Report From Iquitos

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I am writing from Iquitos, a town in Peru, encircled by the jungle of the Amazon. The only connection to the external world is by air. Boats — loaded with cattle, exotic animals, human beings, and forest-produce that in the US would put you in prison for several lives — go downstream and upstream, providing access to smaller villages and tribes, but not to anything beyond. Iquitos is very spacious and well-planned. The mighty Amazon and its tributaries surround the town, and most people have come here from its tribal areas.

For less than $40 a day, I can have a very good style of life. It costs me $22 for a good, clean, air-conditioned hotel, with full breakfast included. A tip of 30 cents a day gets me all the attention I want. A very good meal at an “expensive” restaurant costs me $8. The cost is much less — about $3 — if I go to a good, busy place for locals. Most taxi rides cost 60 cents. Yet because most things are flown in, Iquitos tends to be about 25% more “expensive,” in my estimation, than similar places I have visited in Peru.

During 30 minutes of my sitting in a boat one evening, several fish jumped in, without a need for bait.

I tend to eat at local places. I buy fruit from roadside vendors; a handful costs me 30 cents. This helps the local economy the most, for the money that I spend in touristic areas mostly accrues to the well-connected, entrenched interests. Moreover, spending money directly with locals ensures that their emotions get aligned with my interests and safety — eventually they will go out of their way to win my favors. People are very friendly.

The Amazon offers cheap and good food. During 30 minutes of my sitting in a boat one evening, several fish jumped in, without a need for bait. Fruit trees are easy to find. It is hard to go hungry.

Not too far away is dense jungle and animals of all sorts, all of which are hunted down, irrespective of the diktats of the federal government, the World Wildlife Fund, and so forth. If something “protected” is not killed, it is because its meat is not tasty. In the local market every endangered or protected species can be bought. Locals might show revulsion if you asked them directly whether they hunt monkeys and dolphins. But ask them subtly — without evoking any implanted defences — what dolphin and monkey meat tastes like, and they will describe it.

I feel very free in Iquitos. But for locals it is not a libertarian paradise, not even close. Outside the core, touristic area, Iquitos is very dirty, because people utterly lack the concept of hygiene.

The receptionist at my hotel works every single day, from 3 PM to 11 PM. She works 365 days a year, with no vacation or weekends. This is how they all exist. In the morning she looks after her younger siblings while her own parents go to work. She has nine siblings, all younger, six of them are girls. When asked, she had to count to remind herself how many there are. All of them share a couple of small, dark rooms. Every woman is loaded with children, mostly girls.

The rule is babies first, with whomever, with no thought whatsoever about the future.

There is something about this area that results in a high female-to-male ratio. Some say there might be twice as many — or more — female births than male births in this area; anecdotal evidence shows this. One possible reason is a local fruit called aguaje, which apparently encourages certain hormones in women, although I failed to find a properly researched document to support this.

Girls here want to get pregnant quickly, partly because they have very strong maternal instincts, and being a single mother is perfectly acceptable socially — in fact this is the only way. The rule is babies first, with whomever, with no thought whatsoever about the future. My travel guide, who speaks fluent English, sees absolutely no reason why he should have any discussion with his daughters about the risks of unplanned, early, single motherhood. At the age of 23, he has three daughters, from three different women. Mostly he does not care what the woman he has a relationship with does when he is not with her. Incest is not uncommon.

People have enough to eat, so major crimes do not happen. But when crime must be controlled, it is through fear of punishment and much more importantly through real-time policing; those who cannot think much into a future don’t worry about punishment tomorrow. This reminds me that in many parts of Africa there is no word for “tomorrow” or “future.”

As I have seen elsewhere among people lacking reflective, critical reason — which is the situation in most of the non-Western world — petty crime, such as seizure of cellphones, is not considered immoral and hence is very common. The police and military must stand on every corner.

The area around Iquitos could be better than Switzerland. It isn’t. But you cannot blame lack of resources, lack of space, or even lack of educational possibilities. People here have a very high time-preference. A remote village of 500 people that I went to, about two hours away by boat from Iquitos, started getting surplus money through its interactions with jungle-related tourism, so it set up a night club and two bars. Not a piece of machinery was bought.

Contrary to what a rational person might have expected, Iquitos isn’t a peaceful paradise — the situation got worse with the influx of money.

Any excess money over basic needs gets spent on pleasure, right away. Iquitos is very noisy, because people like loud music and other loud sounds. Girls in very short skirts stand outside shops to attract people to buy motorbikes, TVs, and big, high-capacity sound systems, all playing at full blast. Casinos (and I am told brothels, in this rather promiscuous society) are everywhere, showing how bored people are. They are addicted to constant distractions.

Any rational person would have expected the surplus to go into investments in capital. But of course, the World Bank with its Ivy League educated “economists” must be happy, for they want consumption to go up. Contrary to what a rational person might have expected, Iquitos isn’t a peaceful paradise — the situation got worse with the influx of money.

Outside the supermarket here, there are several women sitting with scales, to let people weigh themselves for a few cents. None has business. There are shops after shops after shops, all well stocked, selling exactly the same wares, with none too busy. Hundreds of women sit next to one another selling exactly the same vegetables and fruit, all staring in oblivion, from early morning to late in the evening. Everywhere people, including the receptionist at my hotel, sit glued to the soap operas on their TVs. Soap operas are packed with fighting and exaggerated emotional dramas.

