Saturday, 9 July 2011

What If Latin America Had Developed Politically And Economically Like The USA?

This question is often simplified to 'what if South America had developed like North America?' though that leads to inaccuracies as people seem to forget that Mexico is in North America and that there are states in Central America and the Caribbean region which are considered to be part of Latin America.  This is generally taken to encompass states which have a culture based on that of Spain or Portugal, though in cases like Bermuda, Jamaica, Belize and Guyana they stemmed from British culture; Haiti, Martinique and French Guiana from French culture and Suriname and parts of Guyana from Dutch culture.  For this posting, I have considered 'Latin' America to be all states in the Americas that lie South of the USA; including states like Puerto Rico and US Virgin Islands which are actually controlled by the USA.

I was drawn to this issue by two other commentators, G.H. Kanowitz's Worldohistory blog that covers a number of counter-factuals which I have featured many times before on this blog and similarly Niall Ferguson's 'Civilization: Is The West History?' television series shown this year.  Kanowitz asked the following questions:
  • What if the American political and economic experiment was copied in South America after many countries on that continent gained independence in the 19th Century?
  • Would South America be a centre of power today?
  • Would the U.S. role in Western Hemisphere politics have been diminished?
  • Would the South American countries eventually have united to form a Federation?
Ferguson similarly asked why could the states created by Simon Bolivar: Venezuela, Colombia, Ecuador and Peru and their neighbours, not have prospered both in terms of democracy and economically as the USA did in the 20th century?  There are geographic reasons.  Much of Latin America has hostile terrain with very high mountains, deserts and dense jungle and the diseases that go with the latter.  If you look at the USA regions such as the Everglades, the Rocky Mountain regions and the deserts of South-West USA (and Alaska only has as a result of oil) have never prospered.  However, the bulk of the USA sits across either fertile river valleys that are not too vast or prairie which can be turned to arable farming.  Even if South America had been a single state, the difficulty of running trains from the Atlantic coast, say of what is Brazil to the Pacific coast of Chile would have been immensely harder than cross-USA railways.  Even in Mexico the geography is tough to provide these multiple foci for industrial development.  Mexico might have been the Latin American state that could have prospered like the USA, but of course lost some of its wealthiest territories, Texas and California, to the USA. 

Part of the difficulty for Latin America was that the conquistadors too often encountered urban societies.  Their access to gold effectively made it too easy for the conquerors.  In the Americas North of Mexico, it was not possible for some noble or commander simply to roll up and make himself a millionaire through winning a couple of battles; prosperity really only came, especially up until the early 19th century in working hard in North America on agricultural produce.  Even the luxury item tobacco needed a great deal more work than looting a temple.  The fact that the Spanish colonies made a huge profit almost instantly rather than through long-term investment and work, distorted the establishment of these states.  If the urban civilisations of the Incas, Aztecs and Mayans were not there or had been in severe decline, then even accessing the gold would have been harder.  These states by centralising wealth made it too easy for the conquerors and so we see the development of effectively what is sometimes termed a 'gangster economy'.  This naturally favours force as the economic tool over business acumen and hard work.

Whilst Latin America does have resources such as gold, oil and many types of metals, as was found in Russia and China simply having these resouces was not much use by the time of 19th century industrialisation if you lacked the infrastructure and had to cross vast distances if you were to the raw materials to industry and to foreign markets.  Thus, even before we turn to look at the human factors that have made development along the lines of the USA challenging for Latin America, there are physical ones to consider.  Another aspect especially for smaller states of Latin America is that they have lacked the diversity of product that the USA was able to benefit from and in many ways even when not run by a metropolitan country have suffered a kind of colonial economy, heavily dependent often on single crops or minerals and often tied into supplying one market, notably the USA in exchange for finished goods.  Whilst the USA claims it has not been an imperial power, it has long been an informal imperial power.  As the British, French and Germans were to prove in the 19th informal imperialism was always far more profitable than formal imperialism, i.e. actually occupying and running a territory.  With the declaration of the Monroe Doctrine in 1823, the USA, having snatched independence 50 years ahead of its Latin American rivals, effectively made all states South of it into its imperial region.  The geographical challenges made Latin American states vulnerable to be being exploited in a imperialistic way.  Though the Americans were dominant, the British too were heavily involved in informal imperialism in the region, notably in Argentina and Chile.

