1
War and Postwar Intersections
Latin America and the United States
David Rock
The 1940s brought some striking changes in many parts of Latin America. Population and the cities were growing as never before. Nationalism suddenly became "rampant" in the region, and the "leaven of economic nationalism [was] working overtime."[1] A "dynamic of rising expectations" erupted in the cities, as the "masses [became] increasingly class conscious and politically potent."[2] Advancing techniques of mass communication led by film and radio "enabled [Latin Americans] to glimpse the way others live[d] [and] they [were] asking why they should not live as well." [3] "People were demanding a voice in government, and...they were getting it. With this new voice they demanded economic independence and progress, social justice and political sovereignty."[4] "It seemed only a matter of time," commented another observer, "before popular pressures would break through the dikes, and bring in a flood of political and social changes."[5]
This period marked the consolidation of a new type of Latin American state, one committed to greater public ownership, economic change, and rising standards of living. At the helm of the state stood a new brand of populist political leader who "claimed to represent the people and...treated social and economic problems as fundamental."[6] Instigated by the populists, Latin Americans demanded "a higher standard of living, and [became] convinced that industrialism was the way to get it."[7] From the emergent new political order came the "the impulse to build strong, independent nations, to mold broader and more efficient economies, and to create new social
forms and institutions."[8] Instead of seeking to modernize by attracting European immigrants—the nineteenth-century liberal-positivist program—the Latin American nations would now "increase their manufacturing efforts as a base for a larger population."[9] A growing middle class of entrepreneurs and managers employed by manufacturing would "provide a broader base for political responsibility."[10] Higher tariffs were "part of the whole fabric of the New Nationalism," while numerous reform movements emerged "designed to bring about a broader distribution of wealth."[11]
Around the mid-1940s—in some parts a little earlier and in others a little later—the demand for industrial development began to fuse with the aspiration for social reform, whereas before, if these conditions existed, they had tended to remain separate. Under the Estado Nôvo (new state), established by Getúlio Vargas in 1937, Brazil, for example, enacted one of the highest tariffs in the world and constructed a heavily regulated and increasingly centralized economy.[12] But it was only around 1945 that the attempt to promote economic change became linked with the emergence of new popular movements and with attempts to promote greater social equality.[13] In Mexico during the late 1930s, in contrast, President Lázaro Cárdenas greatly intensified land reform, nationalized oil, and supplanted clerical power in the schools by "socialistic education." But in Mexico reform and mass mobilization were as yet unaccompanied by the other component of industrial development and structural change: industrialism became the priority in the 1940s.
Before the mid-1940s only Chile effected the synthesis of social reform and industrial development, although somewhat exceptional conditions prevailed there. The Great Depression had a deeper impact in Chile than in any other country. Imports in the early 1930s were around 80 percent lower than in the late 1920s, and gross national product fell by around 40 percent.[14] In Chile the depression fanned a premature populism that in 1938 led to the formation of the Popular Front administration. Under the slogan of "bread, roof, and coat" (pan, techo, y abrigo ), Chile pursued state-led industrial development that for a time at least was combined with an attempt at social reform.[15]
But in most of Latin America until toward the end of World War II, the old-style oligarchic or autocratic state remained intact. Under leaders such as Oscar Benavides in Peru or Agustín P. Justo in Argentina, politics in the 1930s stuck firmly in the molds of the past. Most governments reacted to the
depression not by fostering structural change but by attempting to revive primary exports. As yet industrial and urban growth remained too incipient, the deflationary effects of the depression too deadening, labor markets too slack, markets too fragmented, and popular leaders too defensive to create a climate for political change. The "rebellion of the masses," or as he also labeled it, the "sovereignty of the unqualified," predicted by the Spanish philosopher José Ortega y Gasset had as yet failed to materialize.
The late war years came much closer to fulfilling Ortega y Gasset's prophecies. Change sprang from the reversal of conditions prevalent during the depression. These new conditions included war-induced inflation, accelerating industrial growth, and the rapid growth of urban employment; meanwhile, new democratic and reform currents redefined concepts of participation and economic progress.