Anyone who tried to understand the situation might come, quite contrary to what the mainstream developmental economists would suggest, to the conclusion that in the final analysis the problem here — as elsewhere in the developing world — is not lack of capital, space, resources, safety, or property rights; nor is it overpopulation. The World Bank, the IMF and most economists are looking in the wrong direction.

The problem of poor societies is their lack of imagination, creativity, and reason, which is the dominant characteristic of the non-Western world. Modern education has completely failed to inculcate these human qualities. Perhaps it has made the situation worse, for education has been marketed to people in the non-Western world as something that offers a better material future, not a bigger vision of life. This has encouraged rote learning, not a passion for understanding the universe. In the end the education instilled in such students becomes just another baggage of beliefs, burdening them and distancing them from imagination, creativity, and reason.

Material prosperity without intellectual and spiritual growth does not add up and is not sustainable.

In most parts of the poor world (Africa, India, Peru, Central America, the Middle East, etc.) economic growth — the kind encouraged by international institutions — has had many bad consequences. These regions did not develop the concept of reasoning, planning, and strategic thinking. In the absence of these things, removing people from their tribal lives leads to emptiness and confusion. Any money they get goes into showing off and into too much drinking and partying. Noise, smell, chaos seem to develop quickly wherever surplus money comes to exist. Obesity and other lifestyle diseases are growing rapidly in all of these poor countries. And most rational people in the West fail to understand the situation: rational people’s rationality preempts them from understanding how irrational the developing world really is.

In such places wealth does not lead to peace, hygiene, improved health, and enlightened living. Even what could be an oasis becomes noisy, dirty, and diseased. The developing world has been the economic beneficiary of easy imports of technology, almost all of it attributable to the internet and telephony — both of which, during the past two decades, opened the floodgates of quick economic growth. Contrary to the claims of international institutions, growth in most of the developing world cannot be shown to be a product of liberalization, the spread of democracy, or public education.

For now, the World Bank and the IMF can justify their existence, but correlation is not causation. Liberalization didn’t really happen, although democracy is rearing its ugly head everywhere in the developing world. It has involved masses of people in public policy, masses who cannot think and reason, and are mostly driven by the desire for bread and circuses. Public education hasn’t delivered.

At the core, material prosperity without intellectual and spiritual growth does not add up and is not sustainable. Now the low-hanging fruit has been plucked, and growth rate in the developing world is falling rapidly. The consequences of overconsumption and lack of capital investment are becoming visible.

A true developmental economist should look at the reality beyond the superficial economic numbers. I am extremely happy and free in Iquitos, but what a tourist and an outsider with money can experience is not the full reality. Never trust economists who do a quick fly-in and fly-out of a poor country and while there get driven around in Mercedes cars and stay in five-star hotels. Ask them if they have been to Iquitos, and the jungles with mosquitoes and naked tribes.




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How Much Ruin, Exactly?

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“There is a great deal of ruin in a nation.” It’s a remark Adam Smith made to a young colleague, John Sinclair, who worried that the cost of quelling the American rebels might lead to the downfall of Great Britain. It’s also a remark Liberty’s founder, Bill Bradford, quoted back to me on several occasions, whenever I was doom-and-glooming about how some country or another was on the road to ruin.

It’s a remark that comes to mind often still, whenever I’m agitated about governmental stupidity or malfeasance. Foolish wars in the Middle East have not ruined the US, and neither have decades of profligacy, proliferations of acronymic agencies, or a succession of villains in our highest offices. Communism did not ruin Russia, and has not ruined China; even Nazism could not permanently ruin Germany, though it did succeed in splitting it for a while.

It’s a familiar feedback loop: the more that’s seized, the worse the economy gets; the worse the economy gets, the more can be seized.

Nonetheless on occasion I read of some insane diktat in one or another corner of the globe and wonder just how far that corner’s leaders are prepared to stretch the maxim. Sovereign debt will likely not ruin Spain, or Portugal, or even Greece, though the EU seems intent on testing that out a while longer yet. Debt (again) and a shrinking population will probably not ruin Japan, but its prime minister Shinzo Abe, with his “Abenomics”—a reheated and desperate Keynesianism—is trying his hardest to make things worse. Unemployment and labor unrest will certainly not ruin France, but French president François Hollande, meanwhile, has yet to pass up a chance to kill off jobs and push companies abroad.

And then there’s Venezuela.

Venezuela, of course, was one of the great experiments: Hugo Chávez’s “Bolivarian Revolution” was supposed to prove the superiority of socialism (economic, of course; its moral superiority was assumed long ago), provided only that said socialism is backed up by seemingly inexhaustible national resources. Chávez, wasting no time after his election in 1998, set about “redistributing income” through land grabs and price fixes, threatening hesitant businesses with expropriation and then often following through on that threat. Under “Chavismo,” Venezuela assumed ownership of much of the nation’s construction, telecommunications, utilities, and food production industries, insisting at each step of the way that the takeovers were necessary to combat the predation of profiteering capitalists.

This sets up a feedback loop familiar to anyone who’s given even the slightest attention to modern government, where every gain (however temporary) is attributed to the extraordinary wisdom and foresight of the government agents, while every loss (all too often permanent) is attributed to the greed of speculators and other enemies of the people. Naturally, the more that’s seized, the worse the economy gets, but on the other hand, the worse the economy gets, the more can be seized. It’s brilliant, really—at least until the shortages of basic goods become too great for anyone but an ideologue to ignore.

