Sunday, June 1, 2008
Thursday, May 29, 2008
Friday, May 23, 2008
OPEC: A Texan Idea Twice Thought In Venezuela
I grew up among oil geologists and drilling engineers in various oil fields West of the Maracaibo Lake Basin and, later on, in oil-rich Eastern Venezuela.
One day in 1966—I was barely 15—I went into the camp's chief geologist's house trailer. This particular camp was in the borders of the Orinoco River delta, a remote tropical region of flooded savannas. My parents were very fond of this young American geologist who has just got transferred to Nigeria. So my dad sent me to help him carry his personal belongings into the company's jeep that would take him to a small airstrip some 7 miles away.
Behind his desk hung a framed yellowish sheet of paper with a long typewritten quote on it. You had to come near and look up close to read it. It appeared to be some passage of a book but, to this date, I could not tell for sure where it came from. It read:
If I were a barrel of oil, comfortably located in a pool, hidden in a trap deep in the ground, the region that would be safest for me—where I might live out another 50 or 100 million years in peace and dignity—would be in some country where minerals and exploration are nationalized. The reason is that in counties such as these, there is but one hunter, and the chances of eluding him are far better than the chances of being discovered. The most dangerous place for me to live in, as a barrel of oil, would be in the United States where there are thousands of hunters and each has a different weapon.
—A. I. Levorsen
As we came out of the trailer, I told him not to forget the framed quote. He then said that it wasn't his; it already hung on the wall when he arrived in the camp some 18 months earlier. His predecessor—he guessed—must have left it behind. He noticed how interested I had become in the framed quote and said, "You can keep it if you want it."
Indeed, that framed long paragraph had an enigmatic air about it that appealed to my curiosity about how Venezuela, a malaria-plagued tropical country that during that last quarter of the 19th century competed with Colombia and Costa Rica as major coffee-exporting countries, had became a major oil-exporting country with practically no export-oriented coffee plantations now to be found. And no malaria, either. I hung Mr. Levorsen's framed quote on one of my room's walls, still wondering who he might be.
Arville Irving Levorsen (1894-1965), I came to know, was a brilliant American oil geologist who in 1964 projected with amazing accuracy what the U.S. oil demand would be by 2000. He also was the first Dean of the Stanford School of Mineral Sciences (now Earth Sciences). Mr. Levorsen was revered by every surface geologist I met in Venezuela at the time. His framed quotation is in the very origin of my life-long interest, as a playwright and fiction writer, in my country's petroleum economic history.
Read a memoir about A. I. Levorsen in Stanford Magazine, 2004: "Unforgettable Teachers: A. I. Levorsen", by Harry Ptasynski.
Roland Barthes, the late French structuralist thinker, asserts in one essay on historical narratives that one of the main tropes of history writing—what he calls "the objective voice"—often "turns out to be a particular form of fiction." I can't tell if he was right—I am just a fiction writer—but there is one thing of which I am sure after all this years: there is almost nothing worth being called "objective" in what passes to be petroleum history in Venezuela. The prevailing views on how Venezuela became an oil producing country are very unfortunate, to say the least.
Most of them show a misleading anti-American bias and, time and again, resort to Marxist tenets about "imperialism" and "neo-colonial oil enclaves", thus skewing the understanding of how disparate entities the American petroleum industry and, say, the State Department or the Pentagon can be.
This can be all the more deceptive as Marxism in Latin America has melted into the mainstream of academic progressive "sincretic cults". All sorts of of postmodern "narratives" shape most current Latin America's ideas about its own history. Take the story of how OPEC came about.
The official account of it—the one that is taught in elementary school—has it that Mr. Juan Pablo Pérez Alfonzo, a distinguished Venezuelan lawyer, is the "Father of OPEC". Pérez Alfonzo, a professor of civil law at the Universidad Central, had no training in geology or petroleum engineering. Nevertheless, during the 1940s and 50s, he became the unquestioned spokesman of Venezuela's nationalistic oil policies.
"An ascetic parsimonous man"—says Stephen G. Rabe in a penetrating moral portrait of Pérez Alfonzo—he deplored waste of any kind, including the too rapid depletion of Venezuela's natural resources. He constantly preached the gospel of frugality to his countrymen. By his own admission, he was a Calvinist in a land made spendthrift by the oil bonanza. Like other senior adecos [Venezuelan social-democrats], he endured ten years of exile, living for a time in Washington, D.C., after the fall [in 1948] of the [Rómulo] Gallegos government.
A decade of reflection has sharpened Pérez Alfonzo's views about the roles of his nation and oil in the world economy. In a time of oversupply and declining prices, he insisted that petroleum, the vital commodity of modern civilization, had an 'intrinsic' value above its market price and that it must be husbanded for future generations. His observations of U.S. life during his exile further persuaded him that industrial nations were recklessly wasting a precious resource."1
In 1959, after the dictator General Pérez Jiménez was ousted by a popular rebellion and a democratic government was elected, Pérez Alfonzo became Minister of Mines and Hydrocarbons. He aspired to control oil prices and put an oil producing country's cartel in place of the private cartel of multinational oil corporations. Early in 1960, Pérez Alfonzo and Abdullah Tariki, the Saudi oil minister, met each other in Cairo. Pérez Alfonzo told him about his thoughts. By August that same year, OPEC was founded in Baghdad.
It is no doubt an uplifting story about a single-minded Third World citizen who takes on the great industrial customers of the raw-material producing countries. It is not altogether false, either. But they way it has usually circulated among us, in journalistic reviews, in secondary school history text-books and even in colleges, plays down—when it does not totally conceal—the fact that, while in exile in the United States, Pérez Alfonzo thoroughly studied the regulatory strategies developed by the Oil and Gas Division of the Texas Railroad Commission (TRC) during the 1920s. He developed great admiration for Mr. Clarence G. Gilmore, who was also a distinguished lawyer and once a Commissioner of the TRC.
"Petroleum conservation in Texas in the 1920s occurred within the larger context of business-government relations in the United States",2 says William R. Childs, a thorough scholar of regulation history in America. According to Professor Childs, the TRC is certainly a rara avis among U.S. regulatory agencies of all times in that it "worked cooperatively with industry executives, within a Progressive Era approach, to reconcile conflicts between prevailing legal doctrines and the economic structure of the industry; and that through a dual private-public management approach to rationalizing the industry, the regulators not only made headway in [resources] conservation but also legitimized the [regulatory] agency in the eyes of the industry leaders".3
See the March 2006 EH.net book review by Gary D. Libecap of William R. Childs's recent book, The Texas Railroad Commission: Understanding Regulation in America to the Mid-Twentieth Century, Texas A & M University Press, 2005.
Resource conservation and regulation policies both summarize Pérez Alfonzo's ideas on how Venezuela should draw wealth from its oil. There's something wondrous and unsettling in the way a militant nationalist like Pérez Alfonzo could elicit inspiration for his future political action from the legacy of Southern populist agitation against monopoly of the 1890s that gave origins to the TRC. OPEC could be viewed as an unintended consequence of regulation in mid-twentieth century's American capitalism.
The momentous global tendencies of the oil industry were thus to be fatefully opposed by a Latin American lawyer who, in time, did not shy away from studying a very especial moment of American economic history in order to build one of the most unavoidable forces of the global oil market.
Notes:
1 Stephen G. Rabe, The Road to OPEC, United States Relations with Venezuela, 1919-1976, University of Texas Press, Austin, 1982. Page 159. 2 William R. Childs, "Origins of the Texas Railroad Commission's power to control production of petroleum: regulatory Strategies in the 1920s," Journal of Policy History, Vol. 2, No. 4, 1990. 3 Ibid., page 50.
One day in 1966—I was barely 15—I went into the camp's chief geologist's house trailer. This particular camp was in the borders of the Orinoco River delta, a remote tropical region of flooded savannas. My parents were very fond of this young American geologist who has just got transferred to Nigeria. So my dad sent me to help him carry his personal belongings into the company's jeep that would take him to a small airstrip some 7 miles away.
Behind his desk hung a framed yellowish sheet of paper with a long typewritten quote on it. You had to come near and look up close to read it. It appeared to be some passage of a book but, to this date, I could not tell for sure where it came from. It read:
If I were a barrel of oil, comfortably located in a pool, hidden in a trap deep in the ground, the region that would be safest for me—where I might live out another 50 or 100 million years in peace and dignity—would be in some country where minerals and exploration are nationalized. The reason is that in counties such as these, there is but one hunter, and the chances of eluding him are far better than the chances of being discovered. The most dangerous place for me to live in, as a barrel of oil, would be in the United States where there are thousands of hunters and each has a different weapon.
—A. I. Levorsen
As we came out of the trailer, I told him not to forget the framed quote. He then said that it wasn't his; it already hung on the wall when he arrived in the camp some 18 months earlier. His predecessor—he guessed—must have left it behind. He noticed how interested I had become in the framed quote and said, "You can keep it if you want it."
Indeed, that framed long paragraph had an enigmatic air about it that appealed to my curiosity about how Venezuela, a malaria-plagued tropical country that during that last quarter of the 19th century competed with Colombia and Costa Rica as major coffee-exporting countries, had became a major oil-exporting country with practically no export-oriented coffee plantations now to be found. And no malaria, either. I hung Mr. Levorsen's framed quote on one of my room's walls, still wondering who he might be.
Arville Irving Levorsen (1894-1965), I came to know, was a brilliant American oil geologist who in 1964 projected with amazing accuracy what the U.S. oil demand would be by 2000. He also was the first Dean of the Stanford School of Mineral Sciences (now Earth Sciences). Mr. Levorsen was revered by every surface geologist I met in Venezuela at the time. His framed quotation is in the very origin of my life-long interest, as a playwright and fiction writer, in my country's petroleum economic history.
Read a memoir about A. I. Levorsen in Stanford Magazine, 2004: "Unforgettable Teachers: A. I. Levorsen", by Harry Ptasynski.
Roland Barthes, the late French structuralist thinker, asserts in one essay on historical narratives that one of the main tropes of history writing—what he calls "the objective voice"—often "turns out to be a particular form of fiction." I can't tell if he was right—I am just a fiction writer—but there is one thing of which I am sure after all this years: there is almost nothing worth being called "objective" in what passes to be petroleum history in Venezuela. The prevailing views on how Venezuela became an oil producing country are very unfortunate, to say the least.
Most of them show a misleading anti-American bias and, time and again, resort to Marxist tenets about "imperialism" and "neo-colonial oil enclaves", thus skewing the understanding of how disparate entities the American petroleum industry and, say, the State Department or the Pentagon can be.
This can be all the more deceptive as Marxism in Latin America has melted into the mainstream of academic progressive "sincretic cults". All sorts of of postmodern "narratives" shape most current Latin America's ideas about its own history. Take the story of how OPEC came about.
The official account of it—the one that is taught in elementary school—has it that Mr. Juan Pablo Pérez Alfonzo, a distinguished Venezuelan lawyer, is the "Father of OPEC". Pérez Alfonzo, a professor of civil law at the Universidad Central, had no training in geology or petroleum engineering. Nevertheless, during the 1940s and 50s, he became the unquestioned spokesman of Venezuela's nationalistic oil policies.
"An ascetic parsimonous man"—says Stephen G. Rabe in a penetrating moral portrait of Pérez Alfonzo—he deplored waste of any kind, including the too rapid depletion of Venezuela's natural resources. He constantly preached the gospel of frugality to his countrymen. By his own admission, he was a Calvinist in a land made spendthrift by the oil bonanza. Like other senior adecos [Venezuelan social-democrats], he endured ten years of exile, living for a time in Washington, D.C., after the fall [in 1948] of the [Rómulo] Gallegos government.
A decade of reflection has sharpened Pérez Alfonzo's views about the roles of his nation and oil in the world economy. In a time of oversupply and declining prices, he insisted that petroleum, the vital commodity of modern civilization, had an 'intrinsic' value above its market price and that it must be husbanded for future generations. His observations of U.S. life during his exile further persuaded him that industrial nations were recklessly wasting a precious resource."1
In 1959, after the dictator General Pérez Jiménez was ousted by a popular rebellion and a democratic government was elected, Pérez Alfonzo became Minister of Mines and Hydrocarbons. He aspired to control oil prices and put an oil producing country's cartel in place of the private cartel of multinational oil corporations. Early in 1960, Pérez Alfonzo and Abdullah Tariki, the Saudi oil minister, met each other in Cairo. Pérez Alfonzo told him about his thoughts. By August that same year, OPEC was founded in Baghdad.
It is no doubt an uplifting story about a single-minded Third World citizen who takes on the great industrial customers of the raw-material producing countries. It is not altogether false, either. But they way it has usually circulated among us, in journalistic reviews, in secondary school history text-books and even in colleges, plays down—when it does not totally conceal—the fact that, while in exile in the United States, Pérez Alfonzo thoroughly studied the regulatory strategies developed by the Oil and Gas Division of the Texas Railroad Commission (TRC) during the 1920s. He developed great admiration for Mr. Clarence G. Gilmore, who was also a distinguished lawyer and once a Commissioner of the TRC.
"Petroleum conservation in Texas in the 1920s occurred within the larger context of business-government relations in the United States",2 says William R. Childs, a thorough scholar of regulation history in America. According to Professor Childs, the TRC is certainly a rara avis among U.S. regulatory agencies of all times in that it "worked cooperatively with industry executives, within a Progressive Era approach, to reconcile conflicts between prevailing legal doctrines and the economic structure of the industry; and that through a dual private-public management approach to rationalizing the industry, the regulators not only made headway in [resources] conservation but also legitimized the [regulatory] agency in the eyes of the industry leaders".3
See the March 2006 EH.net book review by Gary D. Libecap of William R. Childs's recent book, The Texas Railroad Commission: Understanding Regulation in America to the Mid-Twentieth Century, Texas A & M University Press, 2005.
Resource conservation and regulation policies both summarize Pérez Alfonzo's ideas on how Venezuela should draw wealth from its oil. There's something wondrous and unsettling in the way a militant nationalist like Pérez Alfonzo could elicit inspiration for his future political action from the legacy of Southern populist agitation against monopoly of the 1890s that gave origins to the TRC. OPEC could be viewed as an unintended consequence of regulation in mid-twentieth century's American capitalism.
The momentous global tendencies of the oil industry were thus to be fatefully opposed by a Latin American lawyer who, in time, did not shy away from studying a very especial moment of American economic history in order to build one of the most unavoidable forces of the global oil market.
Notes:
1 Stephen G. Rabe, The Road to OPEC, United States Relations with Venezuela, 1919-1976, University of Texas Press, Austin, 1982. Page 159. 2 William R. Childs, "Origins of the Texas Railroad Commission's power to control production of petroleum: regulatory Strategies in the 1920s," Journal of Policy History, Vol. 2, No. 4, 1990. 3 Ibid., page 50.
Latin America and the Ideology of Development
To me it is simply a mystery why the Spanish edition of William Easterly's The Elusive Quest for Growth: Economist's Adventures and Misadventures in the Tropics (MIT Press, 2002) has gone almost unnoticed to both reviewers and readers in Latin America.
Yet, it is hard to think of a book so relevant to the debate on how to defeat poverty and backwardness in our nations.
Easterly's work could provide many Latin American scholars, policymakers and politicians with a penetrating survey of the ideas behind so many failed development policies tried in our region for at least five decades. To be sure, he makes his case against what he calls "the ideology of development" with a quick-witted and frequently humorous writing that reads with congenial ease in Spanish.
The Spanish edition of William Easterly's book, "En Busca del Crecimiento. Andanzas y Tribulaciones de los Economistas del Desarrollo." is available through Antoni Bosch, Editor. Barcelona, Spain, 2003.
This sympathy for Easterly's work stems, I think, from the mere fact that, for 50 years or more, Latin Americans have been prey to all sorts of frustrating ideas and contraptions aimed at attaining development.
Indeed, the regions of the world where development ideology has been more influential, namely Africa and Latin America, have fared the worst. In his long career as a World Bank expert, Easterly, who now teaches at New York University, noticed what he rightly deems a sad law: "the poorer the country, the poorer the economic analysis applied to it."
Not far from where I live in Caracas stands a low-rise office building that, despite its lusterless appearance, has become over the years a foremost neighborhood's landmark.
It houses the famed Centro de Estudios del Desarrollo (CENDES, Spanish acronym for Center for Development Studies), a Social Sciences top-level research institution founded in 1961 by the Universidad Central de Venezuela (Central University of Venezuela.)
Surfing its website, you can judge its academic standards, the scope of its research teams and the quality ot its publications. What you cannot gauge by surfing its website is the tremendous influence CENDES has exerted over decades in disseminating the tenets of various inborn ideologies of development throughout Latin America.
It was here where "neocolonial dependence theory", the brainchild of former Brazilian president Fernando Henrique Cardoso (Rio de Janeiro, 1931), took shape during the early 70s and became the most authoritative doctrine to explain Latin American underdevelopment. Professor Cardoso was elected president in 1994, then reelected in 1998. He left office in 2002. To be fair, there is a handful of things about Latin American economics that Mr. Cardoso, in his own admission, does not hold to be true any more. I find this quite telling about Mr. Cardoso's intellectual integrity. Nevertheless, Cardoso's early work is still abundantly quoted by his fellow scholars and many government officials all over the continent.
Dozens of Latin American economic planning experts came out of this small yet prepossessing building during the '60s and '70s. One of them counts among his major achievements having occupied top-level economic planning government posts, first in Cuba and then in Allende's Chile! Venezuela's incumbent planning minister, professor Jorge Giordani, is a distinguished scholar and foremost member of CENDES's ever since its foundation. An unyielding advocate of one of Latin American developmentalism's currently most prestigious theories, Mr. Giordani currently entreats for a formula known as "endogenous growth."
For years, men and women have graduated from CENDES and gone back to their countries armed with the worst ideas imaginable to end poverty, those entailing state direction by the states least able to direct.
