Socio-economic inequality existed in Latin America duringcolonialism and continued to haunt them after their independence from Spain andPortugal. Current increases in socio-economic inequality in Latin America canbe argued is due to the unavoidable consequence of not correcting past errors,allowing history to repeat itself in different manifestations. Socio-economicinequality stems from the exclusion of groups from political participation, noland redistribution for agrarian reform, and lack of access to education, whichhas led into today’s inequality that is surrounded with corruption, lack ofinvestment into creating a bond between the government and businesses, churchesand other organizations, and a kind of political weakness and even isolation ofthe poor especially during economic crises. Generally, from the very beginning ofthe liberation of Latin America from Spain and Portugal rule, the rich elitesbenefitted from inequality in Latin America. After the independence from Spain andPortugal, the white creole elites no longer had to pay taxes to Spain orPortugal and now they can finally directly trade and profit from their trade.
LatinAmerican societies did not change very much after their independence. The elitesacted similarly to how the Spanish and Portuguese had done previously. Politicswere based on patronage and informal bargaining between the people of power andtheir clients. The prime source of status continued to be labor forces andlandholdings. So, the society continued to be extremely patriarchal and dividedbetween race and between economies.
The economic behavior of elites wasresembled by their want to make a profit by selling to a market, privilege, andpower to monopolize markets through political deals. The wealth made was usedto consume luxuries and increase social prestige. The wealth was concentratedon the top of the social/economic pyramid.
Therefore, not much of the money wasput into innovations. Foreigners usually came in and invested in the publicworks, technical and industrial businesses. The export economy did not changethe social relations. Yet, some changes occurred starting from 1870, citiesexpanded, roads and railways were built.
Modernity was seen in the economy withthe emergence of urban populations, middle class professionals, and white-collaremployees. After 1918, world markets were readjusted which hurt Latin Americantrade. This led to social forces tried to replace oligarchic liberalism and ledto state-led industrial development. Therepublics such as Argentina, Brazil, and Mexico had the most open and dynamiceconomies and very Europeanized liberal elites. By the early 1940s, themanufacturing industry was subsidized by an authoritarian state in Brazil,Argentina, and Mexico. Through export trade, creole elites setchanges that actually step by step started to undermine the traditionalpatriarchal authority over other social classes. Export trade led to thedevelopment of the growth of towns and cities.
The working class had no say innational politics even in countries such as Brazil, Mexico, and Argentina.Strikes began due to labor conflicts and was seen as disruptive to the socialorder. Mexicans were the first to make changes by giving workers rights. Therich elites had a hard time overlooking the arguments brought up by the middleclass radicals as they fought for democratic principles that were the basis ofrepublic constitutions. The rich elites still decided rig elections in order toexclude the middle class radicals, which ultimately led to violence andagitation. Creole elites only joined in alliances with the middle class inorder to enter politics as Francisco Madero did in Mexico in 1910 againstPorfirio Diaz as he wanted a limited democratic reform and wanted to mobilizemiddle class and some working class.
This occurrence was similar to Argentinawhen export growth led creole elites to help the middle class by liberalizingthe electoral law in 1912. Ultimately, this led to the Radical party winningthe election in 1916. In Mexico, thisled to the Mexican revolution due to the infusion of foreign power and internalstruggle of power as many of the poor on agrarian lands were left with novoice, struggling to make a living.
During this time period, the economy wasbooming due to the position of free trade without changes from traditionaltimes, as creole elites were still in control and in a monopoly position. Latin America lost its economical advantagedue to declining demand of their traditional products, as more competitors werepresent creating oversupply. After World War I, USA displaced Britain and LatinAmerican countries became dependent on industrial imports from the USA whileselling low-value exports to low in demand markets in Britain and the rest ofEurope. The USA began heavily investing in Latin American countries and greatlygetting involved with the politics of Latin America in order to ensure theirbusiness profits. Luckily, by the Second World War, the industrial basesdeveloped in Argentina and Brazil sold raw materials and foodstuffs during thewar. This generally led to most of their debts to be paid off and enough moneywas made in order to invest in further industrialization, which was needed tocatch up with the rest of the modern world. This was a time when thenationalist standpoint was developed in relation to the rest of the world. Thisview led Brazil, Mexico, Argentina and then later the rest of Latin America toindustrialize the economies through the substitution of imports.