Say this in Chávez’s favor: his policies—and those of his successor, Nicolás Maduro—have encouraged innovation in the Venezuelan people; for instance, consider the smartphone app created to help them find toilet paper, in perpetually short supply thanks to price controls. But, as with the more traditional example of broken windows, this innovation isn’t going toward the sorts of things that would convince anyone of Chavismo’s superiority. And as other nations, especially the United States, Canada, and Brazil, have become more energy-independent, Venezuela and President Maduro are finding fewer buyers for their one undoubted asset, while the state-owned oil industry has become ever more wasteful and unprofitable.

With revenues plummeting and prices held artificially low, inflation has, inevitably, kicked in. And here’s where the “ruin” starts coming in: Maduro’s response (other than continuing to threaten or outright seize businesses) was to devalue the currency, and impose controls on currency exchange. As account holders desperately tried to get their money out of the country ahead of impending hyperinflation, Maduro doubled down by devaluing further, attempting to cut off foreign travel. Finally, he enacted a “Law on Fair Prices,” prohibiting profit margins of over 30%—which is to say, no profit, for anyone running an import business—while at the same time enacting long jail terms to punish “hoarders,” or, less insanely, anyone refusing to sell at a loss.

The socialist policies have certainly encouraged innovation in the Venezuelan people—take for instance the smartphone app that helps them find toilet paper.

Now, I’m no expert on Venezuela. I’ve never been there, I don’t know anyone from there, and I can’t get more than the barest sense of any articles written in Latin American Spanish. But I can’t imagine any experience of the place that would convince me that those Venezuelans who protest Chavismo are just, in the words of professional useful idiot Oliver Stone, “sore losers”—though they certainly aren’t winners, either, not while they’re getting gunned down for demonstrating against the ongoing depredation and repression. And so long as the government is willing to arrest the opposition leader, or expel consular officials for so much as meeting with protesting students, things don’t seem likely to improve.

It’s impossible to know where it will all end, or whether it could be enough to ruin Venezuela. I suspect not: prior to Chávez, Venezuela was no more or less stable than any other Latin American nation since the time of Bolívar himself. Oddly enough, in this era of globalization, the idea of a nation may be more susceptible to ruin than individual nations themselves. Those that are nearest ruin are those that were highly unstable and unwanted to begin with: Somalia, Iraq, Yugoslavia—lines drawn on a map as a convenience to colonial invaders or international do-gooders (if you can tell those apart). Yet even those fictions hold up longer than one might expect—just look at Zimbabwe.

So yes, there is likely a great deal of ruin still in Venezuela. But it is a shame, and likely will be a tragedy, to see the depths its rulers are willing to plumb before they hit bottom.



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Latin America: Autumn of the Antipodes?

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In response to last November’s flooding, mudslides, and destruction of homes that left tens of thousands of Venezuelans destitute in makeshift shelters, Hugo Chávez went camping to show solidarity with his people. The luxurious tent was a gift from Libyan strongman Muammar Gaddafi. Piling insult atop bad grace, Chávez was photographed inspecting the devastation in a Cuban(!) military uniform. He is not one to dwell on the negative. Instead of looking grave, concerned, and statesmanlike, he pursed his lips and spread his cheeks in a smirk that bordered on the manic, sticking his head out the window of a Jeep like a dog without good sense. Not since Mexican President Antonio López de Santa Anna (he of the Alamo) buried his leg with full military honors has a Latin American leader been this much fun.

But for Chávez, the bigger crisis is his impending loss of power. Though the 2010 parliamentary elections netted his United Socialist Party 95 seats, the opposition, successfully united, won 64 seats, thus depriving Chávez of the two-thirds and three-fifths majorities required to pass organic and enabling legislation or fiddle further with the constitution. But never mind, Hugo has a plan.

He requested that the lame-duck legislators grant him unlimited powers to rule by decree for 18 months, limit legislative sessions to four days a month, turn control of all parliamentary commissions over to the executive branch, limit parliamentary speeches to 15 minutes per member, restrict broadcasts of assembly debates to only government channels, and penalize party-switching by legislators with the loss of their seats. The lame duck legislators dutifully complied. Vice President Elías Jaua says the powers are necessaryto pass laws dealing with vital services after the disaster and with such areas as infrastructure, land use, banking, defense and the “socio-economic system of the nation.” For good measure, the lame-duck Chavista legislature also passed a law barring non-governmental organizations such ashuman rights groupsfrom receiving US funding; another law terminating the autonomy of universities; more broadcasting and telecommunications controls; and the creation of “socialist communes” to bypass local governments.

Not since Santa Anna buried his leg with full military honors has a Latin American leader been this much fun.

Opposition newspaper editor Teodoro Petkoff called it a “Christmas ambush,” writing in his daily Tal Cual that Chavez is preparing totalitarian measures that amount to “a brutal attack . . . against democratic life.” Chavez’s end-run around the new National Assembly, which convened on January 5, was blatantly illegal, as such emergency powers can only be granted by the legislature to cover a period within the term of the legislature in office. Chávez demanded powers that extend well beyond the previous legislature’s term and effectively emasculate the new legislature, which would never have given him the two-thirds vote he would need, since 40% of its members are in opposition. Venezuelans have reacted with roadblocks and peaceful but energetic massive resistance. Security forces and government thugs have counter-reacted violently. Many people have been injured, not only physically, but economically as well. On New Year's Eve the Bolivar was halved in value, from 2.6 to the dollar to 4.3.

