The Hispanic Tradition of Liberty
Why are most Latin American countries still underdeveloped? The region suffers from a prevalent culture of corporatism and a general distrust of market forces which leaves “a limited number of dominant companies to bargain with state agencies and trade unions over public resources,” write economist Edmund S. Phelps and law professor Juan Vicente Sola.
The system’s few beneficiaries—politicians, union bosses, and the heads of protected business sectors—justify their privileges with nebulous, collectivist notions such as “social harmony” or “national unity.” This stifles individual initiative, private sector innovation, and competition resulting in sluggish levels of job and wealth creation and minuscule amounts of consumer choice.
Phelps and Sola point to Argentine strongman Juan Domingo Peron, who ruled his country from 1946–1955 and 1973–1974, as the archetype of the anti-individualist South American autocrat. Peron nationalized industries, extended the state’s reach over large swathes of the economy, and brutally curtailed individual freedom in the name of solidarity. His brand of politics was influential far beyond Argentina, as local despots with military backgrounds and a penchant for heavy-handed interventionism—Colombia’s Gustavo Rojas Pinilla, Peru’s Juan Velasco Alvarado, and Venezuela’s Hugo Chávez—copied Peron’s style and substance.
If Peronist-style corporatism was the only Latin American alternative to 21st century socialism, the region’s future would be unequivocally dire. Massive migration from Latin America to the United States might introduce a collectivist mindset anathema to the American founders’ philosophy of limited government. Fortunately, however, there is a parallel legacy of freedom, property rights, and individualism in the Spanish-speaking world, a cultural inheritance that George Mason law professor Leonard Liggio called the “Hispanic tradition of liberty.” Though widely forgotten, it has produced spectacular results in the past.
Peron, for example, found more than enough wealth to redistribute because Argentina was one of the richest countries on the planet at the start of the 20th century. In 1913, Argentina “was richer than France or Germany, almost twice as prosperous as Spain, and its per capita GDP” almost equaled Canada’s, according to Edward L. Glaeser, Rafael Di Tella, and Lucas Llach, writing in the Latin American Economic Review in 2018. The source of those unprecedented levels of wealth was Argentina’s 1853 constitution, which made private property inviolable, outlawed expropriation, encouraged immigration, and allowed the free circulation of goods across provinces. It also ended slavery, protected press freedom, and established the right to freely worship.
The Argentines who sought to create a republic after the downfall of dictator Juan Manuel de Rosas found their inspiration in a treatise on the fundamentals of republican political organization, published in 1852 by Juan Bautista Alberdi, a classical liberal polymath. He observed that the men who had gained independence from Spain prized military glory above all else, disdaining commerce and luxury as they aspired to the Spartan ideal of an austere, secluded warrior caste unmoved by material desires. Such lofty principles did quite little to improve South America’s primitive economic conditions.
Alberdi argued that Argentina and other fledgling South American nations needed “free immigration, commercial freedom, railroads, and unrestrained industry.” The new republics could secure independence only if they allowed tradesmen to flourish, brought in settlers to work vast expanses of empty land, and created links between far-flung, isolated regions via railroads and waterways. Alberdi persuaded the Argentines that their constitution had to value practice over theory and address the country’s immediate needs, not atemporal abstractions or the conditions of European nations with many centuries of previo
Article from Latest – Reason.com