Latin America and The Socio-Economic Impact of The Cuban Revolution

Latin America and the Socio-Economic Impact of the Cuban Revolution Author(s): Pedro C. M.
Teichert Source: Journal of Inter-American Studies, Vol. 4, No. 1 (Jan., 1962), pp. 105-120 Published by: Center for Latin American Studies at the University of Miami Stable URL: http://www.jstor.org/stable/164834 . Accessed: 03/02/2014 17:30
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AND THE LATINAMERICA OF IMPACT SOCIO-ECONOMIC REVOLUTION THECUBAN

Pedro C. M. Teichert The Cuban revolution has profoundly shaken the economic and political foundation traditionalin most of the 20 Latin Americanrepublics. The demand by the rest of Latin Americafor Cuban type reforms has also required a reappraisalof U. S.-Latin Americanrelations,which with the breaking off of diplomatic intercoursebetween Cuba and the U. S., January 4, 1961, have reached their lowest point since the initiation in the mid 1930's of the Good Neighbor Policy by President Roosevelt. Furthermore,the spread of the Cuban revolution, with its ideals and aspirationsfor the fulfilment of the age-old political, social, and economic aspirations of the downtrodden masses, is now an imminent threat for the remaining undemocraticLatin American governments. There is no denying the fact that most Latin American countries are still run by an oligarchy of landlords and the military. It is also interesting to note that some of the more liberal governments, recently still decried as leftist by most U. S. observers - such as the Betancourt government in Venezuela, for instance - are no longer considered radical enough by the Latin American people themselves. Confrontedwith the newly awakened ambitionsand aspirationsof these people, any but the most revolutionarygovernmentwill encounter difficulties in its efforts to keep effective control of the Ship of State. While for the past 10 years U. S. policy, or the lack of it, was characterized by neglect of its southern neighbors - U. S. interests lying more strongly in Europe and Asia - Castro'srevolution has changed all this with a certain suddenness. Furthermore,as will be presently elaborated, it is wrong to assert that the Cuban revolution represents something fundamentally new in terms of Latin American policy objectives.' Quite the contrary, well-informed observers and students of the Latin Americanscene always expected a Cuban type revolution and were aware of the underlying economic and social problems affecting
1Pedro C. M. Teichert, "La revoluci6n economica en la America Latina," Revista estudios americanos, Vol. XIII, Seville, Junio-Julio 1957.
105
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JOURNAL OF INTER-AMERICAN STUDIES
Latin America.2 An explosive atmospherehas existed in this area ever about the Cuban revolutionand the final course it took - or has taken at this writing - was the suddenness and violence with which latent discontent exploded, to the extent of creating the present crisis engulfing all of Latin America. The suddennessof the Cuban revolt came as a shock or at least as a surprise to many, including some of the initiated in the field of Latin American studies. It was certainly not expected that Cuba, only 90 miles from the U. S. mainland,and well believed under the control and political tutelage of the latter, would be the first Latin Americannation to take the drastic measures and implement the far-reaching reforms which Cuba has now undertaken. Fundamentally, of course, what transcurredin Cuba was a violent reaction to the social and economic wrongs which generallyprevail in Latin America. Therefore,the problem of Cuba is nothing more, nor less, than a reflection of the general problems of Latin America. Consequently, to understand the causes leading to the Cuban revolution is to understand the economic and social problems that for a long time have beset and still bother most, if not all, of the Latin American republics and perhaps many of the other under developed areas in the world.3 While only Uruguay and Mexico perceptively changed their social order as early as 1910 - reacting against the feudal past with new social legislation in the former, and with particular emphasis on agrarian reformsin the latter - some of the remainingrepublics began most of their social and economic reforms under the pressure of the great
depression in the 1930's. At that time an economic policy revolution since the great depression of the 1930's. What was rather surprising
