May 30: Introduction
to Latin America powerpoint.
We will see part of
the Brazilian movie, Central Station. There is a file of Notes on Films
that will be updated.
The New York Times
story on the
Nukak Indians includes audio and pictures.
May 31: History
of Latin America to 1915 Powerpoint.
Wikipedia sites on the Aztec, Maya
and Inca
civilizations
Wikipedia on the War of the
Pacific.
June 1: Corruption,
Leadership and Development in LA by Ted Goertzel.
Corruption Index from Transparency International 2005
Index.
- Corruption is generally high in Latin America, but Chile and
Uruguay are exceptions
- Historically rooted in the Aztec and perhaps other
pre-columbian
empires and certainly in the Spanish and Portuguese conquistadores who
unashamedly came to get rich.
- Examples:
- The Mexican Presidency viewed as a license to get rich for
6
years
- Collor
de Melo presidency in Brazil
- Carlos
Andres Perez in Venezuela removed for corruption
- Miguel Aleman
sexenio
in Mexico
- Salinas
de Gortari's brother in Mexico
- Alberto
Fujimori's associates in Peru
- Augusto
Pinochet, recent revelations were surprising
- The Sandinista "pinata"
- Carlos Menem in Argentina
- The Workers Party government in Brazil (see slides
in the
overview powerpoint), also surprising - Video of
official receiving bribe -
- Not all LA governments are corrupt, e.g, Itamar Franco and
FHC
in Brazil, Ruiz Cortines in Mexico
- Economics of Corruption
- a long-term drag on the economy, transparent countries are
richer
- "crony capitalism" can provide a short-term spur to growth
because it provides an alternative source of security for investors -
if you can't trust the legal system, you can at least buy a stable
business environment by bribing officials
- The culture is relatively tolerant of corruption, corrupt
leaders
get re-elected. Adhemar de Baros roba mas faz.
- Leaders indicted for corruption often claim they are being
picked
on by their opponents - e g. Lopez Obrador who ignored a judge's order
to get a construction project done
- When economic growth is poor, there is a great temptation to
blame it on the Americans or on another scapegoat
- Types of Leaders:
- Ideology: Authoritarians, Populists, Democrats,
Marxists
- Style: Chameleons, Hedgehogs and Foxes
(opportunists, ideologues and pragmatists)
- Chameleons: (opportunists): Carlos Menem, Alberto
Fujimori, Hugo Banzer, Jamil Mahuad, Carlos Andres Perez
- Hedgehogs (ideologues): Fidel Castro, Hugo Chavez,
Evo
Morales, Augusto Pinochet
- Foxes (pragmatists) : Fernando Henrique Cardoso,
Lula
da Silva, Michelle Bachelet, Felipe Calderon.
Video on
Hugo Chavez.
Scenes
of Prison Revolt in Sao Paulo. Crime in Latin America.
Missing
Young Women in Ciudad Juarez, Mexico
June 5. Here are some study questions drawn from the readings in
the Munck and Cardoso books.
- What is the common general pattern of thuge geography of the
countries along the west coast of South America?
- Which South American countries include part of the Amazon
region
within their territory?
- What are the two largest cities of Latin
America? How
large are they?
- Which Latin American countries are primarily populated by
European immigrants?
- Which Latin American country has the most citizens of
African
descent?
- What were the major political empires in Latin American
before
the European conquest? Where were they located?
- What was the dominant ideological force in Latin America
during
the period after the Second World War?
- By the end of the 1970s, which group was governing in most
of
South America?
- What happened in Argentina in 1976
- How did independence come about in Brazil? How does
this
differ from the experience of the United States or of the Spanish
speaking Latin American countries?
- Which two Brazilian states
dominated the Presidency during
the
period of the Empire? Why was this called the cafe com leite alliance?
- What does Cardoso say is the most glorified and necessary
trait
among Brazilian politicians?
- Which Brazilian President was the first to involve the
working
class and labor unions directly in the political system?
- Why did Cardoso not go to Law School? What did he
major in?
- What was the big social change in Brazil that brought the
black
and white populations into close proximity with each other?