In an article recently published by Easterly, he presents us with an explanation of why, after the demise of the Soviet Union, the ideologic specter of Developmentalism haunts so many Third World leaders... and peoples. I think it worth quoting at length:
The power of Developmentalism is disheartening [Easterly writes] because the failure of all the previous ideologies might have laid the groundwork for the opposite of ideology—the freedom of individuals and societies to choose their destinies. Yet, since the fall of communism, the West has managed to snatch defeat from the jaws of victory, and with disastrous results. Development ideology is sparking a dangerous counterreaction. The "one correct answer" came to mean "free markets", and, for the poor world, it was defined as doing whatever the IMF and the World Bank tell you to do. But the reaction in Africa, Central Asia, Latin America, the Middle East and Russia has been to fight against free markets. So, one of the best economic ideas of our time, the genius of free markets, was presented in one of the worst possible ways, with unelected outsiders imposing rigid doctrines on the xenophobic unwilling.1
Though this utterly iconoclastic book deals mainly with tragic flaws committed by foreign aid agencies in many poor countries, it also reads as an in-depth treatment of the determinants of economic growth. Easterly's book draws thoroughly on many studies done or commissioned by the World Bank. A former World Bank official himself, Easterly is primarily interested in what kind of policies have really alleviated poverty. In his quest, he reviews the policies that foreign-aid agencies have put into effect since post-World Ward II Third World decolonization era until present days.
Archetypal models explaining economic growth, from Harrod-Domar's to Robert Solow's, are surveyed in depth and their practical results, if any, are mordantly commented in a nontechnical, quite amusing literary style.
In the prologue to The Elusive Quest for Growth, Easterly reminds us that, however paradoxical it may seem, in their practical policy work economists too often cling to formulas that violate the very basic principle of economics. What is this basic principle?
As a wise elder once told me [Easterly answers], "People do what they get paid to do; what they don't get paid to do, they don't do". A wonderful book by Steven Landsburg, The Armchair Economist, distills the principle more concisely: "People respond to incentives; all the rest is commentary."
For a discussion of how incentives affect economists' own behavior, consider Russ Roberts and David Henderson's podcast, Henderson on Disagreeable Economists. EconTalk, July 30, 2007.
Over the past decades, a significant mass of evidence has been accumulated by countless researchers indicating that conventional wisdom on the determinants of growth in poor countries is either wrong or lacks sufficient statistical support. Among Easterly's unsettling findings is the fact that foreign aid does not necessarily go hand in hand with an increase of investment just as high investment ratios do not necessarily lead to higher growth.
According to Easterly, many commonly accepted assertions on the role of education, population control or debt relief in stimulating economic growth lack empirical support. The examples and case stories he brings forward to support his views are drawn from his lifetime experience in many disparate countries of the planet and are all too familiar to any Latin American reader like me.
The key lesson for anyone trying to understand what has made growth possible in places unthinkable to developmentalism pundits is that people respond to incentives they recognize as such. By "people" I mean what Easterly means: private individuals, government officials, even aid donors. Whenever those incentives promote growth-inducing behavior, growth is very likely to occur.
Reviewing a prior work by Easterly (The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done so Much Ill and So Little Good, Penguin Press, 2006), Nobel Prize winner Amartya Sen quotes Easterly's very illuminating division between "planners" and "searchers" when it comes to help poor countries overcome their plights.
In foreign aid [Sen writes], planners announce good intentions but don't motivate anyone to carry them out; Searchers find things that work and get some reward. Planners raise expectations but take no responsibility for meeting them; Searchers accept responsibility for their actions. Planners determine what to supply; Searchers find out what is in demand. Planners apply global blueprints; Searchers adapt to local conditions. Planners at the top lack knowledge of the bottom; Searchers find out what the reality is at the bottom. Planners never hear whether the planned got what it needed; Searchers find out whether the customer is satisfied.2
All the rest, I would say, is commentary.
Notes:
1 William Easterly, The Ideology of Development, Foreign Policy, July/August 2007. 2 Amartya Sen, The Man Without a Plan, Foreign Affairs, March/April 2006
Yet, it is hard to think of a book so relevant to the debate on how to defeat poverty and backwardness in our nations.
Easterly's work could provide many Latin American scholars, policymakers and politicians with a penetrating survey of the ideas behind so many failed development policies tried in our region for at least five decades. To be sure, he makes his case against what he calls "the ideology of development" with a quick-witted and frequently humorous writing that reads with congenial ease in Spanish.
The Spanish edition of William Easterly's book, "En Busca del Crecimiento. Andanzas y Tribulaciones de los Economistas del Desarrollo." is available through Antoni Bosch, Editor. Barcelona, Spain, 2003.
This sympathy for Easterly's work stems, I think, from the mere fact that, for 50 years or more, Latin Americans have been prey to all sorts of frustrating ideas and contraptions aimed at attaining development.
Indeed, the regions of the world where development ideology has been more influential, namely Africa and Latin America, have fared the worst. In his long career as a World Bank expert, Easterly, who now teaches at New York University, noticed what he rightly deems a sad law: "the poorer the country, the poorer the economic analysis applied to it."
Not far from where I live in Caracas stands a low-rise office building that, despite its lusterless appearance, has become over the years a foremost neighborhood's landmark.
It houses the famed Centro de Estudios del Desarrollo (CENDES, Spanish acronym for Center for Development Studies), a Social Sciences top-level research institution founded in 1961 by the Universidad Central de Venezuela (Central University of Venezuela.)
Surfing its website, you can judge its academic standards, the scope of its research teams and the quality ot its publications. What you cannot gauge by surfing its website is the tremendous influence CENDES has exerted over decades in disseminating the tenets of various inborn ideologies of development throughout Latin America.
It was here where "neocolonial dependence theory", the brainchild of former Brazilian president Fernando Henrique Cardoso (Rio de Janeiro, 1931), took shape during the early 70s and became the most authoritative doctrine to explain Latin American underdevelopment. Professor Cardoso was elected president in 1994, then reelected in 1998. He left office in 2002. To be fair, there is a handful of things about Latin American economics that Mr. Cardoso, in his own admission, does not hold to be true any more. I find this quite telling about Mr. Cardoso's intellectual integrity. Nevertheless, Cardoso's early work is still abundantly quoted by his fellow scholars and many government officials all over the continent.
Dozens of Latin American economic planning experts came out of this small yet prepossessing building during the '60s and '70s. One of them counts among his major achievements having occupied top-level economic planning government posts, first in Cuba and then in Allende's Chile! Venezuela's incumbent planning minister, professor Jorge Giordani, is a distinguished scholar and foremost member of CENDES's ever since its foundation. An unyielding advocate of one of Latin American developmentalism's currently most prestigious theories, Mr. Giordani currently entreats for a formula known as "endogenous growth."
For years, men and women have graduated from CENDES and gone back to their countries armed with the worst ideas imaginable to end poverty, those entailing state direction by the states least able to direct.
In an article recently published by Easterly, he presents us with an explanation of why, after the demise of the Soviet Union, the ideologic specter of Developmentalism haunts so many Third World leaders... and peoples. I think it worth quoting at length:
The power of Developmentalism is disheartening [Easterly writes] because the failure of all the previous ideologies might have laid the groundwork for the opposite of ideology—the freedom of individuals and societies to choose their destinies. Yet, since the fall of communism, the West has managed to snatch defeat from the jaws of victory, and with disastrous results. Development ideology is sparking a dangerous counterreaction. The "one correct answer" came to mean "free markets", and, for the poor world, it was defined as doing whatever the IMF and the World Bank tell you to do. But the reaction in Africa, Central Asia, Latin America, the Middle East and Russia has been to fight against free markets. So, one of the best economic ideas of our time, the genius of free markets, was presented in one of the worst possible ways, with unelected outsiders imposing rigid doctrines on the xenophobic unwilling.1
Though this utterly iconoclastic book deals mainly with tragic flaws committed by foreign aid agencies in many poor countries, it also reads as an in-depth treatment of the determinants of economic growth. Easterly's book draws thoroughly on many studies done or commissioned by the World Bank. A former World Bank official himself, Easterly is primarily interested in what kind of policies have really alleviated poverty. In his quest, he reviews the policies that foreign-aid agencies have put into effect since post-World Ward II Third World decolonization era until present days.
Archetypal models explaining economic growth, from Harrod-Domar's to Robert Solow's, are surveyed in depth and their practical results, if any, are mordantly commented in a nontechnical, quite amusing literary style.
In the prologue to The Elusive Quest for Growth, Easterly reminds us that, however paradoxical it may seem, in their practical policy work economists too often cling to formulas that violate the very basic principle of economics. What is this basic principle?
As a wise elder once told me [Easterly answers], "People do what they get paid to do; what they don't get paid to do, they don't do". A wonderful book by Steven Landsburg, The Armchair Economist, distills the principle more concisely: "People respond to incentives; all the rest is commentary."
For a discussion of how incentives affect economists' own behavior, consider Russ Roberts and David Henderson's podcast, Henderson on Disagreeable Economists. EconTalk, July 30, 2007.
Over the past decades, a significant mass of evidence has been accumulated by countless researchers indicating that conventional wisdom on the determinants of growth in poor countries is either wrong or lacks sufficient statistical support. Among Easterly's unsettling findings is the fact that foreign aid does not necessarily go hand in hand with an increase of investment just as high investment ratios do not necessarily lead to higher growth.
According to Easterly, many commonly accepted assertions on the role of education, population control or debt relief in stimulating economic growth lack empirical support. The examples and case stories he brings forward to support his views are drawn from his lifetime experience in many disparate countries of the planet and are all too familiar to any Latin American reader like me.
The key lesson for anyone trying to understand what has made growth possible in places unthinkable to developmentalism pundits is that people respond to incentives they recognize as such. By "people" I mean what Easterly means: private individuals, government officials, even aid donors. Whenever those incentives promote growth-inducing behavior, growth is very likely to occur.
Reviewing a prior work by Easterly (The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done so Much Ill and So Little Good, Penguin Press, 2006), Nobel Prize winner Amartya Sen quotes Easterly's very illuminating division between "planners" and "searchers" when it comes to help poor countries overcome their plights.
In foreign aid [Sen writes], planners announce good intentions but don't motivate anyone to carry them out; Searchers find things that work and get some reward. Planners raise expectations but take no responsibility for meeting them; Searchers accept responsibility for their actions. Planners determine what to supply; Searchers find out what is in demand. Planners apply global blueprints; Searchers adapt to local conditions. Planners at the top lack knowledge of the bottom; Searchers find out what the reality is at the bottom. Planners never hear whether the planned got what it needed; Searchers find out whether the customer is satisfied.2
All the rest, I would say, is commentary.
Notes:
1 William Easterly, The Ideology of Development, Foreign Policy, July/August 2007. 2 Amartya Sen, The Man Without a Plan, Foreign Affairs, March/April 2006
On Good Savages and Good Revolutionists
1.—
The Spanish-American war wiped off the map what remnants there were of the decrepit Spanish empire: Cuba, Puerto Rico and Philippines.
It prompted the response of a group of Spanish novelists, poets, essayists, and philosophers that, up to that moment, had been at the fringes of their country's intellectual mainstream.
This group of commentators of the disaster of 1898 came to be known as la generación del 98 ("the '98 generation"), in implied reference to the moral, political, and social crisis ensued in early 20th century's Spain by military humiliation and the loss of its last colonies. These men intently poured salt on the wounded soul of what they saw as a failed and self-deceiving society.
Considered separately, they were headstrong individualists, but together they found a way to keep "unity among diversity" as they ardently criticized moral values that, in their view, had squandered Spain's importance among the rest of the Old World.
They all opposed the monarchy in Spain and furiously lashed its shortcomings. At the same time, they resented the extreme poverty of the Spanish people, especially when measured against the pettiness of the wealthy gentry. They thought Spain's politics were as trite, weightless and inconsequential a fraud as its intellectual life.
Consequently, their political writings strived to establish some sort of "enlightened" republic, rather than a true liberal one, but this did not keep them from delving deeply in traditional and lost words, especially in long-forsaken Spanish literary myths that brought back memories of the 15th century's great kingdom of Castilla.
Ironically, as its influence on world politics disappeared for ever, Spain regained significance in Europe's literature thanks to the revival of various streaks of 15 century's Spanish spiritualism that generación del 98 brought about.
A distinguished quality of their thinking was its rebuttal of American pragmatism. With more than jocular zest they were given to deride American high entrepreneurial spirit—and, for that matter, any practical, businesslike approach to reality—which they saw as the epitome of rude philistinism.
Commenting on Spain's characteristic lack of scientific inventiveness and industrial innovations, Miguel de Unamuno (1864-1936), foremost thinker of generación del 98, wrote that technological acumen was not really Spain's line. According to Unamuno, Spain's "comparative advantage" was in quixotic self-denying and noble deeds. One of his punchlines was, ¡Que inventen ellos! ("Let them invent!"). "Que inventen ellos!" became something of the group's arrogant watchword. ¡Que inventen ellos! Let them research and develop and make money; Don Quixote never wasted time reading a ticker tape!
This particular trait of generación del 98's thinking had a great influence in Latin American intellectuals at the turn of the 20th century, just when the United States began to flex its muscles as the great world power it was soon to be.
2.—
Even an ordinarily nonpolitical yet greatly influential poet as Nicaraguan Rubén Dario (1867, 1916), rightly dubbed Príncipe de las Letras Castellanas ("The Prince of Spanish Literature"), vented his anger at U.S. interventionism in a celebrated long, incensed poem he dedicated to Theodore Roosevelt.
I find this poem, written at the turn of the 20th century and learnt by heart by many a Latin American would-be writer ever since, a most relevant sample of the core of Latin America's love-hate relationship with the United States. I will not spare my readers of a long excerpt:
It is with the voice of the Bible, or the verse of Walt Whitman,
that I should come to you, Hunter,
primitive and modern, simple and complicated,
with something of Washington and more of Nimrod.
You are the United States,
you are the future invader
of the naive America that has Indian blood,
that still prays to Jesus Christ and still speaks Spanish. […] You are rich.
You join the cult of Hercules to the cult of Mammon,
and illuminating the road of easy conquest,
Liberty raises its torch in New York. […]
But our America, that has had poets
since the ancient times of Netzahualcoyotl,
that has walked in the footprints of great Bacchus
who learned Pan's alphabet at once;
that consulted the stars, that knew Atlantis
whose resounding name comes to us from Plato,
that since the remote times of its life
has lived on light, on fire, on perfume, on love,
America of the great Montezuma, of the Inca,
the fragrant America of Christopher Columbus,
Catholic America, Spanish America,
the America in which noble Cuahtemoc said:
"I'm not in a bed of roses"; that America
that trembles in hurricanes and lives on love,
it lives, you men of Saxon eyes and barbarous soul.
And it dreams. And it loves, and it vibrates, and it is the daughter of the Sun.
Be careful. Viva Spanish America!
There are a thousand cubs loosed from the Spanish lion.
Roosevelt, one would have to be, through God himself,
the-fearful Rifleman and strong Hunter,
to manage to grab us in your iron claws.
And, although you count on everything, you lack one thing: God!
(Translated by Bonnie Frederick))
Long before the 1960s, when Marxist-inspired guerrillas populated our region's political landscape, Latin American intellectuals assumed what Peruvian writer Alvaro Vargas Llosa describes as an "ontological distrust of the North in the name of supposedly 'spiritual' values against 'material' ones". The perfect example is José Enrique Rodó (1872, 1917), an Uruguayan journalist and politician who in 1900 published Ariel, a long essay that criticizes the North's utilitarianism while exalting Latin America's ethical asn aesthetical values.
Ariel reads as a sermon entreating Latin America's youth to adopt the cause of the classical western tradition. Drawn from Shakespeare's The Tempest, Ariel ('an airy spirit', according to the Elizabethan play's dramatis personae) represents Latin America while Caliban ('a savage deformed slave') represents the US.
In the aftermath of the Mexican Revolution nationalism, anti-imperialism, socialism and agrarianism became the dominating ideas of Latin America's political thought.
Mr. Vargas Llosa's aptly summarizes our 20th century's political tradition as one that, "joined with ideological confusion, and our institutional inheritance, amounted to a mixture of corporatism, mercantilism, socialism, and populism that exalted oligarchies and privileges while it isolated large alienated masses.
The public ended up attributing its own condition to capitalism despite the absence of that system in Latin America (emphasis mine) and putting its hope in the state, which had replaced the Catholic Church of the nineteenth century and the preceding colonial centuries."1
The state was thought of as the sole champion of the downtrodden. Collectivism and an immoderate devotion to the state considered as a wonderful wealth-redistributing engine has been the hallmark of Latin American political during the last century.
Not until de 1970s did Carlos Rangel—a noteworthy Venezuelan thinker—begin to wage a solitary intellectual war against the whole corpus of ideological confusion over the real causes of Latin American poverty and institutional backwardnes. He did this by writing a fascinating book, Del Buen Salvaje Al Buen Revolucionario: Mitos Y Realidades De América Latina ("From the Good Savage to the Good Revolutionist"), Monte Ávila Editores, Caracas, 1976). An English translation of this extraordinary work is available under another title: The Latin Americans: their love-hate relationship with the United States (Transaction Books, New Brunswick, N.J., 1987.)
Another book by Carlos Rangel is Third World Ideology and Western Reality: Manufacturing Political Myth, Transaction Books, 1986.
Mr. Rangel also published in English a few other brilliant books dealing with the large family of subjects addressed in Del Buen Salvaje al Buen Revolucionario, but his untimely death, in 1988, prevented him of further developments. Still, Del Buen Salvaje al Buen Revolucionario, remains a comprehensive dissection of tercermundista (Third World) ways of thought.
Recognition by his fellow countrymen has not not come by easily. In fact, his book rapidly became anathema to his times' Latin American academic circuits, most of them stultified by Marxist and Populist views. Appreciation had to come from abroad.
In a preface to the French edition of Mr. Rangel's book, the late French philosopher Jean François Revel wrote, "this book is the first contemporaneous essay on Latin American civilization giving a truly new, and probably exact interpretation."
For any interpretation of reality to be exact it must begin by dispensing with self-deceiving explanations and self-serving excuses. It is true that not everything that has been said about Latin America is false, but on the whole, it usually provides an utterly distorted view.
According to Mr. Rangel, Latin America's 20 century's history can be viewed as a protracted contradiction that stems from the origins of our nations back in the 19th century. Independence form Spain was not a movement "from the bottom up". To the contrary, in almost all our nations, independence was only a rebellion of the privileged local gentry against the imperial rule.
Two hundred years later, still torn between false revolutions and anarchic autocracies, between corruption and poverty, our exacerbated nationalisms are nothing but an alibi for failure.