Ferguson did concede that Brazil, the former Portuguese colony, has now become one of the leading economies of the world, part of the so-called BRIC bloc (of Brazil, Russia, India and China), former second world economies that are now so vital to the global economy and in many ways driving it.  However, certainly in the 19th and 20th centuries all of the states of the region I am considering have battled to maintain democracy and have often fallen to dictatorship, typically of the military, but in some cases such as Mexico and Cuba and now Venezuela, also left-wing regimes.  Part of the problem has been foreign intervention, notably by the USA which undermined left-learning democracies such as Chile in the 1970s and Nicaragua in the 1980s amongst others.  The USA has always been more concerned in creating regimes that permit a cheap and stable supply of the raw materials that it has needed like fruit from Guatemala, sugar from Cuba and copper and nitrates from Chile than with supporting democracy.

Ferguson always seeks simple answers, his 'killer apps' [applications] to explain why the West, notably the USA prospered.  He feels that property ownership linked to voting rights were the reason why the USA was able to develop economically in the 19th century.  The nature of land ownership in the USA which allowed people from ordinary or even poor backgrounds in Europe to become prosperous, and vitally, to become voters in the USA many decades before people of their level of income or social class had such rights in Europe. In contrast the Latin American pattern of property ownership, rather than comparative small farms covering a few hundred acres instead had vast estates like the haciendas of Spain or latifundia of Italy.  In an age when property ownership was related to having the vote, in the UK, USA and across other burgeoning democracies, this meant that for many Latin American states voting was detached from large parts of the population long into the 20th century.  In its place was the caudillo and patron-client systems which so stultify democracy and successful capitalism.  Of course, to some extent such systems exist in the USA.  You only hvae to look at the poverty of so many people in the country and the dominance of a few leading families in business and politics to see that US commentators whining that it is only Hispanic immigrants bringing this culture to the USA are deluded.  The USA has had a stronger civil society and especially post-1945 this gave the impression that it was really a land of opportunity.  Ordinary people could progress further through education, business or the military in a way their counterparts to the South could not have done in as many cases.  However, US society does tend to ignore how many people lacked opportunity and distinguish themselves rather too sharply from the much of the Americas.

Democracy is not alien to Latin America, but if you simply look at the history of the region in the second half of the 20th century you can see that as a political system it has always struggled in a way that it has not in the USA.  As Ferguson noted, it almost comes down to the political framework that was put in place at the founding of the states.  Whilst what became the USA had been colonies of European powers, many of the settlers rather than being royal officials and their entourages were people actually seeking to break from the European powers.  Even if the political break did not come until the late 18th century there was already and ideological and religious separation.  Many of the settlers were Nonconformist in religion whereas in Latin America they tended to come from Catholic countries and practice standard Catholicism when in the colonies.  In additon, whilst countries like Argentina have seen immigrants from Britain and Italy, never formal colonial controllers, the USA drew people from countries which were not powers at all, from Ireland under British control, from rural Sweden and from fragmented Germany and Italy, which even when united were not colonial powers in the Americas.  Consequently they were seeking a different system to the hierarchies in Europe and had no affinity to those of the states which ruled or had ruled the colonies they settled in.  For Latin America, too much of Spanish and Portuguese society of the 16th-18th centuries was trasplanted to the Americas; from the start people coming to North America aimed to precisely leave behind British or French society and its practices.