The most infamous precedent for this maneuver was the German Reichstag’s March 1933 enabling law granting Adolf Hitler the right to enact laws by decree for four years, making him dictator of Germany. No doubt the affair will end up in court — decided by Chávez-appointed judges. Still, it’s only a matter of time before the ship of state either turns or crashes.

By contrast, Sebastián Piñera, Chile’s new president, responded to the March 2010 earthquake with grace and alacrity; and six months later rallied the country behind the 33 miners trapped for 70 days in a deep mine cave-in. Unlike President Obama, in his autarkic response to the BP fiasco, Piñera requested and received international assistance. But Piñera is perhaps more notable as the poster boy of a subtle, newly evolving trend throughout Latin America, a trend only now being recognized: the “normalization” of its politics.

Normalization means the peaceful alternation of center-left with center-right governments, which is the status quo in most developed, liberal democracies. Piñera, a center-right candidate, followed two decades of center-left government.

By definition, normalization is dull, boring, and bereft of transformational ideals. But it is nonetheless great news, especially when compared to the radical swings of the past, when left-wing revolutions followed right-wing golpes de estado (or vice versa). The inevitable mayhem, war, and death were always followed by authoritarian regimes.

Chávez demanded powers that extend well beyond the previous legislature’s term and effectively emasculate the new legislature.

In Chile, the Marxist government of Salvador Allende, which had begun to forcibly expropriate property, was overthrown by a military coup after inflation exceeded 140%. To restore order, General Augusto Pinochet brutally imposed a right-wing authoritarian regime. To his credit, however, he laid the groundwork for the political and fiscal stability Chile now enjoys. He invited the so-called Chicago Boys — Milton Friedman and his acolytes — to design a stable and prosperous economic framework, and he relinquished power slowly and honestly by means of a new constitution and open plebiscites. In 1989, Pinochet lost an election to the Concertación, the center-left coalition that would hold power until Piñera’s election.

As Fernando Mires, a Chilean political science professor at the University of Oldenburg, Germany, has observed, “Everything that does not directly deal with war and death, is a game.” Politics is a game, and games require rules. Once war and death enter the scene, the game of politics is over. Latin America is now anteing up to the table. Though not always perfectly correlated, political stability goes hand-in-hand with some degree of fiscal and institutional stability — preconditions for people’s ability to lead healthy, productive lives.

Independence and Chaos

When Father Miguel Hidalgo’s Grito de Dolores declared Mexican independence from Spain on September 16, 1810, it began a protracted independence movement throughout the continent. Two days later, Chile, at the other end of Latin America, instituted de facto home rule. To be sure, Haiti had already defeated Napoleon in 1804 to gain independence, and Cuba would throw off Spanish rule with US help as late as 1898 (and, some would argue, didn’t actually achieve full independence until the Castro regime nullified the Platt Amendment, which gave the US Congress a veto power over foreign affairs). But the main course of events took place within two decades.

In 1821, Spain recognized Mexico’s independence. By 1823, after it had recognized the independence of much of the rest of Latin America (with Portugal ceding Brazil in 1822), US president James Monroe felt comfortable enough to declare the Americas a European-free zone, in spite of Spanish forces still holding out in what was to become Bolivia.

Latin American independence movements were products of the Enlightenment, influenced by the US Declaration of Independence and subsequent constitution — in the context of the times, left-wing revolutions. But, as Marxist commentators never fail to decry, the American revolutions were not “true,” social revolutions, but rather bourgeois realignments. The original Spanish conquest had left most of the basic indigenous structures of authority intact, replacing Moctezuma and Atahualpa with the throne of Madrid. Latin American independence movements recapitulated that strategy, replacing the Spanish aristocracy with homegrown landed gentry.

Meanwhile, a new model of revolution had emerged: the French Revolution, in which the ideals of the Enlightenment metastasized into a nightmare. The monarchy was decapitated; the ancien regime gone; an empire was founded. Traditional concepts of how societies ought to be organized had been put aside.

In Latin America, would-be liberators, criticized from both Right and Left, became disillusioned and turned away from democracy. Up north, Agustín de Iturbide, the Mexican heir of a wealthy Spanish father, switched sides to fight for Mexican independence and declared himself emperor of Mexico; Santa Anna, another side-switcher, overthrew him and established a republic, then a dictatorship. Santa Anna ended up ruling Mexico on 11 non-consecutive occasions over a period of 22 years. Asked about the loss of his republican ideals, he declared,

It is very true that I threw up my cap for liberty with great ardor, and perfect sincerity, but very soon found the folly of it. A hundred years to come my people will not be fit for liberty. They do not know what it is, unenlightened as they are, and under the influence of a Catholic clergy, a despotism is the proper government for them, but there is no reason why it should not be a wise and virtuous one.

This general sentiment came to be shared by most of Latin America’s liberators.

Meanwhile, Central America (including the Mexican state of Chiapas but excluding Panama), and known as the Captaincy General of Guatemala, seceded from Mexico, becoming “The Federal Republic of Central America” after a short-lived land grab by Mexican Emperor Iturbide who pictured his empire extending from British Columbia to the other Colombia. The Federal Republic didn’t last. In the 1830s Rafael Carrera, led a revolt that sundered it. By 1838, Carrera ruled Guatemala; in the 1860’s he briefly controlled El Salvador, Honduras, and Nicaragua as well, though they remained nominally independent.