- What did Cardoso find inspiring about the works of Karl Marx?
- Why did Janio Quadros resign?
- What happened in Brazil in March, 1964? Why was this
unique
in Brazilian history?
- When did Cardoso come to think of Brazil as part of
Latin
America? Why?
- What happened in France while Cardoso was there?
Basic Organizing Principles of Economies:
- Hunting and Gathering Bands. Small groups of this sort
still exist in the Amazon.
- Self-sufficient villages. Some of these hid from the
authorities, e.g, Brazilian quilombos, the most
famous of which was Palmares.
By and large people had family plots, although neighbors always helped
each other out. In Mexico, a traditional Aztec form was the ejido, which was
revived in the land reform under Lazaro Cardenas in the 1930s.
- Pre-Columbian empires. Azted, Maya and Inca.
These
extracted tribute from villages to support a class or warriors, priests
and hangers-on. Similar to empires in other parts of the world,
e.g, Egypt, China. The forms of organization differed. The
Incas divided land into three parts, some was given to peasants to live
off of, some was held by the state and some by the religious
elite. The peasants were required to work a certain amount of
days on the state and church lands. Every year the peasants were
given new parcels for their own cultivation so they would not become
"owners"
- Feudalism - a European concept where the aristocracy has a
degree
of independence from the king and the serfs belong to the
aristocracy. To some extent, this model was copied in the new
world through devices such as the encomienda, but there is controversy
as to whether it was really "feudalism" or a new form, the plantation
economy.
- Slavery - an economy based on forced labor from enslaved
persons
who can, usually, be bought and sold. Used to grow export crops.
- Market Economy - In its pure form, individuals are
free to
engage in any economic relations they wish. This is Alvaro Vargas
Llosa's ideal, one not achieved in its pure form anywhere. Often
denounced by the left in Latin America as "neoliberalism" or "The
Washington Consensus".
- State Socialism - the Soviet, Cuban, Maoist, North
Korean
system. Hugo Chavez and Evo Morales talk about socialism but
actually have forms of mixed economies.
- Mixed Economy - also known as "social democracy"
or
the "Third Way"- this is what Fernando Henrique Cardoso advocates
although his critics denounce him as a "neolilberal." There
are wide variations within this category. Almost everyone agrees
that the state has a role in infrastructure (e.g., highways), security,
education and health. It also maintains a currency and a judicial
system. The extent to which the state should manage the market
economy is controversial, this is referred to as "industrial
policy". These are some of the policies the government can
use to control the economy
- issuing currency, the "money supply"
- setting interest rates through central banks
- setting exchange rates for foreign currencies - free
or
fixed or floating within bands, etc.
- increasing or decreasing government spending levels
- targeted government spending
- tax policies
- government borrowing - domestic or international (world
bank,
IMF)\
- tariffs, export import controls
Arguments from speech
and book
by Alvaro Vargas Llosa
- The "free market" reforms of the 1990s were disapointing,
but so
have all the other efforts to develop Latin America. Why?
- "Intangible" (social) factors - power, social norms, legal
systems - are more important than "tangible" (economic) ones -
investment, production, growth rates.
- There are two perspectives on the social factors cultural (beliefs and
behavior patterns) and institutional.(social
organization). The two are intertwined, but he chooses to
organize his presentation around five institutional principles
- Corporatism.
Laws
and state actions do not relate to individuals, but to groups.
People are important only as part of social entities that have specific
functions, e.g., laborers, military, priests, educators, women, peasants
- State Mercantilism. The
state regulates and manages the economy rather than leaving this to
private enterprise. This was done differently in different
historical periods, but can be traced back to the pre-Columbian
civilizations.
- Privilege. The
nobility under the pre-Columbian civilizations had hereditary
privileges, similar rights were given to the Spanish and Portuguese
conquerors. Today, privilege is more characteristic of
bureaucrats and state employees.
- Wealth Transfer. The
state transfers wealth from the poor to the rich, although often
claiming to do the opposite. Inflation is a mechanism for doing
this, so is free tuition in elite public universities.
