Philip Whiteley's Blog

May 29, 2010

A re-birth for South America

Filed under: Uncategorized — felipewh @ 8:55 am

In 2008, following his election to the US presidency, Barack Obama received an unusual gift from the Venezuelan leader Hugo Chavez. It was a copy of the 1970 publication The Open Veins of Latin America, by Uruguayan writer Eduardo Galeano. Almost unknown in the English-speaking world, it is highly influential in the southern half of the Americas, and had the honour of being banned by many of the right-wing dictatorships of the 1970s and 1980s. Galeano himself was exiled by the Uruguayan junta, a particularly cruel regime. The book sets out to explain why Europe and North America had been (and to a large extent, still are), more economically developed and wealthy than South America.

If the Watergate investigation was characterised by the mantra ‘follow the money’, Galeano adopted the intriguing approach: ‘follow the resources’. Taking as his starting point the fact that the Latin American economies still depended largely upon export of minerals and agricultural produce, he tracked what happened to them. In chapters headed Sugar, Copper, Silver, and so on, he investigated who controlled them; who benefited from them; who lost out, in an epic tale stretching from the Colombus expedition to the Vietnam War. The most controversial aspect of his story is his claim that the Governments and multinational enterprises of Great Britain, in the 19th Century, and the USA, in the 20th, repeatedly interfered in the politics and wars of the region to ensure the continued supply of cheap raw materials for their industries, and to suppress economic development in the continent; quite coldly supporting dictatorships and genocide in order to ensure continued supplies. Written at the height of the Vietnam War, much of the polemic is devastating: ‘To kill Vietnamese children, you need bullets. To make bullets, you need steel’ is example of the rhetoric.

You can see why it appeals to the leftist Chavez. A careful reading of the book, however, reveals that Galeano does not prescribe state-owned socialism, and indeed the writer became a critic of the ‘burocratismo’ of Castro’s Cuba. He clearly supports a mixed economy, based on successful enterprises. He argued that the North had always been hypocritical; particularly on the matter of free trade. Fledgling enterprises often need the benefit of some protectionism, and the USA and Britain had selectively used it to protect their own industries. Only when industries are clearly the most modern and competitively priced do they benefit from open trade.

The US Civil War was, he argued, a triumph of a semi-protectionist North, dedicated to industrial development and growth of the internal economy, and abolition of slavery; versus the free-trade Confederate South, which at the time had an economy based on powerful land-owners and wealth derived almost entirely from agriculture. His lament is that South America was never able to complete its own internal ‘Reconstruction’ in the way that the young Republican Party achieved in mid-19th Century USA. In this economic analysis, there is an irony presumably lost on Chavez, that Open Veins is an eloquent, thoroughly researched testimony to the genius of an individual who was already Obama’s principal inspiration: Abraham Lincoln. The only real type of investment is that which is in human capital.

But where Chavez has got it wrong, with too much state intervention and not enough investment in people and business, has Lula got it right? The editorial in today’s La Nacion “Brazil grows, Argentina shrinks” is one obvious story. But maybe this is just part of a wider narrative. Given the chronic problems starting to engulf Europe and North America, maybe Brazil is the next economic power – and perhaps Chile, Paraguay and Argentina can reap some benefits, too. Having lived in those countries for a year nearly 20 years ago and got to know some of the most fantastic people in the world, I certainly hope so.

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