swept most of Latin America, mainly with the aim of breaking the traditionalfeudal system of production then in existence, and with the intention to industrialize and diversify the monoculturalcolonial type of economies which had been carried over into modern times. Also social legislation of the welfare type was introduced, and many governments began to interfere with the economic life of their nations in order to benefit the masses. Unfortunatelythis economic policy revolution was not carried out very successfully by some republics, not begun at all by others, and was never wholeheartedly supported and understood by the U. S., the largest and most influential commercial
trading partner of Latin America.
'Pedro C. M. Teichert, Economic Policy Revolution and Industrialization in Latin America, Bureau of Business Research, University of Mississippi, 1959. 3Pedro C. M. Teichert, "The Main Experience and Policies of the Industrial Revolution in Latin America", Weltwirtschaftliches Archiv, Vol. 85, No. 2, 1960, pp. 279-301.
LATIN AMERICAAND THE IMPACT OF THE CUBAN REVOLUTION
107
Perhaps as a result of World War II exigencies, the threat of the Korean conflict, and then in the 1950's for no particularreason but to perpetuate the preceding approach toward Latin America, the U. S. followed a policy of trying to maintain the economic and social status quo. Economically, this lack of a positive policy approach toward Latin America manifested itself by opposing, or at least discouraging, industrialization,and politically by courting or backing many of the area'swell and long established dictators and political oligarchies,composed of large landholdersand propertyowners. No doubt these groups had assured their countries' internal peace during World War II and had also collaborated with the U. S. during the trying days of this war, as well as during the Koreanconflict that followed in its wake.
II
Given the U. S.-Latin American policy approach as it crystallized in the 1950's, no doubt a change in the structural make-up of Latin American economies, a change in their social and economic arrangements, would now, by necessity,imply - as Cuba has vividly indicated a drasticbreak with the U. S. and its traditionalpolicy toward its southern neighbors. Unless the U. S. quickly changes and reverses its attitude towards Latin America, relations between the two areas cannot but deteriorate further.4 This is particularlythe case when it is considered that Latin Americans themselves are determined to change their socio-economicsystem. It is also obvious that a worsening of U. S.-Latin American relations will in turn create additional disturbances for the Latin Americaneconomies proper, since the latter are so closely linked to the U. S. Some republics ship almost all of their monocultural exportsto the latter, while a great many republics are at least dependent on the U. S. for sales of half of their exports. The U. S. is also one of Latin America's principal suppliers of industrial raw materials, semimanufactures,machinery,and frequently even of foodstuffs which, paradoxically enough, some of the agrarianrepublics of Latin America do of monocultureand export-import concentrationin relation to the U. S. is vividly demonstratedin Table I. If on the other hand, the U. S. should change its approach toward Latin America, as it perhaps might be forced to do, and if the U. S. helps the Latin American area solve some of its agrarian problems, helps it to diversify its production and to industrialize,in order to be able to absorb a large unemployed labor force which exists in most republics and presents a definite economic problem, then hope does
4 "Brazil-Insult to Injury," Time, March 17, 1961, p. 32.
not produce in sufficient quantities to satisfy local demand. The degree
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exist that future growth will take place, and that this will happen with much less violence than can now be expected. With positive assistance from the U. S. it is also possible that all the necessary transformations of a structural type will be less sudden and less dramatic than had to be the case in Cuba. Stepping up help from Europe, mainly in the form of capital investment and increased purchases of Latin American products, would, of course, also be very beneficial to Latin America.
TABLE I CONCENTRATION OF EXPORTS AND IMPORTS IN LATIN AMERICAN REPUBLICS* Three main exports Countrya Commodity Mexico Cotton Coffee Lead Coffee Bananas Cocoa Coffee Cotton Livestock Coffee Bananas Bananas Coffee Pine Lumber Cotton Coffee Gold Bananas Shrimp Coffee Sugar Tobacco % of Total 25.03 10.59 4.43 25.6 32.52 6.09 75.29 15.59 1.20 72.24 12.24 52.37 15.18
9.1.2
Percent of Percent of Total exportsb Total importsb to U.S.A. from U.S.A. 70.69 79.12
Costa Rica
58.70
55.14
El Salvador
40.52
51.88
Guatemala Honduras
67.7
62.6
Nicaragua
35.01
34.09
40.2
58.3
10.30 48.02 27.49 3.58