- Political Law. The
law is used to carry out political objectives, not simply as a neutral
mediator of disputes.
- What is to be done about this (not really discussed in the
film,
but in the book. Vargas Llosa is a libertarian, he favors cutting
way back on the state, turning most things over to private
enterprise. He favors lower, flat taxes, primarily a sales
tax. His strongest point is the argument for cutting back on the
bureaucracy needed to start a business, a point first made by Hernando
de Soto in The
Other Path and in The
Mystery of Capital. The big problem is where the political
resources to do this would come from.
An interesting comment from a reviewer
(Adam Wasserman) of The Mystern of Capital:
Attempts to explain why the 3rd
world (and the 2nd world, now that
communism has largely collapsed) is different from the developed world
tend to fall between two poles. At one end are those who seek an
Archimedean point--a single underlying cause which, once grasped, will
allow us to quickly move developing countries up the socio-economic
ladder. Such explanations have the virtue of being useful to people who
actually work in 'development', because they convince us that we know
how to produce fundamental change. But they run the risk of
oversimplifying and, if taken as a guide to policy, of raising
expectations only to see them dashed by the complexities and historical
quirkiness of the real world.
At the other pole are holistic,
multifaceted explanations, taking into account history, culture,
economics, religion--the whole nine yards. Such accounts may be more
intellectually satisfying, but often lead to frustration by convincing
us that the problems are too complicated, too resistant to quick fixes,
for practical solutions.
The Mystery of Capital falls
for the
most part in the first camp. It's author, Hernando de Soto, is one of
the 3rd World's most dedicated and intelligent reformers. He wants
desperately to do something to help the poor, and has been heroically
influential--and successful--in arguing against the failed statist
solutions long in vogue in Latin America. Now he wants to move beyond
criticism to a positive agenda for change. De Soto's impeccably
pro-capitalist credentials make his initial criticism especially
convincing: actual capitalism in most of the world is restricted to a
small elite, while most remain on the outside looking in.
The
question is whether de Soto's solution is equally convincing. He does
not believe poverty is due to the evil intentions of capitalists or
capitalist countries (though he acknowledges that powerful interests in
developing countries do not want to make the system more inclusive--a
subject which could use more discussion). Nor is it because of culture
or any inherent faults in the poor, or in poor countries. No, the real
problem lies in a kind of intellectual or historical blindness, which
has kept everyone from seeing what the real source of wealth is: real
property, or more exactly well-defined and socially accepted property
rights. Once a society has this, it has the secret of capital, since
these assets can then be used to generate loans, credit, insurance,
liabilities and the whole apparatus of capitalism.
It is hard
to argue, looking at the real experience of the undeveloped or
maldeveloped world, that the lack of property rights is not a huge
impediment to economic growth. De Soto and his team have done
tremendous work in documenting exactly how this holds back and
frustrates the poor and disenfranchised.
But it is equally hard
to believe that this is the key or only reason. More accurately, it
seems--from de Soto's own account of what is required--that having
property rights is a sort of 'meta-cause'. It depends on such a host of
other developments in the economy, in society, in the political system
(where access historically often depended on property, limited to a
few), in the legal system, in the informal norms and mores, that it is
hardly practical to point to it as 'the solution' to 3rd world poverty.
For this reason, it seems unlikely that simply pointing out that
developed countries have complex systems of property rights, though
useful, will be enough to allow for the development of similar systems
in the developing world.
If de Soto is right, why is
China
developing so fast, without anything like the formal, all-encompassing
property system he thinks is essential? Why did European economic
development begin to outpace the rest of the world centuries before the
property systems which, he points out, in most Western countries were
only arrived at within the last 100 years?
As a recipe for
action, The Mystery of Capital is excellent in pointing to a dimension
of development that has been neglected, and for its path-breaking
research on the ground, discovering what it takes to bring the newly
urbanized poor into the modern economy. But as a satisfying account of
what ultimately causes poverty and why some countries are rich and
others are not, it falls short. For this, one should go to books like
David Landes' The Wealth and Poverty of Nations, or Jared Diamond's
Guns, Germs and Steel.