Not one to be left behind, the Dominican Republic jumped on the bandwagon in 1821, but was quickly invaded by Haiti. Not until 1844 was the eastern half of Santo Domingo able to go its own way. Sandwiched between Cuba and Puerto Rico (both still held by Spain), in 1861 the Dominican Republic — in a move unique in all Latin America — requested recolonization, having found the post-independence chaos untenable. Spain gladly acquiesced. The US protested but, mired in its own civil war, was unable to enforce the Monroe Doctrine. In 1865, the Dominican Republic declared independence for a second time.

Sebastián Piñera, Chile’s new president, represents a subtle trend only now being recognized: the “normalization” of Latin American politics.

South America fared no better. Simon Bolívar, after a series of brilliant campaigns that criss-crossed the continent, created the unstable Gran Colombia, a state encompassing modern Colombia, Panama, Venezuela, and Ecuador, with himself as president — a model Hugo Chávez aspires to emulate. Bolívar then headed to Peru, to wrest power from Joséde San Martín, its liberator. Bolívar was declared dictator, but the Spanish still held what is now Bolivia. He finished San Martín’s job by liberating it and separating it from Peru. The new state was christened with his name. By 1828, Gran Colombia proved unmanageable, so Bolívar declared himself dictator, a move that ended in failure and more chaos.

Southern South America was liberated by San Maríin and Bernardo O’Higgins, with Chile and Argentina going their separate ways. In Chile, Bernardo O’Higgins turned from Supreme Director into dictator, was ousted, and was replaced by another dictator. A disgusted San Martín exiled himself to Europe, abandoning Argentina to a fate of civil war and strongmen. Uruguay and Paraguay carved themselves a niche — but only after Uruguay’s sovereignty had been contested by newly independent Brazil. In Paraguay, José Rodriguez de Francia, Consul of Paraguay (a title unique to Latin America) became in 1816 “El Supremo” for life. An admirer of the French revolution — and in particular of Rousseau and Robespierre — he imposed an extreme autarky, closing Paraguay’s borders to all trade and travel; abolishing all military ranks above captain, and insisting that he personally officiate at all weddings. He also ordered all dogs in the country to be shot.

Strongmen and Stability

The Latin American wars of independence were succeeded by aborted attempts at unity or secession; wars of conquest, honor, and spite; land grabs, big and little uprisings, civil wars; experiments in democracy, republicanism, federation, dictatorship, monarchy, anarchy, and rule by warlords or filibusters; and even reversion to colonialism; all with radical “left-right” swings — in a word, by every imaginable state of affairs, none long lasting. It all culminated in the era of the caudillo: a populist military strongman, usually eccentric, sentimental, long-ruling, and (roughly speaking) right-wing.

In his novel Autumn of the Patriarch, Colombian author (and confidante of Fidel Castro) Gabriel García Márquez offers a profile of a caudillo that has yet to be surpassed. The stream-of-consciousness, 270-page, 6-sentence prose “poem on the solitude of power” was based on Colombia’s Gustavo Rojas Pinilla (1953–57) and Venezuela’s Juan Vicente Gómez (1908–1935), with dashes of Franco and Stalin thrown in. But its indeterminate timelessness, stretching from who-knows-when to forever, also evokes Mexico’s Porfirio Díaz (1876–1911), Paraguay’s Alfredo Stroessner (1954–89), the Dominican Republic’s Rafael Trujillo (1930–61), and Nicaragua’s Anastasio Somoza (1936–56). It could also easily include Brazil’s Getulio Vargas (1930-54), Argentina’s Juan Perón (1946–55 and 1973–76), Haiti’s “Papa Doc” and “Baby Doc” Duvalier (1957–86), and, yes, the longest ruling military strongman of all — Fidel Castro (1959–201?).

The caudillo period had no specific time frame; it was rather a response to instability (or injustice, in the case of left-caudillos) that varied over time, country, and cultural conditions. Take Mexico for example. Besides the usual post-independence chaos, it also suffered invasions from the US and France. So, in 1846, Porfirio Díaz, an innkeeper’s son and sometime theology student, left his law studies to join the army — first, to fight the US, then to fight Santa Anna in one of the latter’s multiple bids for power, and finally to fight the French-imposed Emperor Maximilian.

Politics is a game, and games require rules. Once war and death enter the scene, the game of politics is over.

In the war against Maxmillian, Díaz rose to become division general under Benito Juárez’ leadership but retired after Mexican forces triumphed and Juárez assumed the presidency in 1868. It didn’t take long for Díaz to become disillusioned. One principle that had developed in Mexican politics and ironically — especially considering the nearly 35 years in power that Díaz would enjoy — became institutionalized, was one-term presidential term limits. So when Juárez announced for a second term in 1870, Díaz opposed him. Losing, he cried fraud and issued a pronunciamento, a formal declaration of insurrection and plan of action accompanied by the pomp and publicity emblematic of Mexican politics. After another pronunciamento and additional revolts much politicking, and a term in Congress, Díaz succeeded in ousting his adversaries. He was elected president in 1877. Having based his campaign on a platform of “no reelection," he reluctantly stepped aside after one term and turned over the presidency to an underling, whose incompetence and corruption ensured Díaz’s victory in the 1884 contest.

