6.5: Latin America and Neoliberalism

Latin America

As described in Chapter 4, Latin American nations achieved independence from Spain and Portugal during the first half of the nineteenth century. The British government supported these revolutions, viewing the new nations as markets for its loans and industrial products. Hoping to find new wealth, English and Irish mercenaries, available after the Napoleonic Wars, joined Simon Bolivar and other revolutionaries in Latin America in their fight for independence. Figure 6.5.1 shows an 1826 equestrian portrait of Simon Bolivar in full regalia, as a fearless leader of of independence from Spanish rule. He is on a white horse with his sword drawn. Bolivar is credited with liberating six nations from Spanish rule: Venezuela, Bolivia, Columbia, Panama, Ecuador, and Peru. 

Figure \(\PageIndex{1}\): Equestrian portrait of Simon Bolivar, Jose Hilarion Ibarra, in the Public Domain.

As the new Latin American nations achieved their independence, European countries outwardly respected their sovereignty, but in reality forced governments to bend to their influence. Already in the 1820s and 1830s, several governments in Latin America were in debt to British banks. The banks provided loans anticipating that independence would bring rapid economic development as it had in the United States. However, local artisans could not compete with British textiles and other manufactured goods that flooded the markets of the new republics. As the new Latin American nations fell into debt, they were unable to pay back the loans to the British banks. Other European banks were also engaged in the same loaning activities.

In addition to mounting debts owed to European governments, many Latin American nations became dependent on exporting their natural resources. Some of these resources were copper and nitrates in Chile, coffee in Brazil, beef and grain in Argentina, sugar in Cuba, and bananas in Central America. British investors in Latin America were followed by French and U.S. investors, also interested in resource extraction, business development, and captive markets. As new colonial territories were formed in Africa and Asia, this pattern of resource extraction was repeated into the second half of the twentieth century. 

Mexico

On December 8, 1861, French military forces landed in Mexico in an attempt to gain control over the country. For the French, this was the right time since, embroiled in its Civil War, the United States was not able to assist Mexico against foreign invasion. The French forces had planned to quickly take control of Mexico City, but were defeated in the Battle of Puebla on May 5, 1861. (Hence the celebration, "Cinco de Mayo.") It would take another year before the French conquered the capital. In 1863, Napoleon III installed the Archduke of Austria, Maximilian of Habsburg, as the Emperor of Mexico. While Maximilian was emperor, he rebuilt Chapultepec Castle in Mexico City, hoping to establish symbols of imperial rule. However, by 1867, Mexican resistance forced the French to leave.

Porfirio Diaz

For over three decades, from 1877-1880 and 1884-1911, Porfirio Diaz was president of Mexico. Diaz ruled in a dictatorial fashion, rewarding those loyal to him and his regime. Those loyal members of the Mexican elite and middle class as well as foreign investors followed Diaz in his pro-business approach to governance. Under Diaz, foreign investors funded railways, roads and other crucial infrastructure or business. The problem is that they took their profits out of the country and did not help develop Mexico itself or the majority of its people. Native populations generally served as an underpaid and exploited work-force.

Increasingly the people of Mexico agitated for greater freedom, equality, and consent of the governed in response to the power imbalances they faced. This became the 1910-1911 Mexican revolution that led to Diaz's removal. Diaz did not go down without a fight to try and maintain his power. His use of the military against his own people is memorialized in artworks that have now become famous throughout the world. As just one example, Figure 6.5.2 features a zinc etching of lithographer Jose Guadalupe Posada. He used skulls in an unprecedented way to draw attention to economic and social inequality in Mexican society. Figure 6.5.2 depicts a female skeleton wearing a hat to show how the upper class emulated European fashion, and La Calavera Catrina symbolizes the intersectionality of race, privilege, and class.

Figure \(\PageIndex{2}\): La Calavera Catrina ("The Dapper Skull"), 1910, Jose Guadalupe Posada, in the Public Domain.