82.9
Panama
95.7
57.2
Cuba
69.2 51.21
72.9 64.25
6.8 46.50 20.96 17.41 73.8 13.5 2.0
Dominican Republic Sugar Products Cocoa Products Coffee Haiti Coffee Sisal Sugar
49.8
68.6
LATIN AMERICAAND THE IMPACT OF THE CUBAN REVOLUTION TABLE I (continued) Three main exports
Countrya % of
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Percent of to U.S.A 12.92
Percent of from U.S.A. 17.13
Commodity Argentina Meats Cereals Wool Tin Lead Silver Coffee Cocoa Sugar
Total 29.72 26.90 9.97 65.14 10.66 9.53 55.01 7.18 5.34
Total exportsb Total imports"
Bolvia
33.8
46.7
Brazil
44.10
37.15
Chile
Minerals & Metals 80.82 Metal Products 6.59 Agricultural Prod. 4.20 Coffee
Petrol - Crude
40.70
52.37
Colombia
Bananas Ecuador Bananas Coffee Cocoa Logs Canned meats Cotton Cotton Sugar Lead Raw Wool Other Wool Wheat Petrol products Iron ore Coffee
78.09 14.66 1.71 36.57 27.31 21.44 22.42 16.38 11.24 26.8 12.2 8.7 45.78 15.54 10.73 91.16 5.03 1.55
71.18
62.19
56.65
52.57
Paraguay
25.33
Peru
38.7
51.5
Uruguay
8.3
13.4
Venezuela
60.53
*Source: Statistical Abstract of Latin America, 1960 (Los Angeles: Center of Latin American Studies, University of California), p. 88. a Most statistics b For Argentina and Uruguay, export and import are for 1958. percentages refer to the trade with Europe. Apparently in the historic process of Latin American economic development the U. S. completely missed noticing that, after a relatively dormant period for most of Latin America during the 19th and early 20th centuries, the area awakened to a new vigorous life of nationally oriented economics, politics, and culture. While prior to World War II in some
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republics an industrial society began to take shape, throwing off the remnants of a feudal past and of foreign tutelage which for so long had stood in the way of progress, the U. S. actually began to neglect the Latin American area when it least should have done so. U. S. policy makers apparently thought it to be inconceivable that industrialism would succeed and that communism could ever become a threat to Latin America. No doubt this tremendous upheaval which was taking place in Latin America deserved careful analysis, and it was dangerous for the U. S. not to have acknowledged the breath-taking changes then taking place. Since the Cuban revolution has literally put the Latin American problem into the backyard of the United States, now U. S. politicians, businessmen, and scholars will find it imperative to inform themselves about the developments to the South, and, unless they quickly acquire a grasp of the real driving forces behind this Latin American revolution, the two areas could conceivably split into permanently opposing camps, as has presently happened in regard to Cuba and the U. S. While Latin America could, no doubt, survive without the friendship and help of the United States, growth in the Western Hemisphere will never be furthered by a sudden and complete rupture of economic relations between the two areas. Economic ties are too deeply rooted not to cause considerable hardship on Latin America if trade with the U. S. were interrupted. Hence the need to understand the Latin American development problem, since in the past the rhythm of growth in most of these economies has been closely linked to prevailing conditions in the U. S. Furthermore, U. S.-Cuban relations, a situation which presently indicates the possibility of U. S.-Latin American enmity of a rather indefinite duration, also indicate that the time has past for the U. S. just to talk and to make promises in regard to the measures it will implement to help Latin America. While, for instance, the U. S. has been claiming its disgust for dictators and its understanding of the aspirations of the Latin American masses, its complete rejection of the Cuban revolution is an absolute denial of such pronouncements.5 Naturally, the U. S. attitude does not deter Latin Americans from pursuing their goal. Cuba in particular indicates to what extent Latin Americans are willing to go to achieve their economic policy revolution and their economic independence for which most republics have been fighting since they threw off the Spanish yoke. That the worst reaction towards the U. S.-Latin American policy approach should have happened only 90 miles from the U. S. mainland only goes to show how little the U. S. knew and probably cared about
"The Americas-Two Views South," Time, March 17, 1961, p. 30.
LATIN AMERICA AND THE IMPACT OF THE CUBAN REVOLUTION
111
its immediate neighbor and about the Latin American growth and development process in general. The fact that in the late summer of 1960 the Organization of American States, and the Republic of Mexico in particular, did not side with the U. S. in the condemnation of the basic tenets of the Cuban revolution, is further proof of the Latin American determination to change their traditional setup in spite of U. S. opposition. Unfortunately, this U. S. opposition toward change in Latin America, if not quickly reversed, will force the latter to try to become even more independent from U. S. economic and political tutelage than, perhaps, originally intended or desired. Excessive isolation would, in turn, create additional friction and economic upheaval in many of the Latin American nations as happened in Cuba, when, because of U. S. opposition to basic land reforms, Cuba had to look for support of its measures in the Russian camp. That, in turn, closer ties with the Russian block create additional troubles of their own nature, nobody knows better than the Cuban revolutionaries themselves. Unquestionably, the