Inflation occurred chiefly from the impact of the war on Latin America's foreign trade. In the Allied nations millions of farmers, miners, and factory workers became soldiers; women workers operated the factories that now produced munitions instead of civilian goods. During the war Latin America's imports of manufactured consumer and capital goods fell sharply, but its exports grew, with trade tilting away from Europe and toward the United States.[16] Import shortages, rising shipping freights, and large balance of payments surpluses all contributed to rising prices in Latin America; inflation then spurred the rapid expansion of the Latin American labor movements. In 1945 workers "heightened the tempo of their struggle for economic and social status," as the Latin American labor unions emerged larger and more powerful than ever before. At this point "labor...received more recognition as an actual or potential political force than in any previous year."[17]
Wartime inflation fostered new forms of political instability. In many parts of Latin America the export boom shifted labor from subsistence or local farming into export production but in doing so provoked a contraction in domestic food supplies. Parts of Mexico, Haiti, Cuba, Venezuela, Peru, the Dominican Republic, and the rubber region of the Amazon, into which the Brazilian government deployed thousands of peasant workers, all suffered outbreaks of political unrest stemming from the rapid expansion of export production, the disruption of peasant communities, and urban food shortages. In 1944 corn riots set the scene for the overthrow of the Hernández Martínez dictatorship in El Salvador. In Bolivia falling real wages among tin miners, alongside pressures from employers to raise export production,
provoked the unrest that led to the "Cataví massacre" of 1942 and then the nationalist revolution of December 1943 led by Víctor Paz Estenssoro.
A second feature of the war period was accelerating industrial growth that built on the expansion of manufacturing during the late 1930s. Although they could no longer import capital goods and raw materials, the industrial producers of Argentina, Brazil, Chile, Mexico, and other countries managed to increase production and, despite the parallel growth of agricultural and mineral exports, to draw growing quantities of labor from the export sectors. Peasants and other rural workers thus swarmed into the cities, contributing to the expansion of the labor unions. In Colombia, for example, President Alfonso López Permejo attributed his fall in July 1945 to "that active industrial development which is causing and creating interests of such magnitude that they openly defy the force of the laws." The expansion of industry, he added, had produced the "awakening of a sleeping social consciousness."[18]
The growth of manufacturing encouraged the growth of state planning and the spread of the interventionist state. The disruption of foreign trade during the 1930s suggested the end of the liberal international economy; the early 1940s displayed the power of the mighty industrialized war economies in Europe and North America. These conditions combined convinced Latin American political leaders, particularly in the military, that planned state-led industrialization offered the key to national progress and national power. A senior Argentine military officer writing in 1944, for example, argued that greater self-sufficiency was essential to his country's future. The war showed that the small, weak nations had no protection against the strong, and therefore "the current war demand[ed] healthy and powerful industries." After the war, he predicted, the reemergence of the trade blocs or "spheres of influence" of the 1930s controlled by the great powers would make it impossible to return to the free trade economy; the key to the future therefore lay in "economic independence." Economic development, moreover, should be led by the state, which was "no worse or more bureaucratic an administrator than a company that possesses a monopoly."[19]
In Mexico industrial development became state policy following the assumption of the Manuel Ávila Camacho government in December 1940. In April 1941 the Law of Manufacturing Industries granted tax incentives and tariff protection to designated sectors of manufacturing; in 1942 the National Chamber of Industry was established to foster public support for industrial development; in 1944 the state-owned Nacional Financiera was revamped
into an industrial bank to support manufacturers; in 1944 too Mexico extended import controls.[20] In 1940 Brazil launched a five-year plan to establish a chemical industry and negotiated a large loan in the United States to build the Volta Redonda steel plant. In Argentina a greater commitment to industrial development also began in 1940 led by Federico Pinedo, the finance minister, and then intensified after the military coup of June 1943. In 1944 the Argentine military junta established a state-controlled industrial bank, and in 1945 another government agency, the Instituto Argentino para la Promoción del Intercambio, began diverting profits from agricultural exports into urban industries.[21] By the end of the war even the smallest and poorest countries of the region such as Haiti and the Dominican Republic were laying ambitious plans for industrial diversification.[22]
