Latin American Independence Development

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Some basic points on Latin America’s 19^th-century history

Dramatic changes, which took place in Latin America in the 19^th century, are considered to be of particular importance, as the period of decolonization was marked by far greater difficulties in comparison with the period of decolonization the USA experienced. Despite the fact that both – North America and Latin American societies experienced colonization, the colonies of North America, which were under the oppression of Great Britain, kept wealth and political prosperity. On the other hand, Latin American societies underwent political instability, economic stagnation, and violent conflicts. Thus, the fact that in the 19^th century, Latin America got independence cannot be regarded within positive perspectives, as in each case, independence was followed by drastic changes¹.

One of the most important reasons, which one is to keep in mind, in order to explain the principal difference between the periods of decolonization the North America and Latin American societies experienced is considered to be the difference in colonial masters. Thus, the so-called salutary neglect is recognized to be one of the key strategies Great Britain followed. In other words, take into account a historical background, one can probably notice that the British gave their colonies more economic freedom. The dominant colonial authority of the Caribbean region, Central/South American, did not provide its colonial subjects with any kind of freedom. Latin American societies were tightly controlled by the absolutist Spanish crown. Being under the oppression of the Catholic Church, Latin American colonies had no chances for local political autonomy. For this reason, one can conclude that in Spanish-controlled American territories, people had no idea what political involvement was. As far as no political autonomy was allowed, independence could not bring about positive consequences. Citizens had no experience in law, participatory systems, and therefore, had no opportunity to succeed in politics.

The Spanish were deeply interested in a variety of resources their colonial subjects provided them with. For instance, Spain, as a dominant colonial authority, obliged its colonies not only to pay extremely high taxes but also to provide colonial masters with gold, silver, coffee, sugar, etc. The mother country of Spain flourished due to Latin American colonies.

The causes of independence in Latin America

Generally, there are many contradictions concerning the causes of independence in Latin America. For instance, David S. Landes² in his work on a wealth of nations states that one of the key causes of independence was the major colonial authorities’ misfortunes. Thus, he draws readers’ attention to a number of European rivalries and rejects the impact of the colonial initiative on Latin American societies’ political and economic freedom. Some historians are of the opinion that there were the Napoleonic Wars, which led to independence; others suppose that new liberal ideas were the most valid reasons of changes in Latin America. Militaristic opportunism and local pressure on institutions are also regarded as the key reasons of independence. According to Stanley and Barbara Stein³ “many of the colonial elite hoped to maintain allegiance to embattled Spain while enjoying the right to trade directly with Europe and the United States” and that is the major argument one is to rely on to explain the key cause of independence. The most common opinion, historians refer to, is considered to be decline in economic activity. Thus, they point out that Landes’s viewpoint on the major colonial authorities’ misfortunes and weaknesses is recognized to be wrong, as no immediate changes in social and economic structures were observed. No consensus on the major reasons of independence is still found.

Generally, Latin America’s poor economic and political behavior in times of decolonization is mostly associated with per capita income divergence between wealthy and inferior. Different paths to economic development are considered to be the key reasons of Latin America’s economic failure. In times of decolonization, British colonies experienced the process of industrialization; however, the colonies in Latin America were depicted as backward areas. For this reason, it becomes evident that political and economic success or failure was determined by the region’s peculiar growth potential.

Venezuela’s 19^th century history

Despite the fact that most of the Latin American countries achieved political independence in the early 19^th century, not one of them was able to achieve first world status over the next one hundred years because of a wide range of reasons. For instance, the process of decolonization Venezuela underwent was marked by periods of serious political and economical instability as well as revolutionary disturbances. Taken into consideration Venezuela’s 19^th century history, one can probably notice that the country was the most unstable nation in Latin America. Violent conflicts occurred all the time. On the other hand, Venezuela remained the most prosperous colony as compared with the rest of the region. In spite of constant revolutionary turbulences, a colony’s intellectual and cultural life was rather impressive. Improved material living standards should be also taken into account. However, people’s property rights were neglected by influential Spanish families, who possessed the political power.

The Bolivarian Revolution and its importance

Venezuela’s independence should be regarded within the Bolivarian Revolution. As far as people were not ready to establish their own political order, they were unable to understand and appreciate the Plan of 1826 developed by one of the most prominent activists – Simon Bolivar. The revolutionary wanted to establish a new state and the document reflected his philosophical positions. The major points of the Plan included the principles of stability, the voice of nomination, and electoral power ⁴. In times of decolonization, the document, however, caused negative interpretations. It seemed that the activist combined the defects of most of the systems (monarchy, democracy, the oligarchic system, the federal system) rather than their benefits. Keeping in mind that Bolivar’s political thinking was mostly related to monarchial powers, it becomes obvious that he had no support and the document written by him speeded up his downfall.