recent ties with Russia have already led Cuba to take more drastic steps in its economic reorganization than were originally envisaged and are, perhaps, necessary. It is very unfortunate, therefore, that the kind of foreign aid and foreign intervention which the U. S. has traditionally given and followed in relation to the growth process of the Latin American nations generally results in the subsequent drawback: it helps continue the old economic and social system of Latin America, as well as the traditional political setup of these republics, and, what amounts to the same, foreign aid of the above type prevents the social revolution necessary to lay the foundation on which to build a new economic system of national orientation and production, exclusively serving the benefit of the local population. The Cuba before Castro is a particularly good example at hand of the results and effects of the wrong kind of outside assistance offered by the U. S. While the latter apparently was attempting to help Cuba with a two cent per pound premium it was paying for Cuban sugar, it was this very subsidy which made it almost impossible for Cuba to re-structure its economy and to adjust it to modern requirements. With the artificial sugar premium, it was profitable for the sugar growers (a few hundred people who owned almost all of Cuba's productive land, half of them of U. S. nationality) to continue to grow sugar. In return for this special consideration of Cuban sugar exports to the U. S., all U. S. exports to Cuba (a large proportion of it being food) received preferential treatment, a burden falling on the Cuban people at large, particularly on the lower income groups. (For statistics on Latin America's concentration of land ownership, see Table II.)
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TABLE II CONCENTRATION OF LAND OWNERSHIP*
Country
Total number % of haciendas Percent of total hacienda land owned in haciendas of 1000 of with 100 or hectares or more more hectares haciendas 5.1 1.6 6.8 2.2 0.5 0.54 0.3 1.9 0.4 0.08 0.14 0.1 0.8 0.7 0.1 5.2 4.6 4.05 74.8 50.8 61.4 73.2 36.1 31.02 29.6 53.3 45.1 19.9 40.8 20.6 55.6 32.8 12.6 93.8 66.5 55.8
564,891 Argentina Brazil 2,064,842 Bolivia 86,377 Chile 147,652 Cuba 159,958 Colombia 820,842 Costa Rica 47,286 Dominican Republic 276,848 Ecuador 344,234 El Salvador 174,204 Guatemala 348,687 Honduras 156,135 Mexico 1,383,212 51,581 Nicaragua Panama 85,473 149,489 Paraguay Peru 82,122 89,130 Uruguay
*Source: Harry Kantor, "Agrarismoy Tierra en Latinoamerica,"Combate, San Jose, Costa Rica, Vol. III, No. 14, Enero y Febrero 1961, pp. 10-11.
The U. S. subsidy to Cuba was really never more than a grandiose handout to U. S. citizens in Cuba and to U. S. exporters in general, and it did not benefit the Cuban masses at all. Furthermore, it was a subsidy to U. S. cane growers in Louisiana who, without a tariff and quota on sugar imports to the U. S., could never have grown sugar competitively. For the Cuban masses the U. S. sugar subsidy meant that the Cuban people had no prospects of ever owning land, nor of ever getting more than seasonal employment (for three months or so a year) when the cane is harvested and ground. Always it should be kept in mind that, because of the profitable sugar economy - profitable to the few owners of the sugar lands - Cuba, as a nation, was never able to diversify its agricultural production and to industrialize its economy for lack of widespread land ownership and for the lack of a system of diversified crops. Funds for industrialization purposes were missing also, since Cuba had to spend its dollar earnings from sugar export income for the importation of basic foodstuffs which were mainly acquired from the U. S. An economic situation similar to
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that in Cuba can be found in many other Latin American republics which depend for their livelihood on the exportation of a single crop such as bananas, coffee, cocoa, cotton, wool, meat or wheat, for example, or who depend on a mineral such as copper, tin, and petroleum, just to mention a few. Furthermore, most of these Latin American monocultural export economies have to import foodstuffs, despite the fact that they are agrarian economies with from 50% to 80% of the total labor force employed in agriculture. IV While large earnings are obtained from monocultural exports, the uneven spread of these earnings among the total population can best be shown by analyzing income distribution in Panama and Venezuela, both apparently among the wealthiest Latin American nations on a per capita basis.6 In addition, comparisons of wealth and income distribution will also be made between Venezuela, Argentina, and Uruguay. A clear indication of the real or physical development of Venezuela, vis-a-vis the other two republics, is given in Table III. Table IV, in turn, indicates Venezuela's development in 1936, shortly before the oil sector entered into the picture. From these tables it should not be too difficult to conclude that per capita income and real internal development do not coincide in Venezuela. The fact, of course, is that Venezuelan oil income mainly accrues to foreigners who take it out of the country, leaving the latter without any visible physical benefits. As to the particular spread of income among the various income groups in Venezuela, no detailed breakdown of per capita statistics is available, but an analogous situation in connection with the interpretation of income statistics is found in Panama. In 1952-53, per capita income in Panama amounted to $343 U. S., as compared with $358 for Argentina in the same year. Argentina was always considered the most developed Latin American nation, in spite of the fact that foreign investments never played, percentage-wise, the important role they did in Venezuela, for instance. Given Panama's per capita income, are we now supposed to believe that Panama is as highly developed as Argentina? Of course not. Most of Panama's income is derived from the highly concentrated business of the Canal Zone. In addition, there is a great discrepancy between the few rich - as in Venezuela - the many poor, and the almost self-sufficient rural campesinos whose annual income averages $14 U. S. per person and not $342, as the per capita income statistics of Panama would have it.
