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Coatsworth Article
Coatsworth Article
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RURAL ENVIRONMENT
Edited by
Otto T. Solbrig,
Robert Paarlberg,
Cambridge, Massachusetts
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Cycles of Globalization, Economic
Growth, and Human Welfare in
I Latin America
I
~ John H. Coatsworth
~~
Introduction
\ Latin America has experienced four cycles of globalization since the
if,
r~ Columbus voyages. The first cycle began with Columbus and lasted
~~.
for a century. The second commenced in the late 17th century and
ended with the Haitian Revolution (1791-1803) and its aftershocks.
~
The third began in the late 19th century and ended with the Great
:.J.,:
Depression. The most recent cycle has only just begun.
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T!
Understanding the dynamics of the past three cycles of globaliza
tion can provide useful historical and analytical perspective on the
~~ contemporary era of accelerating global integration. Each of the
Wt past cycles of globalization produced large and measurable benefits
~ . as well as huge costs. Though in at least two cases the net long-term
.~:- effects on productivity and living standards may have been positive,
.~' they were not equally or even equitably distributed in time and across
societies. Short-term net benefits generally went to tiny minorities.
Longer-term benefits tended to be better distributed, but were reaped
only much later and not by the heroic generations that suffered
through the initial shocks of globalization.
~.
At the risk of belaboring the utterly self-evident, this chapter be
gins with a historically grounded effort at definition. Then it sur
veys the effects of each of the three past cycles of globalization on
the productivity and living standards of the affected societies. The
chapter concludes with lessons and questions.
24 Glohalization and thc Uural Envir(JIll11cnt Cyclcs of Globalization, Economic Growth, and Human Welfarc in Latin Amcrica 25
Globalization Processes make some people rich, by moving merchandise and people over
Globalization can be defined as a significant, long-term increase in the oceans. Technological breakthroughs in production as well as
the flow of information, commodities, or people between distant communications, linked to new ways of making money, have fueled
regions of the earth. In this sense, globalization began with the mi every globalization cycle.
gration of early Homo sapiens from East Africa to Asia, Europe, and In a matter of decades, regular trans-oceanic and inter-oceanic
eventually the Americas. It intensified when ancient empires spread trade and communication became commonplace. It took only a
new military formations, taxes, and religions over large territories. month or so to cross the Atlantic and three months to navigate the
Globalization occurred with the early development of trade and vast Pacific. Letters with detailed instructions regularly traveled from
communications networks in the Mediterranean and over land be one end of the earth to the other. People began to move from densely
tween the Middle East and China, sub-Saharan Africa, and the In populated, resource scarce, low-income regions of the earth (like
dian Ocean. It also occurred with the colonization of the Pacific rural Spain and Portugal) to depopulated, resource rich territories
Island archipelagos and the establishment of regular exchanges across in the Americas. Trade exploded, but in totally unpredictable direc
the Indian Ocean and between Mesoamerica and the Pacific coast 1 tions. The Portuguese and later the Dutch put great effort into cap
of South America. f turing and monopolizing the traditionally lucrative trade in spices
Unlike later processes of globalization, however, these early move i from the Indian Ocean, but this trade never amounted to more than
ments took place over extremely long periods of time, affected rela if a few tons of pepper, cloves, and nutmeg each year. The economics
~
tively small populations and excluded large parts of the earth. The
globe consisted of vast land masses that took many months, even
i
r. of ocean transport soon made it possible to trade heavy European
manufactures for tons of American silver, but the huge cost advan
years, to traverse. Nobody thought to send messages or mail over ~ tage of ocean transport in carrying bulky products was not fully
such distances. Inter-regional trade was confined to luxury goods of exploited until the massive trade in slaves and sugar reached its apo
great value and little weight. Migratory movements only occurred gee in the 18th century.]
in response to great catastrophes, like climate changes or military After the Iberian voyages, globalization processes increased in
conquest. scale, speed, and intensity. A world trading economy developed, in
The Portuguese and Spanish voyages altered the scale and scope which, for example, New World silver financed European imports
of globalization processes. Between 1492 and 1565, for the first time of Asian silks and spices. Massive voluntary and forced migrations
in world history, regular trade and communication opened up be took place in decades rather than millennia. Sea power supplanted
tween the Atlantic and Indian Oceans as well as across and between the huge land armies of the ancient empires and extended colonial
the Atlantic and Pacific Oceans. Moreover, the opening of long dis
tance contacts, commerce, and migration over water routes vastly
increased the magnitude and speeded up the timing of global inter
t! rule to territories not contiguous to the seat of imperial authority.
Purposeful as well as unpremeditated exchanges of people, patho
gens, plants, and animals altered the human and physical ecology of
actions. If immense regions throughout the globe.
