South of the Border

Alvaro’s new book is a penetrating classical liberal critique of the failed development of Latin America over the past 500 years. Writing in the tradition of such penetrating analysts of state and society as Stanislav Andreski, Alexander Rustow, Franz Oppenheimer and Herbert Spencer, Vargas Llosa quickly cuts to the chase. His opening paragraph begins:

If no other evidence were available, the history of Latin America would be enough to lend credence to the theory that sheer force, through conquest and expropriation, was the origin of the state. No matter what periods of peaceful, decentralized, local or clan-based endeavor one can point to, and there are many in Latin America’s long history, a pattern of oppression in which a particular class of people dominate a wider number emerges. Using the history of Latin America as his canvas, Vargas Llosa discusses how five principles of social, economic and political organization have come together to oppress the individual: “corporatism, state mercantilism, privilege, wealth transfer, and political law.” He summarizes:

All five principles made the ancient Latin American state an instrument through which one class exploited lower classes to satisfy its desires. Borrowing Franz Oppenheimer’s definition, one could say that the principles point to the use of “political” means of predation rather than “economic” means of production and exchange in order to sustain an elite. Latin America has been wrestling with, and ultimately has failed to overcome, this heritage at least since the time of the Aztecs and the Incas.

Vargas Llosa makes clear that there is an alternative tradition in Latin America history that provides a basis for hope:

A double legacy, then, permits one to look at the history of liberty in Latin America as no barren land. One is academic and intellectual. It goes all the way from the School of Salamanca . . . The other legacy is practical. It has very ancient roots, traceable even under the suffocating states of the pre-Columbian world, in the customary behavior of native inhabitants seeking to obtain from nature and from social cooperation of various kinds the basics for subsistence. This legacy continues to stare one in the eye wherever one goes in Latin America. It is the daily struggle of ordinary men and women who survive through clandestine property and enterprise. Nevertheless, he does not allow false hope to take hold. While acknowledging that there have been efforts at reform over time, he observes that the successes were “short-lived and, in the final analysis, unable to produce the desired effects. . . They amounted mostly to traumatic reshuffling of political and economic power.” In this context, he is highly critical of the “so-called capitalist reforms” that spread throughout the region in the 1990’s:

Privatization installed a new class of elites, made up of local and foreign interests, in the place of the old ruling class under economic nationalism. In every country, through the granting of monopolies, the passing of discriminatory regulations, or the use of subsidies, the government facilitated the creation of new groups that came to dominate the economy. There is only one disappointment in the book. Vargas Llosa ultimately does not deliver a theory of social change: what will be required to reverse this centuries long saga of state domination? Yes, there is an alternative tradition that can be drawn upon. Yes, there are four categories of reform (the focus of his last chapter) that will be required to build a free society in the countries of Latin America. And yes, he is right in quoting Roger Douglas from New Zealand that two key pre-requisites for structural reform are the abolishment of privilege and the pursuit of reform in quantum leaps rather than small steps.

But, where do the people of Latin America go from here? How do they mobilize support for such a fundamental and far-reaching reform agenda? Is it just a question of getting the right ideas out there? If Vargas Llosa is right that the oppression of Latin American society has been driven by privilege and interests of ruling groups, what social forces and interests can be mobilized around which issues to mount an effective attack against these ruling groups? We suspect that ideas alone are not sufficient. They must be coupled to a strategy of social change that clearly identifies key leverage points in the state systems and groups within the society that can be mobilized to target these leverage points. We hope that this will be the next book that Vargas Llosa writes.

But this is a modest shortfall in an otherwise powerful book. Vargas Llosa has resurrected a powerful tradition of liberal social analysis that unfortunately has largely been on the retreat over the past fifty years. He understands that the evolution of the societies we live in is shaped by a complex and dynamic mix of the political means and the economic means. Conflict and struggle are inherent characteristics of such societies. This evolution cannot be understood through abstract philosophical principles alone. Understanding must be grounded in empirical research spanning across the boundaries of economics, politics, sociology and, most importantly, history.

This was the core insight of the great classical liberal social analysts mentioned at the beginning of our post. These analysts were clearly an inspiration and foundation for Vargas Llosa in his work. One of the most recent of these analysts, Stanislav Andreski, will be the focus of a future post.