To Latin Americans, Mr. Rangel wrote, "the mere notion of a handful of Anglo-Saxons, arriving to this continent much later than the Conquistadores did [...] and, in time, growing into the first power of the world is unbearably outrageous. Only by going deep into an unlikely collective psychoanalysis could our continent face the true causes of the unsettling contrast between the two Americas." [...] "Imperviously real as American imperialism could be, it was a consequence, not the cause, of our impotence. As morally loathsome as robbery can be, it still poses a question about the origins of the thief's strength and its victim's weakness."
Notes:
1 Alvaro Vargas Llosa, "Latin American Liberalism: A Mirage?", The Independent Review, v.VI, n.3, Winter 2002. pp.325-343.
The Spanish-American war wiped off the map what remnants there were of the decrepit Spanish empire: Cuba, Puerto Rico and Philippines.
It prompted the response of a group of Spanish novelists, poets, essayists, and philosophers that, up to that moment, had been at the fringes of their country's intellectual mainstream.
This group of commentators of the disaster of 1898 came to be known as la generación del 98 ("the '98 generation"), in implied reference to the moral, political, and social crisis ensued in early 20th century's Spain by military humiliation and the loss of its last colonies. These men intently poured salt on the wounded soul of what they saw as a failed and self-deceiving society.
Considered separately, they were headstrong individualists, but together they found a way to keep "unity among diversity" as they ardently criticized moral values that, in their view, had squandered Spain's importance among the rest of the Old World.
They all opposed the monarchy in Spain and furiously lashed its shortcomings. At the same time, they resented the extreme poverty of the Spanish people, especially when measured against the pettiness of the wealthy gentry. They thought Spain's politics were as trite, weightless and inconsequential a fraud as its intellectual life.
Consequently, their political writings strived to establish some sort of "enlightened" republic, rather than a true liberal one, but this did not keep them from delving deeply in traditional and lost words, especially in long-forsaken Spanish literary myths that brought back memories of the 15th century's great kingdom of Castilla.
Ironically, as its influence on world politics disappeared for ever, Spain regained significance in Europe's literature thanks to the revival of various streaks of 15 century's Spanish spiritualism that generación del 98 brought about.
A distinguished quality of their thinking was its rebuttal of American pragmatism. With more than jocular zest they were given to deride American high entrepreneurial spirit—and, for that matter, any practical, businesslike approach to reality—which they saw as the epitome of rude philistinism.
Commenting on Spain's characteristic lack of scientific inventiveness and industrial innovations, Miguel de Unamuno (1864-1936), foremost thinker of generación del 98, wrote that technological acumen was not really Spain's line. According to Unamuno, Spain's "comparative advantage" was in quixotic self-denying and noble deeds. One of his punchlines was, ¡Que inventen ellos! ("Let them invent!"). "Que inventen ellos!" became something of the group's arrogant watchword. ¡Que inventen ellos! Let them research and develop and make money; Don Quixote never wasted time reading a ticker tape!
This particular trait of generación del 98's thinking had a great influence in Latin American intellectuals at the turn of the 20th century, just when the United States began to flex its muscles as the great world power it was soon to be.
2.—
Even an ordinarily nonpolitical yet greatly influential poet as Nicaraguan Rubén Dario (1867, 1916), rightly dubbed Príncipe de las Letras Castellanas ("The Prince of Spanish Literature"), vented his anger at U.S. interventionism in a celebrated long, incensed poem he dedicated to Theodore Roosevelt.
I find this poem, written at the turn of the 20th century and learnt by heart by many a Latin American would-be writer ever since, a most relevant sample of the core of Latin America's love-hate relationship with the United States. I will not spare my readers of a long excerpt:
It is with the voice of the Bible, or the verse of Walt Whitman,
that I should come to you, Hunter,
primitive and modern, simple and complicated,
with something of Washington and more of Nimrod.
You are the United States,
you are the future invader
of the naive America that has Indian blood,
that still prays to Jesus Christ and still speaks Spanish. […] You are rich.
You join the cult of Hercules to the cult of Mammon,
and illuminating the road of easy conquest,
Liberty raises its torch in New York. […]
But our America, that has had poets
since the ancient times of Netzahualcoyotl,
that has walked in the footprints of great Bacchus
who learned Pan's alphabet at once;
that consulted the stars, that knew Atlantis
whose resounding name comes to us from Plato,
that since the remote times of its life
has lived on light, on fire, on perfume, on love,
America of the great Montezuma, of the Inca,
the fragrant America of Christopher Columbus,
Catholic America, Spanish America,
the America in which noble Cuahtemoc said:
"I'm not in a bed of roses"; that America
that trembles in hurricanes and lives on love,
it lives, you men of Saxon eyes and barbarous soul.
And it dreams. And it loves, and it vibrates, and it is the daughter of the Sun.
Be careful. Viva Spanish America!
There are a thousand cubs loosed from the Spanish lion.
Roosevelt, one would have to be, through God himself,
the-fearful Rifleman and strong Hunter,
to manage to grab us in your iron claws.
And, although you count on everything, you lack one thing: God!
(Translated by Bonnie Frederick))
Long before the 1960s, when Marxist-inspired guerrillas populated our region's political landscape, Latin American intellectuals assumed what Peruvian writer Alvaro Vargas Llosa describes as an "ontological distrust of the North in the name of supposedly 'spiritual' values against 'material' ones". The perfect example is José Enrique Rodó (1872, 1917), an Uruguayan journalist and politician who in 1900 published Ariel, a long essay that criticizes the North's utilitarianism while exalting Latin America's ethical asn aesthetical values.
Ariel reads as a sermon entreating Latin America's youth to adopt the cause of the classical western tradition. Drawn from Shakespeare's The Tempest, Ariel ('an airy spirit', according to the Elizabethan play's dramatis personae) represents Latin America while Caliban ('a savage deformed slave') represents the US.
In the aftermath of the Mexican Revolution nationalism, anti-imperialism, socialism and agrarianism became the dominating ideas of Latin America's political thought.
Mr. Vargas Llosa's aptly summarizes our 20th century's political tradition as one that, "joined with ideological confusion, and our institutional inheritance, amounted to a mixture of corporatism, mercantilism, socialism, and populism that exalted oligarchies and privileges while it isolated large alienated masses.
The public ended up attributing its own condition to capitalism despite the absence of that system in Latin America (emphasis mine) and putting its hope in the state, which had replaced the Catholic Church of the nineteenth century and the preceding colonial centuries."1
The state was thought of as the sole champion of the downtrodden. Collectivism and an immoderate devotion to the state considered as a wonderful wealth-redistributing engine has been the hallmark of Latin American political during the last century.
Not until de 1970s did Carlos Rangel—a noteworthy Venezuelan thinker—begin to wage a solitary intellectual war against the whole corpus of ideological confusion over the real causes of Latin American poverty and institutional backwardnes. He did this by writing a fascinating book, Del Buen Salvaje Al Buen Revolucionario: Mitos Y Realidades De América Latina ("From the Good Savage to the Good Revolutionist"), Monte Ávila Editores, Caracas, 1976). An English translation of this extraordinary work is available under another title: The Latin Americans: their love-hate relationship with the United States (Transaction Books, New Brunswick, N.J., 1987.)
Another book by Carlos Rangel is Third World Ideology and Western Reality: Manufacturing Political Myth, Transaction Books, 1986.
Mr. Rangel also published in English a few other brilliant books dealing with the large family of subjects addressed in Del Buen Salvaje al Buen Revolucionario, but his untimely death, in 1988, prevented him of further developments. Still, Del Buen Salvaje al Buen Revolucionario, remains a comprehensive dissection of tercermundista (Third World) ways of thought.
Recognition by his fellow countrymen has not not come by easily. In fact, his book rapidly became anathema to his times' Latin American academic circuits, most of them stultified by Marxist and Populist views. Appreciation had to come from abroad.
In a preface to the French edition of Mr. Rangel's book, the late French philosopher Jean François Revel wrote, "this book is the first contemporaneous essay on Latin American civilization giving a truly new, and probably exact interpretation."
For any interpretation of reality to be exact it must begin by dispensing with self-deceiving explanations and self-serving excuses. It is true that not everything that has been said about Latin America is false, but on the whole, it usually provides an utterly distorted view.
According to Mr. Rangel, Latin America's 20 century's history can be viewed as a protracted contradiction that stems from the origins of our nations back in the 19th century. Independence form Spain was not a movement "from the bottom up". To the contrary, in almost all our nations, independence was only a rebellion of the privileged local gentry against the imperial rule.
Two hundred years later, still torn between false revolutions and anarchic autocracies, between corruption and poverty, our exacerbated nationalisms are nothing but an alibi for failure.
To Latin Americans, Mr. Rangel wrote, "the mere notion of a handful of Anglo-Saxons, arriving to this continent much later than the Conquistadores did [...] and, in time, growing into the first power of the world is unbearably outrageous. Only by going deep into an unlikely collective psychoanalysis could our continent face the true causes of the unsettling contrast between the two Americas." [...] "Imperviously real as American imperialism could be, it was a consequence, not the cause, of our impotence. As morally loathsome as robbery can be, it still poses a question about the origins of the thief's strength and its victim's weakness."
Notes:
1 Alvaro Vargas Llosa, "Latin American Liberalism: A Mirage?", The Independent Review, v.VI, n.3, Winter 2002. pp.325-343.
Brave New Word?
It is widely asserted that Latin America has moved to the left.
At the same time, the political map of the continent is often depicted as a seamless, growing web of "populist" regimes. Some pundits have qualified this assertion by making what they think are useful distinctions. They discriminate "degrees" of populism.
Accordingly, a "soft-core" populist government, for instance, would be one that stands for prudent macroeconomic policies while retaining some of the deregulation reforms that went en vogue during the 90s. On the other hand you have populist rulers that order nationalizations or propose the idea of putting central banks under direct control of the executive branch. They decry liberal democracy and threaten freedom of speech, shrug off congress accountability and govern by decree while posing as headstrong advocates of submitting difficult, technical matters to direct popular vote. Both kinds of regimes, however disparate, would all correspond to the Latin American tradition of populism.
To complicate matters, ever since the early 1990s there has been a lot of talk about a special strain, the so called "neoliberal populism".
Though central to grasping what is going on throughout the region, populism has proved to be an elusive concept. In the 1890s, the United States' Midwest saw a surge of what then was called "populism". It was a movement with rural origins that stood against what was thought as "the grip or urban cartels", railroads not the least of them. Its heyday coincided with the 1896 presidential election, when American populists backed William Jennings Bryan in its crusade against the gold standard.
19th century Russia's populists embraced peasant communalism to counter industrialization and Western-styled liberalism. "The heroism, the disinterestedness, the personal nobility of the Populist was often admitted by their Marxist opponents."1 But while regarded as worthy forerunners of 20th century's Russian revolutionary parties, they were usually "written down as an amalgam of unorganized moral indignation and utopian ideas in the muddled heads of self-taught peasants, well-meaning university intellectuals and other social casualties of the confused interim between the of an obsolescent feudalism and the beginning of the new capitalist phase in a backward country. Marxist historians still tend to describe it as a movement compounded of systematic misinterpretation of economic facts and social realities, noble but useless individual terrorism, and spontaneous or ill-directed peasant risings—the necessary but pathetic beginnings of real revolutionary activity, the prelude to the real play, a scene of naïve ideas and frustrated practice destined to be swept away by the new, revolutionary, dialectical science heralded by Plekhanov and Lenin".2
But it is in Latin America where populism has had the most enduring influence and come to signify social unrest, corruption, lawlessness, outrageous contempt for individual and economical liberties, backwardness and sheer poverty.
It is nowadays customary among specialists—prompted by what Frenchmen call l'esprit de systeme—to list the "waves" of Latin American populism that time and again have swept the continent since the late 1920s. Thus, the Argentinian dictator Juan Domingo Perón (1895-1974), who ruled his country as a military dictator from 1943 to 1946, then as an elected strong man, from 1946 to 1955, would belong in the "second wave" category while Peruvian Alan García's first tenure as an elected president (1985-1990) belongs in the "third wave."
Nevertheless, Latin American populism blurs any possible distinction between leader, party, government and state. Fifty years ago, populist leaders already differed from communist and socialist leaders in that they were keen to forge multi-class alliances. But already then as now, they packed the judiciary with their pals, rigged elections and riled against capitalism while fostering crony capitalism.
Most populist, past and present, have been military officers but then José María Velasco (1893-1979), Ecuador's foremost populist leader, five times elected president and four times overthrown by the army, was a lawyer who rose to power on the votes of multitudes of sub-peasants and unskilled labourers emotionally enraptured by his oratory. Typically charismatic, he once was reported saying to his followers, "Give me a balcony and I will become president".
Lashing oratory, charismatic caudillos, be it civil or military, contempt for the restraints on executive power that are normal in properly functioning democracies and crowd-maddening myths of social redemption such as Evita's; these all are elements ordinarily associated with populism.
Indeed, populism can be a tangle of contradictions. Despite its anti-elitist drive, it tends to create new elites. Nationalism do not necessarily curb doing business with foreign "imperialists" corporations. Populist leaders campaign against political corruption but more often than not they end up generating even more.
"In the 1960—says a feature story ran by The Economist last year—populism seemed to fade away in Latin America, squeezed by Marxism, Christian democracy and military dictatorship. Its current revival shows that it is deeply rooted in the region's political culture. But it also involves some new elements. The new crop of populist leaders rely partly on the politics of ethnic identity. Their coalitions are based on the poor, both urban and rural, and those labouring in the informal economy. They champion those discomfited by globalisation rather than industrialisation".3
Early on the 1990s, many observers hastened to predict the demise of populism arguing that now available top-notch techniques of political marketing had rendered all candidates charismatic, given enough money. Furthermore—so went the argument—new global economic and social realities demanded new policies, absolutely unattainable by obsolete, discredited populist parties and leaders. Populism was declared moribund, if not utterly extinct.
More recently, however, other analysts have maintained that one of the most prominent traits of populism is its—very often failed—inclination to bridge the gap between traditional and progressive policies. One explanation for this might be that populism is a technique (or a set of techniques) of political leadership and of mass and proxy control rather than a likely enough "ideology".
Furthermore, as American historian Michael L. Conniff has noted in Populism in Latin America, "The populists imaginatively constructed broad, heterogeneous followings by appealing to diverse groups in different ways. They formulated vague programs and doctrines with which many sectors and class could identify.—Perón's Justicialismo, [Brazilian dictator, Getulio] Vargas' Trabalhismo are good examples".4
This is precisely what we are witnessing in many countries of the region, more than a decade after Conniff's remarks were written. Consider Venezuela's bolivarianismo or Bolivia's indigenismo.
"The multiclass makeup of populism—Connifs goes on to say—stood in contrast to most other parties in the region, which drew from restricted social strata, for example, the workers, middle sectors, or rural landowners. Populists' broad appeals gave their parties heterogeneous followings that were unwieldy yet also very effective in reaching newly enfranchised voters, a something-for-everyone approach. Only very clever leaders could manage this without tripping over discrepant planks in their platforms."5
All in all, no matter how clever a leader can be or how craftily populist coalitions are built, the fact is that personalismo, as well as excessive centralization, condemns government agencies and public servants to paralysis as all decisions, appointments, and initiatives require the leader's direct involvement, approval and action. This is what ultimately undermines the effectiveness of populism once its leaders are in office.
No appraisal of the salient features of Latin American populism will be complete without addressing what populism entails in economical terms.
Populism's emphasis on growth and income distribution with disregard for inflation and deficit finance are paradigmatic. In a 1999 study that has already become a classic, the late Rudiger Dornbusch and Sebastian Edwards set out the Latin American populist paradigm and went as far as breaking it up into phases.6
Once the initial phases are completed the economy runs into bottlenecks due to ill-advised expansive policies and a growing lack of foreign exchange. Inflation, price realignments and devaluation become unavoidable as the budget deficit worsens as a result of subsidized wages and goods.
It has happened in Argentina, Brazil, Bolivia, Mexico, Peru, Venezuela, Nicaragua and Chile, at different epochs throughout the 20 century, and under the aegis of multifarious regimes. According Dornbusch and Edwards, the macroeconomics of all these various experiences is very much the same, even if the politics differed greatly.
Can countries develop an economic memory? It's a difficult question. Dornbusch and Edwards summarize the findings of the many fine Latin American contributors to their book in a somewhat disheartening way.
"Quite clearly," they write, "the detailed case studies collected here suggest that, in general, there is very little capacity (and willingness) of learning from other countries' experiences. Indeed, one of the most striking regularities of these episodes is the insistence with which the engineers of the populist programs argue that their circumstances are unique and thus immune from historical lessons from other nations."
Notes:
1 Isaiah Berlin, "Introduction" in Franco Venturi, Roots of Revolution. A History of the Populist and Socialist Movements in Nineteenth Century Russia. New York, Grosset & Dunlap, 1966, p. xxvii. Published later as "Russian Populism" in Isaiah Berlin, Russian Thinkers. London, 1980. 2 Ibid. p. xxviii 3 "The return of populism." The Economist, Apr. 12, 2006. 4 Michael Conniff, (Editor), Populism in Latin America. The University of Alabama Press, 1999, p.16. 5 Ibid., p.14. 6 For a full fledged discussion on how this "paradigm" explains the ultimate failure of populist economics, see Rudiger Dornbusch and Sebastian Edwards, (Editors), The Macroeconomics of Populism in Latin America. The University of Chicago Press, 1991.
At the same time, the political map of the continent is often depicted as a seamless, growing web of "populist" regimes. Some pundits have qualified this assertion by making what they think are useful distinctions. They discriminate "degrees" of populism.
Accordingly, a "soft-core" populist government, for instance, would be one that stands for prudent macroeconomic policies while retaining some of the deregulation reforms that went en vogue during the 90s. On the other hand you have populist rulers that order nationalizations or propose the idea of putting central banks under direct control of the executive branch. They decry liberal democracy and threaten freedom of speech, shrug off congress accountability and govern by decree while posing as headstrong advocates of submitting difficult, technical matters to direct popular vote. Both kinds of regimes, however disparate, would all correspond to the Latin American tradition of populism.
To complicate matters, ever since the early 1990s there has been a lot of talk about a special strain, the so called "neoliberal populism".
Though central to grasping what is going on throughout the region, populism has proved to be an elusive concept. In the 1890s, the United States' Midwest saw a surge of what then was called "populism". It was a movement with rural origins that stood against what was thought as "the grip or urban cartels", railroads not the least of them. Its heyday coincided with the 1896 presidential election, when American populists backed William Jennings Bryan in its crusade against the gold standard.