Ferguson is correct to see slave ownership and the enduring legacy of racial tension it left as an obstacle to the USA becoming a modern industrialised state.  He contrasts this experience with the greater racial mixing of South America.  Whilst this is true, it tends to ignore the fact that the Atlantic slave trade in the period 1519-1867 saw far more slaves go to Latin America than the USA. Of course, some of the Spanish colonies were established earlier and some parts of the Spanish empire now form parts of the USA, for example Florida began receiving African slaves in 1581.  Of the 10 million Africans shipped to the Americas, 38.5% went to what is now Brazil and 17.5% to Spanish territories, admittedly including California, Texas, Arizona, New Mexico and Florida, but predominantly to modern day Latin American states notably Cuba, Colombia, Costa Rica, Honduras and Guatemala.  The percentage of slaves going to British colonies outside North America, primarily Caribbean islands, was 18.4%; those to British-held North America 6.45%; those to French territories 13.6% and those to English-speaking American states, i.e. the USA after independence, 3.25%.  To some extent this was because the USA only came to slavery in an industrial way, more than two centuries after the Spanish colonies had been receiving slaves.  In addition, with slavery inherited, actual African slaves increasingly became a pool from which American-born slaves were descended, reducing the need quite quickly to import more slaves from Africa.

In neglecting to see the amount of slaves who went to places other than North America Ferguson actually missed an element which could have strengthened his argument.  Whilst initially slavery was permitted right across what was to become the USA, by the 19th century it had become regionally focused and in fact in the rural areas away from the North-East which even now remains a cornerstone region for US industry.  Slavery stultifies a capitalist economy.  In many ways as Karl Marx would have said, it is a feudal hangover which prevents effective capitalist development, which needs people to believe that through their own efforts whether simply labouring, but certainly through innovating and creating new business, that they will be rewarded financially, and typically, in terms of status too.  As Ferguson noted, in semi-democratic USA property brought men a say in the running of their area and their country.  This worked even more in the USA where the class structure had been disrupted, than it did in the UK which also saw its democracy grow on the basis of property equalling voting rights.  In a slave society as a slave you know that however hard you work, you will always be a slave and that even your children and grandchildren will be slaves.  There is no opportunity for you to advance the capitalist system.  Even for owners and free people in a slave society, as the Roman Empire ably proved, there is no incentive to innovate or find more efficient methodologies when the prime source of labour is cheaper than any waged labour might be.  Thus, what was vital for the USA was that its industrial regions moved away from slavery even before it had been abolished nationwide and that they were able to assert their authority over the slave owning parts of the country, thus freeing up not only former slaves but the innovation and entrepreneuralism of the former free people of the southern states.

Latin America, whilst, like the USA finally freeing itself from slavery then had an experience like Russia rather than the USA.  Whilst retaining a great deal of inequality, in the USA people could get on in small business and factory work generally not held back by a rigid social class structure.  In Latin America and Russia even moving into virgin regions the rigid class structure remained, so that once slavery/serfdom was removed, though it released a potential force of industrial workers and business people they found their opportunities choked off by the hierarchy still firmly in place; the same applies to China in many ways too.  These countries had none of the tradition of breaking away from former structures, instead they either retained the structures that had been in place within the country for centuries (in the case of Russia and China) or found that they had imported almost wholesale those structures from the metropolitan countries and Spain and Portugal themselves were going to suffer industrially as a result of this, in the 19th century and fall quickly from the prime positions they had held up to the 18th century. 

Possibly the most extreme case was the future King of Portugal, João VI, leaving his country in 1808 and settling in Brazil.  In 1815 Brazil became a part of the Portuguese Empire on the same level as Portugal itself and in 1820 it became an independent country, but rather than a republic, in 1822 it became an empire in its own right with the crown prince of Portugal, Pedro, becoming emperor.  The replication of European monarchical patterns or at least the hierarchies around a land-owning aristocracy, was a model across Latin America that in many ways held back these states from developing capitalism successfully the way the USA and in fact the UK too, was to do.