"Comparative Statistics on the Latin American Republics," World Trade Information Service, Part 3: Statistical Reports, Nos. 55-47, 58-3.
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TABLE III SOME PHYSICAL INDEXES OF WEALTH AND DEVELOPMENT IN ARGENTINA, URUGUAY, AND VENEZUELA* Time Argentina Uruguay Venezuela 2,615 85 507 452 58,000 1,837 6,342 6,200 114,300 26,012 26,500 9,500 15,900 5,774 52 1,046 228 196,000 180 10,675 6,174 104,500 6,400 14,500 5,417 158 Mid-1955 Population (thousands) ---------------19,111 87 Literate, age 15 and over (%) -------1958 Per capita income (yearly in U.S.$) --428 1956 Per capita Kilowatt-hours produced -327 1957 Merchant marine tonnage ------------901,000 1955 Railroad mileage ---------------------27,273 1954 89,090 Highway mileage total --------------34,383 improved ------8-1956 Telephones in use ------.--1,----------1,127,933 1954 Farm tractors _--45,000 1956 Production of pulp paper and board (tons) .--------_................ 283,634 1956 Production of textiles cotton products (tons) ----------------95,000 wool products (tons) --------------29,700 1955 Intensity of industrialization(% of total industrial production not taken up by foodstuffs, beverages and 78.4 -_ tobacco) -----_ 1956-57 Wheat production (thousands of tons) 7,130 1956 Petroleum production (thousands of
tons) --------------------------5,016
62.5 840
49.6 1.8
131,220
"Source: Economic Survey of Latin America, 1956. - World Trade Information Service, Part 3: Statistical Reports, No. 58-3, 1958. TABLE IV MANUFACTURING INDUSTRIES IN 8 LATIN AMERICAN COUNTRIES* Number of Republic year establishments Argentina Brazil Mexico Uruguay Chile Colombia Venezuela Bolivia 1941 1940 1940 1937 1940 1942 1936 1939 57,940 70,000 11,974 11,470 4,169 1,415 8,025 681 wage earners 733,968 1,412,432 240,762 79,725 104,771 45,448 41,230 10,000 Gross value of production (millionsof U.S. Dollars) 1,700 1,500 300 216 200 135 70 10 Per capita gross value of production 122 34 14 108 40 13.5 17 2.8
*Source: Paul V. Horn and Hubert E. Bice, Latin American Trade and Economics, New York, 1949, p. 294.
LATIN AMERICAAND THE IMPACT OF THE CUBAN REVOLUTION
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Furthermore, 64% of the Panamanian population is classified as rural.7 This means that, for 64% of the Panamanian population, per capita income is closer to $14 per person than to $342. From a close analysis of Venezuelan statistics, exclusive of oil development, a similar conclusion can be drawn.8 It is further claimed by the majority of Latin American policy makers that a nation, such as Venezuela, is politically dependent since its economy is, by necessity, dominated by the large foreign oil enterprises, which are nothing but exclaves of foreign economies. It is the realization of this situation which, of course, also explains the general reluctance of the Latin Americans to accept foreign investments in the petroleum field. As regards the Cuban situation and its impact on Latin America, it is important, therefore, in the light of the preceding analysis, to keep in mind the economic results of foreign investments generally leading to monoculture. Furthermore, no matter how well-intentioned the United States, Latin America in general will have to be very careful not to fall collectively into an economic trap, when it clamors for the stabilization and support of raw material (also mineral) prices and food exports. This support might only lead to perpetuate the monocultural system of production which is the main curse of the area's economies. It is also a contradictory policy for Latin American countries to decry the suggestion, as most Latin American politicians and economists do, that Latin America increase its exports and its production of minerals and raw materials in general, while at the same time they demand international or hemispheric price stabilization agreements for these raw material export products. It should always be kept in mind that price stabilization schemes can bring only temporary relief.9 V A better and more positive approach in regard to future development possibilities for Latin America lies in the establishment of the Latin American Common Market, now in the incipient stage. This is an institution which, in the long run, could be the answer to the solution of many, while certainly not of all, of Latin America's problems of industrialization and the achievement of economies of mass production
7 C. A. Hauberg, "Panama: Pro Mundi Beneficio," Current History, Vol. XXXII, New York, April 1957, p. 232. 8Pedro C. M. Teichert, "Analysis of Real Growth and Wealth in the Latin American Republics," Journal of Inter-American Studies, Vol. I, Gainesville. April 1959, pp. 173 seq. 9Pedro C. M. Teichert, "Preface to Spanish Edition," Economic Policy Revolu-
in Latin America,Bureauof BusinessResearch,Univertion and Industrialization

