Michael Reid's task in "Forgotten Continent" is onerous: in one book - a large one, to be sure - he wants to summarize two hundred years of a continent's history, and to argue that Latin America is now ready for a major change: the embrace of Free Market Democracy in earnest for the first time.
The thesis of the book is simple: Latin America is torn between reformers - democrats who support free markets and democracy, and populists - who support neither. Reid argues that although the populists have considerable appeal in the region, the tide has turned against them. Unlike previous eras, the current embrace of democracy and capitalism - augmented with a great deal of redistribution policies - is here to last.
Surprisingly for a journalist, Reid's history of Latin American, in three large chapters which take us from the 1820s to the 1990s, is cumbersome and hard to read. It is only when he gets to economic history that Reid, a correspondent for The Economist, hits his stride; A chapter on the development of the Washington Consensus is fascinating; I've read general economic accounts of 1997-1998 crisis (e.g. Paul Krugman's
The Return of Depression Economics) and a specific study of Argentina's woes (Paul Bluestein's
And the Money Kept Rolling In (and Out) Wall Street, the IMF, and the Bankrupting of Argentina), but Reid offers a continent wide survey of the economic liberalization program which started in the 1980s, and offers a balanced evaluation; Unsurprisingly, Reid, like the journal for which he writes, thinks that the reforms were largely successful and positive, and that the responsibility for economic failures in the countries of Latin America lies more in insufficient reform of their economies and institutions and hardly if at all in the malign influence of Wall Street, the US, and the International Monetary Fund.
I was pleased with Reid's decision to dedicate a chapter to Hugo Chavez, the Venezuelan President. I originally bought "Forgotten Continent" to a large extent in order to learn more about the man and the phenomenon. Unfortunately Reid's account, although informative about Chavez's biography (coolest tid-bit: did you know that Chavez has his own TV show in which he dazzles Venezuelan audiences for five to seven hours every week?) but did not really enlighten me about the overall significance of "The Chavez Revolution", for Venezuela, Latin America, or the world. Overall, Reid's conclusion corresponds to the views I held before reading his book: Chavez's Venezuela is less democratic and more corrupt than the very imperfect regimes that came before it. Chavez's entire regime rests on the high price of oil; once that is gone, Chavez, and unfortunately, his country are in for a rude awakening (for a dissenting view, see Bart Jones's biography
Hugo!: The Hugo Chavez Story from Mud Hut to Perpetual Revolution).
Reid's focus is squarely on economics and politics. The chapter on the changing societies of Latin America is short and feels rudimentary. Reid touches briefly upon the region's press (becoming more liberal and open), religion (becoming more diverse, with a decline of traditional Catholicism and the rise of Protestantism) and race relations (becoming more complicated, as the previously hushed reality of racism is brought to the surface, unleashing various forces and counter forces), but doesn't do them justice.
The heart of the book is the description of the struggle to reform: not only the state and the economy, but the law enforcement and education systems. That improving schools is a difficult job comes as no surprise; Investing in education is relatively easy, but making sure that the investment is productive is much more difficult (see William Easterly's
The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics and
The White Man's Burden: Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good). The difficulties of reforming the law enforcement services owe much to the so-called "War on drugs": US pressure on Latin American countries to destroy coca production causes unnecessary resentment, and is unlikely to effect the availability of crack-cocaine on US streets - the high price of cocaine isn't due to scarcity but to the risks involved in moving it within the market countries, where it is much more heavily regulated (p.256). But beyond the inherent problems in reform, the main obstacle to the spread of effective, free market democracies is the weak economic performances of Latin America. Unlike China and India, which clearly enjoy the benefits of Globalization, the economic performance of most Latin American countries have been abysmal.
Why has Latin America's economies (with few exceptions such as Chile) performed so badly? It's hard to say. The great differences in size, population, geography, system of government, availability of natural resources, etc, guarantees that challenges would always be launched against any single "one size fits all" explanation. Regardless of the cause, Reid argues that Latin America's improved economic policies in the 1990s and 2000s would lead to improved economic outcome, and thus the reformers (and not the populists) would win the "Battle for the Soul of Latin America". Let's hope he's right - a poor Latin America dominated by quasi-socialistic dictators, as in the 20th century, would be a grim reality for the 21st.