The Iberian seafarers did not, of course, "discover" any places Three aspects of these modern globalization processes stand out.
others had not already found. They did, however, make two differ First, globalization processes are multi-dimensional both in causes
ent but historically far more important discoveries. First, they dis and in effects. Alter one aspect, even a single crucial detail, and the
covered by trial and error the winds, currents, and navigational de entire process may change speed, direction, scale, and impact. Sec
vices that made return voyages routine. Many others over many mil t
ond, perhaps because of this complex sensitivity, globalization has
lennia had managed to sail to distant places across great expanses of .~ -'
occurred in cycles. Periods of relatively rapid, large-scale changes
ocean. The big leaps forward in globalization came when people i·,,'
:'~.'
have alternated with eras of slower change and even reversals. This
learned how to go back as well as forth. Second, the Iberian con is true both for globalization as a whole and for particular regions
querors and settlers discovered how to get rich, or at least how to ,{~~,
of the globe. Local and regional processes of integration have some
~~:
26 Globalization and thc Rural Environmcnt Cycles of Globalization, Economic Growth. and Human Welfare in Latin America 27
times worked on a distinct timetable, as for example, when the rapid on less food than Europeans. Nutrition levels, especially in Central
growth in a region's export of a diminishing natural resource ends Mexico, tended to be low by European standards and particularly
even while world trade is growing because the local resource de deficient in the proteins required to fight disease or sustain pro
pletes or rising world supplies push prices down below costs. While longed physicallabor. 4 In the core areas of European conquest, the
this chapter focuses primarily on the macro-cycles, it is worth re Native American population found itself subject not only to Euro
calling at the outset that analyzing macrohistorical trends necessar pean diseases but to Spanish and Portuguese work routines as well.
ily does some violence to underlying variations. Third, though multi Just as they needed to conserve energy to ward off and overcome
dimensional and many layered, the search for economic gain-in infection, more and more Native Americans faced demands to la
dividual as well as collective-has driven the globalization cycles of bor from dawn to near dusk. s Even without new diseases, the impo
the past five hundred years with relentless force. sition of Spanish and Portuguese work routines would probably
I:
forced labor. In such circumstances, "virgin soil" epidemics prob
America after the migrations occurred as a result of Spanish and ably took a greater toll than they would have taken had the Span
later Portuguese conquest and colonization. Between 1492 and 1537,
Spanish expeditions, many with indigenous allies recruited along
the way, managed to defeat, overthrow and replace all the major
I
iards merely sailed away, leaving their diseases behind. In a single
generation, most of Hispaniola's indigenous population disappeared,
forcing the Spaniards to send slave-hunting expeditions to other
Native American governments in the Caribbean, Mesoamerica, and islands. A generation later, Native Americans had virtually disap
the Andes. The Portuguese achieved similar successes along the coast peared from Cuba, Jamaica, and Puerto Rico. 6 On the mainland,
of Brazil after Cabral's accidental "discovery" in 1500. especially in the temperate zones of Central Mexico and compa
The Iberian conquests brought a substantial portion of the in rable regions in the Andean highlands, successive epidemics drasti
digenous population of the Americas into contact with lethal Old cally reduced but did not entirely destroy indigenous populations.
World pathogens such as smallpox, pneumonia, influenza, and The virgin soil epidemics ended in the early to mid 17th century,
measles to which they had never before been exposed. Before the though occasional but less devastating outbreaks of epidemic dis
arrival of the Europeans, Native Americans lived in a somewhat more ease continued. By this time, the indigenous population had fallen
benign disease environment than the peoples of Africa, Asia, and by more than 90 percent
Europe in part because Native Americans had few domesticated ani Globalization also took a toll on the environment in th e century
mals to carry and spread disease. 2 The abrupt epidemiological glo after the conquest. Deforestation occurred wherever the Spaniards
balization of the Americas had catastrophic effects, which were mag i> and Portuguese elected to establish a town or open a mine. 7 Ungu
nified as a result of Spanish and Portuguese treatment of their in ~.
;."
late irruptions, especially massive increases in sheep and cattle popu
digenous subjects. The pre-contact population of the Americas prob t··, lations, occurred throughout the hemisphere, with long lasting ef
ably stood at 50 to 70 million, though estimates have ranged from fects. In one well-studied case, an irruption of sheep irreversibly
less than 20 to more than 100 million and continue to be debated. transformed the Mesquital region of Mexico from a green area of
By the early seventeenth century, the Native American population intensive agriculture into a dry region of hardy grasses and scrub
had fallen to less than five million, though one estimate runs as r;~
brush suitable only for extensive grazing. R Mercury poisoning oc
high as ten. 3 curred at Spanish mining centers throughout the colonies. The con
Globalization shattered the precarious equilibrium that permit tamination of people and soil afflicted not only the workers at the
ted Native Americans in the densely populated highlands to survive ~.
': huge new mercury mine at Huancavelica in Peru but at every silver
2R G/obnlizotio/1 n/1d thc 1~1/1'Il1 E/1l'irnn111cnl Cycles of Clobalizntion, Economic Growth. a/1d HlIlI1an Welfare i/1 Latin America 29
mine where the mercury amalgamation process was used to extract capita income rose in many areas. The fragmentary evidence for
silver from lower grades of ore. 9 The Spanish decision to drain the these trends is stronger in Mesoamerica than in the Andes, but it is
five lakes that surrounded Mexico City destroyed pre-conquest ag persuasive. Evidence for other regions is mixed and often difficult
ricultural systems based on raised fields (chinampas) and perma to evaluate. In Central Mexico and some of the more densely popu
nently altered the ecology of the Valley of Mexico. 10 lated highland regions in the Andes, the people who survived the
The Iberian conquests and subsequent depopulation led to the epidemics tended to abandon more marginal lands and resettle on
abandonment and loss of pre-conquest agricultural techniques. The the most fertile and best-watered terrain. 14 This occurred sponta
greatest destruction occurred in areas of dense pre-conquest popu neously in some villages. In many cases, however, colonial authori
lation, like the Valley of Mexico, where the Spaniards did not under ties forced Native American survivors to resettle in new towns and
stand or chose to ignore the raised field techniques that had sup villages with people from other places,ls Frequently, Spaniards and
plied the Aztec capital of Tenochtitlan (renamed Mexico City by the other outsiders grabbed the best of the lands left vacant after epi
Spaniards) with much of its food. In many regions, technical knowl demics and resettled indigenous villagers as peones on thei r hacien
edge, irrigation systems, terraces, and the like fell into disuse. Such das. 16 Whatever the process, the results were impressive. Total agri
losses, however, had occurred many times over the in the pre-con cultural production fell as the death toll mounted, but per capita
quest history of the Americas. The irrigation systems of Teotihuacan output rose as survivors resettled on the best lands.