Venezuela’s postindependent experiences

The postindependent experiences of Venezuela as well as other countries in Latin America depended upon geographic, climatic and ecological aspects. Moreover, in Venezuela the policy of the major colonial authorities led to extractive institutions appearance. Thus, the citizens of the county were under the oppression of the government. The disease environment along with the environment of change and uncertainty can be also regarded as some of the reasons of the country’s political instability. An authoritarian system establishment was one of the consequences of the struggle between various ideological powers. Patrick Bolton and Gerard Roland⁵ state that “Despite its inefficiency, colonial administration took advantage of the increasing returns and the economies of scale that all large organizations enjoy. Separation brought with it clearly negative effects in terms of economic efficiency”. Monetary disintegration was also one of the negative consequences of Venezuela’s independence; the process of losing cohesion in relation to a single fiscal system led to political fragmentation and therefore, increasing subordination of fiscal policies took place. The modernistic monetary systems had to be established on the basis of custom duties; for this reason, Venezuela’s government suffered chronic deficits. Other Latin American societies experienced the same situation. As far as monetary regime disintegration prevented the new fiscal markets establishment, Venezuela’s government could not operate in an effective way and fiscal weakness caused mass disorders.

Some historians are of the opinion that the new independent country experienced serious fiscal and governmental difficulties on the basis of inappropriate economic organization. Thus, a centralized political system was rather weak, as no important elements of economic organization were present. In other words, one can make a conclusion that the country’s government did not know what to do with the desired freedom. The postindependent period Venezuela underwent was characterized by extremely high military expenses. Moreover, tax revenues were stagnant; so, the fact that state-building failed seems to cause no questions.

It should be pointed out that local credit markets disintegration was caused by the colonial treasury system destruction. Forced loans and military funds spending are considered to be the primary reasons of a profound fiscal crisis in Venezuela. Generally, keeping in mind Venezuela’s 19^th century history, one is to remember that there is a strong need to differentiate between the short-run effects of political and economic freedom and the long-run consequences. So, destroyed property was considered over a short period of time; while the long-run consequences involved dismal alterations of administrative expenditures. Venezuela’s economic organization was characterized by fiscal mismanagement and fluctuating economic growth. Of course, it seems to be evident that the economic system suffered from political fragmentation. Despite the fact that providers of protection appeared, their capacities were quite restricted, as there was no appropriate military system. Revolutionary disturbances caused the collapse of public finances.

The country’s trade interactions

Venezuela’s political and economic freedom gave the country an opportunity to start trade interactions with the North America and Europe. However, the role of the political instability and a wide range of violent conflicts cannot be neglected; therefore, the trade regime also “experienced” a variety of difficulties. Low levels of productivity were observed⁶.

Venezuela’s economic performance in the 19^th century can be regarded rather ambiguously, as there are different viewpoints on the role of the new international trade the country started. For instance, according to Dependency School researchers, the country’s trade regime brought about inequality within Latin American societies. On the other hand, neoclassical trade theory gives us an opportunity to state that Venezuela’s political and economic freedom gave the country comparative advantage. Hans W. Singer⁷ is of the opinion that the new trade regime should be regarded within negative perspectives, as certain advances of the international interactions led the country “to commit resources to primary production, with the implicit opportunity cost of not allocating it to the domestic sector, where factor returns were higher as a consequence of increasing returns and economies of scale”. Finally, it is necessary to point out that the country exported primary goods. The tyranny of distance is recognized to be one of the most important aspects in the country’s international relations. Therefore, it seems to be obvious that Venezuela’s location was of great importance in terms of the new trade regime. The Great Britain was Venezuela’s principal partner in trading.

Some historians are of the opinion that Venezuela’s economic decline started far long before its independence; although political and economic freedom led to increased transaction costs. The tax increases were considered to be unavoidable, as the country’s authorities had to cover expenses political and economic freedom required. The country’s international economy is considered to be one of the key questions historians heatedly debate. The major contradictions on the international trade are mostly related to the so-called income inequalities across and within Latin American societies.

Venezuela in times of the first globalization episode

When comparing Venezuela’s 19^th century economic performance with the performance of the modern countries of the Third World, one can probably make a conclusion that even in times of decolonization a republic on the northern coast of South America experienced better conditions. Thus, GDP levels per head in Venezuela for the period from 1870 to 1913 did not become worse as compared with the USA, but were even improved as compared with other countries. Keeping in mind a historical background, one can notice that there were domestic circumstances, which formed Venezuela’s 19^th century political and economic freedom. Despite the fact that the country became independent, some historians suppose that Venezuela became politically and economically free, when the first wave of globalization emerged. As far as the economic necessities of the country caused raising tariffs, the country’s isolation from world markets can be regarded as one of the consequences of the globalization⁸.

