The Penguin History of the World

Almost all Latin American states were primary producers of agricultural or mineral exports. Some were relatively highly urbanized, but their manufacturing sectors were inconsiderable, and for a long time they did not seem to be troubled by the social and political problems of nineteenth-century Europe. Capital had flowed into the continent, only briefly and occasionally checked by financial disasters and disillusionments. The only social revolution in a Latin American state before 1914 (as opposed to countless changes in governmental personnel) began with the overthrow of the Mexican dictator, Porfirio Diaz, in 1911. It opened the way to nearly ten years of fighting and a million deaths, but the primary role was played by a middle class that felt excluded from the benefits of the regime, not by an industrial or rural proletariat, and that class was the main gainer, along with the politicians of the party which emerged to monopolize power until the 1990s. Although most Latin American countries could display class conflict aplenty in their countrysides, they did not appear to suffer from the social bitterness of industrialized and urbanized Europe.

These promising-looking societies survived the First World War prosperously. It brought important changes in their relations with Europe and North America. Before 1914, although it was the predominant political influence in the Caribbean, the United States did not exercise much economic weight to the south. In 1914 it supplied only 17 per cent of all foreign investment south of the Rio Grande – Great Britain provided much more. The liquidation of British holdings in the Great War changed that; by 1919 the United States was the largest single foreign source of investment in South America, providing about 40 per cent of the continent’s foreign capital. Then came the world economic crisis; 1929 was the doorway to a new and unpleasant era for the Latin American states, the true beginning of their twentieth century and the end of the nineteenth. Many defaulted on their payments to foreign investors and it became almost impossible to borrow further capital abroad. The collapse of prosperity led to growing nationalist assertiveness, sometimes against other Latin American states, sometimes against the North Americans and Europeans; foreign oil companies were expropriated in Mexico and Bolivia. The traditional Europeanized oligarchies were compromised by their failure to meet the problems posed by falling national incomes. From 1930 onwards there were more military coups, risings and abortive rebellions than at any time since the Wars of Independence.

The year 1939 again brought prosperity as commodity prices rose because of wartime demand (in 1950 the Korean War prolonged this trend). In spite of the notorious admiration of Argentina’s rulers for Nazi Germany and evidence of German interests in some other republics, most of them were either sympathetic to the Allies who courted them, or subservient to the United States. Most of them formally joined the United Nations’ side before the war ended and one, Brazil, sent a small expeditionary force to Europe, a striking gesture. The most important effects of the war on Latin America, however, were economic. One, of great significance, was that the old dependence on the United States and Europe for manufactured goods now became apparent in shortages; an intensive drive to industrialize gathered speed in several countries. On the urban workforces that industrialization had built up was founded a new form of political power that entered the lists as a competitor with the military and the traditional élites in the post-war era. Authoritarian, semi-Fascist but popular mass movements brought to power a new kind of strong man. Perón in Argentina was the most famous, but Colombia in 1953 and Venezuela in 1954 produced similar rulers. Communism had no such conspicuous success among the masses.