He set out to establish a pax Porfiriana by (as he termed it) eliminating divisive politics and focusing on administration. The former was achieved by stuffing the legislature, the courts, and high government offices with cronies; making all local jurisdictions answerable to him; instituting a “pan o palo” (bread or a beating) policy, enforced by strong military and police forces; artfully playing the various entrenched interests against each other; and stealing every election. Porfirio Díaz opened Mexico up to foreign investment, built roads and public works, stabilized the currency, and developed the country to such a degree that it was compared economically to Germany and France.

Classifying caudillos as Left or Right is not always easy. Caudillos who focused on economic development, fiscal stability, and monumental public works are generally perceived as right-wing, while those who improved education, fought church privilege, or imposed economic controls are perceived as left-wing. Nearly all were initially motivated by idealism, followed by disillusionment with democracy and addiction to power. Nearly all lined their pockets. Venezuela alone, between 1830 and 1899, experienced nearly 70 years of serial caudillo rule, which, some would argue, continued intermittently to the present.

In Ecuador, 35 right-wing years initiated by a caudillo were followed by 35 left-wing years initiated by another caudillo. General Gabriel García Moreno had saved the country from disintegration in 1859 and established a Conservative regime that wasn’t overthrown until 1895, when Eloy Alfaro led an anti-clerical coup. Alfaro secularized Ecuador, guaranteed freedom of speech, built schools and hospitals, and completed the Trans-Andean Railroad connecting the coast with the highlands. In 1911, his own party overthrew him and further liberalized the regime by opening up the economy. The Liberal Era lasted until 1925. Altogether, Alfaro initiated four coups — two succeeded, and one finally killed him — that made him the idol of Rafael Correa, Ecuador’s present, left-wing, president.

One right-wing caudillo, the Dominican Republic’s Rafael Trujillo (1930–61), was prematurely Green, restricting deforestation and establishing national parks and conservation areas in response to the ravages in next-door Haiti. His successor (after a five-year, chaotic interregnum that included a civil war and US Marines) was Joaquín Balaguer, an authoritarian who dominated Dominican politics until 2000 and continued Trujillo’s conservation policies.

Some caudillos combined elements from both Left and Right, coming up with ideologies that were internally inconsistent but extremely popular. Argentina’s Perón absorbed fascism, national socialism and falangism while stationed as a military observer in Italy, Germany, and Spain. Back in Argentina he allied himself with both the socialist and the syndicalist labor movements to create a power base. In 1943, as a colonel, he joined the coup against conservative president Ramon Castillo, who had been elected fraudulently.

In Paraguay, José Rodriguez de Francia closed the borders to all trade and travel; abolished all military ranks above captain, and insisted that he personallyofficiate at all weddings. He also ordered all dogs in the country to be shot.

When Perón announced his candidacy for the 1945 presidential elections as the Labor Party candidate, the centrist Allied Civic Union, the Socialist Party, the Communist Party, and the conservative National Autonomous Party all united against him — to no effect. As president, his stated goals were social justice and economic independence; in fact, he greatly expanded social programs, gave women the vote, created the largest unionized labor force in Latin America, and went on a spending spree that nearly bankrupted Argentina (it included modernizing the armed forces, paying off most of the nation’s debt, and making Christmas bonuses mandatory). Perón also nationalized the central bank, railways, shipping, universities, utilities, and the wholesale grain market. By 1951, the peso had lost 70% of its purchasing power, and inflation had reached 50%.

During the Cold War, Perón refused to pick either capitalism or communism, instituting instead his “third way," an attempt to ally Argentina with both the United States and the Soviet Union. Today, Peronism remains a vital force in Argentina, with President Cristina Fernández at its helm.

Sandino Lives!

Not that caudillismo needed any intellectual justification, but the social Darwinism that developed during the late 19th century helped to rationalize many of the abuses committed under its aegis. Then, fast on its heels and in rebuttal to it, Marxism burst on the scene, invigorating the Left by advocating the forcible redistribution of wealth. The Left-Right divide widened, and conflict sharpened.

In 1910, old and ambivalent about retiring, Porfirio Díaz decided to run once more for president of Mexico. When he realized that his opponent, Francisco Madero, was set to win, he jailed him on election day and declared himself the winner by a landslide. But Madero escaped and, from San Antonio, Texas, issued his Plan de San Luis Potosí, a pronunciamento promising land reform. It ignited the Mexican Revolution.

The Zapatista Army of National Liberation now sells t-shirts and trinkets to finance its anti-capitalist jihad.

Though not specifically Marxist, the Mexican Revolution has been interpreted as the precursor to the Russian Revolution. Its ideologies — especially “Zapatismo” — are part of the progressive, Fabian, and socialist zeitgeist of the time. In fact, however, the Mexican Revolution — a many-sided civil war that lasted ten years — was so indigenously Mexican as to elude historians’ broader interpretive models. Yet it was the first effective and long-lasting leftist Latin American movement. Its successors are Cuban communism, liberation theology, Bolivarian socialism, and many others. Out of it coalesced Mexico’s Institutional Revolutionary Party (PRI), heir to a coalition of forces and ideologies that were, at last, fed up with fighting. The PRI, a member of the Socialist International, instituted de facto one-party rule, and controlled Mexico for over 70 years.

Other radical leftist revolutionary movements followed — some sooner, some later, not all successful — operating either by force or through the ballot. The earliest (1927) was that of the Sandinistas in Nicaragua. Augusto César Sandino identified closely with the Mexican Revolution. Although he was not a Marxist, his movement adopted that ideology after his death. Five years later, in next-door El Salvador, the Farabundo Martí National Liberation Front (Martí was a Communist Party member and former Sandinista) rose in revolt. Guatemala followed in 1944 with the Jacobo Arbenz coup, then Cuba in 1952 with Castro’s insurrection.

With Castro’s accession to power in 1959, the outbreak of Marxist revolts in Latin America intensified. During the 1960s the Tupamaros rose in Uruguay. In Peru, various groups, including the Shining Path, revolted. The FARC, ELN, and M-19 followed in Colombia. In 1967, Fidel’s own Che Guevara met his death while trying to organize a premature revolution in Bolivia. Then, in 1970, Chileans voted in — by only 36%, a plurality in a three-way race — the first elected Marxist regime in the Americas.

Venezuela was next. Hugo Chávez launched his first, unsuccessful coup in 1992. After a stint in jail he was pardoned, ran for president in 1998, and won.

In Bolivia, Evo Morales, a former trade union leader, and his Movement Toward Socialism won the 2005 elections with a majority.

Latin American Marxism, unlike the European sort, has little to do with the industrial revolution or conditions of the working class. Not only is it currently more tolerant of religious belief; it is more relaxed about ideology and — again, currently — lacks gulags and killing fields. It is more about land distribution and “Social Justice” — a term whose words, innocuous and benign in themselves, don bandoliers and carbines and become fighting words when capitalized.

Social Justice is the concept of creating a society based on the principles of equality, human rights, and a “living wage” through progressive taxation, income and property redistribution, and force; and of manufacturing equality of outcome even in cases where incidental inequalities appear in a procedurally just system.

The term and modern concept of "social justice" were created by a Jesuit in 1840 and further elaborated by moral theologians. In 1971 Peruvian priest Gustavo Gutiérrez justified the use of force in achieving Social Justice when he made it a cornerstone of his liberation theology. As a strictly secular concept, Social Justice was adopted and promulgated by philosopher John Rawls.

The Other Path

Mario Vargas Llosa is a Peruvian writer and 2010 Nobel laureate — pointedly awarded the prize for his literary oeuvre, as opposed to his political writings, but this from a committee that awarded Barack Obama a Peace Prize for nothing more than political penumbras and emanations. Vargas Llosa started as a man of the Left. His hegira from admirer of Fidel Castro to radical neoliberal candidate for president of Peru in 1990 is a metaphor for Latin America’s own swing of the pendulum today.

In 1971 he condemned the Castro regime. Five years later, he punched García Márquez (patriarch of Marxist apologists) in the eye. Their rupture has never been fully healed (or explained), but it is attributed by some to diverging political differences. In 1989, when Peruvian economist Hernando de Soto published his libertarian classic, The Other Path (an ironic allusion to the Shining Path guerrilla movement), Vargas Llosa wrote its stirring introduction. He and de Soto advocated individual private property rights as a solution to property claims by the Latin American poor and Indians. Both the fuzzy squatters’ rights of the urban poor and the traditional subsistence-area claims of indigenous communities were being — literally — bulldozed by corrupt or insensitive governments; the two authors believed that the individual occupiers of the land should own it as their private property. This proposed solution did not sit well with the Social Justice crowd. To them, communal rights trumped individual rights.

But it struck a chord with the poor and dispossessed. So Vargas Llosa declared for the presidency in 1990 on a radical libertarian reform platform (the Liberty Movement). In Peru, the Shining Path guerrillas were terrorizing the country and the economy was a disaster, having been run into the ground by left-wing populist Alan García, who was now running for reelection. In the outside world, Soviet communism and its outliers were disintegrating, both institutionally and ideologically. Between García and Vargas Llosa in the three-way race stood Alberto Fujimori, the center-right candidate. Vargas Llosa took the first round with 34%, nearly the same majority that had put Allende into office in next-door Chile. But he lost the runoff, handing Peru over to the authoritarianism (as well as the reforms) of the Fujimori regime.

Latin American politics culminated in the era of the caudillo: a populist military strongman, usually eccentric, sentimental, long-ruling, and (roughly speaking) right-wing.

Without skipping a beat and less than a month later, Vargas Llosa attended a conference in Mexico City entitled "The 20th Century: The Experience of Freedom." This conference focused on the collapse of communist rule in central and eastern Europe. It was broadcast on Mexican television and reached most of Latin America. There Vargas Llosa condemned the Mexican system of power, the 61-year rule of the Institutional Revolutionary Party, and coined “the phrase that circled the globe”: "Mexico is the perfect dictatorship.” “The perfect dictatorship,” he said, “is not communism, not the USSR, not Fidel Castro; the perfect dictatorship is Mexico. Because it is a camouflaged dictatorship."

But the “perfect dictatorship” was already loosening its grip. Recent PRI presidents had been well-degreed in economics and public administration, as opposed to politics and law. They had already moved Mexico rightward, to the center-left, by privatizing some industries and liberalizing the economy — especially by joining NAFTA. By the 1994 election, the PRI had opened up the electoral system to outside challengers: the center-right National Action Party (PAN) and the strong-left Party of the Democratic Republic (PRD). In the 2000 elections the PRI ceded power to the PAN’s Vicente Fox, though not entirely.

The popular but hapless Fox ended Mexico’s last Marxist uprising, Subcomandante Marcos’ Zapatista Army of National Liberation (they now sell t-shirts and trinkets to finance their anti-capitalist jihad). But he was unable to further the rest of his reform agenda through the PRI-controlled legislature. So Mexico reelected the PAN in 2006. Today, in a move emblematic of Latin America’s change to European-style, alternating center-left/center-right administrations, the PAN and the PRD are exploring avenues of cooperation to pass legislation through the PRI-controlled Congress.

But Vargas Llosa wasn’t through yet. During one of Hugo Chávez’s marathon television tirades in 2009, he challenged Vargas Llosa to a debate on how best to promote Social Justice. When Vargas Llosa accepted, Chavez — in his most humiliating public move to date — declined.

Ho-hum

Peru’s increasingly discredited Fujimori resigned because of corruption, a questionable third presidential term, and the exercise of disproportionate force, once too often. He was followed by Alejandro Toledo, an economist so centrist and dull that he bored his people into not reelecting him. By the 2006 elections, Peru’s centrist politics were entrenched in the most ironic of ways. Alan García, the disastrous, populist left-wing ex-president, ran on a center-right, neoliberal platform — and won. And against all odds, he kept his word. In 2009 Peruvian economic growth was the third highest in the world, after China and India. In 2010 it remained in double figures. The 2011 elections won’t include García, as he can’t succeed himself. They are expected to be contested by the technocratic Toledo and the center-right Keiko Fujimori, Alberto’s daughter and leader of the Fujimorista Party.

It’s much the same — with few exceptions — in the rest of Latin America. Brazil’s widly popular, fiscally prudent, and social justice-sensitive center-left Lula da Silva administration was reelected, this time led by Dilma Rouseff, Brazil’s first female president. She has promised more of the same. In next-door Paraguay, the exceptionally long-ruling (61 years) Colorado Party ceded power in 2008 to the country’s second-ever left-wing president, Fernando Lugo, an ex-bishop and proponent of liberation theology. But Lugo has moved to the center, distancing himself from Chávez and tempering his social and fiscal promises by seeking broad consensus. GDP growth in 2010 was 8.6%.

In 2009 Uruguay elected as president José Mujica, a former Tupamaro guerrilla. But Mujica, described by some as an “anti-politician,” has moved radically to the ceemnter. The tie-eschewing, VW Beetle-driving president has promised to cut Uruguay’s bloated public administration dramatically. He identifies with Brazil’s Lula and Chile’s Bachelet rather than Bolivia’s Morales or Venezuela’s Chávez. After 6% growth in 2010, Uruguay is expected to level at 4.4% in 2011.

With the unexpected death of her husband and her disastrous left-wing populist policies (inflation is close to 30%), Argentina’s Fernández is not expected to win reelection in 2011. Reading the writing on the wall, she (unlike Chávez) is tiptoeing toward the center.

In Colombia, the feared authoritarian tendencies of Alvaro Uribe turned out to be wildly exaggerated; and his successor, Juan Manuel Santos, has moved even closer to the center. The two — Santos was Minister of Defense under Uribe — brought the FARC insurgency to its knees, reducing the guerrillas to little more than extortionists and drug dealers. With Colombia’s new-found safety, high growth, and low inflation, its tourist industry is booming.

El Salvador, long the archetype of extreme polarization between the now-peaceful FMLN Marxist revolutionaries and the ex-paramilitary rightwing Arenas coalition, elected Mauricio Funes in 2009. Funes, the FMLN’s surprise candidate, ran on a centrist platform and has stuck to it — throwing the Arenas coalition into disarray. He enjoys a 79% approval rating, which makes him Latin America’s most popular leader. Neighboring Honduras, after deposing a power-grabbing Chávez clone in 2009, elected the center-right Pepe Lobo, who promised reconciliation and stability. Even Guatemala shows signs of progress. The 2007 elections inducted Álvaro Colom, the first center-left president in 53 years.

Latin American Marxism, unlike the European sort, has little to do with the industrial revolution or conditions of the working class.

Costa Rica, long Latin America’s exemplar of democracy and moderation, is becoming ever more so. The 2009 elections turned Laura Chinchilla into Costa Rica’s first female president (one even more stunningly beautiful than Argentina’s Fernández). In spite of being socially conservative, she continues Óscar Arias’ vaguely center-left policies. With the traditional center-right and center-left parties always closely vying for power, the libertarian Partido Movimiento Libertario (PML), which retains a 20% popular vote base (and 10% of the legislature), has emerged as the policy power broker in the Congress.

Latin American politics’ move to the center is even mirrored in its ancillaries. The Cuban American National Foundation, largest of the Cuban diaspora’s political representatives, abjured the use of force after the death of its founder, Mas Canosa, and advocates a more open US policy toward Cuba.

Not all is good news. Though Cuba is showing microscopic hints of change (as reported in Liberty’s December issue), Chávez’ power play in Venezuela after his electoral defeat is yet to play out, and Bolivia’s Evo Morales holds steady after a barely avoided civil war, Nicaragua’s anti-capitalist tyrant Daniel Ortega is bound and determined to hold onto power come what may. But their days, too, are numbered.




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