------------------------------
But Landes focuses primarily on culture, Or to writers such as Fernando
Henrique Cardoso, who take this complex, multi-faceted approach.
But their work is harder to summarize, it cannot be so usefully reduced
to a few key points - if it is, they seem vague and obvious.
Their work focuses on the complexities of specific historical
conjunctures - what happens in specific places and times.
We view at least part of a video
of FHC, although he is not as good a speaker as Vargas Llosa,
especially when reading a text in English, and the bandwith of the host
site is not so good. The book is much better (thanks in large
part to the help from Brian Winter).
------------
June 6 - Governance. - Systems are characterized as
"polyarchies" or multiparty democracies. Free and competitive
elections are common, and the competition is generally real. In
Mexico, the election of Fox was the first in which the PRI actually
allowed an honest vote count and gave up office. Many of the
South American countries had military regimes in the 60s and 70s, but
went through a return to democracy in the 80s and 90s. They are
presidentialist systems, rather than parliamentary, and the
concentration of pwoer in the presidency tends to be stronger than in
the US. The party systems vary considerably. In Brazil
there is a proportional representation system which has led to many
parties without much party discipline. Argentina has two major
parties, the Radicals and the Peronists or Justicialists, but new ones
are growing. Chile has the Concertacion, a coalition of the left
and Crhistian Democrats, plus the conservative parties and small
revolutionary leftist parties. Electioneering is more reliant on
television than in the past, similar to the US. The Globo network
made Collor de Mello president of Brazil. In Brazil, all parties
get free TV time and paid ads are prohibited.
Democracy depends on independent civil organizations, or pressure
groups, and these have been weaker in Latin America than in the
US. They have modeled their parties more on European models, but
are becoming more Americanized (less ideological, coalitions,
personality drives).
Governance is more of a problem than politics, the actual carrying out
of policies - Latin American government often looks good on paper but
the implementation is defective. It often seems that the
government does not control the police. Many times middle class
citizens support abuses by the police which are seen as necessary to
suppress violent crime. The police emphasize social control, not
law enforcement. Tax evasion, money-laundering, child labor,
slave labor and drug trafficking are often not seen as targets for law
enforcement. Torture is used by the police to gather information
or just to punish criminals.
In the 1990s, the "technocrats" became very popular, often people with
PhD degrees in economics from American Universities, Domingo Cavallo,
Hernan Buchi. FHC is the only sociologist, but he won power
through his role as finance minister. There were efforts to
reform the state, e.g., under Bresser Pereira in Brazil, to move from a
bureaucratic form to a managerial reform - administrators are judged by
results rather than by how well they follow the rules. Whenever
possible, services are distributed to non-governmental agencies.
This was calling "reinventing government" when Al Gore was responsible
for it in the Clinton administration. It is clear today that just
cutting back on the state is not what is needed, what is needed is an
effective state, e.g., to regulate land use.
Nongovernmental organizations are a growing trend, NGO's. This is
supported by the World Bank and international organizations as a means
of building civil society.
Right now, the Mexican presidential elections are winding up with a
close race. The article "The
Populist at the Border" focuses on Lopez Obrador, but the
surprising thing is that Felipe Calderón is closing the
gap. It is debatable how much leadership makes a
difference. As we discussed before there are different types of
leaders differentiated both by ideology and by style.
- Types of Leaders:
- Ideology: Authoritarians, Populists, Democrats,
Marxists
- Style: Chameleons, Hedgehogs and Foxes
(opportunists, ideologues and pragmatists)
- Chameleons: (opportunists): Carlos Menem, Alberto
Fujimori, Hugo Banzer, Jamil Mahuad, Carlos Andres Perez
- Hedgehogs (ideologues): Fidel Castro, Hugo Chavez,
Evo
Morales, Augusto Pinochet
- Foxes (pragmatists) : Fernando Henrique Cardoso,
Lula
da Silva, Michelle Bachelet, Felipe Calderon.
There is much variation between Latin American countries in both their
political institutions and their political histories, so the amount one
can say about Latin American in general is limited. We will look
in more depth at Brazil and Mexico.