Why are you here

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Why are you here?

• Please answer the following questions
• Name/place of birth
• Major
• Countries of expertise/interest
• Languages you master/study
• Products/areas of expertise/interest
• Past studies/work experience
• Why are you here?

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A Brief History of Latin America
IB 372 September, 1999 Jorge Villegas
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Pre-conquest times

• - 1492

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Spain before 1492

• Invasion of the moors was over
• Getting ready to begin a new golden epoch.
• Why get in small, smelly boats in dangerous
  missions?
• To serve God and the Catholic King.
• And of course to get rich.
• The opportunities in the Old World were few and
  restricted by societys hierarchies.

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LA before 1492

• Many different civilizations
• Northern Mexico, Southen Central America, Brazil
  and Argentina were populated by small indigenous
  cultures
• However the largest civilizations were
• Aztecs Mid-Mexico
• Mayas Yucatan and Guatemala
• Incas Ecuador, Peru and Chile

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Aztecs

• A rigid hierarchical society known better as
  warriors than wise men. But good with words.
• Finding a place within the boundaries of the
  social group is harmonious and good for society.
• Even in the afterlife there were social
  differences

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Social Pyramid
Ruler (Tlatoani) Nobles Warriors (Pipiltin and
Macehualtin) Merchants (Pochtecas) Commoners Slave
s
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Pochtecas

• Merchants who traveled to trade, spy, make war,
  and bring goods home
• Dangerous lifestyle
• Three major moments in their life
• Leaving home
• Returning home
• Paying the debt

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Incas

• The ruler was a representative of the sun.
• There were two levels of nobles Inca nobles and
  leaders of vanquished civilizations (Curacas).
• A very different way to deal with enemies than
  the Aztecs.
• The nobles were the guardians of the established
  order

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The Conquest

• 1519 - 1533

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The End of Pre-Columbian Times

• 1519, Hernan Cortes begins the conquest of the
  Aztec empire.
• 1521, the end of the Aztecs. But why?
• Better weapons and tactics.
• Mythical status for the Spanish conquistadors
• Aztecs were not very kind to their enemies. So,
  payback time. (Malinche, Tlaxcaltecas)

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The end of the Incas Empire

• 1525, a bloody internal war destabilizes the Inca
  Empire.
• Atahuallpa was a good strategist but a ruthless
  leader.
• 1532, Francisco Pizarros fray tries to convert
  Atahuallpa to the Catholic religion
• 1533, The son of the sun is executed in a bonfire
  and the end of his Empire is very near.

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Colonial Times

• 1600-1800

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Colonial Times

• Spaniards changed completely the civilizations
  that they found.
• Conquistadors vanquished the Indigenous culture
  but they were vanquished by bureaucrats sent by
  Spain.
• Complete control over trade.
• The indigenous populations all over America
  dropped tremendously.
• Spaniards were allergic to hard physical work
  so they imported black slaves.

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The societal structure of the New World
Vice Kings Auditors (Corregidores,
Intendentes) Higher levels of bureaucracy Commer
ce Lower levels of bureaucracy Workers
Peninsular Born in Spain Criollo Born in
America Mestizos Spanish Indian Mulatos
Spanish Black Slaves Black Indians Indig.
ethnic groups
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Two Economic Models

• Mining (Mexico-gtSilver, Peru-gtGold)
• Tight controls
• Regions highly regarded by the crown
• No attention to other activities
• Agriculture (Brazil-gtSugar, Honduras-gtBananas)
• Less control
• Control through taxation

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International Trade

• Strict control of every economic aspect
• State monopoly No trade with France or England
• Protectionism
• Regulated ports
• Contraband
• The control was relaxed in 1778 and 1808 with
  some decrees of free trade.

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A Recipe for Social Unrest

• Dependence of just one product from each region.
• Latifundios Landowners aristocracy.
• No upward social mobility
• Peninsulares monopolized. government positions.
• No industries nor development of internal
  markets.

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Independence

• 1800-1830

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Independence Day in Spanish-Speaking America

• Spains had its share of troubles with Napoleon.
• The elites raised in arms to obtain political
  power but they were also interested in keeping
  the status quo that protected their interests.
• Two stages of independence
• Defense of Ferdinand VII reign.
• Emancipation from Spains rule.

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Brazil is a Different Story

• In 1807, Brazil acquired a monarchy.
• The Portuguese escaped from Napoleon by fleeing
  to Brazil.
• British influence was pervasive.
• In 1808, the monarchy returned to Portugal
• The prince regent of Brazil, Dom Pedro cried I
  shall remain! in 1822.

