Neoliberalism in Latin America
Neoliberalism in Latin America
From the 1930s until the 1980s state intervention and protection were key components of most Latin American economies. In these years many Latin American countries were used an Import-substitution industrialization based economy trying to reduce dependence on foreign imports and replacing them with domestic production. Due to the use of an Import-substitution industrialization based economy Latin American countries were forced to keep high tariffs to protect the private companies of their countries. This combined with many Latin America countries providing numerous government subsidized programs eventually led to the 1982 debt crisis.
This debt crisis created a vacuum affect in Latin America with many of the countries taking on a new neoliberal economic model, and by the early 1990s John Charles Chasteen claims that almost every Latin American country was led by a president that was pro neoliberalism. This neoliberal economic model called for the slashing of tariffs as well as the reduction of removal of all nationalist-inspired subsides. Also following the neoliberal model, Latin American countries stopped the printing of money to slow inflation effectively undermining the functionality of their local markets. All of this was done so that a completely “free market” could be created. It was believed that this free market would not only help improve the economies of Latin American countries, but also create more personal freedoms for the people of Latin America. In the article “Neoliberalism, Neoclassicism and Economic Welfare”, John T. Harvey claims the complete opposite, arguing although a neoliberal economic model was created to produce conditions conducive to social provisioning or democratic problem solving, the exact opposite has occurred. Harvery states in his article, “Instead of growth, stability, and the narrowing of income gaps, we have seen stagnation, volatility, and increased inequality.” By
From the 1930s until the 1980s state intervention and protection were key components of most Latin American economies. In these years many Latin American countries were used an Import-substitution industrialization based economy trying to reduce dependence on foreign imports and replacing them with domestic production. Due to the use of an Import-substitution industrialization based economy Latin American countries were forced to keep high tariffs to protect the private companies of their countries. This combined with many Latin America countries providing numerous government subsidized programs eventually led to the 1982 debt crisis.
This debt crisis created a vacuum affect in Latin America with many of the countries taking on a new neoliberal economic model, and by the early 1990s John Charles Chasteen claims that almost every Latin American country was led by a president that was pro neoliberalism. This neoliberal economic model called for the slashing of tariffs as well as the reduction of removal of all nationalist-inspired subsides. Also following the neoliberal model, Latin American countries stopped the printing of money to slow inflation effectively undermining the functionality of their local markets. All of this was done so that a completely “free market” could be created. It was believed that this free market would not only help improve the economies of Latin American countries, but also create more personal freedoms for the people of Latin America. In the article “Neoliberalism, Neoclassicism and Economic Welfare”, John T. Harvey claims the complete opposite, arguing although a neoliberal economic model was created to produce conditions conducive to social provisioning or democratic problem solving, the exact opposite has occurred. Harvery states in his article, “Instead of growth, stability, and the narrowing of income gaps, we have seen stagnation, volatility, and increased inequality.” By
Cited: Bacon, David, and Omar Gil. "The Story of a Maquiladora Worker." GPMI Membership Meeting Minutes. Web. 27 Apr. 2012. . Chasteen, John Charles. Born in blood and fire: a concise history of Latin America. 3rd ed. New York: W.W. Norton & Co., 2011. Print. Fuguet, Alberto. "Magical Neoliberalism." Foreign Policy July-August.125 (2001): 66-73. Harvey, John. "Neoliberalism, Neoclassicism and Economic Welfare." Journal of Economic Issues 44.2 (2010): 359-368. Kurtz, Marcus J, and Sarah Marie Brooks. "Embedding Neoliberal Reform in Latin America." World Politics 60.2 (2008): 231-280. Lubliner, Paul B.. "Exploring the Impact of Neoliberal Economic Development on Poverty in Costa Rica: What Went Wrong?, (2006): 1-89. Mannon, Susan. "Love in the Time of Neo-Liberalism." Gender & Society 20.4 (2006): 511-530. Montero, Alfred P.. "From Democracy to Development: The Political Economy of Post-Neoliberal Reform in Latin America." Latin American Research Review 40.2 (2005): 253-267. Roxborough, Ian. Neoliberalism in Latin America: Limits and alternatives." Third World Quarterly 13.3 (1992): 421-440.