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Latin America:Latin America: 18201820 19301930
From Independence to the eve of Great Depression
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There will be a general overview of Latin America countries (LAC) on
each of the three areas: Economy, Society and Politics
After the overview, there will be specific section, exploring each area in
detail
The areas inter-connection and viewpoints will be explored in the tutorial
The next background power-point will be about the Great Depression.
StructureStructure of this presentationof this presentation
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Guerra a muerte(1814 20): Conventional warfare decimated LAC population
Cost of maintaining armies leave little capital
Independence cut off trade with Spain, a major trading partner Neglected communication systems between former colonies mean the loss of
oversea trade is notcompensated by raise in regional trade.
PrePre--DepressionDepression Latin America:Latin America:
Economy (I)Economy (I)
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Post-Independence (1820 30)
Post-independence violence further deters regional trade, e.g. Mexico before 1850, Brazil until
1840s.
New governments, with substantial public debt for army upkeep, unable to rebuild the economy.
(Prime debt source being UK)
Governments inability to collect tax revenue, plunging it further in debt.
1830 1850
LAC export of primary goods to North America steadily increases.
At the same time, Import from European industries for manufactured goods increases
Small-scale LAC industry out-competed by European (especially British) Industry, leaving thecontinent with little industrial base to produce manufactured goods
LAC export remain to be primary products, e.g. Chilean nitrate, which is plentiful but prices
fluctuates greatly in the international market, whereas manufactured goods price remain
relatively constant.
PrePre--Depression Latin America:Depression Latin America:
Economy (II)Economy (II)
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Key points:
Economy came to a virtual standstill throughout the independence war
Governments cannot stimulate economy due to debt, and its incapability to raise
independent revenue, i.e. taxes
Low population means 1) labour cost is high, further discouraging output.
2) Small domestic spending = lack of consumer
Low population and high prices for goods equates to a weak domestic market
Weak domestic market means
Higher dependence on export market for economic growth; No mass market to grow an industrial base
Export remains to be primary product, leaving the economy highly sensitive to
change in international prices.
PrePre--Depression Latin America:Depression Latin America:
Economy (III)Economy (III)
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Independence war drove out the Spanish colonial elites, leaving a political vacuum. (except
Brazil)
Indigenous people, who fought on both sides of the independence war, pleased neither the old
colonial, nor the new elites.
At the same time, indigenous population fall dramatically, leaving a labour gap The independence war created a meritocratic military, which weaken social stratification
based on race and status. And widen the pool of new elite.
Nonetheless, this changed little on the unequal land distribution, favouring large landowners.
Despite increased women participation in public sphere, with examples such as Manuela
Saenz, women participation post-independence witnessed little change from the colonial
period.
PrePre--Depression Latin America:Depression Latin America:S
ocietyS
ociety
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Two movements: Decentralisation/Regionalisation vs. Centralisation.
Creole (native of pure Spanish descent) Landowners withdrawal from politics leaves political
power gap, which are filled by army generals-turn-politicians, known as caudillos
Caudillos government are largely unstable, due to weak government finance deny caudillo to
reward their followers.
Emergence of strong-man: Not exclusively military, individuals emerge to strengthen
central authority, e.g. Diego Portales (Chile), Juan Manuel de Rosas (Argentina)
Indigenous Indians lost special status under colonial law and communal lands---Whilst
military and politics increase social mobility for middle class mestizos (people of mixed
European and indigenous descent), indigenous Indians suffered.
PrePre--Depression Latin America: PoliticsDepression Latin America: Politics
Outliner: Brazil.1. They acquired a ruling elite, when the Portuguese crown migrated to Brazil during the
Peninsular war.
2. Unlike other Latin American countries, they inherited a monarchy, not a republic.
3. Military played little role in widen membership of elite.
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EconomyEconomy
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Majority of LA elite, old and new, adhere to liberalism and free trade.
Export-Import model was found on liberalisms notion of free trade with little to no
protectionism, and comparative advantage, i.e. countries specialise in producing goods with
minimal input, and exchange surplus.