19th century Russia's populists embraced peasant communalism to counter industrialization and Western-styled liberalism. "The heroism, the disinterestedness, the personal nobility of the Populist was often admitted by their Marxist opponents."1 But while regarded as worthy forerunners of 20th century's Russian revolutionary parties, they were usually "written down as an amalgam of unorganized moral indignation and utopian ideas in the muddled heads of self-taught peasants, well-meaning university intellectuals and other social casualties of the confused interim between the of an obsolescent feudalism and the beginning of the new capitalist phase in a backward country. Marxist historians still tend to describe it as a movement compounded of systematic misinterpretation of economic facts and social realities, noble but useless individual terrorism, and spontaneous or ill-directed peasant risings—the necessary but pathetic beginnings of real revolutionary activity, the prelude to the real play, a scene of naïve ideas and frustrated practice destined to be swept away by the new, revolutionary, dialectical science heralded by Plekhanov and Lenin".2
But it is in Latin America where populism has had the most enduring influence and come to signify social unrest, corruption, lawlessness, outrageous contempt for individual and economical liberties, backwardness and sheer poverty.
It is nowadays customary among specialists—prompted by what Frenchmen call l'esprit de systeme—to list the "waves" of Latin American populism that time and again have swept the continent since the late 1920s. Thus, the Argentinian dictator Juan Domingo Perón (1895-1974), who ruled his country as a military dictator from 1943 to 1946, then as an elected strong man, from 1946 to 1955, would belong in the "second wave" category while Peruvian Alan García's first tenure as an elected president (1985-1990) belongs in the "third wave."
Nevertheless, Latin American populism blurs any possible distinction between leader, party, government and state. Fifty years ago, populist leaders already differed from communist and socialist leaders in that they were keen to forge multi-class alliances. But already then as now, they packed the judiciary with their pals, rigged elections and riled against capitalism while fostering crony capitalism.
Most populist, past and present, have been military officers but then José María Velasco (1893-1979), Ecuador's foremost populist leader, five times elected president and four times overthrown by the army, was a lawyer who rose to power on the votes of multitudes of sub-peasants and unskilled labourers emotionally enraptured by his oratory. Typically charismatic, he once was reported saying to his followers, "Give me a balcony and I will become president".
Lashing oratory, charismatic caudillos, be it civil or military, contempt for the restraints on executive power that are normal in properly functioning democracies and crowd-maddening myths of social redemption such as Evita's; these all are elements ordinarily associated with populism.
Indeed, populism can be a tangle of contradictions. Despite its anti-elitist drive, it tends to create new elites. Nationalism do not necessarily curb doing business with foreign "imperialists" corporations. Populist leaders campaign against political corruption but more often than not they end up generating even more.
"In the 1960—says a feature story ran by The Economist last year—populism seemed to fade away in Latin America, squeezed by Marxism, Christian democracy and military dictatorship. Its current revival shows that it is deeply rooted in the region's political culture. But it also involves some new elements. The new crop of populist leaders rely partly on the politics of ethnic identity. Their coalitions are based on the poor, both urban and rural, and those labouring in the informal economy. They champion those discomfited by globalisation rather than industrialisation".3
Early on the 1990s, many observers hastened to predict the demise of populism arguing that now available top-notch techniques of political marketing had rendered all candidates charismatic, given enough money. Furthermore—so went the argument—new global economic and social realities demanded new policies, absolutely unattainable by obsolete, discredited populist parties and leaders. Populism was declared moribund, if not utterly extinct.
More recently, however, other analysts have maintained that one of the most prominent traits of populism is its—very often failed—inclination to bridge the gap between traditional and progressive policies. One explanation for this might be that populism is a technique (or a set of techniques) of political leadership and of mass and proxy control rather than a likely enough "ideology".
Furthermore, as American historian Michael L. Conniff has noted in Populism in Latin America, "The populists imaginatively constructed broad, heterogeneous followings by appealing to diverse groups in different ways. They formulated vague programs and doctrines with which many sectors and class could identify.—Perón's Justicialismo, [Brazilian dictator, Getulio] Vargas' Trabalhismo are good examples".4
This is precisely what we are witnessing in many countries of the region, more than a decade after Conniff's remarks were written. Consider Venezuela's bolivarianismo or Bolivia's indigenismo.
"The multiclass makeup of populism—Connifs goes on to say—stood in contrast to most other parties in the region, which drew from restricted social strata, for example, the workers, middle sectors, or rural landowners. Populists' broad appeals gave their parties heterogeneous followings that were unwieldy yet also very effective in reaching newly enfranchised voters, a something-for-everyone approach. Only very clever leaders could manage this without tripping over discrepant planks in their platforms."5
All in all, no matter how clever a leader can be or how craftily populist coalitions are built, the fact is that personalismo, as well as excessive centralization, condemns government agencies and public servants to paralysis as all decisions, appointments, and initiatives require the leader's direct involvement, approval and action. This is what ultimately undermines the effectiveness of populism once its leaders are in office.
No appraisal of the salient features of Latin American populism will be complete without addressing what populism entails in economical terms.
Populism's emphasis on growth and income distribution with disregard for inflation and deficit finance are paradigmatic. In a 1999 study that has already become a classic, the late Rudiger Dornbusch and Sebastian Edwards set out the Latin American populist paradigm and went as far as breaking it up into phases.6
Once the initial phases are completed the economy runs into bottlenecks due to ill-advised expansive policies and a growing lack of foreign exchange. Inflation, price realignments and devaluation become unavoidable as the budget deficit worsens as a result of subsidized wages and goods.
It has happened in Argentina, Brazil, Bolivia, Mexico, Peru, Venezuela, Nicaragua and Chile, at different epochs throughout the 20 century, and under the aegis of multifarious regimes. According Dornbusch and Edwards, the macroeconomics of all these various experiences is very much the same, even if the politics differed greatly.
Can countries develop an economic memory? It's a difficult question. Dornbusch and Edwards summarize the findings of the many fine Latin American contributors to their book in a somewhat disheartening way.
"Quite clearly," they write, "the detailed case studies collected here suggest that, in general, there is very little capacity (and willingness) of learning from other countries' experiences. Indeed, one of the most striking regularities of these episodes is the insistence with which the engineers of the populist programs argue that their circumstances are unique and thus immune from historical lessons from other nations."
Notes:
1 Isaiah Berlin, "Introduction" in Franco Venturi, Roots of Revolution. A History of the Populist and Socialist Movements in Nineteenth Century Russia. New York, Grosset & Dunlap, 1966, p. xxvii. Published later as "Russian Populism" in Isaiah Berlin, Russian Thinkers. London, 1980. 2 Ibid. p. xxviii 3 "The return of populism." The Economist, Apr. 12, 2006. 4 Michael Conniff, (Editor), Populism in Latin America. The University of Alabama Press, 1999, p.16. 5 Ibid., p.14. 6 For a full fledged discussion on how this "paradigm" explains the ultimate failure of populist economics, see Rudiger Dornbusch and Sebastian Edwards, (Editors), The Macroeconomics of Populism in Latin America. The University of Chicago Press, 1991.
A Russian Word for a Latin American Disease
"Populism" once was a plain Russian word for a movable, complex Russian family of themes.
"Russian Populism is the name not of a single political party, nor of a coherent body of doctrine" notes Sir Isaiah Berlin, "but of a widespread radical movement in Russia in the middle of the nineteenth century. It was born during the great social and intellectual ferment that followed the death of Tsar Nicholas I and the defeat and humiliation of the Crimean War, grew to fame and influence during the sixties and seventies, and reached its culmination with the assassination of Tsar Alexander II, after which it swiftly declined."1
The word "populism" had its share of good luck and it fared well as a hint of something certainly difficult to define but quite easy to sympathize with. Russian Populists not only yearned to destroy absolutism, abolish slavery and defeat their country's economic and cultural backwardness: they also wanted to replace the tsarist state—the embodiment of authoritarianism, injustice and inequality—with a new and liberating something called "revolution".
"All these thinkers share one vast apocalyptic assumption: that once the reign of evil—autocracy, exploitation, inequality—is consumed in the fire of the revolution, there will arise naturally and spontaneously out of its ashes a natural, harmonious, just order, needing only the gentle guidance of the enlightened revolutionaries to attain to its proper perfection. This great Utopian dream, based on simple faith in regenerated human nature, was a vision which the Populists shared with Godwin and Bakunin, Marx and Lenin. Its heart is the pattern of sin and fall and resurrection, of the road to the earthly paradise the gates of which will only open if men find the one true way and follow it".2
According to the Italian historian supreme, Franco Venturi, "[Alexander] Herzen ( 1812-1870) created populism; [Nikolai] Chernishevsky was it politician".
A self-taught man who thought that literature was the best mean to publicize his political ideals, Chernishevsky infused Russian populism with its distinguishing qualities and, even as he kept changing his views on what the Russian revolution should involve and mean, his writings inspired generations of Populist activists during the sixties and the seventies.
While imprisoned in Petrograd's Peter and Paul Fortress—from 1862 to 1864—he wrote "What is to be done?·", a novel deemed by many of his contemporaries as a handbook of Russian radicalism. So influential was this book that it led to the creation of a strong and widespread—if ultimately failed—, populist Land and Liberty political society. V.I. Lenin named one of his pamphlets after Chernishevsky's novel and it was the hero of Chernishevsky's novel who coined the phrase 'the worse the better': the worse the social conditions became for the poor, the more willing they would be to support a revolution.
However committed to the cause of the downtrodden, the lifelong fickleness of Chernishevsky's cogitations makes it very difficult to ascertain the core of his politics. The naiveness with which he used to address social and political matters as well as his insistence in writing dull novels to convey the maze of his enthusiams, disappointments, fierce denunciations and political programs can make the reading of his work an exacting experience.
V.I. Lenin, however, considered that Chernishevsky was "the one true great writer who managed to remain on a level of unbroken philosophical materialism from the fifities right up to 1888". Yet for all the "unbroken materialism" that Lenin found in Chernishevsky's philosophical stance, it is at least intriguing that he could never bring himself to be a Marxist. He was sent a copy of Das Kapital in 1872. "I glanced through it—he wrote shortly afterwards—but didn't read it; I tore off the pages one by one and made them into little ships, and launched them into the Vilyui river."
In his novel The Gift, Russian-American author Vladimir Nabokov (1899,1977) has his main character—Fyodor Godunov-Cherdyntsev—be a biographer of Chernishevsky. But Fyodor's apocryphal book is only a parodic ploy to satirize Chernishevsky's ideas. With gleeful irreverence, Nabokov tells of Chernichevsky's ability "to bend the silliest daydream into a logical horseshoe".
Bryan Boyd, a distinguished expert in Nabokov's life and works, notes:
Fyodor treats Chernyshevsky as an intellectual buffoon, whose ideas do not deserve the compliment of rational opposition. He quotes enough Chernishevsky to let his crude materialistic approach condemn itself; he suggests a mental and emotional muddle behind Chernishevsky's aesthetics that invalidates any claim to their serious consideration. But Fyodor pays less attention to argument than to the way Chernishevsky's life continually undermines his own philosophy, as if fate took revenge on him for his beliefs.
Chernishevsky is a materialist, but is almost blind and deaf to the material world: short-sighted, living in abstractions and books, unable to tell beer from Madeira, Siberian flora from European, a horsefly from a wasp. A lover of mass audiences, he ends in the near-solitude of exile, where the few around around him pay him no heed. A believer in common sense, he is surrounded by madmen, a neurotic wife,a psychotic son. A champion of at least a certain kind of freedom, he wins for himself only imprisonment and leaves behind a legacy of censorship.
Grimmest irony of all, perhaps, he had aspired to invent a perpetual motion machine as the first step to a material solution to the problems of life, and instead in his last years becomes such a machine himself, translating 'with machine-like steadiness volume after volume of George Weber's Universal History in order to support his family, thereby turning his brain into a forced labor factory' that represents 'the greatest mockery of human thought.'3
This pottering with perpetual motion machines lasted almost five years, until 1853, and was accompanied by an intricate rummage of notes and descriptions of his absurd experiments—"a mixture of ignorance and raciocination", writes Nabokov's alter ego, that Chernishevsky "burned when he feared he would die (from that fashionable disease, aneurysm) before endowing the world with the blessing of eternal and extremely cheap motion".4
"Perpetual motion" refers to a chimerical condition in which an object continues to move indefinitely without being driven by an external source of energy. Thus, perpetual motion machines violate both of the first and second laws of thermodynamics. You can learn more about George Weber's Outline of Universal History, in a contemporary review by translator Dr. M. Behr. North American Review, vol. LXXVI, Boston, 1853, p. 124-165.
Chernishevsky's fortitude in face of authoritarianism is beyond doubt; in the long run his beliefs and unrelenting fight against Tsarist tyranny eventually cost him his life.
Russian Populists were usually at odds among themselves over many different subjects and were most given to engage in heated controversies over the future role of state or whether capitalism was still evitable in Russia. But most of them gave credence to a handful of unshakable beliefs. One of those shared convictions was the possibility of alternative economic formations to capitalism.
The basic approach of Russian Populists towards economics was, generally speaking, moral and even religious. Russian Populists "shrank from the prospect of industrialism in Russia because its brutal cost, and they disliked the West because it had paid this price too heartlessly".5 They believed in socialism not because it was feasible but because, to their eyes, it was just. But the most pervasive belief among Russian Populists was that the salvation could not lie in Western-styled liberal politics.
The defeat of the European revolutions in 1848-49 confirmed them in their mistrust of Western liberal democratic ideals. "As for political rights, votes, parliaments, republican forms, these were meaningless and useless to ignorant and barbarous, half-naked and starving men; such programmes merely mocked their misery."6
Lats but not least, there was the obschina question. The obschina, a primitive Russian form of peasant commune, was idealized by many Populist as the promising germ of a larger collective, egalitarian and free form of association: the corner-stone of collective wealth cration and redistribution. The obschina , they would argue, was not an alien Western idea; it was autochthonous. Obschina had been there from times immemorial as a kind of condensed peasants' wisdom that could help Russia skip capitalism on the way to economic development and social happiness.
Meeting this kind of argumentation against liberal democracy, republican forms and capitalism, as well as the advocacy of indigenous culture and "alternative roads" towards development and social justice can be an unsettling experience in 21 century Latin America. They all ring as too familiar for intellectual comfort.
For example, the pre-Columbian Andean mita has been assimilated to the 19th century Russian obschina by many a scholar on economic development. Populist leaders all over the continent keep urging to find despotic "third ways" leading to "painless" economic development and egalitarian redistribution.
To be sure, Latin American populism is not indebted to Chernishevsky's musings on "illustrated despotism" and perpetual motion machines. But it certainly shares the same disdain for individual liberties and capitalism held by those late 19th century Russian narodniki militants. Latin American populism has, of course, a history of its own, heroes of its own, intellectual superstitions and popular myths of its own.
Having said so, one question still lingers on. How a word—"populist"—that once meant heroism, disinterestedness and personal nobility in Russia has come to name corruption, lawlessness, contempt for individual liberties and poverty in our continent? I think it is a story worth telling.
In forthcoming articles I will try to delve, intently and to the best of my wits, into that history.
Happy New Year!
Notes:
1 Isaiah Berlin, "Introduction" in Franco Venturi, Roots of Revolution. A History of the Populist and Socialist Movements in Nineteenth Century Russia, New York, Grosset / Dunlap, 1966 pp vii-xxxiii. Published later as "Russian Populism" in Isaiah Berlin, Russian Thinkers, London, 1980.
2 Ibid, pp xiii
3 Brian Boyd, Vladimir Nabkov. The Russian Years. Pirnceton University Press, New Jersey. 1990, p. 457
4 Vladimir Nabokov, The Gift, Penguin Books, Londo, 1963, p. 199.
5 Ibid, p. Xxiv
6 Isaiah Berlin, Ibid, p. ix
"Russian Populism is the name not of a single political party, nor of a coherent body of doctrine" notes Sir Isaiah Berlin, "but of a widespread radical movement in Russia in the middle of the nineteenth century. It was born during the great social and intellectual ferment that followed the death of Tsar Nicholas I and the defeat and humiliation of the Crimean War, grew to fame and influence during the sixties and seventies, and reached its culmination with the assassination of Tsar Alexander II, after which it swiftly declined."1
The word "populism" had its share of good luck and it fared well as a hint of something certainly difficult to define but quite easy to sympathize with. Russian Populists not only yearned to destroy absolutism, abolish slavery and defeat their country's economic and cultural backwardness: they also wanted to replace the tsarist state—the embodiment of authoritarianism, injustice and inequality—with a new and liberating something called "revolution".
"All these thinkers share one vast apocalyptic assumption: that once the reign of evil—autocracy, exploitation, inequality—is consumed in the fire of the revolution, there will arise naturally and spontaneously out of its ashes a natural, harmonious, just order, needing only the gentle guidance of the enlightened revolutionaries to attain to its proper perfection. This great Utopian dream, based on simple faith in regenerated human nature, was a vision which the Populists shared with Godwin and Bakunin, Marx and Lenin. Its heart is the pattern of sin and fall and resurrection, of the road to the earthly paradise the gates of which will only open if men find the one true way and follow it".2
According to the Italian historian supreme, Franco Venturi, "[Alexander] Herzen ( 1812-1870) created populism; [Nikolai] Chernishevsky was it politician".
A self-taught man who thought that literature was the best mean to publicize his political ideals, Chernishevsky infused Russian populism with its distinguishing qualities and, even as he kept changing his views on what the Russian revolution should involve and mean, his writings inspired generations of Populist activists during the sixties and the seventies.
While imprisoned in Petrograd's Peter and Paul Fortress—from 1862 to 1864—he wrote "What is to be done?·", a novel deemed by many of his contemporaries as a handbook of Russian radicalism. So influential was this book that it led to the creation of a strong and widespread—if ultimately failed—, populist Land and Liberty political society. V.I. Lenin named one of his pamphlets after Chernishevsky's novel and it was the hero of Chernishevsky's novel who coined the phrase 'the worse the better': the worse the social conditions became for the poor, the more willing they would be to support a revolution.