Through theutilization of import substitution, the state would have to intervene in theeconomy by creating heavy taxes on foreign manufactured goods and have themreplaced by local goods. The goal was to succeed in creating a self-sufficienteconomy. Overall, this created a circle between the state, foreign capital, theelites involved in exports, and the different industries involved. Thus, theeconomy became dependent on politics.
Another overlooked crisis embedded in socio-economicinequality in Latin American societies became agriculture including the Indianpopulation. People were so involved in improving urban life and importation/exportationthat they forgot about the ongoing crisis in the rural areas. It was necessaryto redistribute the land for efficiency in the agrarian reform and socialjustice for the poor people living in the rural areas and working in the farmsas a cheap labor force, as agriculture was extremely important for foreignexchange. By the 1960s, countries like Mexico reached a point at which theycould no longer produce enough food to supply for their own populations andbecame importers, losing money earned from exports. By 1980s, Latin Americancountries were still not fully industrialized due to internal war and militarydespotism, which hurt their economy and led them to debt. The debt crisis wasonly resolved in an international context.
Latin America couldn’t export itsway out of debt. However, with the emergence of new leaders and commitment of democracyand reform the 90s led to an increase in economical growth that wasn’tsustainable, leading to today’s ongoing issue of socio-economic inequalitywithin Latin America. In specifics, Mexico after their independence comes to beruled under Porfirio Diaz who was considered brutal and ruled as a dictator.
Diazbelieved in neo-liberal ideals. He encouraged investment from foreign powers.He suppressed the voices of anybody who disagreed with him and took control ofthe peasant collective farming.
The economy of Mexico showed growth although,the people were suffering from the lack of democracy and lack of equalityeconomically especially during this economic growth. Due to this inequality,people including Francisco Madero, Pancho Villa, and Emiliano Zapatarepresented the middle and lower classes views against Porfirio Diaz in manyrevolts. Many of the issues came up due to the need of land reform and changein policy of foreign ownership of resources. Presidents later on such asObregon cultivated close ties with the United States as they sold petroleum tothe U.
S. market. More changes came to Mexico, with Cardenas in power as hecreated a political system that lasted till the end of 1980s was focused onorganization of corporatist structures for trade unions, peasant organizations,and middle class professionals and office workers were in the ruling party. Duringhis presidency, the government redistributed millions of acres of hacienda landto peasants, and urban and industrial workers gained unionization rights andwage increases. He also created nationalistic economic policies involving oilproduction, which soared especially during a time of need during World War II.Cardenas Company, Pemex, later became a model for other nations in LatinAmerica who aspired to take control over their own oil and natural sources, asthe company still remains an important source of income for the country. As awhole, the constant struggle between the poor and the rich as well as itsleaders, is shown through in their economy as the past continues to prevailbecause of class struggles, racism, and constant competing quest of powerbetween elite groups.
While, Brazil back in their colonialdays was a monarchy until they became a republic in 1889. Liberalism was a fairytale and an ideology that wasn’t used in reality. Universal rights becameprivileges of a minority that has power and property.
Economic and socialstructures were created to set limits for liberalism. People in charge werestill interested in having a monarchy rather than the system they admired ofthe United States of America. The main supporters of liberalism in Brazil wereinterested in leaving the old way of production through slavery while removingthe “grip” of the mother country (free trade and no taxes).
