing Latin American society from that of eastern Europe in this period is a relative lack of an intelligentsia, in the classical sense of an underemployed intellectual community radically at odds with prevailing power structures. This fact owes chiefly to the limited number of university students, compared to employment opportunities in law, journalism, and civil service.

Furthermore, intellectuals frequently held important political posts. But such figures were realtively so few as to lack the group-consciousness one associates with an intelligentsia; they were perhaps closer to a bohemia.

In any event, seldom could the pensador be Gramsci's "organic intellectual," a spokesman for well-defined class interests, since social classes were still relatively inchoate.