and most of the lowland Maya city-states, for example, had been The "Columbian exchange" of plant and animal species also con
forgotten long before the arrival of the Spaniards These systems tributed to rising productivity. Biodiversity rose in both the Old
collapsed at least in part as a result of man-made ecological disas World and the new, but the increase was greater in the Americas.
ters associated with overpopulation. I I The raised fields that sup The Old World held 12 of the world's 14 species of domesticated
plied the great city of Tiwanaku on the shores of Lake Titicaca had animals and some 500 of the 640 plant species cultivated by hu
fallen into disuse long before the Incas conquered the region and a mans. 17 Conquest and colonization brought the diversity and crop
century before the Pizarro brothers arrived. 12 Decades of dry weather mix of New World agriculture closer to that of the old. The Ameri
had lowered the water level in the lake and made the Tiwanaku cas gave the Old World maize, potatoes, hot peppers, beans, pea
canals useless. In the post-conquest era, the demographic collapse nuts, tomatoes, tropical fruits, and cacao, to mention the most ex
caused the abandonment of indigenous infrastructure created to portable of its cultivated plants. European transplants to the new
accommodate much larger populations than those that survived the world included wheat and other grains, wine grapes, onions, sugar
epidemics. Given the population losses of the 16th century and the cane, fruit trees, and rice. Greater diversity increased the options
consequent fall in demand for food, the immediate impact of aban available to farmers, and thus agricultural productivity, on both sides
doning indigenous agricultural systems may have been small. For of the Atiantic. 18
example, the arrogance of the Mexico City authorities, who cared The introduction of domesticated animals also produced ben
little for the effects of draining the lakes on the chinampas, is indis efits. Though the explosive multiplication of hoofed animals dam
putable, but the negative impact on the food supply would have t aged crops and even entire ecosystems, the long-term impact of in
been far more noticeable if the city's population had not fallen from troducing domesticated animals was positive. The new animals trans
perhaps as many as 200,000 to under 30,000 during the 16th cen formed both agricultural practices and dietary standards, especially
tury.13 in Mesoamerica. The Europeans brought horses, oxen, donkeys,
Globalization also yielded substantial, long term benefits, though cattle, sheep, goats, pigs, chickens and a variety of other animals,
the human catastrophe of the post-conquest century makes it im including silk worms and pets of all kinds. In the context of rapid
possible to weigh them against the millions who perished. As the ~,; ':
depopulation, the fact that animals required more land but less la
indigenous population collapsed over the 16th century and into the bor to produce equivalent nutritional benefits may even have helped
17th century, agricultural productivity, nutrition levels, and per , to improve resistance by raising nutrition levels. Eventually, indig
,:"
30 Globalization and the Rural Environment Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 31
enous populations learned how to control and make use of the new The Portuguese and the Spaniards brought Asian sugar cane and
animal populations. Smaller domesticates, especially chickens and African slaves to the Americas. At first only the Portuguese exported
pigs, became common in Native American communities through substantial quantities of sugar, up to 9,000 tons by the early 1600s.
out the Americas. Even in regions outside European control, the Slave-worked sugar plantations did not become dominant in the
spread of wild horses and cattle transformed the living standards of American tropics until late in the 17th century. The transition be
indigenous nomads from the Argentine pampas to the Great Plains gan in the 1640s, when the Dutch facilitated the transfer to the Car
of the United States and Canada. In the both regions, Native Ameri ibbean of slaves, plants, technology, and equipment from the terri
cans adopted the horse to extend hunting ranges. In Mesoamerica tories in northeast Brazil, which they had seized temporarily (1630
and the Great Plains, and probably throughout the rest of the Ameri 54) from Portugal. By the 1740s, both British Jamaica (exports of
cas as well, the amount of meat proteins in Native American diets 36,000 tons per year) and French St. Domingue (61,000 tons) pro
increased substantially, with positive effects on stature, stamina, and duced more than Brazil (27,000 tons) The other British, Dutch,
longevity. 19 French, and Danish islands were not far behind. 21
The European conquest and colonization had other productivity Sugar production could not have developed in the Americas with
enhancing effects. The Spaniards and the Portuguese introduced out the migration of a working population from outside the hemi
new tools and technologies as well as new institutions and methods sphere. By the early 16th century, the first cycle of globalization had
of organizing economic activity. The Americas imported sailing eliminated the Native American population of the Caribbean and
ships, wheeled vehicles, iron and steel making, deep shaft mining, greatly reduced that of Brazil and the other mainland colonies. Only
and the chemistry of tanning leather and making soap, along with slaves could have solved the New World's tropical labor shortage,
money and commercial credit. The opening of long distance trade because only slaves could have been forced to labor for subsistence
also contributed to productivity advance. Unfortunately, many of wages in labor-scarce regions where land was abundant. Brazilian
these net benefits did not reach the indigenous population, either planters enslaved the Native Americans initially, but they died or
because as in most cases death occurred too swiftly or because the escaped at such high rates that slave-hunting expeditions far into
conquerors and their descendants imposed rules that concentrated
the private gains in the hands of European and Creole minorities.