These problems were not even shaken off by Latin American states in the 20th century.  In the 1950s Venezuela experienced the regime of Jimenez and it is under only semi-democratic rule now; Colombia that of Pinilla; Argentina that of Peron; Brazil that of Vargas; Cuba had Batista and then a Communist state under Castro which still persists; Mexico had a revolution in the 1910s but then had a de facto one party state up until present day; Ecuador, Bolivia and Argentina experienced more than 25 coups or attempted coups each in the 1950s and 1960s; Peru is still suffering from civil war.  The involvement of the USA in Latin American states has helped fuel such conflict and give rise to regimes like that of General Pinochet in Chile after 1973 and General Noriega in Panama until the Americans themselves overthrew him. US involvement in Nicaragua, El Salvador and Honduras has simply helped prolong unrest and violence in these states. The rise of drug cartels in the 1980s added an extra element to the corruption and unrest especially in Colombia.  The development of these states with rich landowners concerned with their own wealth and influence at the heart of everything they do and political systems that are not strong enough to survive coups has meant that the region has been plagued by instability and loss of life even if it had had socio-economic structures in place which would have helped promote a non-corrupt successful approach to capitalism.  The truth of this is demonstrated by the very rapid economic rise of Brazil in the 21st century when it has begun to reduce some of these harmful aspects.

Turning away from what actually happened to the counter-factual, it is apparent that Kanowitz's first question really starts too late.  It seems for Latin American states to have gone down the path of the USA would have needed very different structures in place right from the start of colonisation.  Those who went to Latin America from Spain and Portugal rather than being aristocratic land-owning military leaders would needed to have been businessmen with a desire to establish societies that would allow other entrepreneurs to succeed.  As the model of Dutch colonisation of North America shows, entrepreneurs can be as exclusive and as controlling as a conquistador, so this additional element would also have been required.  It would have needed more of the settlers of these colonies to be people at odds with the monarchical systems in Europe, perhaps with a different religion, so in some ways you can even trace the nature of Latin America back to the lack of success of the Reformation on the Iberian peninsula in the 16th century; Spain even lacked its equivalent of Huguenots.  Perhaps a later removal of the last of the Moors and Jews from Spain would altered Spain's colonies as these would have been the type of people who would have developed the kind of robust, distinct colonial society that the USA benefited from.  The Thirteen Colonies did not really prosper because they were like Britain but because they were different from Britain.  However, offering resettlement to Jews and Moors in America would have been blasphemy to the Spanish monarchs as there was a common view that South America somehow had gateways to Heaven, perhaps even that the Orinoco River led into Eden.

What the Latin American states would have needed, as Ferguson identifies, is both a social structure and land ownership that allowed ordinary settlers to 'get on' and to have a voice in the running of their state.  Replicating Spain/Portugal of the 18th century in the Americas, meant that there was as little chance for progression as there was back in Europe, thus choking off all the individual acts of capitalism that were necessary to lead to a property-owning democracy.  Coupled with this, too much of the area of these states had a slave economy.  In addition to the tens of thousands of Africans shipped to Latin America, in these regions, especially in South America, indigenous peoples were effectively enslaved or at least indentured, again draining off people who had the potential to develop the state.  Thus, too quickly Latin America became a region in which vast areas of property were in the hands of very few people and even on the 'virgin' frontier because of the prevailing socio-economic and political structures entrenched, ordinary people were never going to be able to rise much higher than their level on arrival in the country, in contrast to many of their counterparts North of Mexico.

In my mind only an uprising across the Spanish and Portuguese colonies at the time of the American War of Independence or the French Revolution, would have given these states the chance of adopting a system that would have allowed them to prosper in the long run.  Even before this, the states would have had to have been established on the basis that a single man could not simply own half a valley or at least areas would have to have been set aside for small holdings to exist, as the USA was not lacking in large landowners, it was just there were areas where smaller properties were always being opened up.  If the independence, say in 1791 had also ended slavery (though remember neither the USA nor revolutionary France did that) then it would have moved Latin American states to adopt different ways of getting labour and so would have promoted the immigration necessary to provide these states with the urban and rural free workers and small property owners necessary for a prosperous capitalist society.  Without these, whether they came from Spain or other states like the Italian and German states, the Latin American states were going to be condemned to the economic and political stagnation that was to plague both Spain and Portugal through the 19th and 20th centuries (remember they only became lasting democracies in the mid-1970s).  The more rapid growth of industrial cities and agriculture to feed the population as much as supply exports, would have helped develop a robust capitalist economy.  It takes decades to construct a robust democracy as countries like Russia have found.  However, with an educated, prosperous middle class with an interest in advancing democracy rather than turning themselves into the latest generation of aristocrats, it would have advanced as it did in France, in some ways similar, a country short on industrial raw materials and with a former very hierarchical society.  The American or French models or even the British model of the 19th century in new Latin American states would not have stood much chance without a social structure which permitted it to thrive.