However committed to the cause of the downtrodden, the lifelong fickleness of Chernishevsky's cogitations makes it very difficult to ascertain the core of his politics. The naiveness with which he used to address social and political matters as well as his insistence in writing dull novels to convey the maze of his enthusiams, disappointments, fierce denunciations and political programs can make the reading of his work an exacting experience.
V.I. Lenin, however, considered that Chernishevsky was "the one true great writer who managed to remain on a level of unbroken philosophical materialism from the fifities right up to 1888". Yet for all the "unbroken materialism" that Lenin found in Chernishevsky's philosophical stance, it is at least intriguing that he could never bring himself to be a Marxist. He was sent a copy of Das Kapital in 1872. "I glanced through it—he wrote shortly afterwards—but didn't read it; I tore off the pages one by one and made them into little ships, and launched them into the Vilyui river."
In his novel The Gift, Russian-American author Vladimir Nabokov (1899,1977) has his main character—Fyodor Godunov-Cherdyntsev—be a biographer of Chernishevsky. But Fyodor's apocryphal book is only a parodic ploy to satirize Chernishevsky's ideas. With gleeful irreverence, Nabokov tells of Chernichevsky's ability "to bend the silliest daydream into a logical horseshoe".
Bryan Boyd, a distinguished expert in Nabokov's life and works, notes:
Fyodor treats Chernyshevsky as an intellectual buffoon, whose ideas do not deserve the compliment of rational opposition. He quotes enough Chernishevsky to let his crude materialistic approach condemn itself; he suggests a mental and emotional muddle behind Chernishevsky's aesthetics that invalidates any claim to their serious consideration. But Fyodor pays less attention to argument than to the way Chernishevsky's life continually undermines his own philosophy, as if fate took revenge on him for his beliefs.
Chernishevsky is a materialist, but is almost blind and deaf to the material world: short-sighted, living in abstractions and books, unable to tell beer from Madeira, Siberian flora from European, a horsefly from a wasp. A lover of mass audiences, he ends in the near-solitude of exile, where the few around around him pay him no heed. A believer in common sense, he is surrounded by madmen, a neurotic wife,a psychotic son. A champion of at least a certain kind of freedom, he wins for himself only imprisonment and leaves behind a legacy of censorship.
Grimmest irony of all, perhaps, he had aspired to invent a perpetual motion machine as the first step to a material solution to the problems of life, and instead in his last years becomes such a machine himself, translating 'with machine-like steadiness volume after volume of George Weber's Universal History in order to support his family, thereby turning his brain into a forced labor factory' that represents 'the greatest mockery of human thought.'3
This pottering with perpetual motion machines lasted almost five years, until 1853, and was accompanied by an intricate rummage of notes and descriptions of his absurd experiments—"a mixture of ignorance and raciocination", writes Nabokov's alter ego, that Chernishevsky "burned when he feared he would die (from that fashionable disease, aneurysm) before endowing the world with the blessing of eternal and extremely cheap motion".4
"Perpetual motion" refers to a chimerical condition in which an object continues to move indefinitely without being driven by an external source of energy. Thus, perpetual motion machines violate both of the first and second laws of thermodynamics. You can learn more about George Weber's Outline of Universal History, in a contemporary review by translator Dr. M. Behr. North American Review, vol. LXXVI, Boston, 1853, p. 124-165.
Chernishevsky's fortitude in face of authoritarianism is beyond doubt; in the long run his beliefs and unrelenting fight against Tsarist tyranny eventually cost him his life.
Russian Populists were usually at odds among themselves over many different subjects and were most given to engage in heated controversies over the future role of state or whether capitalism was still evitable in Russia. But most of them gave credence to a handful of unshakable beliefs. One of those shared convictions was the possibility of alternative economic formations to capitalism.
The basic approach of Russian Populists towards economics was, generally speaking, moral and even religious. Russian Populists "shrank from the prospect of industrialism in Russia because its brutal cost, and they disliked the West because it had paid this price too heartlessly".5 They believed in socialism not because it was feasible but because, to their eyes, it was just. But the most pervasive belief among Russian Populists was that the salvation could not lie in Western-styled liberal politics.
The defeat of the European revolutions in 1848-49 confirmed them in their mistrust of Western liberal democratic ideals. "As for political rights, votes, parliaments, republican forms, these were meaningless and useless to ignorant and barbarous, half-naked and starving men; such programmes merely mocked their misery."6
Lats but not least, there was the obschina question. The obschina, a primitive Russian form of peasant commune, was idealized by many Populist as the promising germ of a larger collective, egalitarian and free form of association: the corner-stone of collective wealth cration and redistribution. The obschina , they would argue, was not an alien Western idea; it was autochthonous. Obschina had been there from times immemorial as a kind of condensed peasants' wisdom that could help Russia skip capitalism on the way to economic development and social happiness.
Meeting this kind of argumentation against liberal democracy, republican forms and capitalism, as well as the advocacy of indigenous culture and "alternative roads" towards development and social justice can be an unsettling experience in 21 century Latin America. They all ring as too familiar for intellectual comfort.
For example, the pre-Columbian Andean mita has been assimilated to the 19th century Russian obschina by many a scholar on economic development. Populist leaders all over the continent keep urging to find despotic "third ways" leading to "painless" economic development and egalitarian redistribution.
To be sure, Latin American populism is not indebted to Chernishevsky's musings on "illustrated despotism" and perpetual motion machines. But it certainly shares the same disdain for individual liberties and capitalism held by those late 19th century Russian narodniki militants. Latin American populism has, of course, a history of its own, heroes of its own, intellectual superstitions and popular myths of its own.
Having said so, one question still lingers on. How a word—"populist"—that once meant heroism, disinterestedness and personal nobility in Russia has come to name corruption, lawlessness, contempt for individual liberties and poverty in our continent? I think it is a story worth telling.
In forthcoming articles I will try to delve, intently and to the best of my wits, into that history.
Happy New Year!
Notes:
1 Isaiah Berlin, "Introduction" in Franco Venturi, Roots of Revolution. A History of the Populist and Socialist Movements in Nineteenth Century Russia, New York, Grosset / Dunlap, 1966 pp vii-xxxiii. Published later as "Russian Populism" in Isaiah Berlin, Russian Thinkers, London, 1980.
2 Ibid, pp xiii
3 Brian Boyd, Vladimir Nabkov. The Russian Years. Pirnceton University Press, New Jersey. 1990, p. 457
4 Vladimir Nabokov, The Gift, Penguin Books, Londo, 1963, p. 199.
5 Ibid, p. Xxiv
6 Isaiah Berlin, Ibid, p. ix
On Guano and Dependency Theory
"Could you name one major undisputable Latin American contribution to modern economic thought?"
The speaker was a former chief economist of a large Latin American state-owned company, hosting a dinner party in Washington a few weeks ago. He posed the question with only a hint of self-derision.
Some of his guests had held high posts in the past as finance or development ministers or Central Bank officials in their own countries. Others were distinguished Social Sciences scholars currently heading various research projects in well renowned U.S. and European colleges.
Our host's gentle and mischievous question certainly brightened up what announced itself as a somewhat dull sobremesa (Spanish for "after dinner gossip") among senior Latin American peers currently playing in the multilateral Major Leagues. But I am sad to say that, though I stayed well into the wee hours of the morning, ready to be enlightened by these wise and experienced men, I just could not gather any relevant clue on the matter. So I went back to my hotel with mixed feelings of frustration and perplexity.
Next morning I was still so intrigued by our host's baffling question that I decided to write a—short—piece about it that would mark the first anniversary of my column, "Reflections from Latin America."
As we all know, geography and language merited the coinage, circa 1850, of the expression "Latin America", referring to those independent nations in which Spanish, Portuguese or French, all languages derived from Latin, is spoken.
There is real meaning to the phrase "Latin America", far beyond linguistics and a shared colonial past, since, as economic historian Victor Bulmer-Thomas notes, "the factors in common are stronger than those that bind the countries of Africa or Asia or Europe. Furthermore, the membership of the Latin American club has been fairly stable since independence, with relatively few additions or subtractions as a result of border changes, secession or annexation; indeed, the boundaries of Latin American states, although often the course of inter-state conflict and still not entirely settled, have changed much less in the last 150 years than have frontiers in Europe, Africa, and Asia".1
Victor Bulmer-Thomas is Emeritus Professor of Economics at the U. of London, and has written extensively on Latin America.
Our nations were the first modern postcolonial societies ever, and it was here that 19th century notions of political and social liberalism were first tried—to almost no avail—by the local elites, beginning in the 1820s.
Failure of "imported economic ideas"—as they were regarded with contempt by some, as if resorting to more "authentic", pre-Columbian economies were still possible—did not prevent the universal belief, during most of the 19th century, in a liberal programme that held in store the always-elusive bequest of sustainable export-led economies. It can be said that, in its first encounter with capitalist modernization, Latin America became an outpost of liberal orthodoxy in the 19th century, but a blatantly failed one.
Latin American intellectual historians have too often bypassed economic thinking. It suffices to browse the Cambridge History of Latin America or the Oxford Book of Latin American Essays to appraise how orphaned economic ideas have been in our region. This "economic illiteracy" works as an incentive to eschew rawly factual but nonetheless complex relationships that took place in our region's material life, thus hindering any comprehensive grasp of what really happened and still goes on.
Paul Gootenberg, a brilliant historian of social and economic ideas, reflecting on the 19th century's newly born Latin American countries, asserts that "Nineteenth century [Latin American] thinkers could invent nations that barely existed and project constitutions without states; they spun national myths, composed poetic canons, and reified indigenous masses whom they knew nothing about." Then goes on to ask, "What did Latin Americans imagine about development? What did they imagine as national futures as they bought and bought themselves into global markets?"2
See Paul Gootenberg, Imagining Development: Economic Ideas in Peru's 'Fictitious Prosperity' of Guano, 1840-1880
An attempt to answer this question could well envision Latin American early postcolonial history as an economic "culture conflict". Such is E. Bradford Burns' approach in The Poverty of Progress: Latin America in the Nineteenth Century, one of the best books I ever read on the subject.
Bradford Burns deems the encounter between these unwitting postcolonial elites and modern capitalist world trade forces as having been as powerful in cause and effects as the conquistadores' sixteenth century.
Consider: Free-trade individualism fighting rural oligarchies against a a backdrop of permanent bloody civil strife, economic stagnation, and militarism. "The legacy of this postcolonial culture clash," writes Gootenberg, summing up Bradford Burn's view, was "modern Latin America's baneful 'poverty of progress.' " No image can illustrate this 'poverty of progress' ideology better than Manuel Pardo's motto: hagamos ferrocarriles de guano: "Let's make guano railroads!" Pardo (1834-1878) was the first Peruvian elected civil president. He was assassinated two years after he left office. As to the guano boom, by the early 1880s it was almost completely over.
The region's export-led experiment that followed independence and lasted until the early 1930s coincided with an era during which the relative advantage enjoyed by primary goods such as guano, coffee, tin or copper—over manufactured ones—steadily decreased. Deep in the 20th century, immediately after WWII, new "inward-looking" slow developments came about that, at best, only peaked when the world economy had already gone into a rapid, sustained growth in international trade.
At the turn of the 20th century, 75 years or so after gaining independence, average per capita income of the larger Latin American economies was 14 percent that of the United States. By 1990, it was 13 percent. By the end of the 20th century, income had grown from 5 to nearly 25 percent of GDP, but the region's share of world trade fell from 7 to 3 percent. Over half of the exports were still primary products such as coffee, oil, sugar, iron ore and copper. Latin America is perhaps the most volatile region of the planet; its financial structure being extremely vulnerable to external shocks. None of our republics can be classified as truly developed.
Guano is a Quechua word that designates the dried excrement of Peruvian coastal seabirds. Rich in nitrogen and phosphorous, guano is said to be the best natural fertilizer ever known. Read more about Manuel Pardo, (1834-1878), President of Peru from 1872-1876.
But let's return to my dinner party! My dinner host went on to talk about the "major Latin American undisputable contribution to modern economic thought". In the face of two-centuries' worth of poor performance, I think that the only "major Latin American undisputable contribution to modern economic thought" one could vindicate is the regional version of the so-called "dependency theory".3
Dependency theory emphasizes the disjointedness between the "center" (the developed countries) and the "periphery" (us) and the unequal terms of exchange between the two regions. It is an attractive theory that, quite understandably, became very popular among unwary Third World economists for a many years.
Dependency theory had its roots in postwar protectionist orthodoxies that came to be known as cepalismo, after CEPAL, the Spanish initials of the United Nations Economic Commission for Latin America, whose head was the influential Argentinian economist Raúl Prebisch.
Indeed, Mr. Prebisch's thought was that the terms of trade and investment in the postwar period favored the industrial nations of the "centre" as against the developing nations of the periphery. Cepalismo recommended stark land reforms and emphasized on economic diversification and import substitution and industrialization.
Among other pitfalls, dependency theory fails to explain why the United States, a peripheral country at the turn of the 19th century, overtook Great Britain's living standards by way of a productivity revolution based in technological innovation, or how Argentina, another peripheral country, once the perfect model of growth-led strategy, went from success to failure in an astonishingly short period of time and with practically no intervention from "the center".
Up to the appearance and prevalence of dependency theory in our region during the second half of the 20th century, state intervention in Latin America had been largely a response to market failure in unregulated, imperfect "liberal" environments. Bulmer-Thomas relevantly points out the fact that, "the half century before 1930, which was dominated by liberal ideology, was marked by the modest role of state and by the importance of private foreign investment." Dependency theory came to legitimize statist policies in most of our countries. The current wave of populism that sweeps the region has resuscitated old tenets of dependency theory that fuel the tirades of local strains of the anti-global movement.
To be fair, one more thing must be said regarding self-serving theories that explain our backwardness by putting the blame on "the center": we have conceived neither the bulk of current theories of economic growth nor the most ineffectual prescriptions.
If you don't agree, just read what 1987 Nobel Prize winner Robert M. Solow had to say about the conventional wisdom behind "foreign aid and economic growth."
Notes:
1 Bulmer-Thomas, Victor, The Economic History of Latin America since Independence. Cambridge University Press, 1994. 2 Paul Gootenberg, Imagining Development: Economic Ideas in Peru's 'Fictitious Prosperity' of Guano, 1840-1880 University of California Press, 1993, page 16. 3 Cardoso, F. H. and Faletto, E. Dependency and Development in Latin America. University of California Press. Berkeley. 1979.
The speaker was a former chief economist of a large Latin American state-owned company, hosting a dinner party in Washington a few weeks ago. He posed the question with only a hint of self-derision.
Some of his guests had held high posts in the past as finance or development ministers or Central Bank officials in their own countries. Others were distinguished Social Sciences scholars currently heading various research projects in well renowned U.S. and European colleges.
Our host's gentle and mischievous question certainly brightened up what announced itself as a somewhat dull sobremesa (Spanish for "after dinner gossip") among senior Latin American peers currently playing in the multilateral Major Leagues. But I am sad to say that, though I stayed well into the wee hours of the morning, ready to be enlightened by these wise and experienced men, I just could not gather any relevant clue on the matter. So I went back to my hotel with mixed feelings of frustration and perplexity.
Next morning I was still so intrigued by our host's baffling question that I decided to write a—short—piece about it that would mark the first anniversary of my column, "Reflections from Latin America."
As we all know, geography and language merited the coinage, circa 1850, of the expression "Latin America", referring to those independent nations in which Spanish, Portuguese or French, all languages derived from Latin, is spoken.
There is real meaning to the phrase "Latin America", far beyond linguistics and a shared colonial past, since, as economic historian Victor Bulmer-Thomas notes, "the factors in common are stronger than those that bind the countries of Africa or Asia or Europe. Furthermore, the membership of the Latin American club has been fairly stable since independence, with relatively few additions or subtractions as a result of border changes, secession or annexation; indeed, the boundaries of Latin American states, although often the course of inter-state conflict and still not entirely settled, have changed much less in the last 150 years than have frontiers in Europe, Africa, and Asia".1
Victor Bulmer-Thomas is Emeritus Professor of Economics at the U. of London, and has written extensively on Latin America.
Our nations were the first modern postcolonial societies ever, and it was here that 19th century notions of political and social liberalism were first tried—to almost no avail—by the local elites, beginning in the 1820s.
Failure of "imported economic ideas"—as they were regarded with contempt by some, as if resorting to more "authentic", pre-Columbian economies were still possible—did not prevent the universal belief, during most of the 19th century, in a liberal programme that held in store the always-elusive bequest of sustainable export-led economies. It can be said that, in its first encounter with capitalist modernization, Latin America became an outpost of liberal orthodoxy in the 19th century, but a blatantly failed one.
Latin American intellectual historians have too often bypassed economic thinking. It suffices to browse the Cambridge History of Latin America or the Oxford Book of Latin American Essays to appraise how orphaned economic ideas have been in our region. This "economic illiteracy" works as an incentive to eschew rawly factual but nonetheless complex relationships that took place in our region's material life, thus hindering any comprehensive grasp of what really happened and still goes on.
Paul Gootenberg, a brilliant historian of social and economic ideas, reflecting on the 19th century's newly born Latin American countries, asserts that "Nineteenth century [Latin American] thinkers could invent nations that barely existed and project constitutions without states; they spun national myths, composed poetic canons, and reified indigenous masses whom they knew nothing about." Then goes on to ask, "What did Latin Americans imagine about development? What did they imagine as national futures as they bought and bought themselves into global markets?"2
See Paul Gootenberg, Imagining Development: Economic Ideas in Peru's 'Fictitious Prosperity' of Guano, 1840-1880
An attempt to answer this question could well envision Latin American early postcolonial history as an economic "culture conflict". Such is E. Bradford Burns' approach in The Poverty of Progress: Latin America in the Nineteenth Century, one of the best books I ever read on the subject.
Bradford Burns deems the encounter between these unwitting postcolonial elites and modern capitalist world trade forces as having been as powerful in cause and effects as the conquistadores' sixteenth century.
Consider: Free-trade individualism fighting rural oligarchies against a a backdrop of permanent bloody civil strife, economic stagnation, and militarism. "The legacy of this postcolonial culture clash," writes Gootenberg, summing up Bradford Burn's view, was "modern Latin America's baneful 'poverty of progress.' " No image can illustrate this 'poverty of progress' ideology better than Manuel Pardo's motto: hagamos ferrocarriles de guano: "Let's make guano railroads!" Pardo (1834-1878) was the first Peruvian elected civil president. He was assassinated two years after he left office. As to the guano boom, by the early 1880s it was almost completely over.
