Latin American State Formation & Economic Shifts: 1880-1910
Semi-State Formation in Latin America
The imperialist drive of the second half of the nineteenth century laid the basis for the establishment of a new colonial pact between Latin American countries and European industrial centers. This new order involved a situation of economic dependence, where the incorporation of Latin American societies into the international capitalist market determined their specialization in the production of exportable raw materials and food. Unlike colonial states, economic dependency did not involve direct political dependence. States with a powerful local socioeconomic class were able to lay the institutional foundations to ensure the necessary political order and conditions for the primary export model.
Political Centralization (1880-1910)
Between 1880 and 1910, years of centralization of political authority and consolidation of state institutions took place. This process was related to the consolidation of the new semi-colonial order. During this period, foreign investment, earnings from exports, and customs revenues from imports provided the capital increase in peripheral societies. They also provided the resources needed to co-opt potential opponents by offering them positions in government and various grants related to some economic exploitation.
Nation Building in Latin America
The modern centralized states during the last decades of the nineteenth century were considered “national states,” representing a specific “nation.” In Latin America, the process of constitution of modern nation-states and the relations between nation/ethnicity and the state were different. The ruling elites centralized political authority and represented the state, while the “new” Latin American nations emerged. The ruling elites who triumphed and led the national constitution of states belonged to the ruling class and refused to build a national identity based on the ethnic and cultural values of the rural areas. The ideological basis of the new states consisted of strange combinations of European thought, Hispanidad, secularism, positivism, and so on. The ruling groups also proposed to construct and impose a “national identity” in each society.
Socio-Economic Foundations of Oligarchic Rule
During the last quarter of the nineteenth century, the dominant groups that controlled the export manufacturing sector took over the state and imposed a national government system that restricted the political participation of the population. Through various mechanisms of control of political succession, their movements and supporters remained in power, often seen as restricted democracy. These states played a central role in the development of the capitalist organization.
Consolidation of the Primary Export Model
During the nineteenth century, the development of industrialization and the expansion of international trade led to a new international division of labor. Latin American countries specialized in the production of raw materials and food demanded by industrial centers. They took advantage of their comparative and competitive advantages. Each country specialized in the production of products for which they could produce an advantage over other countries that did not have the same resources. From these specializations, non-industrialized countries were incorporated into the international capitalist market as peripheries.
Forms of Economic Production Organization
- National Control of Production: The economic organization of production was of “national ownership.” In these societies, capitalists forged alliances with other social groups that were not integrated into the modern sector of the economy and established relations with the capitalist industrialized countries. Numerous activities related to production, marketing, etc., originated.
- Production Enclaves: Foreign capitalists decided to invest to start production that interested them. They found it more convenient to produce the raw materials they needed in the peripheral countries, sometimes because their countries did not have these resources, or because it was cheaper to produce. These foreign companies controlled everything from production to transportation of products. Foreigners who controlled the enclave had to pay local taxes to the state where the enclave was situated.
Emergence of New Social Groups
In Latin American countries with “economies of national control,” the development of the productive system was generated. As a consequence of economic development, a growing social diversification was observed. The “urban areas” were composed of small traders, artisans, professionals, teachers, and public employees. In countries with an “enclave economy,” the distribution of income from exports to the interior of society was minimal. In these societies, mining workers from the enclave and some urban sectors related to public administration differed.