sity of Mississippi, 1961 (Fourth Printing).
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and distribution. Nevertheless, it is already clear that as a consequence of the Common Market, in the short run, difficulties will arise both between Latin America and the U. S., and even between Latin America and Europe, as well as among the Latin American nations themselves. Preliminary discussions have already indicated the tremendous difficulties and problems that would have to be overcome to implement such a market for the whole Latin American area. Most likely the establishment of partial markets among groups of Latin American nations will be the first step. This might be a development similar to the European Common Market, including six nations, and the more recent establishment of the common market of the Outer Seven, two market areas which might perhaps be fused in the near future. There is always a possibility of a fruitful merger of the smaller markets into a big organization, and this might also well become the tendency for Latin America. Given the facts of internal U. S. politics and particularly of its foreign policy, there seems to be no doubt that in the future Latin America itself might have to carry the main load of its economic policy revolution and development efforts, just as Mexico did in the critical years of its agrarian reform and during the post World War II process of industrialization. That Mexico - having gone it alone - is now far better off having to thank nobody for its social and economic achievements, is hardly questionable. Nevertheless, this does not imply that, if unselfish aid - free of political and economic ties - were offered by the new government of the U. S., it should be rejected and not be used to better the living conditions of the Latin American people. Of course, if aid with no strings attached should be available from other than U. S. sources, there is no reason why Latin America should not accept it either. After all, the U. S. has so far poured several billion dollars into such communist nations as Yugoslavia and Poland, for instance - far more aid than all of Latin America has ever received in all its history. Consequently, there ought to be nothing wrong if Latin America were to accept aid from the non-western world. If strings are attached to foreign aid, then there is even less reason why Latin America should take it exclusively from the U. S. and not from other nations. It should then be up to Latin Americans themselves to decide under whose influence they want to fall. But in all probability, in the near future the U. S. will do something about Latin America, if for no other reason than the fear that the Cuban revolution might spread to the rest of the area. This new program, by some Latin Americans cynically referred to as the "Castro Plan", will be followed by other arrangements trying to stabilize the prices
117
of Latin American raw materials and food exports, as President Kennedy has already promised. VI Latin Americans, as well as U. S. policy-makers, should never forget that the restructuring of the Latin American economies requires complete economic change and social upheaval, and that this, in most instances, cannot be done without internal sacrifices and dislocations, as well as without a complete reorganization of the present monocultural export economies. In regard to the latter it should be added, therefore, that the revolution that has succeeded most in the diversification of the economy - and is an accomplished fact - is the Mexican Revolution. It is too early yet to draw final conclusions on the economic outcome of the Cuban experiment. The Mexican Revolution succeeded - as the economic aspects of the Cuban revolution probably will do in the long run - because Mexicans made it themselves and no foreign nation was there to sweeten the bitter pill of necessary growth adjustments. Perhaps the Mexican example might serve as a lesson to the rest of Latin America, on how to abolish a feudal society, and on how to move into the 20th century world, without becoming dependent for foreign aid on some outside nation or political entity. Table II clearly indicates to what extent land holding is still concentrated in present day Latin America - hence, the difficulties to diversify these economies and the opposition to the redistribution of large landholdings by their owners. Of particular importance in this restructuration and in the future development of the Latin American economies will be the introduction of an efficient tax system. At present, tax rates and collections are very insignificant, and taxes, in spite of these low rates, are frequently avoided by those who could best afford to pay them. Some republics have no income taxes at all, and few dare tax agricultural lands. It is obvious that economies without