The region's export-led experiment that followed independence and lasted until the early 1930s coincided with an era during which the relative advantage enjoyed by primary goods such as guano, coffee, tin or copper—over manufactured ones—steadily decreased. Deep in the 20th century, immediately after WWII, new "inward-looking" slow developments came about that, at best, only peaked when the world economy had already gone into a rapid, sustained growth in international trade.
At the turn of the 20th century, 75 years or so after gaining independence, average per capita income of the larger Latin American economies was 14 percent that of the United States. By 1990, it was 13 percent. By the end of the 20th century, income had grown from 5 to nearly 25 percent of GDP, but the region's share of world trade fell from 7 to 3 percent. Over half of the exports were still primary products such as coffee, oil, sugar, iron ore and copper. Latin America is perhaps the most volatile region of the planet; its financial structure being extremely vulnerable to external shocks. None of our republics can be classified as truly developed.
Guano is a Quechua word that designates the dried excrement of Peruvian coastal seabirds. Rich in nitrogen and phosphorous, guano is said to be the best natural fertilizer ever known. Read more about Manuel Pardo, (1834-1878), President of Peru from 1872-1876.
But let's return to my dinner party! My dinner host went on to talk about the "major Latin American undisputable contribution to modern economic thought". In the face of two-centuries' worth of poor performance, I think that the only "major Latin American undisputable contribution to modern economic thought" one could vindicate is the regional version of the so-called "dependency theory".3
Dependency theory emphasizes the disjointedness between the "center" (the developed countries) and the "periphery" (us) and the unequal terms of exchange between the two regions. It is an attractive theory that, quite understandably, became very popular among unwary Third World economists for a many years.
Dependency theory had its roots in postwar protectionist orthodoxies that came to be known as cepalismo, after CEPAL, the Spanish initials of the United Nations Economic Commission for Latin America, whose head was the influential Argentinian economist Raúl Prebisch.
Indeed, Mr. Prebisch's thought was that the terms of trade and investment in the postwar period favored the industrial nations of the "centre" as against the developing nations of the periphery. Cepalismo recommended stark land reforms and emphasized on economic diversification and import substitution and industrialization.
Among other pitfalls, dependency theory fails to explain why the United States, a peripheral country at the turn of the 19th century, overtook Great Britain's living standards by way of a productivity revolution based in technological innovation, or how Argentina, another peripheral country, once the perfect model of growth-led strategy, went from success to failure in an astonishingly short period of time and with practically no intervention from "the center".
Up to the appearance and prevalence of dependency theory in our region during the second half of the 20th century, state intervention in Latin America had been largely a response to market failure in unregulated, imperfect "liberal" environments. Bulmer-Thomas relevantly points out the fact that, "the half century before 1930, which was dominated by liberal ideology, was marked by the modest role of state and by the importance of private foreign investment." Dependency theory came to legitimize statist policies in most of our countries. The current wave of populism that sweeps the region has resuscitated old tenets of dependency theory that fuel the tirades of local strains of the anti-global movement.
To be fair, one more thing must be said regarding self-serving theories that explain our backwardness by putting the blame on "the center": we have conceived neither the bulk of current theories of economic growth nor the most ineffectual prescriptions.
If you don't agree, just read what 1987 Nobel Prize winner Robert M. Solow had to say about the conventional wisdom behind "foreign aid and economic growth."
Notes:
1 Bulmer-Thomas, Victor, The Economic History of Latin America since Independence. Cambridge University Press, 1994. 2 Paul Gootenberg, Imagining Development: Economic Ideas in Peru's 'Fictitious Prosperity' of Guano, 1840-1880 University of California Press, 1993, page 16. 3 Cardoso, F. H. and Faletto, E. Dependency and Development in Latin America. University of California Press. Berkeley. 1979.
Sunday, May 18, 2008
Blogging is no country for old men
Yesterday morning I finally started this blog.
So far it is nothing more than a collection of some pieces I have written in the past.
It's good to have them all linked but I am set out to post much more "fresh" material. Part of it will surely be just drafts of forthcoming articles for the website I write for:(http://www.econlib.org/).
But, as soon as I get the hang of it, I'll be more intent to blog. Just blog.
So far it is nothing more than a collection of some pieces I have written in the past.
It's good to have them all linked but I am set out to post much more "fresh" material. Part of it will surely be just drafts of forthcoming articles for the website I write for:(http://www.econlib.org/).
But, as soon as I get the hang of it, I'll be more intent to blog. Just blog.
Delve more into my subject by blogging.
It never occurred to me until day before yesterday.
So help me God.
It never occurred to me until day before yesterday.
So help me God.
Saturday, May 17, 2008
Remittances and the Latin American Dream
A major shift in the United States official immigration policy occurred in 1965 that, in time, shaped this country's demographic and economic prospects for the 21st century.
Ever since the 1920s, the United States had limited the number of immigrants admitted. Visas were awarded on the basis of a national-origins quota system. According to this scheme, Germany and the United Kingdom were among the "most favored countries."
One of the goals—though certainly not the only one—of the 1965 new policy was family reunification; applicants who had relatives already residing in the United states were thus granted entry visas.
A distinguished Harvard scholar, George J. Borjas, wrote back in 1996, "the social, demographic, and economic changes initiated by the 1965 legislation have been truly historic. The number of immigrants began to rise rapidly. As recently as the 1950s only about 250,000 immigrants entered the country annually; by the 1990s the United States was admitting more than 800,000 immigrants a year, and some aliens entered and stayed in the country illegally. [This] led to a momentous shift in the ethnic composition of the population."1
See also George J. Borjas's article, "Immigration," in the Concise Encyclopedia of Economics.
The 1910 census yielded some 13.5 million foreign-born people in the American population. According to the Census Bureau, by the mid-nineties, foreign-born people living in America amounted to 22.5 million. Over the past 25 years the foreign-born population had almost doubled in the U.S., going from 6.2% in 1980 to 12% today. By the 1990s more than 800,000 legal immigrants admitted to the United States yearly while 300,000 aliens entered the country illegally.
Prior to 1965, the heaviest immigration influx that preceded WWI lasted almost a quarter of a century. It was then when most of the tired, poor and huddled masses that Emma Lazarus so movingly ennobled in her famous poem came in from Europe.
The current heated debate about immigration laws in the United States underscores the novel fact that during the past quarter of a century half of the immigration has arrived from just eight countries: Mexico, the Philippines, Korea, Vietnam, China, Taiwan and the Dominican Republic.
These are Asian and Latin American countries with disparate economic performances, but their nationals' motives to emigrate are in many ways identical to those that triggered the great European migration more than one hundred years ago.
For the text and historical context of Emma Lazarus's 1883 poem, the inscription on the Statue of Liberty, see "The New Colossus" at the U. of Virginia, Capitol Project.
A recent New York Times editorial (April 12, 2006), commenting on the immigration rallies organized in recent weeks for the "national day of action" in several big cities all across the country, says, "This nation is deeply divided and undecided about illegal immigration. The ambivalence runs deep. Americans can hardly even agree on whom they are talking about. Listen to debates from talk radios to the Senate, and you will hear utterly incompatible descriptions of the same group of people. The nation's 11 million to 12 million illegal immigrants are either an occupying army of thieves, snatching jobs and subverting our laws, or the are a wholesome community of strivers, eager to build families and chase the American dream."
According to various estimations, there are now 34 million immigrants in the United States, one third of them illegal. The Center for Immigration Studies estimates that 35 percent of immigrants lack health insurance and 26 percent receive some sort of federal benefit. Mexicans have become the single largest group of U.S. immigrants: 30 percent of the total in 2000.
A recent study by Harvard economists George J. Borjas and Lawrence Katz affirms that Mexican immigration "is historically unprecedented, being both numerically and proportionately larger than any other immigrant influx in the past century." Apparently, non-Hispanic whites will form a minority in America sometime after 2050.
As debates rage on, several economists, newspaper columnists and public policy pundits have contended that illegal immigrants compete for jobs with the nation's most disadvantaged citizens.
The received wisdom on the economics of immigration tells us that unskilled illegal workers bid down wages thus harming low-skilled job opportunities for the native born labor force. But there are studies that cast doubt on this supposed damage to the wages of the least educated domestic workers.
According to study by David H. Autor of the Massachusetts Institute of Technology, Mr. Katz of Harvard and Melissa S. Kearney of the Brookings Institution,2 income inequalities in the bottom of the ladder have not grown significantly since the mid-1980s.
Be that as it may, an unsettling notion comes to mind when you realize what millions of unskilled immigrant Mexican workers' effort, illegal or not, represent in Mexico's economy. Indeed, Mexico has become the largest remittance-receiving country in the region.
Remittances have become a fashionable academic subject nowadays; there is considerable global awareness about them. But only a few years ago we all had only a shallow knowledge of how "trans-national families" have shaped a kind of money flow that had been hidden to the eyes of both multilateral research teams and finance market's analysts.
Only in 2005, remittances to Latin America and the Caribbean (LAC) reached over US $53.6 billion. A recent report by the Inter-American Development Bank says that these figures make the region "the largest remittance market in the world. This amount exceeded, for the third consecutive year, the combined flows of all net Foreign Direct Investment (FDI) and official Development Assistance (ODA) to the region."
The same report shows how remittances from Mexican immigrant workers living in the United States equal to 2.8% of Mexico's GDP, and 10% of its annual exports. Only in 2005, remittances reached US $20,034 million, representing 13772% of ODA and 178% of FDI.3
Mexico is by far the largest recipient of remittances, at over US $20 billion. Dominican Republic and Central America combined reached over US $11 billion. Brazil and Colombia reached over US $6 and US $4 billion respectively. How such enormous amount of money could go unchecked in front of so many specialists' eyes for so long?
The IADB's report estimates that more than 25 million LAC-born adults are living outside their country of origin. Some 65% send money home on a regular basis. But they do so in small amounts; $100/$200/$300 a month. More than 200 million separate bank transactions are made in any given year.
Illegal immigrants cannot have bank accounts in the United States so they rely on an encomendero, a Spanish word derived from encomendar, meaning "to entrust". Encomendero's networks carry and deliver the money from the USA to remote Central American or Andean villages.
The system works much in the same way that halawa, the informal Middle East financial channels, do. Tracking the encomendero underground transactions can be a complicated process. Money traveling through the hand-to-hand encomendero informal networks can make actual flows at least 10% higher.
That illegal immigrants low-wage workforce subsidizes the host economy is a widely accepted notion among economists. But consider that 75% of LAC remittances (US $40 billion) are sent from the United States. Since most remittances going into Mexico pass through a modern banking system, the Government is able to tax them. Money thus raised goes into road maintenance all over Mexico.
Intraregional flows are scarce in Latin America. Remittances from Spain and other Western Europe countries, including the United Kingdom, account for US $7.5 billion, which represents almost 15% of the market.
"Unskilled" is the word most frequently used by specialists to qualify most of the immigrant labor force that every year sends US $40 billion back to their country. Such an impressive achievement can only be explained by something in the "physiology" of the host economies.
Reading the IADB's report and other authorized sources on the subject reminded me of the obsessive ideas that Latin American policy-makers and multilateral officials have had about education of the workforce as a sine qua non tool for economic growth.
How come, then, illiterate Mexican immigrants can end up financing Mexico's road maintenance federal agency, not to mention the 2.8% remittances' share of Mexico's GDP?
Productivity seems to be the answer.
Discussing the findings on productivity made by the McKinsey Global Institute during a 12-year research project, William W. Lewis says, "the importance of the education of the workforce has been taken away too far. In other words, a high education level is no guarantee of high productivity."[...] "Whatever weakness exists in the U.S. education system, it is being made-up for by on-the-job training.[...] If illiterate Mexican immigrants can reach world-class productivity, building apartment houses in Houston, there is no reason why illiterate Brazilian agricultural workers cannot achieve the same in Sao Paolo".4
For the definition and a discussion of productivity, see Sylvia Nasar's article, "Productivity," in the Concise Encyclopedia of Economics.
As his very illuminating book shows, and contrary to what used to be conventional wisdom pertaining German and Japanese economies, U.S. workers achieve the highest productivity in the world in most economic sectors. Obviously, this also applies to immigrant workers, illegal or not, whose countries of origin are plagued by all kinds hindrances to individual initiative and legitimate ambitions of affluence. Viewed this way, immigrant remittances are a trustworthy index of hard work, thrift and family devotion.
Are not these the proverbial moral qualities that made market economy and capitalism in America not only possible but endurable?
Notes:
1 George J. Borjas; The Atlantic Monthly; November 1996; "The New Economics of Immigration"; Volume 278, No.5, pages 72-80. 2 Quoted by Eduardo Porter; The New York Times; Economic View; "Cost of Illegal Immigration May Be Less Than Meets The Eye", April 16, 2006. 3 Inter-American Development Bank; Remittances 2005: Promoting Financial Democracy. Washington, D.C. March 2006. 4 William W. Lewis; The Power of Productivity: Wealth, Poverty, and the Threat to Global Stability; The University of Chicago Press, 2004. Pages 11-12.
Latin Baseball: A Frontier Story
[The Pride of Havana. By Roberto González Echevarría, Oxford University Press, 1999.]
"The Pride of Havana" by Roberto González Echevarría, offers an impressive collection of penetrating ideas about certain sports in Latin American culture.
Imagine a history of the Cuban national pastime written by a Cuban-born distinguished professor of Hispanic literature at Yale who has also been a semipro catcher and you will only have an inkling of what this wonderful book can convey.
Addressing the "cultural imperialism" issue, for example, Professor González Echevarría writes: "Though an island, Cuba is really a frontier. In colonial times it was the first border betwen the Old and the New worlds, later the embattled line betwen the Spanish Empire and the other europeans powers. Since the nineteenth century, and most poignantly in the last forty years, it has been either a bridge or a wall between itself and the United States. Crossings in either direction have always entailed a more or less radical transformation, at times to sharpen the differences, at others to erase them, or, more often than not, to mask them. Though this play of transformations, fueled by powerful feelings of attraction or rejection, finds a stage in politics, literature, and the arts, its most visible and telling exhibition is found in popular culture and sports, particularly baseball and music."
"Cuban independentists... got to favoring baseball over bullfights.... The crowd attending a bullfight dutifully had to pay homage to Spanish colonial authorities."
González Echevarría then goes on to affirm that his book is, therefore, "a partial history of a border, an account of the transformations that occur in that border." The main thesis of this most illuminating book is—let me quote one more time professor González Echevarría's own words—"that American culture is one of the fundamental components of Cuban culture, even when historically there have been concerted and painful attempts to fight it off or deny it. [...] Baseball is the clearest indication of this, but not the only one. It is a process in which the antagonist is absorbed instead of repelled, which shows that in any relationship of cultures, even rejection is mutually influencing, because cultures are dynamic ensembles."1
While today many baseball fans in the Caribbean Basin assume the game was brought to our countries as a result of countless early 20th-century U.S. military interventions in the region, the proven fact is that it was not a U.S. Marine Corps serviceman who first took baseball to Cuba.
Don't miss Roberto González Echevarría's latest NYTimes op-ed piece, Jan. 11, 2006, "Castro at the Bat".
Nemesio Guilló, who is believed to have brought the first bat and baseball to the island in 1864—while the American Civil Secession raged and Cubans were still subjects of the Spanish king—was one of three well-to-do young Cuban men sent by their parents to Mobile, Alabama in 1858 to study at Springhill College. One of the other two was Nemesio's brother, Ernesto.
According to González Echeverría, the Guilló brothers and a number of their contemporaries had, by 1868, founded a baseball team—the Habana Base Ball Club— that allegedly defeated the crew of an American schooner anchored at the Matanzas's harbor for repairs. The team did not have much time to celebrate this exploit and actually had to go underground because the first and ill-fated Cuban War of Independence—called "the Ten Years War (1868-1878)—broke out and the Spanish colonial authorities outlawed the game.
It is easy to imagine the Spaniards' motives for this ban: Cuban independentist young men and women got to favoring baseball over bullfights. In those times, and at certain precise moments of this ageless ritual, the crowd attending a bullfight dutifully had to pay homage to Spanish colonial authorities.
Putting aside all the fun and excitement a baseball game can provide, Cubans committed to their independence from Spain seemed to find in baseball a symbol of freedom and egalitarianism and, probably, democracy too.
Many Cubans had to flee their country because of the ruthless methods unleashed by the colonial Spanish troops against the rebels. Some escaped war and turmoil by migrating with their families to the Dominican Republic. "Young Dominicans emulated them—writes Rob Buck in The Tropic of Baseball—and joined with compatriots who had studied in the United States to establish a self-organized matrix of teams and tournaments well in place before the U.S. Marines arrived in 1916 for their eight-year occupation."
I was raised during the fifties in various oil-fields all over Eastern Venezuela and all around the Maracaibo Lake basin, where baseball is part of everyday life.
Like many other Venezuelans of my age, I grew up in the belief that the game had been brought to my country by American oilmen. In fact, and as if following step-by-step Mr. Nemesio Guilló's example, it was a Venezuelan bunch of "merry pranksters", the offspring of rich coffee-trading Caracas' families who, during the last decades of the 19th century, first introduced the game in my country... with a little help from Cuban cigar manufacturer, don Emilio Cramer of Havana.
In 1911, Ralph Arnold, a noteworthy American geologist who led the first comprehensive geological survey of Venezuela, arrived in an impoverished, malaria-plagued country. Mr. Arnold's work helped Venezuela to become one of the biggest oil exporting countries of the 20th century. He was amazed to find that Venezuelans had been playing baseball ever since the 1890s.
At the time of his arrival, Venezuela was a poor country ravaged by the endless civil wars that had been going on all through the 19th century. Here, as almost elsewhere in the region, there was no sports tradition. We only had a very degraded form of rodeo... and occasional bullfighting, but none is exactly what you'd call a sport. As elsewhere, here too the forerunners of the game belonged in the élite. But the poor soon learned everything about the game by intently watching the rich play it.
Later on, all along the first half of the 20th century, a kind of cross-pollination put Caribbean and Mexico's professional baseball leagues in permanent contact with the U.S. Black Leagues, a kind of relationship that surely is worth attention.