.
L
I:
.
~
the interior could no longer replace them. 22 Sugar could have been
produced (and was later on) by free wage laborers, but the wage
In short, the European conquest and colonization of the new world f"
r~
levels required to attract and transport free immigrants from Eu
"
f~
produced large long term net benefits that most of the indigenous rope to the labor scarce and disease-ridden tropical regions of the
[
population failed to appreciate or experience-because the small Americas exceeded the cost of importing slaves from Africa by a
number of Native Americans who managed to survive were legally
[. wide margin. In the British West Indies, English colonists first popu
excluded from reaping them. ~.'. lated Barbados, Nevis, and St. Kitts but were dislodged by slave plan
!~ tations whose owners could afford to bid up land prices because
Globalization, Sugar, and Slavery, 1680-1791 sugar production with African slaves proved to be more profitable
't-
A second cycle of globalization occurred in the American tropics than tobacco and indigo grown by free farmers. 23
with the spread of sugar cultivation and plantation slavery from Between 1500 and 1888, in the nearly four cen turies of the trans
Brazil to the Caribbean. While the first cycle arose from the com Atlantic slave trade, as many as nine million Africans were shipped
plex encounter between Europeans and Native Americans and thus r:~~ to the new world. Of that number, 1.3 million arrived between 1500
'''-~.
involved the entire hemisphere to one degree or another, the second and 1700, an average of some 7,000 per year. In the 18th cen tu ry,
cycle affected mainly the tropical zones of the New World. Though the peak era of African slavery in the Americas, more than four
more limited geographically within the Americas, the effects of this million slaves were forcibly transported to the Americas. By the 1770s,
second cycle of globalization extended to Africa as well as Europe. 2o over 50,000 slaves a year were arriving, the majority of them in
British ships. The vast majority of all slaves brought to the Americas
32 Globalization and the Rural Environment Cycles of Globalization, Economic Growth, and Humall Welfare in Latin America 33
were sold in the sugar growing regions of Brazil and the British, eighteenth century.28 Even Spanish Cuba, which produced more to
Danish, Dutch, French, and Spanish West Indies. 24 bacco than sugar until the end of the 18th century, had a higher
African slaves thus repopulated the Americas after the collapse of GDP per capita than the United States until at least the 1830s. 29
the Native American population. More Africans migrated to the New This economic success occurred despite the disruptive effects of fre
World between 1492 and 1800 than Europeans. 25 The Africans wert' quent wars and related slave and maroon revolts. Not until Haiti
not taken to the areas where the largest number of Native Ameri exploded in 1791 could anyone begin to glimpse the abolitions to
cans died, such as the densely populated highlands of Mexico and come.
Peru. Nor were many Africans taken to the regions of heaviest Eu After 1791, slavery in Latin America ceased to be associated with
ropean immigration to supplement free working populations in cit economic growth and commercial success. Only its revival after 1800
ies, mining centers, and agricultural estates producing for local and in the southern United States made it seem feasible as a modern
regional markets. The trans-Atlantic slave trade brought most of its institution in a modernizing society. In Latin America, slave planta
human cargo to tiny patches of tropical coast scattered along a nar tions gained ground for a time only in Brazil and Cuba, but eco
row strip of northeast Brazil, the north coast of South America, and nomic stagnation rather than economic growth was the result. 50
a small number of the Caribbean islands. Like the first cycle of globalization in Latin America, the second
Sugar plantations in all the Americas covered no more than a few produced huge short-term costs. While the first cycle killed millions
thousand square miles, all located on the seacoast or within a rela of Native Americans, the second inflicted vast suffering on millions
tively short distance, usually less than 15 miles or so, of a seacoast. of Africans kidnapped from their homes and forcibly transplanted
Except in a few places where navigable rivers made interior lands to disease-ridden tropical coasts across the Atlantic. As in the first
accessible to the sea, sugar was so costly to ship overland, even after cycle, short-term private gain both motivated and rewarded the Eu
reducing the cane to processed cakes or molasses, that it had to be ropeans who made slavery and sugar their business. In contrast to
grown near the ocean. This constraint also affected the production the first cycle, however, it is not so clear that anyone reaped great
of the other, much less important, agricultural products produced gains in the long run.
by slave labor such as cacao, cotton, rice, and tobacco, until the rail Historians and economists have debated for decades about the
road era began in the 1830s. 26 'i·;"
" links, if any, between slave plantation agriculture and long term eco
The location constraint also limited the environmental impact of nomic retardation. Whatever the nature of those linkages may be, it
sugar production. Deforestation, however, was extensive both in Bra is clear enough that neither slavery nor sugar cane cultivation con
zil and the islands. Forests were cleared to plant cane and to supply tributed to economic growth or development in Brazil or the Car
fuel for sugar mills as well as for urban construction and other pur ibbean in the long run. The much debated issue of how much, if at
poses. The coastal forests of northeast Brazil, Rio de Janeiro, Sao all, slavery contributed to the industrial revolution in Britain or the
Paulo, Minas Gerais and other settlement zones largely disappeared United States, on the other hand, has now shifted back towards ear
during the colonial era, permanently altering the landscape of vast 'i'~: lier views that assigned slavery and slave profits a significant and
territories. 27
positive role. If this is true then the separation between winners and
Sugar plantation agriculture produced enormous short-term eco losers in the second cycle of globalization is both temporal and geo
nomic gains. The profits from this famously profitable industry, es graphic. The industrial revolution has never reached most of the
pecially in the Caribbean, went to fuel the luxury consumption, po former slave plantation zones of the Americas. 31
litical careers, and investment portfolios of absentee and resident
owners alike. Much less appreciated is the extraordinarily high pro Globalization and Export-Led Growth, 1880-1929
ductivity, given 18th-century sugar prices, of the West Indian plan The third cycle of globalization occurred with the onset of export
tation economies. The per capita GDP of the sugar islands exceeded led economic growth in the closing decades of the 19th century.