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Aftermath of Independence

• 1830-1850

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A New Recipe for Future Failure

• The new republics had to deal with
• Economic disaster and destruction
• External debts
• Low tax collection
• Lack of capital
• No domestic market
• No experience in politics and democracy

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Efforts to Join the International Economy

• No local industries
• Imports
• Money
• Exports
• Infrastructure
• Investments

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Transformations

• 1880-1990

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A Model of Change
Europe
Economic Change
Social Change
Political Change
Latin America
Economic Change
Social Change
Political Change
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Phases of the Transformation

• Initiation of Export-Import Growth, 1880-1900
• Expansion of Export-Import Growth, 1900-1930
• Import-Substituting Industrialization, 1930-1960
• Stagnation in Import-Substituting Growth,
  1960-1980
• Crisis, debt and democracy, 1980-1990

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I. Initiation of Export-Import Growth1880-1900

• The industrial revolution was the miracle that
  Latin America needed
• From the fields to the factory in Europe meant
  need for food and raw materials.
• Main products from Latin America
• - Argentina Beef - Chile Copper
• Brazil Coffee - Cuba Sugar
• Mexico Henequen -CA Coffe
• Peru Sugar

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I. Initiation of Export-Import Growth(cont.)

• The beginning of an unequal relationship
• Bananas and coffee for machinery, textiles,
  luxury items
• British invested heavily in LAs railroads,
  mining, and other activities fell in hands of
  foreign hands
• However, at home things were not perfect
• Racism/Inferiority
• Malinchismo
• Elites were aggressive entrepreneurs and
  politicians
• Military had some control of the political
  processes

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II. Expansion of Export-Import Growth1900 - 1930

• The light side of the EI model
• Exports grew fast
• Middle social class expanded
• Immigration of Europeans to South America
• Raise of the unions
• Rural ?Urban
• Middle class began to participate in the
  political process

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II. Expansion of Export-Import Growth(cont)

• The dark side
• Economic prosperity, but just for a few.
• No internal markets
• Total dependency on imports and foreign markets
• No protection for manufacturing

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III. Import-Substituting Industrialization
1930-1960

• The world collapses around our ears REM.
• The great depression made apparent the drastic
  flaws of the EI model.
• The economic decline led to unemployment and the
  hunt for escape goats.
• The favorite escape goat? Democracy of course
• Military coups in countries like Argentina, and
  Brazil

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III. Import-Substituting Industrialization
(cont)

• There were two alternatives to avoid the economic
  collapse
• Improve the selling efforts
• Argentina
• Industrialization
• Substitute imports to depend less in foreign
  countries and create jobs

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III. Import-Substituting Industrialization
(cont)

• A new and powerful group, industrialists
• States hands were important manipulators of the
  economy
• Tariff barriers and increments of imported
  products
• Creating demand
• Investing directly in industrial firms.

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IV. Stagnation in Import-Substituting
Growth1960-1980

• Stagnation is a fancy word for crisis or
  standstill.
• The problems of the ISI model
• Dependence on imported good capitals that were
  getting more expensive while the local products
  were getting cheaper.
• Domestic demand was limited.
• Investment in machines not in human development.

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IV. Stagnation in Import-Substituting
Growth(cont)

• Oppressive regimes raise their ugly heads
• Brazil, Argentina, and Chile controlled by the
  military
• The only solution to the economic problems?
  Stabilization by force and blood of course
• Antilabor policies
• Reduction of political activity
• Alliances with international economic forces

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IV. Stagnation in Import-Substituting
Growth(cont)

• Mexico was in a different situation but the
  answer to the problems was very similar.
• The PRI (Partido Revolucionario Institucional)
  controlled the country through a complex web of
  clientelistic relationships with unions, and
  other social groups.

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V. Crisis, debt and democracy1980-

• One of the main drivers of growth was borrowing
  money
• Problems began when interest rates climbed and
  international prices of commodities went down.
• A sense of déjà vu. LAs future was determined in
  part by foreign organizations
• International Monetary Fund

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V. Crisis, debt and democracy(Cont)

• The IMF measures were a sour medicine but worked
  after all
• Some countries took longer than other to accept
  IMFs requirements.

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V. Crisis, debt and democracy(cont)

• Positive outcomes of the crisis
• Bureaucratic-authoritarian governments were
  fragile institutions after all
• Civic participation is key
• Some of the leaders of the LA countries are
  middle-class, well-educated politicians, or
  economists
• Stability thanks to a disciplined investment and
  expenditure of national resources

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Have we learned the lesson?

• Check the Snapshot of LA in the Web site.
• If your SSN ends in
• 0, 3, 6 or 9 look for information on Venezuela
• 1,4, or 7 look for information on Ecuador
• 2, 5 or 8 look for information on Colombia
• What are the major problems of these countries?
• How can the present problems be related to the
  past?