sufficient tax collections are even more vulnerable when the small amount of taxes collected comes from import and export imposts of only a few commodities traded. Mexico, furthermore, for its revolution to succeed in an era when foreign aid was an unheard-of practice, had to diversify its economy in order to offset the effect of price drops on the exports of one commodity, by being able to gain from price increases in other exports in a compensatory fashion. Diversification of production and exports is, therefore, the pre-condition for the success of any revolution among whose aims are the achievement of real economic independence. It is apparent that, while the long run terms of trade are deteriorating for raw material and food producer-exporters in general, - and the Economic Commission for Latin America does believe they have deteriorated since
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1955 - prices of particular commodities do not all drop and rise at the same time and, to the same extent, in any given year. While some prices drop, others might actually rise in a temporary fashion - hence, the need to diversify in order to gain from compensatory price movements on the world markets. The preceding analysis makes it quite apparent that Latin America has to solve the three following problems: (1) In the short run, Latin America could try to work out price stabilization schemes in order to avoid losses from short run market fluctuations for raw materials and food exports; (2) In the long run, Latin America should try to diversify its production and exports of food and raw materials in order to avoid extreme yearly fluctuations of export income, particularly if the commodity price agreements listed under (1) do not work out too well or should break down, as has happened in the past; and (3) In the long run, Latin America will have to industrialize more than it has done already, in order to avoid having the terms of trade move against it if it remains a substantial exporter of raw materials and foodstuffs. As was already mentioned, the Latin American common market, now in the incipient stage of formation might become the mechanism through which diversification and industrialization is achieved, given the relatively small purchasing power of the Latin American people for industrial goods which can only be produced economically in large scale establishments. VII The future road for the transformation of the Latin American economy will be a very thorny one. It will particularly remain that way as long as the U. S. continues to believe that in Latin America the breaking up of large private estates is communism. But without this basic reform in most of Latin America, progress is almost impossible, and the longer the structural change of the Latin American economies is postponed, the more violent will the unavoidable future revolutions be. The violence of these revolutions will, therefore, increase to the extent that the U. S. opposes them. Furthermore, as in the case of Cuba, U. S. opposition might force the Latin American nations to side openly with Russia and Red China, which, perhaps for some of the weaker republics, could only mean that they exchange one master for another of a different political color. Whether this will actually be the final outcome in Cuba is not predictable at this moment. After all, Yugoslavia is still a very independent nation and master of its own affairs and destiny, while it does accept aid from the communists and from whoever else offers it. The outcome in Cuba might be similar to developments in Yugoslavia, at least as far as her political independence is concerned,
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but as far as the final form of the Cuban economic system is concerned, in the long run, it might well approach the Mexican model. At present the Cuban Revolution is much too young to have its future and final outcome predicted with any claim to scientific accuracy. No doubt, many Latin American countries will take Mexico's 1910 Revolution as an example of what they have to do to break with their past economic setup in order to be able to move forward. Incidentally, it is no accident that interest in the success of the Mexican Revolution has again arisen. It is the possibility that now exists to compare the policies and results of two important revolutionary approaches - the Mexican and the Cuban - which has revived interest in the policies of Mexico. Also, interestingly enough, in connection with the Mexican and Cuban Revolutions, and as regards the general U. S. dislike for popular revolutions in Latin America, it might be pertinent to point out that, if Russian communism had been in existence before the Mexican Revolution took place in 1910, Mexico would have been accused of much the same crimes and in the same fashion as is Cuba. Therefore, it is also reasonable to conclude that the many Latin American revolutions which cannot fail to make their appearance in the near future will create great disturbances in Latin America and further disrupt U. S.