In many ways, particularly in the case of Brazil, Latin America is a power today.  However, if the states there could have avoided the vast social gaps and had far more robust democratic systems, then they would likely to have had this role much sooner.  There was an anticipation that at least Brazil if not Argentina and Venezuela too would have reached this global standing back in the 1970s.  Then it was abortive, with the growth sapped by political unrest and corruption.  As with China, it is not really surprising that these states are becoming economically powerful now, rather why it took them so long to do so.  Of course, with a different political and economic path going back to the late 18th century, then it seems feasible that these states may have been spared the instability that weakened their status in the world.  Just as China was a genuine superpower in the 1950s and 1960s but this was not apparent because its people were being starved and fighting among themselves, so the real strength of many Latin American states has long been curtailed by conflict.  In addition, their economic strength has been overshadowed by the neo-imperial relationship with US companies.  The USA's difficulties with the Chavez government of Venezuela stem as much for his sale of oil to countries other than the USA as it does from his left-wing, increasingly less democratic, political stance.  The informal imperial relationship between the USA and Latin America has only ebbed to some extent and China is replacing the USA as a type of imperial exploiter of Latin American resources, notably in Brazil, however much China continues to protest (as the USA has too) that it is no colonial power.   A number of Latin American states can become powers with Brazil in the lead and probably Venezuela and Argentina in the next league down, but still as important as members of the G8 are today in terms of global politics.

Historically, I think if one of the larger states such as Brazil, Argentina, Venezuela or even Chile had managed to adopt a system closer to the USA that it would have faced more of a challenge, particularly if it had been a state with an Atlantic or Caribbean coast.  It seems feasible that this strong Latin American state would have contested US dominance in the Caribbean, with, for example Cuba and Panama coming under their control, the latter might have remained in Colombia, for example.  There seems a chance too that the USA would have had a rival for other former Spanish territories, notably the Philippines.  Given the weakness of Latin American states the USA was spared much rivalry in the Caribbean and Pacific.  The only country which came close was Mexico which the USA warred with and by the 1840s it had been decided in the USA's favour.  If Mexico had been able to retain the lands it was to lose to the USA then it would not have been as strong because of its weaker industrial base, but it would have been a regional power that the USA would not have been able to ignore.  If the USA had been unable to cow Mexico before the American Civil War or if the French and then Emperor Maximillian's intervention in the state had succeeded then the USA's almost absolute power in its own hemisphere would have been challenged at least to a degree.  Having to tussle more with a Latin American even second strength Power, may have distracted the USA from intervention elsewhere, notably the Pacific region.  It may have, conversely, brough earlier US intervention in Central America and the Caribbean to counter-balance the Latin American power.  This kind of scenario is envisaged to some extent in 'C.S.A.: The Confederate States of America' (2004) which envisaged the CSA in colonial wars in South America in the early 20th century. 

Globally, a stronger Latin American state would have meant that Hispanic culture would have been viewed differently.  Too easily, people make the assumption that it is all about poverty next to immense wealth and political unrest leading to dictatorship.  A Brazil or Argentina which had propsered with a democracy right through the 20th century would have shifted that view and made Latin American culture more influential than it has even become today.  In addition, it may have impacted on Spain and/or Portugal themselves, perhaps encouraging an earlier overthrow of their dictators, perhaps greater industrialisation.  Argentinian republican troops being shipped to help defend the legitimate Spanish Republic in 1936 would be one of the eye-catching outcomes of this scenario.