 

Latin American Commodity History

Crops like coffee became significant commodities in Latin American international trade. The production, sale, and transport of coffee interlinked people from different parts of the globe and changed people’s lives and their societies. Coffee was originally from Yemen. Arab and Indian merchants had transported it across the seas for centuries. However, with the era of European colonization, Dutch merchants displaced the Arab and Indian merchants. The Dutch trade was diminished once coffee production was established in Latin America.

During the nineteenth century, Brazil became the leading producer of coffee, reliant on slave labor. Slavery and the suffering and exploitation involved, made the production of cheap coffee possible, influencing cultures across the globe. As the last country to emancipate its slaves in 1888, Brazil had been exporting cheap coffee, mostly to the United States. Brazilian coffee became the drink of Americans who wanted to distinguish themselves from British tea drinkers. Coffee was at the center of Brazil’s economy, and this was a key reason it developed the most extensive railroad infrastructure in Latin America by 1890. Figure 6.5.3 shows the loading of large bags of coffee brought on carts from São Paolo for shipment to Europe from Port Santos in 1880. 

Figure \(\PageIndex{3}\): Photograph of coffee being embarked at the port in Santos, 1880, Marc Ferrez, in the Public Domain.

In Costa Rica, the landscape was less amenable to coffee production, so smaller areas were used to grow higher quality and more expensive beans. For Brazil and Costa Rica, the coffee commodity chain played a role in race and class relations while coffee drinking became ubiquitous around the world and remains so today. When buying coffee at the local store, check to see where it has come from.

Between 1866 and 1870, Argentina, Uruguay, and Brazil fought Paraguay over border disputes. The result was the bloody War of the Triple Alliance. Desperate for soldiers, the Brazilian government offered freedom to enslaved men if they served in the army. Impressed with the ability and dedication of these soldiers, many Brazilian army officers began to feel that slavery should end in their country. 

Even without the war, slavery was coming to an end in Brazil because coffee cultivation used less labor than either sugar plantations or mines. Also, as Brazil was the last country to free its slaves, it was facing growing international scrutiny and criticism. By 1880, nearly three quarters of the slave population had been freed. King Pedro II finally and formally abolished slavery in 1888. A year later, Pedro II abdicated and the military organized a republic.

Bananas also became a major Central American commodity. A Cape Cod, Massachusetts sea captain named Lorenzo Dow Baker bought 160 bunches of bananas in Jamaica and resold them in Jersey City in 1870. Realizing bananas were immediately popular with U.S. consumers, Minor C. Keith began planting banana trees alongside his railroad in Costa Rica in 1873. The Costa Rican government had defaulted on some payments to Keith, so instead they gave him 800,000 acres of tax-free land along the rail line. When the railroad failed to pay for itself in the 1890s, Keith concentrated on bananas. He merged with Baker’s Boston Fruit Company, which was growing bananas on about 10,000 acres in Jamaica. Figure 6.5.4. shows Jamaican workers transporting bananas on small boats for shipment to US markets. The United Fruit Company (UFC) was the result, established in 1899. The UFC quickly bought up several competitors and gained control of 80% of the bananas reaching the U.S. ​

Figure \(\PageIndex{4}\): Transport of the banana crop in Jamaica, 1894, New England Magazine, in the Public Domain.

While the U.S. media praised United Fruit for its growing banana business, its leaders brutally suppressed worker strikes, even leading later to the 1928 "Banana Massacre," in which over one thousand were killed.  This 1928 event was in response to workers asking for changes such as 6-day work weeks and compensation for work related accidents. Overlooking United Fruit's monopolistic practices and abuses, the U.S. government needed the UFC's reach into Central America whether it was their shipping fleet, large number of railways, or transport of the U.S. mail.  Imperialism was often a combination of private business and governmental cooperation, with the most vulnerable people, such as the workers, at risk of immense exploitation and suffering.

 

Review Questions

• How did Brazil become the leading exporter of coffee during the nineteenth century?
• What happened during the 1928 "Banana Massacre" in Columbia?