In the large Latin American nations, governments embarked on projects to increase power supplies from oil and hydroelectricity and to develop roads and air transport. Supporting these ventures were associations like the "New Group" of manufacturers in Mexico, which campaigned for government-subsidized industries in Mexico City, Guadalajara, and Monterrey. The New Group demanded government investment in chemical and machine tool industries, export duties on industrial raw materials to safeguard supplies for local producers, the lowering of railroad freights, and the establishment of new regional industrial banks.[23]
State planning initially went furthest in Chile, where government institutions controlled industrial, mining, and farming credit and financed large-scale power and transportation projects. Chile became a leader in utilizing the profits from wartime exports to finance government corporations led by the state development company, the Corporación de Fomento.[24] The Chilean Economic Powers Law of December 1943 embodied the type of government intervention now starting to appear in many parts of the region. This legislation fixed urban rents; controlled prices, profits, and internal commerce; and supervised tax subsidies for local industries.[25]
Lastly, the mid-1940s marked the rise of new forms of popular politics. Their origins lay partly in the growth of the cities and the labor unions and in the activities of the Communist parties that between 1942 and 1947 functioned in greater freedom than ever before. But change also sprang from the great blasts of wartime propaganda by the Allies, which fostered, as one commentator defined it, a new "democratic faith."[26] As early as 1941 Arthur P. Whitaker correctly recognized the likely impact in Latin America of the
principles and ideals the Allies were brandishing in the war against fascism. Latin American conservatives, he noted, were cooperating with the Allies in an effort to safeguard "the defense of the status quo, [but] Washington's emphasis on inter-American cooperation for the defense of democracy had revolutionary implications."[27]
Three years later Whitaker identified "the wartime contagion of liberal ideas" as the main reason for the downfall of Fulgencio Batista in the Cuban elections of 1944.[28] Similarly, in the struggle against dictatorship in El Salvador in 1944, "it was possible for the Diario Latino to conduct an anti-[Hernández] Martínez campaign."[29] This campaign constantly echoed the phrases and speeches of Roosevelt and Churchill.
In Guatemala the overthrow of Jorge Ubico in July 1944 followed a student-led uprising that invoked the "Four Freedoms" (freedom of speech, freedom of worship, freedom from want, and freedom from fear) proclaimed by Franklin D. Roosevelt in 1941.[30] Among the manifestos that appeared in Guatemala in the weeks preceding the fall of Ubico was that of the "311 " (leading citizens). "Guatemala cannot remove itself from the democratic imperatives of the era," the manifesto proclaimed. "It is impossible to frustrate by coercion the uncontainable impulses of that great ideology now being reaffirmed in the conscience of the world by means of the bloodiest of struggles between oppression and liberty."[31] Even in reactionary Nicaragua "the international context at the end of World War II with its rhetoric of democracy and anti-fascist united fronts provided a supportive milieu for Somoza's (brief) turn to the left."[32]
The sweep toward free elections and popular democracy began in 1943–1944, and in 1945 nine states including Brazil fell to movements pledged to democratization. "The years 1944 and 1945," commented Whitaker, "brought more democratic changes in Latin America than perhaps in a single year since the wars of independence. The victory of the United Nations over fascist totalitarianism in Europe and Asia galvanized the democratic forces....There were renewed discussions of fundamental problems of democracy all over Latin America."[33]
In Latin America, however, these nascent democratic forces often possessed a somewhat different content from the democratic movements typical of the United States. In a 1945 piece entitled "Rise of the Common Man," Whitaker noted that "the underlying discontent had been stirred into action
by the war, with its economic dislocations and the impulse...for social justice [generated] by the...Four Freedoms and the higher standard of living in the United States. But in several Latin American countries the resultant popular movements diverged widely from the pattern of liberal democracy in the United States."[34] Going far beyond the demand for the vote, in Latin America "democracy" implied popular mobilization and social reform. Thus in one typical Latin American definition during this period, democracy signified an "awakening of conscience and a concern with the problems of social welfare."[35] In Mexico democracy was understood as "satisfying the hunger of the people," and in Colombia as "an equalization [of] liberty and social justice."[36] In many cases European influences made a stronger impression in Latin America than those from the United States. "Among Latin American progressives," remarked an observer in late 1945, "there is a growing eagerness to look at the British experiment in democratic socialism (under Clement Atlee) for possible guidance and inspiration."[37]