Conclusion

Most of the Latin American countries achieved political independence in the early nineteenth century, but not one of them was able to achieve first world status over the next one hundred years, because the countries were not ready to operate independently. In other words, one can probably conclude that the countries fought for independence, but their expectations did not correspond to the reality. Latin American societies did not know what to do with political and economic freedom. Being under the oppression of the absolutist Spanish crown a considerable period of time, people had no idea how to establish a new society. Moreover, one is to keep in mind that numerous internal and external contradictions within newly independent countries aggravated the process of socialization. On the other hand, it should be noted that the gap between living standards in the Caribbean region, Central/South American and other countries can be also regarded as one of the major reasons of the societies’ inability to achieve first world status over the next one hundred years.

Venezuela’s example shows that many policies developed by the Latin American countries were ineffective and cost as compared with the policies of the US. “The direct and indirect economic benefits of independence were small, as were the measurable costs of colonialism: the limited net benefits of independence were overcome by new costs, such as prolonged wars, civil strife, and economic instability”⁹. On the other hand, institutional modernization took place much later.

Still, despite the fact that most of Latin American countries obtained independence in the 19^th century, numerous political transformations were not accompanied by equal cultural or financial alterations. The process of independence the countries went through was extremely difficult. In my opinion, people should fight for independence, when they are ready to face a variety of changes political and economic freedom can bring about. Governments, in turn, should be deeply concerned about their population and therefore, think about strategies domestic and foreign policy should be based on.

Bibliography

Bates, R, J Coatsworth & J Williamson, Lost Decades: Lessons from Post-Independence Latin America for Today’s Africa. Harvard.edu, 2006. Web.

Bolton, P & G Roland, ‘The Breakup of Nations: A Political Economy Analysis’, Quarterly Journal of Economics, vol. 113, 1997, pp. 1057-90.

Coatsworth, J, ‘Inequality, Institutions and Economic Growth in Latin America’, Latin American Studies, vol. 40, 2008, pp. 545-569.

Findlay, R, ‘International Trade and Factor Mobility with an Endogenous Land Frontier. Some General Equilibrium Implications of Christopher Colombus’, Theory, Policy and Dynamics in International Trade, 1993, p. 47.

Landes, D, The Wealth and Poverty of Nation: Why Some Are So Rich and Some So Poor, W.W. Norton & Company, Inc., New York, 1998, p. 313.

Price, P,How Bolivarian is the Bolivarian Revolution: Hugo Chavez and the Appropriation of History. Boisestate.edu, n.d. Web.

Singer, H, ‘The Distribution of Gains between Investing and Borrowing Countries’, American Economic Review. Papers and Proceedings, vol. 2, no. 2, 1950, pp. 473-85.

Stein, S & B Stein, The Colonial Heritage of Latin America. Essays on Economic

Dependence in Perspective, New York: Oxford University, 1970, p. 131.

Williamson, J, ‘Real Wages, Inequality and Globalization in Latin America before 1940’, Revista de Historia Económica, vol. 17, 1999, pp. 101-142.

Footnotes

1. R Bates, J Coatsworth & J Williamson, J. Lost Decades: Lessons from Post-Independence Latin America for Today’s Africa. Harvard.edu, 2006.
2. D Landes, The Wealth and Poverty of Nation: Why Some Are So Rich and Some So Poor, W.W. Norton & Company, Inc., New York, 1998, p. 313.
3. S Stein & B Stein, The Colonial Heritage of Latin America. Essays on Economic Dependence in Perspective, New York: Oxford University, 1970, p. 131.
4. P Price, How Bolivarian is the Bolivarian Revolution: Hugo Chavez and the Appropriation of History. Boisestate.edu, n.d.
5. P Bolton & G Roland, ‘The Breakup of Nations: A Political Economy Analysis’, Quarterly Journal of Economics, vol. 113, 1997, pp. 1057-90.
6. R Findlay, ‘International Trade and Factor Mobility with an Endogenous Land Frontier. Some General Equilibrium Implications of Christopher Colombus’, Theory, Policy and Dynamics in International Trade, 1993, p. 47.
7. H Singer, ‘The Distribution of Gains between Investing and Borrowing Countries’, American Economic Review. Papers and Proceedings, vol. 2, no. 2, 1950, pp. 473-85.
8. J Williamson, ‘Real Wages, Inequality and Globalization in Latin America before 1940’, Revista de Historia Económica, vol. 17, 1999, pp. 101-142.
9. J Coatsworth, ‘Inequality, Institutions and Economic Growth in Latin America’, Latin American Studies, vol. 40, 2008, pp. 545-569.

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