-Latin American relations since, if they are similar to the original Mexican Revolution, they will be branded communist. Nevertheless, and here lies the significance of the Mexican experience for an understanding of future Latin American developments: At present, Mexico is not communist nor Russian, but exclusively Mexican. Furthermore, the Mexican Revolution of 1910, the Uruguayan policy revolution of the early 20th century, the present agrarian reform quietly carried on in Venezuela (of which we hear very little, but which is really spectacular in terms of reversing traditional agricultural economic policy), and, perhaps, even to some extent the ill-fated attempt of the descamisados or Peronistas (the followers of former President Per6n in Argentina) to do something for the peon - fundamentally all of these movements are only a part of the great Latin American movement of self-assertion and economic independence, the core problem of Latin America. VIII To the U. S. and, perhaps, even to the entire Western block of nations, the present developments in Latin America which have deep roots and experiences in the past, should be a final warning not to take the Latin American problem as lightly as has been customary. It is significant in this connection that all of the later undemocratic and unpopular Latin American dictators, starting with Per6n, Rojas
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Pinilla, Perez Jimenez, and topping the list with Batista in Cuba, were tumbled with the help of the Catholic Church. But the leaders of the true or fundamental Revolutions, the ones that significantly change the entire political and economic structure of a nation, such as the Mexican Revolution, the Bolivian Revolution of the early 1950's and, to some extent, the recent Venezuelan Revolution, and, of course, the present Cuban Revolution - all these Revolutions (which should be written with a capital R) will not be reversed and their leaders toppled because the peasant masses follow the conservative dictates of the church, rather than the doctrines of the revolutionaries. It is one of the most significant aspects of the new Latin American Revolutions, that the people want them and that the people, themselves, set the aspirations and goals of these new revolutions higher in their scale of values than their traditional religious faith and loyalty to the more conservative Catholic Church. While, no doubt, individual revolutionaries of the true Revolutions will be unsettled from power, others of the same conviction will take their place, and the revolutions will continue unabated. Perhaps the programs and creeds of popular revolutions in present-day Latin America have become the ultimate faith of the masses. Finally, when predicting the future of Latin America, three conclusions are almost obvious from the previous analysisis of the Latin American scene and deserve restatement: (1) That many Latin American republics are just at the threshold of their own fundamental Revolution, (2) That these Revolutions will not just be barracks uprising of the political type, and (3) That, while the Cuban Revolution should be interpreted as an integral part of the fundamental phenomenon of the economic policy revolution in Latin America, it should not be forgotten that each Latin American republic will have to formulate its own particular policies best suited to its environment, as well as to its historical and economic stage of growth, in order to accomplish the transformation of the still agrarian-colonial societies into 20th century industrialized nations.

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Latin America and the Socio-Economic Impact of the Cuban Revolution Author(s): Pedro C. M.

AND THE LATINAMERICA OF IMPACT SOCIO-ECONOMIC REVOLUTION THECUBAN

JOURNAL OF INTER-AMERICAN STUDIES

LATIN AMERICAAND THE IMPACT OF THE CUBAN REVOLUTION

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JOURNAL OF INTER-AMERICAN STUDIES

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JOURNAL OF INTER-AMERICAN STUDIES

LATIN AMERICA AND THE IMPACT OF THE CUBAN REVOLUTION

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LATIN AMERICA AND THE IMPACT OF THE CUBAN REVOLUTION

JOURNAL OF INTER-AMERICAN STUDIES

LATIN AMERICAAND THE IMPACT OF THE CUBAN REVOLUTION

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STUDIES OF INTER-AMERICAN JOURNAL

LATIN AMERICA AND THE IMPACT OF THE CUBAN REVOLUTION

JOURNAL OF INTER-AMERICAN STUDIES

ANDTHEIMPACT LATINAMERICA OF THECUBANREVOLUTION

OF INTER-AMERICAN STUDIES JOURNAL

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