In practice, it means:
manufactured goods from industrialised Europe and North America.
Key trading partner, before independence, was Spain(due to a closely controlled trade
monopoly to the New World by Spain)
After Independence, key trading partner gradually became Britain, Europe, than North
America.
Liberalism and ExportLiberalism and Export--ImportImport
modelmodel
List ofLA raw materials
- Chile: guano and nitrate fertilizers, wool, industrial metals(esp. copper)
- Argentina: Beef, cow hides, wool, wheat,
- Brazil & Columbia: coffee
- Cuba: Sugar
- Peru: Silver and Sugar
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Economics: Too much resources, no one else wants them, and those do offer a tempting price---Why not?
Abundance of raw materials
High raw material prices due to high demand from industrialising nations.
Foreign imports superior quality and scale of production drove out local industry, deepen the dependence on
foreign manufactured goods.
Self-sustaining landowners, ranchers and mine owners have no domestic market, with the export market often
their only.
Highly stratified socioeconomic structure, with 90% population being manual labour, there is little scope for a
domestic market for local manufacture goods
Politics: No one say otherwise!
No powerful industrial lobby.
Chief beneficiaries of Export-Import model, i.e. merchants, are economically and politically powerful
LA governments are heavily indebted to its customers.
Increase protectionism would have discouraged trade, and reduce tariff revenue. Without tax revenue,government often heavily dependent on it.
Social: We cant do any other way
The combination of labour-intensive primary industry, i.e. agriculture, mining, and lack of skilled labour force,
undercut development of manufacture industry, and favour primary industry
Wide consensus amongst LA elites in progress only through free trade. A consensus encouraged by its
European and American customers.
WhyWhydiddid ExportExport--Import work?Import work?
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Volatile international price for raw materials destabilise LA economic growth
Export-Import model leave little excess money to build up the necessary capital toreinvest and improve production
Foreign import gave often destroys local manufacture industry
Investment depends on industrial nations, e.g. Britain.
Without industrialisation, economic liberalism does not translate into politicalliberalism like industrial nations
Without local capital, Impetus for capital investment are largely foreign. Inconsequence, key economic sectors, e.g. mining, railway, are left in foreign hands.
The problem with ExportThe problem with Export--ImportImport
In Summary: Export-Import model made LA countries depend on the
international economy entirely to survive, in the most unpredictable way.
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Objective: Economic autarky by building local manufacture industry
Why?Reduce dependence on exporting raw material for income
Reduce dependence on foreign manufactured import
Improve current balance of payments health by reducing import.
Regain control of industry and raw material ownership by capital accumulation
How?Build industrial base to manufacture consumption and capital goods for domesticmarket.
Stage 1: Purchase capital goods to create the light industry base for consumers goodsproduction, e.g. TV
Stage 2: Purchase capital goods to create the heavy industry base for producing capitalgoods, e.g. Tractors
ImportImport--SubstitutionSubstitution IndustrialisationIndustrialisation(ISI): The Theory(ISI): The Theory
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SocietySociety
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The colonial militia, established by Charles III(1759 88) and staffed by creoles, became the
core of the independence army. (By 1800, it has 23,000 LA-born members)
Spains substantial military resources meant Spanish Americas gained its independence only
after a long war(1810 1830).
The military circumstance of the war enabled talented mestizosto reach commanding
positions, achieving fame and power in process. This is previously an exclusive domain of
traditional, established Creole families andpeninsulares Examples: Jose Antonio Paez (Venezuela), Jose Maria Morelos (Mexico)
After the war, a combination of large military establishments, lack of alternative careers, the
power vacuum left from the colonial elites, as well as lack of competition from the
landowners and ranchers, who maintained much of the economic power, mestizos generals
entered into politics as caudillos.
Military: Legacy of IndependenceMilitary: Legacy of Independence
Outliner: Brazil
Military weakness of the Portugal Crown meant that, unlike Spanish Americas, Brazils independence
was gained was less bloodshed.
