Over 27 chapters, these two volumes review the most recent and influential research on Latin America's economic history from the colonial period to the present day. This is an ambitious and impressive task covering five centuries, more than a dozen countries and a multitude of economic sectors, and is executed by the three editors and various contributors with enormous creativity and rigour.
Trying to summarise a voluminous masterpiece like this one would be totally impossible. Instead it may be more useful to concentrate on some major themes that emerge from this study and that will influence our teaching and research on Latin America in the future. Starting in the colonial period, the first few chapters depict the creation of new colonial regimes in Latin America as a complex, multifaceted process that ‘involved both indigenous peoples and invaders’ in equal ways (vol. 1, p. 111). The consolidation of a centralised institutional system in Spanish America resulted from the preferences of the Spanish crown (vol. 1, Chapter 12), but also from the way indigenous empires in the Andes and Mesoamerica had been organised before 1492 (vol. 2, Chapter 4). Indigenous groups provided not only manpower for the exploitation of the mines, but also technological know-how (vol. 1, Chapter 9). They also adopted European vegetables and fruits (although not all varieties; wheat, for example, took a long time to succeed) and produced them for their own consumption and for the market (vol. 1, Chapter 8).
Yet the political, social and economic influence of indigenous peoples diminished gradually due to a combination of demographic, economic and political factors. The demographic impact of colonisation was particularly catastrophic as the indigenous population decreased from at least 50 million people in 1492 to less than six million by the mid-seventeenth century (vol. 1, Chapter 5). In his contribution, Carlos Sempat shows how this demographic crisis changed the methods of production in the agricultural sector: large proportions of land were abandoned, the indigenous irrigation systems were transformed, and the expansion of European crops and livestock accelerated significantly (vol. 1, Chapter 8).
The colonial regime gradually evolved into one characterised by a difficult equilibrium between the crown and the settler elite, with the indigenous population playing a subsidiary role (vol. 1, Chapter 7). According to John Coatsworth, conflicts between the crown and the elite over taxes, regulation and management of indigenous labour were frequent, but never triggered a full crisis because of the failure of the domestic elite to defend themselves from external threats and build a supporting base among poor segments of society. This colonial institutional structure contributed to socio-political stability for more than two centuries, but did not create sufficient opportunities for productivity growth and economic expansion. Coercive labour systems (discussed by Monteiro in vol. 1, Chapter 6) like the encomienda, the mita (and later repartimiento) and slavery were particularly harmful and were followed by an inefficient caste system of free labour. Neither the legal system nor land tenure regimes protected property rights effectively or encouraged investment (vol. 1, Chapter 7). Pre-modern manufacturing systems like the obrajes (a system of large workshops which integrated all stages of clothing production ) were dependent on coercive and semi-coercive labour systems and failed to encourage technological innovation (vol. 1, Chapter 10). The management of mining (discussed in vol. 1, Chapter 9), external trade (vol. 1, Chapter 11) and taxes (vol. 1, Chapter 12), while effective at times, also imposed significant costs on the colonial economies in both Spanish America and Brazil.
The process of independence failed to create a more efficient economic system and may have caused more harm than good in the short run, particularly in countries like Mexico and Peru. According to John Coatsworth, ‘the collapse of stable government and the persistence of violent social and political strife overwhelmed the potential benefits of independence’ (vol. 1, p. 270). Departing from traditional dependentista arguments, many contributors provide examples of the high costs of independence. In Mexico, silver production halved between 1810 and 1811 and went down steadily until at least 1840; a fall in production in the first part of the nineteenth century was also evident in the Andean countries (vol. 1, Chapter 9). According to Carlos Marichal (vol. 1, Chapter 12), the fiscal and monetary system broke down completely with the emergence of a growing number of nation-states. Leandro Prados de la Escosura, in his evaluation of the costs of independence (vol. 1, Chapter 12), argues that Latin America performed better than Asia or Africa between 1820 and 1870, but recognises that significant institutional and economic costs were not overcome until later periods. The ultimate effect of independence is more controversial; for Dye it left post-independence governments with a permanent lack of credibility and capacity to commit (vol. 2, Chapter 5), while Coatsworth, Prados de la Escosura and others offer a more benign account of this historical break.
What is clear, in any case, is that by the 1870s Latin America was ready to enter a new path of development and occupy a new place in the global economy. The 1870s opened a whole century of (truncated) modernisation, which was characterised more by continuity than change – a central message of the second volume. According to several contributions, the standard division between export-led growth and import substitution may be less useful than traditionally assumed; this point is made forcefully by Stephen Haber in vol. 2, Chapter 13, when he argues that ‘beginning in the 1890s, the largest economies of Latin American conducted a 100-year experiment in which they built substantial manufacturing sectors behind barriers to trade’ (vol. 2, p. 583). The bases of this experiment were created at the end of the nineteenth century and the beginning of the twentieth. High levels of protection generated fiscal revenues (vol. 2, Chapter 1) and promoted a gradual process of industrialisation in large countries (vol. 2, Chapters 7 and 13). The construction of railways and other infrastructure projects facilitated not only the expansion of exports, but also the creation of more integrated domestic economies (vol. 2, Chapter 8). At the same time, the expansion of migration in this period (reviewed by Blanca Sánchez-Alonso in vol. 2, Chapter 10) contributed to the growth of the urban sector and the creation of social capital.
An accent on continuity does not mean a failure to recognise that radical changes took place after the 1930s. The state acquired a more direct role in the process of development (triggered, in part, by new ideas), and industrialisation accelerated rapidly. New income taxes were created to finance and support a growing number of social demands (vol. 2, Chapter 6). External conditions deteriorated as developed countries became more protectionist and controlled global capital inflows (a point emphasised by Taylor in vol. 2, Chapter 2). The picture that ultimately emerges from the volume, however, is one of significant continuities until the 1980s. There was continuity in policies, in (weak) institutional structures, in environmental degradation (although with increasing awareness of the problem, as discussed by Otto Solbrig in vol. 2, Chapters 9 and 12), in inequality and poverty (vol. 2, Chapter 14), and in the lack of equalising spending in education (vol. 2, Chapter 11).
Some of the authors see this new accent on continuities and the blurring of traditional periodisation as a decisive rejection of dependencia. According to Richard Salvucci, ‘the decline of the dependency model, so influential and fruitful to a previous generation of scholars, has proved liberating’ (p. 250), a point echoed by Haber, Prados de la Escosura and others. This may have become part of mainstream thinking, but we should still pay close attention to the high costs that a weak and asymmetric insertion in the global economy had at different times in history. As the debt crisis and the failures of the New Economic Model of the 1980s and 1990s (discussed with characteristic skill by Victor Bulmer-Thomas in vol. 2, Chapter 4) clearly demonstrate, external shocks still drive much of what happens in Latin America, and primary specialisation continues to place the region in a vulnerable position in the global system.