that of the 13 British North American colonies right through the The timing differed from place to place, but the process quickly
34 Globalization and the Rural Environment
Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 35
.~\
abrupt redistribution of assets provoked political and social unrest,39
trial economies. The trend toward convergence ended and even ex -1"
Outside of agriculture, industrial and mining development required
perienced some reverses in the half century after 1930, but the econo
ever larger or "lumpier" investments. Productivity and wages rose,
mies of the region did not cease to grow. Several major economies, ":."
r,s but returns to scarce, often foreign capital rose faster.
including Mexico and Brazil, achieved relatively high rates of growth ."
:i: A second dimension of this inequality shock affected labor scarce
from the 1950s into the 1970s. 35
regions where export producers imposed and governments enforced
Though the Latin American economies did not manage to main
~~';'
coercive systems of forced labor, indenture, and even slavery to fa
tain the high growth rates of the pre-1930 era, the overall twenti
,~~ cilitate export production. These included the imposition of rural
Yi Globalization and thc Rural EnvironmCllt Cycle" ofGlo!Jalization. Economic Growth, and Human Welfare in Latin America 37
passbooks and vagrancy statutes that permitted local authorities, in ing at the end of the 19th century. Many liberal policy makers, whose
Cuba, Guatemala, and parts of the Andes, to force unwilling work ideological forebears had insisted on education as crucial for na
ers to labor on export plantations. 40 In the henequen growing areas tional development a few decades before, now looked to foreign
of Mexico, new forms of slavery were introduced, abetted by the investment and European immigration as the keys to economic
Diaz regime when it captured Yaqui Indian rebels in Sonora on the modernization.
u.s. border and shipped them to Yucatan for sale on the docks to When the high rates of economic growth that began in the late
local planters. 4 \ "Coolie" laborers in the Peruvian highlands rebelled 19th century ended in the Great Depression, the major Latin Ameri
repeatedly against slave-like conditions at the turn of the century.'12 can economies turned inward. The region's share of international
Coercive forms of enganche or indenture also developed in south trade declined steadily after 1945. 44 In the post war era, part of the
ern Mexico, Central America, and parts of the Andes. Migration, decline in Latin America's share of world trade occurred because
population growth, and reforming governments helped to end such various war ravaged exporters recuperated, but the decline contin
practices, but only after decades of abuse in many cases. ued into the 1970s. Most of the smaller economies in Latin America
Third, the wage gap between unskilled and skilled workers tended did not turn inward as fully as the major economies because their
to grow, as demand for the latter outpaced supply in the early de markets were too small to absorb the output of efficient large-scale
cades of economic growth. This is a common feature of early growth manufacturing plants. 45 The five Central American countries at
spurts in many regions of the globe. In Latin America, the migra tempted to overcome this constraint by creating a common market
tion of rural unskilled workers to the cities kept unskilled wages in 1960, but the effort collapsed when economic tensions exploded
low. In some countries, notably Argentina, Brazil, Chile, and Uru in a border war between EI Salvador and Honduras in 1969.41' The
guay, immigration from Europe tended to further dampen unskilled import substituting policies vigorously pursued in Argentina, Bra
wage rates relative to skilled wages, though real wages levels in ab zil, Chile, Colombia, Mexico, and Uruguay in the postwar era, even
solute terms increased. when balanced against the more export oriented smaller economies,
Finally, the failure of many Latin American governments to in reduced Latin America's share of international trade from 13.5 per
vest adequately in the development of human resources also tended cent in 1946 to 4.4 in 1975.
to exacerbate initially and then to prolong the income inequalities
that make this region the most unequal in the world. Sustained eco Concluding Remarks
nomic growth did contribute to incremental improvements in all Since the financial and economic collapse of the early 1980s, Latin
the conventional indicators of human development -longevity, America has embarked on a new cycle of globalization. As in previ
health, education, and the like. Life expectancy in Latin American ous eras, globalization has reached some countries and regions, such
increased from less than 40 years on average to over 65 in the late as Chile and Mexico, earlier than others. A number of the major
20th century. Infant mortality rates dropped from 300 to 400 per economies, such as Argentina and Brazil, have elected for the time
1000 live births in 1900 to less than 50. Illiteracy fell from over 80 to being not to rely on the external sector to dynamize their econo
"]0-;
near ten percentY These achievements required substantial invest mies. The late 20th century globalization cycle is still at such an
ments in human capital, made all the more diffi~ult by rates of popu early phase of its development that it could still be blocked by iner
.
