Socio-economic were based on patronage and informal

Socio-economic inequality existed in Latin America during
colonialism and continued to haunt them after their independence from Spain and
Portugal. Current increases in socio-economic inequality in Latin America can
be argued is due to the unavoidable consequence of not correcting past errors,
allowing history to repeat itself in different manifestations. Socio-economic
inequality stems from the exclusion of groups from political participation, no
land redistribution for agrarian reform, and lack of access to education, which
has led into today’s inequality that is surrounded with corruption, lack of
investment into creating a bond between the government and businesses, churches
and other organizations, and a kind of political weakness and even isolation of
the poor especially during economic crises.  


         Generally, from the very beginning of
the liberation of Latin America from Spain and Portugal rule, the rich elites
benefitted from inequality in Latin America.  After the independence from Spain and
Portugal, the white creole elites no longer had to pay taxes to Spain or
Portugal and now they can finally directly trade and profit from their trade. Latin
American societies did not change very much after their independence. The elites
acted similarly to how the Spanish and Portuguese had done previously. Politics
were based on patronage and informal bargaining between the people of power and
their clients. The prime source of status continued to be labor forces and
landholdings. So, the society continued to be extremely patriarchal and divided
between race and between economies. The economic behavior of elites was
resembled by their want to make a profit by selling to a market, privilege, and
power to monopolize markets through political deals. The wealth made was used
to consume luxuries and increase social prestige. The wealth was concentrated
on the top of the social/economic pyramid. Therefore, not much of the money was
put into innovations. Foreigners usually came in and invested in the public
works, technical and industrial businesses. The export economy did not change
the social relations. Yet, some changes occurred starting from 1870, cities
expanded, roads and railways were built. Modernity was seen in the economy with
the emergence of urban populations, middle class professionals, and white-collar
employees. After 1918, world markets were readjusted which hurt Latin American
trade. This led to social forces tried to replace oligarchic liberalism and led
to state-led industrial development.  The
republics such as Argentina, Brazil, and Mexico had the most open and dynamic
economies and very Europeanized liberal elites. By the early 1940s, the
manufacturing industry was subsidized by an authoritarian state in Brazil,
Argentina, and Mexico.

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         Through export trade, creole elites set
changes that actually step by step started to undermine the traditional
patriarchal authority over other social classes. Export trade led to the
development of the growth of towns and cities. The working class had no say in
national politics even in countries such as Brazil, Mexico, and Argentina.
Strikes began due to labor conflicts and was seen as disruptive to the social
order. Mexicans were the first to make changes by giving workers rights. The
rich elites had a hard time overlooking the arguments brought up by the middle
class radicals as they fought for democratic principles that were the basis of
republic constitutions. The rich elites still decided rig elections in order to
exclude the middle class radicals, which ultimately led to violence and
agitation. Creole elites only joined in alliances with the middle class in
order to enter politics as Francisco Madero did in Mexico in 1910 against
Porfirio Diaz as he wanted a limited democratic reform and wanted to mobilize
middle class and some working class. This occurrence was similar to Argentina
when export growth led creole elites to help the middle class by liberalizing
the electoral law in 1912. Ultimately, this led to the Radical party winning
the election in 1916.  In Mexico, this
led to the Mexican revolution due to the infusion of foreign power and internal
struggle of power as many of the poor on agrarian lands were left with no
voice, struggling to make a living. During this time period, the economy was
booming due to the position of free trade without changes from traditional
times, as creole elites were still in control and in a monopoly position.