If the rise and fall of black professional baseball can give us a window into important issues of African American history, this cross-pollination betwen black leagues and the Cuban, Venezuelan, Dominican Republic and Mexican professional leagues can provide a window on the Spanish speaking Caribbean Basin modern cultures. For one thing, long before the 1947 landmark Jackie Robinson-Brooklyn Dodgers breakthrough major league contract, many African Americans were playing side by side with American white players in the integrated Mexican and Venezuelan leagues.
Take strategy, take surprise plays. The guile, hustling and cunning typical of black league baseball were rapidly absorbed by the Cubans and Dominicans who came to the United States to play in those leagues. These strategies, this playful ethos involved in playing on the brink of the rules, once back in Cuba or Venezuela, began to be called "pelota caribe"—"Caribbean ball"—an allusion to the bold and guileful Carib aborigines who, long before Columbus arrived oin the continent, came out of the Amazonian jungles and daringly took to the sea in wooden canoes from what now is Eastern Venezuela up to the Greater Antilles and subjugated the island tribes.
Hiding the ball is perhaps one of the most difficult tricks of the pelota caribe repertoire. It entails cutting behind a runner in the bases and steal an out.
My countryman, Oswaldo "Ozzie" Guillén, used to look awful in the end-of-season stats, but he could make odd plays nobody else would make. He reportedly made the hidden-ball trick twice in two days, against the same team! His controversial "small ball" managing that helped the Chicago White Sox swiftly win the 2005 World Series is, in my view, simply the quintessential pelota caribe frame of mind that evolved from the now long vanished U.S. black professional leagues.
Reading out loud the names and surnames of any U.S. professional line-up you can get a sense of the place that this more than a century old "border story" occupies in the cultural history of both the United States and its neighbors.
"Whatever the reasons", writes Milton Jamail in Full Count, "the talent pool for baseball in the United States clearly is shrinking, thus making it necessary to look elsewhere for players. [...] Statistics provided by the baseball industry show that almost 35 percent of players in professional baseball at all levels, from rookie to big league, were born outside the United States.(Puerto Rico is included in this figure.) Baseball clearly is no longer just a U.S. sport."
I think he is right. Baseball is today an international sport that is played at its highest level by many Latin Americans in the United States. Cuba's participation in the forthcoming World Baseball Classic would salute good old Nemesio Guilló, the founding father of Latin American baseball.
Notes:
1 Roberto González Echevarría, The Pride of Havana, A History of Cuban Baseball, Oxford University Press. New York. 1999. P.12.
"The Pride of Havana" by Roberto González Echevarría, offers an impressive collection of penetrating ideas about certain sports in Latin American culture.
Imagine a history of the Cuban national pastime written by a Cuban-born distinguished professor of Hispanic literature at Yale who has also been a semipro catcher and you will only have an inkling of what this wonderful book can convey.
Addressing the "cultural imperialism" issue, for example, Professor González Echevarría writes: "Though an island, Cuba is really a frontier. In colonial times it was the first border betwen the Old and the New worlds, later the embattled line betwen the Spanish Empire and the other europeans powers. Since the nineteenth century, and most poignantly in the last forty years, it has been either a bridge or a wall between itself and the United States. Crossings in either direction have always entailed a more or less radical transformation, at times to sharpen the differences, at others to erase them, or, more often than not, to mask them. Though this play of transformations, fueled by powerful feelings of attraction or rejection, finds a stage in politics, literature, and the arts, its most visible and telling exhibition is found in popular culture and sports, particularly baseball and music."
"Cuban independentists... got to favoring baseball over bullfights.... The crowd attending a bullfight dutifully had to pay homage to Spanish colonial authorities."
González Echevarría then goes on to affirm that his book is, therefore, "a partial history of a border, an account of the transformations that occur in that border." The main thesis of this most illuminating book is—let me quote one more time professor González Echevarría's own words—"that American culture is one of the fundamental components of Cuban culture, even when historically there have been concerted and painful attempts to fight it off or deny it. [...] Baseball is the clearest indication of this, but not the only one. It is a process in which the antagonist is absorbed instead of repelled, which shows that in any relationship of cultures, even rejection is mutually influencing, because cultures are dynamic ensembles."1
While today many baseball fans in the Caribbean Basin assume the game was brought to our countries as a result of countless early 20th-century U.S. military interventions in the region, the proven fact is that it was not a U.S. Marine Corps serviceman who first took baseball to Cuba.
Don't miss Roberto González Echevarría's latest NYTimes op-ed piece, Jan. 11, 2006, "Castro at the Bat".
Nemesio Guilló, who is believed to have brought the first bat and baseball to the island in 1864—while the American Civil Secession raged and Cubans were still subjects of the Spanish king—was one of three well-to-do young Cuban men sent by their parents to Mobile, Alabama in 1858 to study at Springhill College. One of the other two was Nemesio's brother, Ernesto.
According to González Echeverría, the Guilló brothers and a number of their contemporaries had, by 1868, founded a baseball team—the Habana Base Ball Club— that allegedly defeated the crew of an American schooner anchored at the Matanzas's harbor for repairs. The team did not have much time to celebrate this exploit and actually had to go underground because the first and ill-fated Cuban War of Independence—called "the Ten Years War (1868-1878)—broke out and the Spanish colonial authorities outlawed the game.
It is easy to imagine the Spaniards' motives for this ban: Cuban independentist young men and women got to favoring baseball over bullfights. In those times, and at certain precise moments of this ageless ritual, the crowd attending a bullfight dutifully had to pay homage to Spanish colonial authorities.
Putting aside all the fun and excitement a baseball game can provide, Cubans committed to their independence from Spain seemed to find in baseball a symbol of freedom and egalitarianism and, probably, democracy too.
Many Cubans had to flee their country because of the ruthless methods unleashed by the colonial Spanish troops against the rebels. Some escaped war and turmoil by migrating with their families to the Dominican Republic. "Young Dominicans emulated them—writes Rob Buck in The Tropic of Baseball—and joined with compatriots who had studied in the United States to establish a self-organized matrix of teams and tournaments well in place before the U.S. Marines arrived in 1916 for their eight-year occupation."
I was raised during the fifties in various oil-fields all over Eastern Venezuela and all around the Maracaibo Lake basin, where baseball is part of everyday life.
Like many other Venezuelans of my age, I grew up in the belief that the game had been brought to my country by American oilmen. In fact, and as if following step-by-step Mr. Nemesio Guilló's example, it was a Venezuelan bunch of "merry pranksters", the offspring of rich coffee-trading Caracas' families who, during the last decades of the 19th century, first introduced the game in my country... with a little help from Cuban cigar manufacturer, don Emilio Cramer of Havana.
In 1911, Ralph Arnold, a noteworthy American geologist who led the first comprehensive geological survey of Venezuela, arrived in an impoverished, malaria-plagued country. Mr. Arnold's work helped Venezuela to become one of the biggest oil exporting countries of the 20th century. He was amazed to find that Venezuelans had been playing baseball ever since the 1890s.
At the time of his arrival, Venezuela was a poor country ravaged by the endless civil wars that had been going on all through the 19th century. Here, as almost elsewhere in the region, there was no sports tradition. We only had a very degraded form of rodeo... and occasional bullfighting, but none is exactly what you'd call a sport. As elsewhere, here too the forerunners of the game belonged in the élite. But the poor soon learned everything about the game by intently watching the rich play it.
Later on, all along the first half of the 20th century, a kind of cross-pollination put Caribbean and Mexico's professional baseball leagues in permanent contact with the U.S. Black Leagues, a kind of relationship that surely is worth attention.
If the rise and fall of black professional baseball can give us a window into important issues of African American history, this cross-pollination betwen black leagues and the Cuban, Venezuelan, Dominican Republic and Mexican professional leagues can provide a window on the Spanish speaking Caribbean Basin modern cultures. For one thing, long before the 1947 landmark Jackie Robinson-Brooklyn Dodgers breakthrough major league contract, many African Americans were playing side by side with American white players in the integrated Mexican and Venezuelan leagues.
Take strategy, take surprise plays. The guile, hustling and cunning typical of black league baseball were rapidly absorbed by the Cubans and Dominicans who came to the United States to play in those leagues. These strategies, this playful ethos involved in playing on the brink of the rules, once back in Cuba or Venezuela, began to be called "pelota caribe"—"Caribbean ball"—an allusion to the bold and guileful Carib aborigines who, long before Columbus arrived oin the continent, came out of the Amazonian jungles and daringly took to the sea in wooden canoes from what now is Eastern Venezuela up to the Greater Antilles and subjugated the island tribes.
Hiding the ball is perhaps one of the most difficult tricks of the pelota caribe repertoire. It entails cutting behind a runner in the bases and steal an out.
My countryman, Oswaldo "Ozzie" Guillén, used to look awful in the end-of-season stats, but he could make odd plays nobody else would make. He reportedly made the hidden-ball trick twice in two days, against the same team! His controversial "small ball" managing that helped the Chicago White Sox swiftly win the 2005 World Series is, in my view, simply the quintessential pelota caribe frame of mind that evolved from the now long vanished U.S. black professional leagues.
Reading out loud the names and surnames of any U.S. professional line-up you can get a sense of the place that this more than a century old "border story" occupies in the cultural history of both the United States and its neighbors.
"Whatever the reasons", writes Milton Jamail in Full Count, "the talent pool for baseball in the United States clearly is shrinking, thus making it necessary to look elsewhere for players. [...] Statistics provided by the baseball industry show that almost 35 percent of players in professional baseball at all levels, from rookie to big league, were born outside the United States.(Puerto Rico is included in this figure.) Baseball clearly is no longer just a U.S. sport."
I think he is right. Baseball is today an international sport that is played at its highest level by many Latin Americans in the United States. Cuba's participation in the forthcoming World Baseball Classic would salute good old Nemesio Guilló, the founding father of Latin American baseball.
Notes:
1 Roberto González Echevarría, The Pride of Havana, A History of Cuban Baseball, Oxford University Press. New York. 1999. P.12.
Simón Bolívar: 200 Years Of Failure?
[ Simon Bolivar: A Life. By John Lynch, Yale University Press, 368 pages, 2006]
John Lynch's superb biography of Simón Bolívar1 is no doubt a major achievement, a key book for anyone who wishes to make any sense of where many independent Latin American nations stemmed from and what they have made of themselves.
Bolívar became a mythical revolutionary warrior as well as an outstanding intellectual who elaborated the ideals of national liberation. His undaunted soul and astonishing military prowess eventually put an end to Spanish rule in what are now the six republics of Venezuela, Colombia, Panama, Ecuador, Peru and Bolivia, the recently newsworthy country that bears his name.
Mr. Lynch is Emeritus Professor of Latin American History and former director of the Institute of Latin American Studies at the University of London. More than thirty years ago he wrote "The Spanish American Revolution, 1808-1826, (Norton, NY, 1973), a comprehensive and illuminating work frequently referred to by leading Latin American historians as The Book on the subject.
His biography of "The Liberator", as Bolívar is also known in some of the Andean countries, departs from the bulk of hero-worshipping literature that, sadly enough, passes for History in Latin American countries. Yet Lynch is well aware that, "the independence of Spanish America is incomprehensible without the presence of the liberators and its subsequent history would be empty without the intervention of personal authority. In the action of Bolívar we observe the dynamics of leadership, the power to command and the modes of ruling (emphasis mine) in the diverse society of Spanish America, not the whole history of the age, but a great part of it."
Those modes of ruling foreshadowed modern incarnations of Bolívar's military authoritarianism that patterns current authoritarian populist projects throughout the region. Two centuries after the first independentist movements broke out in Spanish America, most of them inspired by the French Illustration and decidedly intent on the creation of liberal republics, what can be said on balance about liberty—about all liberties— in our nations?
Many enraged Latin American writers and scholars have denounced the poor opinion in which Mr. Joseph Conrad held our newly-born "liberal" republics. They think his views are supremacist and/or imperialistic. I concur with the few who believe that the fictional Republic of Costaguana—where Conrad set the action of Nostromo—is still a vividly accurate depiction what the "modes of ruling" we inherited from our founding fathers brought about.
Nostromo, a short novel by Joseph Conrad centered on the fictional country of Costaguana, is available at Amazon.com.
(I cannot but digress briefly only to note that among Latin Americans you do not really speak of "founding fathers" but of "liberators", "protectors", "benefactors" and the like. One of our infamous 19th century "liberal tyrants" had himself unabashedly titled "the civilizing autocrat".)
We can, as Mr. Lynch engagingly suggests, see Bolívar life and times as times of transition from colonial societies based on absolutist hierarchies, nobility values and inequality to nation states, but then one can only ask how Bolívar, an aristocrat revolutionist par excellence, conceived liberty in the many inceptive Costaguanas his epic gave birth to.
In his review of Lynch's book, the Peruvian writer Alvaro Vargas Llosa addresses this question in a most incisive way:
Bolívar's blunder was to contain, rather than to open, the doors of social mobility. He did not quite recognize the disjunction between the theoretical constitutions that he and his men passed and the kind of stratified society that existed beneath them. In his elitist view of the economy, shopkeepers and small traders were "vulgar people."... As Lynch aptly states, "In Venezuela, where the colonial aristocracy was reduced both in numbers and importance, the great estates passed into the hands of a new creole and mestizo oligarchy, the successful warlords of independence." So the faces may have changed, but the system was left almost intact.... Some of the measures taken by Bolívar were just, such as abolishing the Indian tribute and unpaid labor services, but for many Indians this simply meant having to pay more taxes as normal citizens. The real problem was that they were not in practice equal before the law, they owned very little property, and they could not engage in productive and commercial activities of their own because property rights essentially depended on the ruling elite.2
As almost any other post-colonial people, 19th century Latin Americans nurtured war myths and hero worshipping that helped themselves move ahead into their future without a Spanish king. Thus el culto a Bolívar—the Bolívar cult—was born, first as an spontaneous outpouring of popular devotion, almost immediately after Bolivar's death. But soon a "more regimented and government inspired" doctrine was to be preached from on high.
Lynch's rendering of the essentials of the official Bolivar cult and the way it has worked so far is worth quoting in extenso: "The cultists had a good story. A hero of pure Venezuelan lineage, after a tragic marriage and golden youth in Europe, assumes the leadership of national independence, provides the intellectual base for a continental revolution, and the military and political talents to create a union of states and win international respect, all the time asserting his manhood as a glorious lover. There were many Bolívars here, with any of whom people could identify. Venezuelan nationalist, American hero, macho male, Bolívar conformed to the roles. But hero-worship was not the same as the cult. This had a greater purpose. Bolívar was a model for the nation. A post-colonial people who, through no fault of their own, had been rendered incapable of improvement or of enjoying the liberty he had won for them, could be saved by his example and his guidance."3
Many Latin American countries won independence for Spain in the early 1820s. In those times, standards of living were low, but as the economic historian Victor Bulmer-Thomas adverts, "not much lower than in North America, probably on a par with much of central Europe and perhaps higher than the newly discovered countries of the antipodes. All that was need, it was thought, were capital and skilled labor to unlock the natural resources in Latin America's vast unexploited interior and unrestricted access to the wealthy markets of western Europe."
Nearly two centuries later, that dream is still elusive. Few of the republics in the region can be deemed as developed. To the contrary, some remain extremely poor. Of course, you can always find pockets of wealth within any of our Costaguanas but these pockets do not make up for the deprivation suffered by the poor majority of the population. In the process, the region's achievements in literature, art, music, popular culture, and yes, myths, has rightly won the world's admiration. But, as Bulmer-Thomas rightly asserts, "this is only partial compensation for failure to bridge the enormous gap of the levels of economic development n the region and in the developed counties."
Liberation myths instead of true, significant liberties: that's something we have had plenty of, from Bolívar to "Evita" to "Ché" Guevara , myths that almost always signal towards a scapegoat that may be called "oligarchies' unrelenting greed" or "yanqui imperialism."
The "dynamics of leadership" that Lynch observes in his compelling magnus opus, dates back to colonial days and echo in Conrad's depicting of the "liberal" Republic of Costaguana's founding myths and popular caudillo's "modes of ruling": "the exaggeration of a cruel caricature, the fatuity of solemn masquerading, the atrocious grotesquenes of some military idol of Aztec conception and European bedecking, awaiting the homage of worshippers…".
Two centuries later those dynamics still are at work as the major threat that hovers on the frail democracies of our many Costaguanas.
Notes:
1 John Lynch, Simón Bolívar: A Life, Yale University Press, 2006 2 Álvaro Vargas Llosa, "Democracy's Caudillo," The New Republic, June 19, 2006. Available online at The Independent Review. 3 John Lynch, Ibid, page 301.
John Lynch's superb biography of Simón Bolívar1 is no doubt a major achievement, a key book for anyone who wishes to make any sense of where many independent Latin American nations stemmed from and what they have made of themselves.
Bolívar became a mythical revolutionary warrior as well as an outstanding intellectual who elaborated the ideals of national liberation. His undaunted soul and astonishing military prowess eventually put an end to Spanish rule in what are now the six republics of Venezuela, Colombia, Panama, Ecuador, Peru and Bolivia, the recently newsworthy country that bears his name.
Mr. Lynch is Emeritus Professor of Latin American History and former director of the Institute of Latin American Studies at the University of London. More than thirty years ago he wrote "The Spanish American Revolution, 1808-1826, (Norton, NY, 1973), a comprehensive and illuminating work frequently referred to by leading Latin American historians as The Book on the subject.
His biography of "The Liberator", as Bolívar is also known in some of the Andean countries, departs from the bulk of hero-worshipping literature that, sadly enough, passes for History in Latin American countries. Yet Lynch is well aware that, "the independence of Spanish America is incomprehensible without the presence of the liberators and its subsequent history would be empty without the intervention of personal authority. In the action of Bolívar we observe the dynamics of leadership, the power to command and the modes of ruling (emphasis mine) in the diverse society of Spanish America, not the whole history of the age, but a great part of it."
Those modes of ruling foreshadowed modern incarnations of Bolívar's military authoritarianism that patterns current authoritarian populist projects throughout the region. Two centuries after the first independentist movements broke out in Spanish America, most of them inspired by the French Illustration and decidedly intent on the creation of liberal republics, what can be said on balance about liberty—about all liberties— in our nations?
Many enraged Latin American writers and scholars have denounced the poor opinion in which Mr. Joseph Conrad held our newly-born "liberal" republics. They think his views are supremacist and/or imperialistic. I concur with the few who believe that the fictional Republic of Costaguana—where Conrad set the action of Nostromo—is still a vividly accurate depiction what the "modes of ruling" we inherited from our founding fathers brought about.
Nostromo, a short novel by Joseph Conrad centered on the fictional country of Costaguana, is available at Amazon.com.
(I cannot but digress briefly only to note that among Latin Americans you do not really speak of "founding fathers" but of "liberators", "protectors", "benefactors" and the like. One of our infamous 19th century "liberal tyrants" had himself unabashedly titled "the civilizing autocrat".)
We can, as Mr. Lynch engagingly suggests, see Bolívar life and times as times of transition from colonial societies based on absolutist hierarchies, nobility values and inequality to nation states, but then one can only ask how Bolívar, an aristocrat revolutionist par excellence, conceived liberty in the many inceptive Costaguanas his epic gave birth to.
In his review of Lynch's book, the Peruvian writer Alvaro Vargas Llosa addresses this question in a most incisive way:
Bolívar's blunder was to contain, rather than to open, the doors of social mobility. He did not quite recognize the disjunction between the theoretical constitutions that he and his men passed and the kind of stratified society that existed beneath them. In his elitist view of the economy, shopkeepers and small traders were "vulgar people."... As Lynch aptly states, "In Venezuela, where the colonial aristocracy was reduced both in numbers and importance, the great estates passed into the hands of a new creole and mestizo oligarchy, the successful warlords of independence." So the faces may have changed, but the system was left almost intact.... Some of the measures taken by Bolívar were just, such as abolishing the Indian tribute and unpaid labor services, but for many Indians this simply meant having to pay more taxes as normal citizens. The real problem was that they were not in practice equal before the law, they owned very little property, and they could not engage in productive and commercial activities of their own because property rights essentially depended on the ruling elite.2
As almost any other post-colonial people, 19th century Latin Americans nurtured war myths and hero worshipping that helped themselves move ahead into their future without a Spanish king. Thus el culto a Bolívar—the Bolívar cult—was born, first as an spontaneous outpouring of popular devotion, almost immediately after Bolivar's death. But soon a "more regimented and government inspired" doctrine was to be preached from on high.
Lynch's rendering of the essentials of the official Bolivar cult and the way it has worked so far is worth quoting in extenso: "The cultists had a good story. A hero of pure Venezuelan lineage, after a tragic marriage and golden youth in Europe, assumes the leadership of national independence, provides the intellectual base for a continental revolution, and the military and political talents to create a union of states and win international respect, all the time asserting his manhood as a glorious lover. There were many Bolívars here, with any of whom people could identify. Venezuelan nationalist, American hero, macho male, Bolívar conformed to the roles. But hero-worship was not the same as the cult. This had a greater purpose. Bolívar was a model for the nation. A post-colonial people who, through no fault of their own, had been rendered incapable of improvement or of enjoying the liberty he had won for them, could be saved by his example and his guidance."3
Many Latin American countries won independence for Spain in the early 1820s. In those times, standards of living were low, but as the economic historian Victor Bulmer-Thomas adverts, "not much lower than in North America, probably on a par with much of central Europe and perhaps higher than the newly discovered countries of the antipodes. All that was need, it was thought, were capital and skilled labor to unlock the natural resources in Latin America's vast unexploited interior and unrestricted access to the wealthy markets of western Europe."
Nearly two centuries later, that dream is still elusive. Few of the republics in the region can be deemed as developed. To the contrary, some remain extremely poor. Of course, you can always find pockets of wealth within any of our Costaguanas but these pockets do not make up for the deprivation suffered by the poor majority of the population. In the process, the region's achievements in literature, art, music, popular culture, and yes, myths, has rightly won the world's admiration. But, as Bulmer-Thomas rightly asserts, "this is only partial compensation for failure to bridge the enormous gap of the levels of economic development n the region and in the developed counties."
Liberation myths instead of true, significant liberties: that's something we have had plenty of, from Bolívar to "Evita" to "Ché" Guevara , myths that almost always signal towards a scapegoat that may be called "oligarchies' unrelenting greed" or "yanqui imperialism."
The "dynamics of leadership" that Lynch observes in his compelling magnus opus, dates back to colonial days and echo in Conrad's depicting of the "liberal" Republic of Costaguana's founding myths and popular caudillo's "modes of ruling": "the exaggeration of a cruel caricature, the fatuity of solemn masquerading, the atrocious grotesquenes of some military idol of Aztec conception and European bedecking, awaiting the homage of worshippers…".
Two centuries later those dynamics still are at work as the major threat that hovers on the frail democracies of our many Costaguanas.
Notes:
1 John Lynch, Simón Bolívar: A Life, Yale University Press, 2006 2 Álvaro Vargas Llosa, "Democracy's Caudillo," The New Republic, June 19, 2006. Available online at The Independent Review. 3 John Lynch, Ibid, page 301.
Panama: Does Geography Matters?
The official declaration that the Panama Canal was finally open to the world, after more than 10 years of superhuman efforts, was overshadowed by the outbreak of the Great War in Europe. All across the world the war that was expected "to end all wars" filled the papers.
An unpretentious cement boat—the Cristobal—was the first ship to go through the canal in the early days of August, 1914. Many journalistic accounts of the ocean-to-ocean crossings that followed emphasized the ease with which all the locks, floodgates and engines that towed the ships at some stretches of the 47.9 miles long waterway worked.
One man on board of the Ancon—the ship that perfunctorily performed the "grand opening" of the canal on August 15, only a few days after the lowly Cristobal went through the canal—wrote, "So quietly did she pursue her way that... a strange observer coming suddenly upon the scene would have thought that the canal had always been in operation, and that the Ancon was only doing what thousands of other vessels must have done before her."
Almost a century later the Panama Canal still works exactly as intended by its designers, everything functioning as originally devised by the American engineers who, at the turn of the 20 century, took to finish the waterway the French had commenced to construct circa 1880 only to be defeated by the malarian swamps. Malaria and yellow fever took the lives of more than 20.000 workers in less than 13 years. All sorts of insurmountable technical problems eventually forced the French to abandon the works in 1893, amidst tremendous financial scandals.
David McCullough, a most remarkable American historian (twice winner of the Pulitzer Prize and who also has twice garnered the National Book Award) wrote in 1977 a modern classic on the political, financial and engineering intricacies involved in the construction of the Panama Canal.
In one of the final chapters of this remarkable book, Mr. McCullough relives the moment in which, just before the canal was completed, a Commission of Fine Arts attached to the General Administration, "sent the sculptor Daniel Chester French and the landscape architect Frederick Olmsted, Jr., son of the famous creator of New York's Central Park, to suggest ways in which the appearance of the locks and other components might be dressed up or improve upon." Here is what the two men reported:
The canal itself and all the structures connected with it impress one with a sense of their having been built with a view strictly to their utility. There is an entire absence of ornament and no evidence that the aesthetic has been considered except in a few instances... Because of this very fact there is little to find fault with from the artist's point of view. The canal, like the Pyramids or some imposing object in natural scenery, is impressive from its scale and simplicity and directness. One feels that anything done merely for the purpose of beautifying it would not only fail to accomplish that purpose, but would be an impertinence.1
The canal may not have changed its looks ever since those two sensible architects declined to "embellish" it, but the symbolism of the continental role of the United States that it used to carry has changed as drastically as Panamanians have come to grapple with their long cherished ambition: the reverting of the Canal Zone to local control.
Originally a remote province of Colombia, Panama's politics during the 20th century has not lacked the violent simplicity that is conventionally attributed to its neighboring banana republics. But curiously enough, agriculture represents less than 7% in the composition of Panama's GDP. Services, on the other hand, account for 77% of a strongly dollarized economy that rests primarily on the operation the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, etc.
Panama's greatest economic asset always was the privileged geographic peculiarity that shaped its history ever since the 16th century when, suddenly, as a result of Spanish conquests in the New World, the Panamanian isthmus became significant to a newly born global trade.
It was through Panama that 16th century Spaniards transported on pack mule trains all the silver that came from Peru—along with Mexican gold—to be stockpiled in the fortified seaport city of Cartagena, before having it all shipped across the Atlantic.
That thin strip of land, infested as it was by all sorts of tropical diseases, was nevertheless meant to revolutionize the transport of goods from one side of the world to the other.
Up to a century before the New World was discovered, the cost of transport of goods over long distances was sufficiently high as to make space a strong and enduring obstacle to competitive production and trade. With the advent of the industrial age, however, economies of scale growingly went hand in hand with the fall of transport and communication costs, thus making space—distances—an everyday element of economic life that definitely demanded to be taken into account.
The construction of the Panama Canal coincided with the United States's coming of age as a global power. The canal in itself became a symbol of American continental hegemony. Today, however, it may only symbolize the noxious effects that a globalized economy can have on trade systems that refuse to catch-up with the times.
The trading systems of centuries past, most especially those of the era of container shipping, are now yielding to the so-called "post-Panamax" generation of transport vessels which is expected to dominate shipping within the next decade, putting the canal in severe danger of going out of date.
Should the Panamanians do nothing about it, the Panama Canal will be forced to turn away some 37% of the world's container traffic by 2011 because the ships will just be too big to pass through.
The volume of global container shipping has tripled over the last 15 years and increased more than 50 percent over the past seven. Queues of up to 100 cargo ships waiting to make the nine hours passing are not an uncommon sight on either side of the canal. And a day in idle can cost a large container vessel up to $50,000.
British journalist Andrew Gumbel has reported of "a complex bidding system whereby ships can jump the queue for the right price. Last year [2006] a British oil tanker paid a record $220.3000—not including the hefty transit fees—to jump ahead of 83 other ships."
To be sure, Panamanian authorities have been on the issue and two years ago year lobbied for a public referendum to approve the canal expansion. The referendum passed easily and now Panama is embarked on a seven-year project with an estimated cost of more than 5 billion dollars. The plan entails doubling the width of a set of locks that elevate the traffic over sea-level and move it along the 48-mile waterway.
Global economic recession nothwithstanding, the truth is that even the expansion of the Panama Canal might not settle the global problem of cargo-vessel overcrowding. As international shipping companies look around for alternatives, and as unlikely as it may sound, the Panama Canal might well become just one sea passage among many others. Consequently, lobbyists urge competing governments to float their own ambitious projects.
Only two years ago, for example, high-ranking Nicaraguan government officials advanced the proposition of what they called Grand Inter-Oceanic Canal. Though in Nicaragua the distance between the Pacific and Atlantic oceans is 173 miles rather than the Panamanian 48, the Nicaraguans insisted that their canal could be ready by 2020 and welcome the most modern ships from the get-go at an estimated cost of $18 billion. Not an interesting idea among would-be international investors, especially after the re-election of Sandinista leader Daniel Ortega as Nicaraguan president.
The hunt for alternatives, however, goes on and on, and as Mr. Gumbel writes, "there has even been talk of the effects of global warming on the Arctic ice pack and the possibility of one day using the North-west Passage, assuming, somewhat unnervingly, that its icebergs melt into harmlessness."
At the turn of the 20th century, U.S. technology solved the swamp problem that had defeated the French. American engineers successfully raised the canal and built the locks that granted big ships access to both oceans. At the same time, key advances in medicine helped eradicate malaria and yellow fever just before construction began.
But with ocean levels rising because of global warming, so the pessimists affirm, sooner or later the Panama Canal could get to be at serious risk and then the opening of the North-west passage might not be a folly.
In the meantime, the cargo vessels line up as Panama hopes to keep reaping the benefits of global trade.
Notes:
1 David Mc Cullough, The Path Between the Seas The creation of the Panama Canal 1870-1914, Simon & Schuster, NY, 1977, p. 603-604. At amazon.
*
An unpretentious cement boat—the Cristobal—was the first ship to go through the canal in the early days of August, 1914. Many journalistic accounts of the ocean-to-ocean crossings that followed emphasized the ease with which all the locks, floodgates and engines that towed the ships at some stretches of the 47.9 miles long waterway worked.
One man on board of the Ancon—the ship that perfunctorily performed the "grand opening" of the canal on August 15, only a few days after the lowly Cristobal went through the canal—wrote, "So quietly did she pursue her way that... a strange observer coming suddenly upon the scene would have thought that the canal had always been in operation, and that the Ancon was only doing what thousands of other vessels must have done before her."
Almost a century later the Panama Canal still works exactly as intended by its designers, everything functioning as originally devised by the American engineers who, at the turn of the 20 century, took to finish the waterway the French had commenced to construct circa 1880 only to be defeated by the malarian swamps. Malaria and yellow fever took the lives of more than 20.000 workers in less than 13 years. All sorts of insurmountable technical problems eventually forced the French to abandon the works in 1893, amidst tremendous financial scandals.
David McCullough, a most remarkable American historian (twice winner of the Pulitzer Prize and who also has twice garnered the National Book Award) wrote in 1977 a modern classic on the political, financial and engineering intricacies involved in the construction of the Panama Canal.
In one of the final chapters of this remarkable book, Mr. McCullough relives the moment in which, just before the canal was completed, a Commission of Fine Arts attached to the General Administration, "sent the sculptor Daniel Chester French and the landscape architect Frederick Olmsted, Jr., son of the famous creator of New York's Central Park, to suggest ways in which the appearance of the locks and other components might be dressed up or improve upon." Here is what the two men reported:
The canal itself and all the structures connected with it impress one with a sense of their having been built with a view strictly to their utility. There is an entire absence of ornament and no evidence that the aesthetic has been considered except in a few instances... Because of this very fact there is little to find fault with from the artist's point of view. The canal, like the Pyramids or some imposing object in natural scenery, is impressive from its scale and simplicity and directness. One feels that anything done merely for the purpose of beautifying it would not only fail to accomplish that purpose, but would be an impertinence.1
The canal may not have changed its looks ever since those two sensible architects declined to "embellish" it, but the symbolism of the continental role of the United States that it used to carry has changed as drastically as Panamanians have come to grapple with their long cherished ambition: the reverting of the Canal Zone to local control.
Originally a remote province of Colombia, Panama's politics during the 20th century has not lacked the violent simplicity that is conventionally attributed to its neighboring banana republics. But curiously enough, agriculture represents less than 7% in the composition of Panama's GDP. Services, on the other hand, account for 77% of a strongly dollarized economy that rests primarily on the operation the Panama Canal, banking, the Colon Free Zone, insurance, container ports, flagship registry, etc.
Panama's greatest economic asset always was the privileged geographic peculiarity that shaped its history ever since the 16th century when, suddenly, as a result of Spanish conquests in the New World, the Panamanian isthmus became significant to a newly born global trade.
It was through Panama that 16th century Spaniards transported on pack mule trains all the silver that came from Peru—along with Mexican gold—to be stockpiled in the fortified seaport city of Cartagena, before having it all shipped across the Atlantic.
That thin strip of land, infested as it was by all sorts of tropical diseases, was nevertheless meant to revolutionize the transport of goods from one side of the world to the other.
Up to a century before the New World was discovered, the cost of transport of goods over long distances was sufficiently high as to make space a strong and enduring obstacle to competitive production and trade. With the advent of the industrial age, however, economies of scale growingly went hand in hand with the fall of transport and communication costs, thus making space—distances—an everyday element of economic life that definitely demanded to be taken into account.
The construction of the Panama Canal coincided with the United States's coming of age as a global power. The canal in itself became a symbol of American continental hegemony. Today, however, it may only symbolize the noxious effects that a globalized economy can have on trade systems that refuse to catch-up with the times.
The trading systems of centuries past, most especially those of the era of container shipping, are now yielding to the so-called "post-Panamax" generation of transport vessels which is expected to dominate shipping within the next decade, putting the canal in severe danger of going out of date.
Should the Panamanians do nothing about it, the Panama Canal will be forced to turn away some 37% of the world's container traffic by 2011 because the ships will just be too big to pass through.
The volume of global container shipping has tripled over the last 15 years and increased more than 50 percent over the past seven. Queues of up to 100 cargo ships waiting to make the nine hours passing are not an uncommon sight on either side of the canal. And a day in idle can cost a large container vessel up to $50,000.
British journalist Andrew Gumbel has reported of "a complex bidding system whereby ships can jump the queue for the right price. Last year [2006] a British oil tanker paid a record $220.3000—not including the hefty transit fees—to jump ahead of 83 other ships."
To be sure, Panamanian authorities have been on the issue and two years ago year lobbied for a public referendum to approve the canal expansion. The referendum passed easily and now Panama is embarked on a seven-year project with an estimated cost of more than 5 billion dollars. The plan entails doubling the width of a set of locks that elevate the traffic over sea-level and move it along the 48-mile waterway.
Global economic recession nothwithstanding, the truth is that even the expansion of the Panama Canal might not settle the global problem of cargo-vessel overcrowding. As international shipping companies look around for alternatives, and as unlikely as it may sound, the Panama Canal might well become just one sea passage among many others. Consequently, lobbyists urge competing governments to float their own ambitious projects.
Only two years ago, for example, high-ranking Nicaraguan government officials advanced the proposition of what they called Grand Inter-Oceanic Canal. Though in Nicaragua the distance between the Pacific and Atlantic oceans is 173 miles rather than the Panamanian 48, the Nicaraguans insisted that their canal could be ready by 2020 and welcome the most modern ships from the get-go at an estimated cost of $18 billion. Not an interesting idea among would-be international investors, especially after the re-election of Sandinista leader Daniel Ortega as Nicaraguan president.
The hunt for alternatives, however, goes on and on, and as Mr. Gumbel writes, "there has even been talk of the effects of global warming on the Arctic ice pack and the possibility of one day using the North-west Passage, assuming, somewhat unnervingly, that its icebergs melt into harmlessness."
At the turn of the 20th century, U.S. technology solved the swamp problem that had defeated the French. American engineers successfully raised the canal and built the locks that granted big ships access to both oceans. At the same time, key advances in medicine helped eradicate malaria and yellow fever just before construction began.
But with ocean levels rising because of global warming, so the pessimists affirm, sooner or later the Panama Canal could get to be at serious risk and then the opening of the North-west passage might not be a folly.
In the meantime, the cargo vessels line up as Panama hopes to keep reaping the benefits of global trade.
Notes:
1 David Mc Cullough, The Path Between the Seas The creation of the Panama Canal 1870-1914, Simon & Schuster, NY, 1977, p. 603-604. At amazon.
*
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