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Latin American Industrialization. How do we think about Latin American industrialization (theories, myths) How do we periodize Latin American development? How did governments try to promote industrialization? What impact has it had on Latin Americans?. Theories of Industrialization.

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Latin american industrialization l.jpg
Latin American Industrialization

  • How do we think about Latin American industrialization (theories, myths)

  • How do we periodize Latin American development?

  • How did governments try to promote industrialization?

  • What impact has it had on Latin Americans?

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Theories of Industrialization

  • Hispanic capitalism—colonial beliefs in monopoly, limited credit, special privileges

  • Economic liberalism (late 19th century model)

    • Spread of free trade and capitalism vital for modernity

    • Implies but does not guarantee the end of non-wage labor

    • Makes no effort to redistribute wealth –only the market does that

    • Supported by industrialized nations and many modernizing nations

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Kinds of Industrialization

  • Labor intensive

  • Capital intensive-railroads

  • Consumer goods—textiles, shoes, food

  • Durable goods: sewing machines, cars

  • Capital goods for heavy industry: steel, iron, oil chemicals

  • Factories that produce other factories and machines

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Obstacles to Industrial Development

  • Shortage of capital

  • Lack of technology

  • Lack of skilled literate work force

  • Low purchasing power of majority of population

  • Extensive rural population occupied by export agriculture

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Typical Agricultural Export Industries

  • Sugar cane

  • Tobacco

  • Chicle

  • Bananas and other tropical fruits

  • Cattle

  • Cereal Production

  • Textile fibers (cotton, wool, henequen)

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Extraction of Raw Materials

  • Foreigners involved as investors and owners of mining, agriculture, and food processing industries such as cattle production, sugar production, coffee, etc.

  • Many mines in Latin America owned by foreign corporations because of technological resources. Particularly important in Chile and Bolivia.

  • U.S. corporations exported many tropical fruits and products---bananas, sugar, etc.

  • Labor for these endeavors often paid badly and sometimes imported from abroad such as Indian, Chinese and Japanese laborers to replace former slaves

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Classic Problems of Economic Development

  • Problem of economic development vs. social justice

  • Dilemma continues through 20th century

  • 19th Century solution: foreign investment and limited political participation

  • Case studies

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Landholding inequities

  • Emphasis on commercial agriculture for export created new conditions of landholding as foreign born investors and local elites took over lands previously held by peasants and indigenous groups

  • Railroad building often caused similar conditions to occur

  • Resulted in extreme differences between rural rich and poor

  • Led to poor rural people migrating to cities in search of work

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Government efforts to promote industry

  • Governments create new economic monopolies to keep profits in country

    • Yrigoyen in Argentina did this in 1922 when he created YPF (Yacimientos Petrifoleros Fiscales) the state petroleum monopoly

    • Yrigoyen later imitated by the creation of PEMEX in Mexico

  • Governments pass new laws to promote industrialization, rather than agriculture

    • Change customs tariffs

    • Create new tax laws favoring urban industry

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Other Government Efforts

  • Promote greater literacy

    • Seen in Mexico in the 1930s, Cuba, Nicaragua in the 60s and 70s

  • Place restrictions on foreign industrialists and investors

  • Promote better living conditions for the working class—seen in populist governments of Getulio Vargas, Juan Peron, etc.

  • Expand university education as well as technical education