         Latin America lost its economical advantage
due to declining demand of their traditional products, as more competitors were
present creating oversupply. After World War I, USA displaced Britain and Latin
American countries became dependent on industrial imports from the USA while
selling low-value exports to low in demand markets in Britain and the rest of
Europe. The USA began heavily investing in Latin American countries and greatly
getting involved with the politics of Latin America in order to ensure their
business profits. Luckily, by the Second World War, the industrial bases
developed in Argentina and Brazil sold raw materials and foodstuffs during the
war. This generally led to most of their debts to be paid off and enough money
was made in order to invest in further industrialization, which was needed to
catch up with the rest of the modern world. This was a time when the
nationalist standpoint was developed in relation to the rest of the world. This
view led Brazil, Mexico, Argentina and then later the rest of Latin America to
industrialize the economies through the substitution of imports. Through the
utilization of import substitution, the state would have to intervene in the
economy by creating heavy taxes on foreign manufactured goods and have them
replaced by local goods. The goal was to succeed in creating a self-sufficient
economy. Overall, this created a circle between the state, foreign capital, the
elites involved in exports, and the different industries involved. Thus, the
economy became dependent on politics.


Another overlooked crisis embedded in socio-economic
inequality in Latin American societies became agriculture including the Indian
population. People were so involved in improving urban life and importation/exportation
that they forgot about the ongoing crisis in the rural areas. It was necessary
to redistribute the land for efficiency in the agrarian reform and social
justice for the poor people living in the rural areas and working in the farms
as a cheap labor force, as agriculture was extremely important for foreign
exchange. By the 1960s, countries like Mexico reached a point at which they
could no longer produce enough food to supply for their own populations and
became importers, losing money earned from exports. By 1980s, Latin American
countries were still not fully industrialized due to internal war and military
despotism, which hurt their economy and led them to debt. The debt crisis was
only resolved in an international context. Latin America couldn’t export its
way out of debt. However, with the emergence of new leaders and commitment of democracy
and reform the 90s led to an increase in economical growth that wasn’t
sustainable, leading to today’s ongoing issue of socio-economic inequality
within Latin America.


In specifics, Mexico after their independence comes to be
ruled under Porfirio Diaz who was considered brutal and ruled as a dictator. Diaz
believed in neo-liberal ideals. He encouraged investment from foreign powers.
He suppressed the voices of anybody who disagreed with him and took control of
the peasant collective farming. The economy of Mexico showed growth although,
the people were suffering from the lack of democracy and lack of equality
economically especially during this economic growth. Due to this inequality,
people including Francisco Madero, Pancho Villa, and Emiliano Zapata
represented the middle and lower classes views against Porfirio Diaz in many
revolts. Many of the issues came up due to the need of land reform and change
in policy of foreign ownership of resources. Presidents later on such as
Obregon cultivated close ties with the United States as they sold petroleum to
the U.S. market. More changes came to Mexico, with Cardenas in power as he
created a political system that lasted till the end of 1980s was focused on
organization of corporatist structures for trade unions, peasant organizations,
and middle class professionals and office workers were in the ruling party. During
his presidency, the government redistributed millions of acres of hacienda land
to peasants, and urban and industrial workers gained unionization rights and
wage increases. He also created nationalistic economic policies involving oil
production, which soared especially during a time of need during World War II.
Cardenas Company, Pemex, later became a model for other nations in Latin
America who aspired to take control over their own oil and natural sources, as
the company still remains an important source of income for the country. As a
whole, the constant struggle between the poor and the rich as well as its
leaders, is shown through in their economy as the past continues to prevail
because of class struggles, racism, and constant competing quest of power
between elite groups.


         While, Brazil back in their colonial
days was a monarchy until they became a republic in 1889. Liberalism was a fairy
tale and an ideology that wasn’t used in reality. Universal rights became
privileges of a minority that has power and property. Economic and social
structures were created to set limits for liberalism. People in charge were
still interested in having a monarchy rather than the system they admired of
the United States of America. The main supporters of liberalism in Brazil were
interested in leaving the old way of production through slavery while removing
the “grip” of the mother country (free trade and no taxes). Brazil’s
liberalism became one big, contradiction as they kept the practice of the
system of patronage and clientele, had a peripheral position in the
international market, still wanted to use slave labor, and had a delayed
Industrial Revolution. In the republic, the voting population was small as you
had to be literate in order to vote and not many people were literate in Brazil
at the time due to a lack of access to education. The elites had the property,
power, and education to have a say and contribute to their government in order
to monopolize markets. Economic development only took place in three states.
Coffee was a major export in Brazil making the rich richer. Brazil in 1945
became a democratic nation till 1964, when it became a dictatorship. Only by
1979, Brazil returned to a democratic set up. Lula da Silva came into power by
2002 and started to represent a new type of social democracy.