lation growth that accelerated to peaks in the 1950s and 1960s in ~~ tia or even reversed by a return to the inward looking pre-] 982
many countries. Nonetheless, progress in most countries of Latin strategies. Market pressures and elite policy preferences, however,
America, and particularly in nations historically divided by ethnicity push toward globalization. The economic logic is inescapable, but
and race, has lagged behind the region's economic capacities and the political viability of elected governments that embrace global
the minimum requirements for modern economic progress. Part of ization in the 21 st century will depend critically on the magnitude
the explanation for this historic failure probably lies in the relatively and distribution of the costs and benefits.One measure of an
low cost of the skills and technology Latin America began import- economy's globalization is the ratio of exports to GOP. In Argentina
Cycles of Globalization, Economic Growth. and Human Welfare in Latin America 39
38 Globalization and the Rural Environment
Finally, the first and third cycles produced long-term benefits that
and Brazil, that ratio in 1998 still hovered between five and ten per
cent. In Chile and Mexico, the ratio stood at 25 and 24 percent eventually spread throughout society. The rise in per capita income
respectively.47 in the 16th century did not continue, but the 17th century resump
tion of population growth, in Mesoamerica at least, certainly owed
The three cycles of globalization analyzed in this chapter all shared
something to improved productivity and living standards. The best
certain characteristics that appear to some degree to characterize
case for the proposition that globalization can promote welfare, how
contemporary processes, as well. First, each cycle of globalization
raised the productivity of the affected economies. GDP per capita ever, comes from the third cycle. Relatively high rates of economic
growth achieved in the half century before 1930 eventually contrib
rose substantially after the Spanish conquest in the late 15th and
uted to measurable improvements in living standards, both through
16th centuries, increased to even higher levels in the Caribbean slave
higher real wages and by increasing the tax base generating resources
economies of the 18th century, and took off again during the epoch
of export-led growth in the late 19th and early 20th centuries. Open for public spending and investment.
The profoundly contradictory history of past cycles of globaliza
ness to external trade, capital, technology, ideas, and immigrants
tion in Latin America makes it important that policy makers, pro
has usually promoted economic growth, while less integrated or
closed economies have tended to grow more slowly. This is true ducers, and citizens undertake conscious efforts to better under
stand and manage the distribution of costs and benefits in the fu
whether the comparison is made across cases at a single moment in
ture. Pareto optimality-the condition that no one suffer, even if
time or by comparing growth rates within and between countries
some gain-would constitute a huge step forward. At the onset of a
passing through phases of greater and lesser integration to the glo
bal economy.48 fourth cycle of globalization, a crucial question remains to be an
swered. Have the natural and policy sciences developed over the
The second commonality is the alarming tendency for tiny mi
past 500 years sufficiently to reduce the risks of globalization to
norities to reap the lion's share of the short term benefits of global
ization-Spanish conquerors, slavocracies, export oligarchies and acceptable levels? Will it be possible to distribute the costs and the
benefits of the fourth cycle more equitably and with less damage to
foreign investors. Europeans survived the new world epidemics they
unleashed and ended up with mineral riches, titles to lands for the environment?
merly occupied by the Native Americans who died, and a monopoly
on high office and tax revenues. Slave owners compelled their chat Notes
On the magnitude and shape of the Iberian trans-Atlantic economy, see
tel to labor in exchange for subsistence rations, far below the wage Carla Rahn Phillips, "The Iberian Atlantic," ltinerario: European Journal
level a free market would have set. Oligarchies usurped land, prof
of Overseas History 23 (1999): 84-106.
ited from high returns to the scarce capital they deployed, and cre
Jared Diamond, Guns, Germs and Steel: The Fates of Human Societies
human resources.
William M. Deneven, ed., The Native Population of the Americas in 1492,
Third, all three globalizations coincided with a sharp decline in
2d ed. (Madison: University of Wisconsin Press, 1992); Linda A. Newson,
living standards for most people and a sharp rise in inequality. Na " Indian Population Patterns in Colonial Spanish America," Latin Ameri
tive Americans, made more vulnerable by abuse, overwork, and dis can Research Review 20 (1985): 41-74. See also Noble David Cook, Born
location, died in their millions of Eurasian diseases. The rise of the to Die: Disease and New World Conquest, 1492-1650 (Cambridge, UK:
trans-Atlantic. slave trade reduced the legal status and physical wel ;.;.
Cambridge University Press, 1998).
fare of millions of hitherto free Africans and their descendants. Ex 4 Woodrow Borah and Sherburne F. Cook, Essays in Population History, 3
port-led growth produced widespread theft of peasant lands, wid f vols. (Berkeley: University of California Press, 1971-79), vol. 3: Mexico
ening wage gaps between skilled and unskilled, and the unhealthy and California, chap. 2.
multiplication of urban slums and favelas. Extensive though region
ally concentrated environmental damage also occurred in each cycle.
40 Gloho/izllticl/1 ol1li the r~lIml Envimllrrll'lIt
Cycles o(Glol'o/izotioll, Econol1/ic G1'Owth. and HlIIlIan Welfarc in Latin A nlcrica 41
5 Charles Gibson, The Aztecs Under Spanish Rille: A History o(l1le Indio liS
and potatoes in Ireland caused severe problems well into the 19th cen
of the Valley of Mexico, ]519-18 tn (Stanford: Stanford University Press,
tury. See i/7id., pp. 183-5 and Arturo Warman, La historia de UII bastardo:
1964), pp. 224-25. On the Andes, see Steve J. Stem, Peru's lndion Peoples
maiz y capitalismo (Mexico: 1nstituto de Investigaciones Sociales, UN AM
and the Challenge of Spanish Conquest: Huamanga ta 1640 (Madison:
and Fondo de Cultura Economica, 1988).
University of Wisconsin Press, J 982), chap. 6.
J 9 Crosby, Columbian Exchange, chaps. 3 and 5. Also Joseph M. Prince and
6 William D. Phillips, Jr., and Carla Rahn Phillips, The Warlds af Christo
Richard H. Steckel, "Tallest in the World: Native Americans of the Great
pher Columbus (Cambridge, UK: Cambridge University Press, J 992) chap.
Plains in the Nineteenth Century," in NBER Workillg Paper Series. His
5. And see Felipe Fernandez-Armesto, Columblls (Oxford: Oxford Uni
versity Press, 1991).
torical Paper 112 (Cambridge, MA: National Bureau of Economic Re
search, 1998). To the purposeful transfer of plants and animals should
7 Elinor G. K. Melville, A plague of sheep: environmental conseqllences of be added the incalculable number of"stowaways"-especially grasses and
the conquest of Mexico (Cambridge, UK: Cambridge University, J 994), ot her "weeds," as well as rodents and insects-which made t he trans
pp.55-9. Atlantic journey, hidden from view like the bacteria and viruses that killed
8 Ibid., chap. 4. so many. Some of these species undermined productivity by reducing
harvests, but their net effect over time seems not to have detracted much
9 Rafael Dobado, "Salarios y condiciones de trabajo en la Minas de
from the gains made possible by the new crops and farm animals.
Almaden, 1750-1839," in La e[Onomia espanola al final del Alltiguo
Regimen, ed. Pedro Tedde (Madrid: Alianza, 1982); Guillermo Lohmann ,, 20 The recovery of silver production in New Spain (Mexico) and the
Villena, Las minas de Huancavelica en los siglo.~ XVI y XVI!. (Lima: ; Viceroyalty of Peru (Bolivia and Peru) in the 18th century along with
i
Pontificia Universidad Cat61ica del Peru, 1999). I the resulting growth in external trade could also be treated as a kind of
10 Gibson, The Aztecs Under Spanish Rule, chap. 1I. l
~
reglobalization process after the 17th "century of depression." In the
Mexican case, however, silver production in 1800 was only marginally
I I William L. Fash, Scribes. Warriors, and Kings: The City of Coplin and the higher, if not actually lower, in per capita terms than in 1700, while Peru's
Ancient Maya (New York: Thames and Hudson, 1991), chap. 9. And see
f
Rebecca Storey, Life and death in the ancient city of Teotihllawn: a 11I0d
t silver production never came close to repeating, even in absolute terms,
the output achieved before 1630. On Mexico, see John H. Coatsworth,
ern paleodemographic synthesis (Tuscaloosa: University of Alabama Press, "The Mexican Mining Industry in the Eighteenth Century," in The Econo
1992). mics of Mexico and Peru During the Late Colonial Period: I76()-18I(), ed.
12 Alan L. Kolata, The Tiwanaku: portrait of an Andean civilization (Cam Nils Jacobsen and Hans Jiirgen Puhle (Berlin: Colloquium Verlag, 1986),
bridge, MA: Blackwell, 1993). 26-45. On Peru, see Enrique Tandeter, Coercion and Market: Silver Min
ing in Colonial Potosi. 1692-1826 (Albuquerque: University of New
13 Gibson, The Aztecs Under Spanish Rule, chap. 9.
Mexico Press, 1993).
14 Borah and Cook, Essays in Population History vol. 3, pp. J 72-76. See also
Herbert Klein, African Slavery in Latin America and the Caribbean (Ox
Gibson, The Aztecs Under Spanish Rule, pp. 282-86.
ford: Oxford University Press, 1986), p. 59.
15 The "reducci6n" or "congregaci6n" of indigenous villagers into Spanish
Stuart Schwartz, "Indian Labor and New World Plantations: European
style towns occurred in Peru with the reforms of Viceroy Francisco de
Demand and Indian Responses in Northeastern Brazil," American His
Toledo in the 1570s; similar forced resettlements occurred throughout
torical Review 83 (June 1978): 43-79.
Mesoamerica. See Stern, Peru's Indian Peoples. chap. 3.
Klein, African Slavery, p. 50.
16 Francois Chevalier, Land and Society in Colonial Mexico: The Great Ha
cienda (Berkeley: University of California Press, 1970), chap. 5. David Eltis, The Rise ofAfrican Slavery in the Americas (Cambridge: Cam
bridge University Press, 2000), chap. 1.
17 Alfred W. Crosby, Jr., The Columbian Exchange: Biological and Cultllral
Consequences of 1492 (Westport, CT: Greenwood Press, 1972), p. 170. Also Ibid., Table 1-1, pp. 9-11.
Diamond, Guns, Germs and Steel, p. J 62. 26 B.W. Higman, "Economic and Social Development of the Bri tish West
18 Crosby, Columbian Exchange., chaps. 3 and 5. The dietary effects also Indies from Settlement to ca. 1850," in The Cambridge Economic History
appear to have been positive, though over-dependence on corn in Italy ofthe United States, ed. Stanley L. Engerman and Robert E.Gallm an (Cam
bridge, UK: Cambridge University Press, 1996), pp. 297-336. Also Stuart
42 Globalization and the Rural Environment Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 43
B. Schwartz, Sugar Plantations in the Formation of Brazilian Society: Ba36 Maddison, "Explaining the Economic Convergence of Nations, 1820
hia, 1550-1835 (Cambridge, UK: Cambridge University Press, 1985). 1989," 20-61.
27 Schwartz, Sugar Plantation, p. 77. See also Preston E. James and C.W.
Minkel, Latin America, 5th ed. (New York: John Wiley & Sons, 1986), pp.
t
I 37 John H. Coatsworth, "Economic and Institutional Trajectories in Nine
teenth-Century Latin America:' in Latin America and the World Economy
472ff. ! Since 1800, ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA:
David Rockefeller Center for Latin American Studies, Harvard Univer
28 David Eltis, "The Total Product of Barbados, 1664-1701," Journal of Eco
nomic History 55 (1995): 321-36. sity Press, 1998),23-54.
38 John H. Coatsworth, "Railroads, Landholding and Agrarian Protest in
29 Pedro Praile Balbin, Richard J. Salvucci, and Linda K. Salvucci, "E! caso
the Early Porfiriato," Hispanic American Historical Review 54 (February,
cubano: exportaci6n e independencia," in La independencia americana:
consecuencias econ6micas, ed. Leandro Prados de la Escosura and Samuel 1974): 48-71.
Amaral (Madrid: Alianza Universidad, 1993), part II, chap. 3. 39 The Mexican Revolution began in western Chihuahua where elite land
grabbing inspired by railroad construction provoked the victims to take
30 Cuban GDP per capita was only slightly higher in 1850 than in 1750,
up arms. See Friedrich Katz, The Life and Times ofPancho Villa (Stanford:
according to Ibid. On Brazil, see Angus Maddison, "Explaining the Eco
Stanford University Press, 1998), p. 28. For a Brazilian example, see Todd
nomic Convergence of Nations, 1820-1989," in Convergence of Produc
A. Diacon, Millenarian Vision, Capitalist Reality: Brazil's Contestado Re
tivity: Cross National Studies and Historical Evidence, ed. WIlliam T
bellion, 1912-16 (Durham: Duke University Press, 1991), chap. 4.
Baumol, Richard R. Nelson, and Edward N. Wolff (Oxford: Oxford Uni
versity Press, 1994), pp. 20-61. 40 For a survey that is appropriately skeptical of poorly established claims,
see Arnold J. Bauer, "Rural Workers in Spanish America: Problems of
I 31 See the essays in Barbara L. Solow and Stanley M. Engerman, eds., Brit
Peonage and Oppression," HispanicAmerican Historical Review 59 (1979):
ish Capitalism and Caribbean Slavery: The Legacy of Eric Williams (Cam
!
bridge, UK: Cambridge University Press, 1987), especially the editors' in 34-63.
troduction. 41 See Allen Wells, Yucatan's Gilded Age: Haciendas, Henequen and Interna
tional Harvester, 1860-1915 (Albuquerque: University of new Mexico
32 The best survey and analysis is Kevin H. O'Rourke and Jeffrey G.
Williamson, Globalization and History: Evolution of a Nineteenth-Cen Press, 1985).
tury Atlantic Economy (Cambridge, MA: MIT Press, 1999). 42 Wilfredo Kapsoli, "La crisis de la sociedad peruana en el contexto de la
Guerra," in Reflexiones en torno a la guerra de 1879, ed. Jorge Basadre, et
33 Victor Bulmer-Thomas, The Economic History of Latin America since In
al. (Lima: Francisco Campodonico F. y Centro de Investigaci6n y
dependence (Cambridge, UK: Cambridge University Press, 1994), Appen
dix 2, pp. 438-41. Capacitaci6n, 1979), 339ff.
43 The Mexican case is typical. See Instituto Nacional de Estadistica,
34 Michael J. Twomey, "Patterns of Foreign Investment in Latin America in
Geografia e Informatica, Estadisticas hist6ricas de Mexico, 2 vols. (Mexico:
the Twentieth Century," in Latin America and the World Economy Since
Instituto Nacional de Estadistica, Geografia e Informatica, 1985), vol. I,
1800, ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA: David
Rockefeller Center for Latin American Studies, Harvard University Press, chaps. 1 and 4.
1998), pp. 177-85. 44 Bulmer-Thomas, The Economic History of Latin America since Indepen
35 Bulmer-Thomas, The Economic History of Latin America since Indepen dence, p. 271.
dence, Appendix 3, pp. 442-47. Also Andre A. Hoffman and Nanno 45 The six major import substituting economies saw their share of world
Mulder, "The Comparative Productivity Performance of Brazil and trade drop from 8.9 percent in 1946 to less than one fourth of that level
Mexico, 1950-1994," in Latin America and the World Economy Since 1800, (2.2 percent) in 1975; the smaller and more open economies dropped by
ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA: David ,U",
'['
a little over half, from 4.6 to 2.2 percent. Ibid., p. 271
~.
Rockefeller Center for Latin American Studies, Harvard University Press, r
46 Ibid., p. 271.
1998), pp. 88-90. Also Maddison, "Explaining the Economic Convergence
'irt.
~: 47 World Bank, Entering the 21st Century: World Development Report 1999/
of Nations, 1820-1989," pp. 20-61; O'Rourke and Williamson, Global
ization and History, chap. 1. ~ii.:,2000 (Oxford: Oxford University Press, 2000) ,pp. 254-55.
I~
rl'.=..
44 Globalization and the Rllral Environment Cycles of G/aba!izatian, Ecanomic Growth, and Hllman Welfare in Latin America 45
48 For a recent test of this proposition for Latin America, see Alan M. Tay Eltis, David. The Rise of African Slavery in the Americas. Cambridge: Cam
lor, "On the Costs of Inward-Looking Development: Price Distortions, bridge University Press, 2000.
Growth, and Divergence in Latin America," Journal of EcolliJrl1ic History
58 (March, 1998): 1-28. - - - . "The Total Product of Barbados, 1664-1701." Journal af Economic
Histmy 55, no. 2 (1995): 321-36.
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~I