In Latin America the most typical expression of political change was "populism," the unique blend of popular participation, charismatic leadership, corporatism, nationalism, and social reform. The populists were often conservatives at heart, and among their main political objectives was the creation of mass movements under their own control as a barrier to the expansion of the Communist parties. Meanwhile, their economic objectives were to expand the domestic market as a basis for "inward-led" industrial development. Miron Burgin, an American academic historian then working for the State Department, recognized this trend in 1943 and judged it both desirable and inevitable. "Manufacturing industries in Latin America," he wrote,
must for some time to come depend on domestic markets. The broader the internal market the more secure is the foundation for the continuing growth of domestic industries. This in turn presupposes a higher standard of living of the population at large...[and] a reorientation in the economic thinking and policies concerning the national dividend. Standards of living rather than exports [are now] the index and criterion of economic well-being. Consequently the primary objective of economic policy centers around the problems of placing higher real incomes in the hands of consumers, as this provides the best means of insuring economic diversification and stability.[38]
The Hemispheric Alliance
Toward the mid-1940s these trends in Latin America toward social reform, industrial development, and nationalism began to collide with the interests and policies of the United States. Immediately before World War II Latin America as a whole, as opposed to the traditional bulwarks of U.S. influence in the Caribbean basin, was central in U.S. foreign policy and strategic planning.[39] At that point Americans embraced the Pan-American movement "with all the fervor of a religious crusade. Latin America [was] the fashion; it [was] more, it [was] a mission."[40]
The chief foundation of these attitudes was "isolationism": with closer access to the markets, raw materials, and agricultural resources of Latin America, the American isolationists of this period argued, the United States could establish a self-contained commercial bloc insulated from all economic and military threats from abroad. In 1933 Franklin D. Roosevelt proclaimed the "Good Neighbor" policy, which pledged that the United States would abandon the use of military force in Latin America and no longer seek to undermine nondemocratic governments by tactics like the withdrawal of diplomatic recognition. "The maintenance of constitutional government in other nations is not, after all, a sacred obligation devolving upon the United States alone," Roosevelt declared.[41] During the prewar years Roosevelt greeted Gen. Rafael Trujillo of the Dominican Republic as his "great and good friend" and Vargas of Brazil as "co-author of the New Deal."[42] As observers recognized, the main purpose of these gestures was to enable the United States to dominate Latin American trade. The Good Neighbor policy, declared one commentator, was a "supercolossal trade promotion scheme in dignified attire."[43] "Pan-Americanism is a trade term made in the United States. It means buy from us....It proclaims that those who live in the hemisphere should love one another and must buy one another's pots and pans."[44]
The pursuit of Latin America intensified after 1935, as hemispheric control came to be seen as still more imperative to balance the growth of German and Japanese influence in Europe and Asia and to prevent Germany and Japan from expanding into Latin America. Americans feared that growing trade between Germany and parts of Latin America, particularly Brazil, would serve as the springboard for the expansion of German political influences in the region. Similarly, if war occurred, "there could be no great war
industry in North America without free access to the mines and fields of the southern continent....[A] struggle for the hegemony of Latin America [was] therefore [to] be one of the most important phases of the Second World War."[45] The nationalization of Mexican oil in 1938 alarmed the United States not only because U.S. properties were confiscated but also because of fears that Germans would be brought to Mexico to run the industry and the Nazis would gain control over supplies and prices.[46]
Between 1936 and 1940 the United States sponsored a sequence of inter-American conferences that established elaborate procedures for consultation among the American republics on defense and security issues.[47] At Lima in 1938, for example, the republics resolved to block the spread of "totalitarian ideologies," and in the Declaration of Lima they proclaimed that "American solidarity" was founded in republican institutions, national sovereignty, and individual liberty.[48]
After the outbreak of war in Europe in September 1939, all the American nations again supported the United States by subscribing to the "Declaration of Neutrality of the American Republics." At the Havana conference of 1940 the United States sponsored resolutions in which the republics undertook to share information on Axis attempts at "subversion." An increasingly dense web of U.S. federal government agencies led by the Inter-American Development Commission and the Reconstruction Finance Corporation sought to strengthen American political and economic interests in the region.[49] In July 1940 the Export-Import Bank, founded in 1934, received a large quantity of additional funds to be used to stabilize Latin American trade and currencies and to assist the United States in winning control over the region's raw materials.
Behind all these measures lurked the fear that an unguarded Latin America would fall prey to an Axis takeover.[50] