Latin American History

The shift of many Latin American nations away from liberal economic and political models, as well as away from European ideals began with changes in Latin American nationalism and culture and ended in economics. In the beginning of the 20th century many Latin American nations had cultural movements that were challenging the old ideas about racist positivism. In Mexico, there was a significant break with the old Diaz regime that created efforts to present the indigenous past as something to be proud of (Cohen). Nationalistic art grew with the Muralistas and Vasconselos's idea of the Cosmic Race embraced the mixing of all races. In Brazil an example of the break away from European ideals would be Sao Paulo's Modern Art Week in 1922 (Chasteen 232). This festival signified a strengthening of nationalism in Brazilian arts. These changes in ideas about race and culture were beginning all around Latin America. More widespread use of the telegraph, radio, and easier access to books and literature helped Latin America change and grow. Also, new ideas were fermenting globally. With the Russian revolution in 1917 and the rise to power of Mussolini and Hitler, radical movements were also growing in Europe (Cohen). The countries of Latin America recognized that Europe was also rejecting liberalism. Ecuador, Peru, and Bolivia started small movements of Indigenismo, which glorified the indigenous race and rejected the idea of a racial hierarchy. The Communist party grew in Brazil, Chile, Argentina, and Uruguay.

Another main reason for the shift away from liberal economic and political models was the basis of Latin American economies in exports. The demand for Latin American exports was very high and many countries were prospering. WW1 created demand for products from Latin American that were previously bought elsewhere. The worker and middle classes were growing, creating new ideas and problems. However, the export economies were unstable and even though Latin America was part of the global economy, it was too dependent on foreign capital. Any resources that could have been put into developing new technologies, improving efficiency, or self sustainment were poured into foreign firms and export centers.

The reason for the timing of the break from liberal policies lies in economics. With the Great Depression in 1929, world economic crisis erupted. The Great Depression cut off all forms of foreign interest in Latin America. There was no longer any demand for Latin American exports and all investment was cut off (Cohen). Many large commercial farms went under and there was great over production. A shift to new governments and economic policies was needed. This shift was global, as exemplified by FDR and the New Deal. The liberal economic policy of laissez faire was not appropriate in this time of economic crisis. The state's prime responsibilities became stability and growth, leading towards a more interventionist approach. During this troubled time, the discontent with liberalism made it possible for Latin American governments to intervene in exchange rates, monetary policies, regulation of wages and labor, as well as subsidies.

One of the most widespread movements that came out of this break with European ideas was the movement of Populism. These movements challenged the established oligarchial powers and aimed to bring together the interests of the working and middle classes. They were popular because they encouraged nationalism and the growth of industrialization, especially with import substitution industrialization. The Populist