Brazil’sliberalism became one big, contradiction as they kept the practice of thesystem of patronage and clientele, had a peripheral position in theinternational market, still wanted to use slave labor, and had a delayedIndustrial Revolution. In the republic, the voting population was small as youhad to be literate in order to vote and not many people were literate in Brazilat the time due to a lack of access to education. The elites had the property,power, and education to have a say and contribute to their government in orderto monopolize markets. Economic development only took place in three states.Coffee was a major export in Brazil making the rich richer. Brazil in 1945became a democratic nation till 1964, when it became a dictatorship.
Only by1979, Brazil returned to a democratic set up. Lula da Silva came into power by2002 and started to represent a new type of social democracy. In comparison, Argentina like other Latin American countriesdivided themselves from the Indian population and tried not to recognize them, whichled to their “Conquest of the Desert” as they killed a large sum of the Indianpopulation. After Argentina’s independence from Spain, there came a new periodof time in which foreign powers started to invest in Latin America leading toprosperity in Argentina.
During time period, Argentina believed in liberalism,more specifically neo-liberalism. After 1870, the flood of immigration fromEuropean countries led to the development of modern agriculture and recreatedthe Argentine society and economy. This in turn strengthened their state. Argentina’sincreased prosperity was due to their agriculture export-led economy. Yet,Argentina continues to suffer inequality as they continued to rely on theirexport economy and foreign investment. Leaders such as Peron believed in socialjustice and economic independence. He asked his economic advisors to create a5-year plan in order to increase workers’ pay, achieve full employment, andstimulate and diversify industrial growth.
He believed in economic nationalismin which, industries were nationalized and foreign ownership was limited aswell as utilizing import substitution and safety nets. When Menem came in, hebroke the protectionist barriers, business regulations, and privatizationscreated. This later on led to Argentina’s bankruptcy. This is seen in thedocumentary, The Take, as we see the after effects of Menem’s work. He sold offany public asset he could, making Argentina the most privatized country. Themultinational banks took $40 billion from the country as the government frozeall bank accounts.
As usual, the rich got away safely as they had their moneystored in foreign banks while the rest of the citizens were left with theconsequences. Factories started to get abandoned by their bosses and workerswere left out of work. More than half of the country fell below the povertyline. Finally, through direct democracy, the workers took control of thefactories fighting through court after court in order to create a democraticworkplace without hierarchy, to work, make a salary that allows their familiesto survive, strengthen the economy, and give back to their own communities. Thisspecific example sheds light on how specific social groups such as the poor arestuck with no choice or opportunity to survive even from their own governmentduring economic downfalls, while the elites are supported by the politicalleaders because of corruption, leading to this dualistic view on the inequalityof the citizens in Argentina as well as the rest of Latin America. Currently, all three of these Latin American countries aresaid to follow democratic policies and ideals. Yet, it seems that the trueproblem has to do with the quality of democracy that exists in these countries.The citizens are supposed to be protected and given power to be used due to theexistence of the constitution.
Through citizenship, all the citizens should beequal and autonomic. Without this base, democracy of these countries has littleto no meaning as each citizen’s vote for candidates should be equally counted,regardless of the social status of the voter. But, this is only one way thateffective citizenship can be shown. With corruption and violence in thestreets, the unpredictability of the lives of the people leads to the sufferingof the economy. Through the ups and downs of LatinAmerican history, it is evident that changes must be made in order to betterthe lives of the Latin American people. The state government institutionsshould be improved in order to create sustainable socio-economic policies thatcan finally stabilize the economic state of the Latin American countries. It isseen that many of the Latin American countries especially Mexico, Brazil, andArgentina suffer from a dualistic view of their people and countries overall asone side shows the rich and some middle class who can actually make money, havean education, and can buy themselves houses, goods, and a sense of securitywhile, the other side is poor as well as the ones who have no security fortheir future especially in terms of finances, leaving them feeling isolatedfrom the others especially their own government. There is definitely a linkbetween these two sides of the Latin American countries.
However, it seems thatjust like they received their independence in solidarity, they should try tostand together to overall remove some social distance in order to effectivelylead their countries to stable economic states.