But this also implies no emergence of military leader such as Paez, Morelos, Bolivar or San Martin.
As a result, politics remained in the domain ofhacendados (Landowners), estancieros (ranchers) and
merchants.
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During the colonial times, economic power, in the form of land, retained in threehands: The Crown, the Church and Landowners, as well as a small number ofindigenous communities, retaining their communal land.
After independence, indigenous communities have lost their special status, with it,their communal land.
As a result, Indigenous people often are economically and politically under, in somecases not, represented to their majority status in demography(e.g. Peru, Mexico)
Another effect of land distribution inequality is a highly stratified socioeconomicstructure, this nature restricted political debates and decision making to the elite,usually less than 5% of population.
Land and Social HierarchyLand and Social Hierarchy
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Trade Union: To keep up with expanding export-import trade, countries without endow of a large
indigenous population, such as Argentina, began to pursue aggressive pro-immigrationpolicy, especially in 1880s.
(Compare to Mexico, with its large indigenous endowment, meantMexico did not pursuesimilar policy)
This creates a growing working class population, e.g. railway workers, docks worker, whichorganised themselves by union of craft(similar to guild) rather than industry, reflecting thesmall size of LA industry
As firms in Latin America are of small scale, and concentrated on export-import industries,such as transport, industrial actions seriously disrupt export-import trade.
With the countries dependence on export-import industry, disruption in trade present anequally serious disruption in national economy.
Elites, or governmental, responses varies, from cooperation democracy/Populism torepression/strong-man.
In turn, this creates variety in political system, from cooperative democracy to integrativedictatorship.
Church
Many Latin American countries are predominately Catholic, this also gives the church highlevel of social legitimacy. As it will be seen, the church is often a powerful social forcecountering government actions.
Social forces: Trade Unions and ChurchSocial forces: Trade Unions and Church
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Machismo:based on chivalry, coballerosidadand other medieval conceptions ofknighthood, men in Latin America was often expected to express themselves in public
sphere, often on the womens behalf. Marianismo: Named after the VirginMary, womens role in Latin America were
confined at the private sphere, whilst remain deferral to men in public matters.
This social conception has affected womens role as a political force, and itscontrollability.
MachismoMachismo andand MarianismoMarianismo: Gender: GenderMattersMatters
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PoliticsPolitics
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As export-import trade expands, the emergence of workers and professional class, and their
economical and political demand, provides a threat to the elites interest.
On the other hand, partly out of belief in liberalism, partly out of interest to ensure minimal state
intervention in export-import trade, the elites were encouraged to participate in politics to safeguard
their interest.
The political emphasis of the elite were stability and social control. Namely, no disruption on trade,and suppression of social forces, such as trade union, to preserve stability. In turns, attract foreign
investment and stimulate economic growth.
In turns, foreign investments are used to further centralise power, i.e. use of railway to mobilise
national forces against local authorities.
This is impossible to achieve with particularistic caudillos
In short, the elite seeks to centralise power to a national bureaucracy.Two methods:
Direct oligarchic control of the government, with occasional co-operation, e.g. Chile, Argentina.
Support dictatorial strongman, e.g. Porfirio Diaz (Mexico), Dom Pedro II (Brazil)
The Fall ofThe Fall ofCaudillos, or,Caudillos, or,
TheR
ise ofN
ational BureaucracyTheR
ise ofN
ational Bureaucracy
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Key Comparative themes:
- Economic: Domestic-based, or foreign driven, growth?
Concentration vs. diffusion of wealth?
- Social: Stratification or social mobility?
Men vs. Women?
Indigenous vs. Creoles & Metizos
- Political: Centralisation vs. Regionalisation?
Tax vs. Rent
Latin America: the selfLatin America: the self--convincedconvincedperipheryperiphery
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Next:Next:the Great Depression and Latinthe Great Depression and Latin
Americas reactionsAmericas reactions