In comparison, Argentina like other Latin American countries
divided themselves from the Indian population and tried not to recognize them, which
led to their “Conquest of the Desert” as they killed a large sum of the Indian
population. After Argentina’s independence from Spain, there came a new period
of time in which foreign powers started to invest in Latin America leading to
prosperity in Argentina. During time period, Argentina believed in liberalism,
more specifically neo-liberalism. After 1870, the flood of immigration from
European countries led to the development of modern agriculture and recreated
the Argentine society and economy. This in turn strengthened their state. Argentina’s
increased prosperity was due to their agriculture export-led economy. Yet,
Argentina continues to suffer inequality as they continued to rely on their
export economy and foreign investment. Leaders such as Peron believed in social
justice and economic independence. He asked his economic advisors to create a
5-year plan in order to increase workers’ pay, achieve full employment, and
stimulate and diversify industrial growth. He believed in economic nationalism
in which, industries were nationalized and foreign ownership was limited as
well as utilizing import substitution and safety nets. When Menem came in, he
broke the protectionist barriers, business regulations, and privatizations
created. This later on led to Argentina’s bankruptcy. This is seen in the
documentary, The Take, as we see the after effects of Menem’s work. He sold off
any public asset he could, making Argentina the most privatized country. The
multinational banks took $40 billion from the country as the government froze
all bank accounts. As usual, the rich got away safely as they had their money
stored in foreign banks while the rest of the citizens were left with the
consequences. Factories started to get abandoned by their bosses and workers
were left out of work. More than half of the country fell below the poverty
line. Finally, through direct democracy, the workers took control of the
factories fighting through court after court in order to create a democratic
workplace without hierarchy, to work, make a salary that allows their families
to survive, strengthen the economy, and give back to their own communities. This
specific example sheds light on how specific social groups such as the poor are
stuck with no choice or opportunity to survive even from their own government
during economic downfalls, while the elites are supported by the political
leaders because of corruption, leading to this dualistic view on the inequality
of the citizens in Argentina as well as the rest of Latin America.


Currently, all three of these Latin American countries are
said to follow democratic policies and ideals. Yet, it seems that the true
problem has to do with the quality of democracy that exists in these countries.
The citizens are supposed to be protected and given power to be used due to the
existence of the constitution. Through citizenship, all the citizens should be
equal and autonomic. Without this base, democracy of these countries has little
to no meaning as each citizen’s vote for candidates should be equally counted,
regardless of the social status of the voter. But, this is only one way that
effective citizenship can be shown. With corruption and violence in the
streets, the unpredictability of the lives of the people leads to the suffering
of the economy.


         Through the ups and downs of Latin
American history, it is evident that changes must be made in order to better
the lives of the Latin American people. The state government institutions
should be improved in order to create sustainable socio-economic policies that
can finally stabilize the economic state of the Latin American countries. It is
seen that many of the Latin American countries especially Mexico, Brazil, and
Argentina suffer from a dualistic view of their people and countries overall as
one side shows the rich and some middle class who can actually make money, have
an education, and can buy themselves houses, goods, and a sense of security
while, the other side is poor as well as the ones who have no security for
their future especially in terms of finances, leaving them feeling isolated
from the others especially their own government. There is definitely a link
between these two sides of the Latin American countries. However, it seems that
just like they received their independence in solidarity, they should try to
stand together to overall remove some social distance in order to effectively
lead their countries to stable economic states.


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