I do not think that the Latin American states would have become a federation, perhaps unless they had been formally colonised by the USA, especially in Central America.  Even then, if you look at what happened to French Indochina fragmenting into four states after the end of formal colonialism, even a US Central American colony may have broken up.  As for the Caribbean there is too much diversity in language and culture between islands and too many links to former colonies or in the past to one of the superpowers, for them to come together.  If you look at the conflicts just in South America over borders: such as the Buenos Aires region of Argentina becoming an independent state 1852-9; the Paraguyan War 1865-70 which saw Paraguay lose 70% of its population as territory was taken by Bolivia, Argentina and Brazil; Bolivia losing the nitrate rich Atcama province and its only outlet to the sea to Chile in 1879-83; the Acre free state formed on the border of Brazil, Peru and Bolivia 1899-1903; the dispute over the Oriente territory which now makes up the eastern half of Ecuador and Colombia losing Panama when it became an independent state under US influence in 1903 suggest that the region was doomed to experience fragmentation.  In part this comes back to the hierarchical societies of these countries in that to progress many of the elite saw success through promoting local interests which fragmented even the states we know.  With different twists in history, Bolivia, Colombia and Paraguay might be far larger than in our world; Argentina, Chile and especially Ecuador, much smaller and there could be other states easily the size of modern day Uruguay, that do not exist in our world.  Many of the states, like Brazil and Colombia were entitled 'United States of' anyway.  This reflects the geographical areas they cover and the diversity of territories which fall within their borders each with local interests. 

Of course, many Latin American states may have hoped to become like the USA.  However, we need to look at how the USA came together.  In effect it was a New England hegemony over other regions enabled by the industry that developed in this region and its hinterland, expanding along the southern side of the Great Lakes.  The main challenges to this hegemony were territories like Deseret and the CSA based on a different perspective to the liberal, bourgeoise North-East and these were only defeated by military action.  However, the toleration of a degree of federalism and distinctiveness in individual states took the sting out of opposition to the over-arching state, though even today a lot of tension against 'big government' comes from the same kind of irritation with this North-Eastern hegemony.  For a federation to have worked across South America would have needed a grouping which could address itself to all social classes and, as we have seen, that was lacking in any of the states anyway.  Secondly, it would have needed military success exceeding that of Simon Bolivar not only to unite the states but to keep them from fragmenting especially with the drive for particularism in the 19th century.  A key rift would naturally be around the Spanish/Portguese divide of Brazil and the other states.  However, given that many of the states called themselves 'united states' or 'empire' suggests that with communications of the 19th century the states of South America were deemed large enough and an even larger state, even if confederal, would have been too large, especially given the physical geography, to have seemed feasible.

It seems bleak to say that Latin America was condemned to the kind of development it has experienced from the moment the first conqusitador stepped ashore or even that it went back to the expulsion of the Moors and Jews from the Iberian Peninsula.  However, it does seem that pretty quickly, as Niall Ferguson has suggested, the basic structures of the economics of these societies and the political links to them did mean that it would be difficult for a different type of country to have developed in Latin America.  Whilst the USA tends to think it has followed a path of manifest destiny, in fact, only a few different steps would have seen the Thirteen Colonies and Louisiana ruled over by barons and marquesses (as John Locke wrote into his constitution for Carolina which also enshrined popular property ownership), commanding vast estates based on slave labour, with anyone between landowner and slave having no hope of ever owning land or having a political voice.  To some extent, though, North America like South reflected the different approaches of the metropolitan countries and even France before the revolution and Britain with enclosure tended to lack the haciendas of Spain and had tenancy rather than share-cropping.  The basis on which colonies were established coupled with the nature of the settlers drawn to them, often in what became the USA, deliberately turning their back on the European culture they were leaving, was the basis on which the successor states to the colonies functioned and consequently were able/unable to claim the wealth and power that their size and resources otherwise permitted.

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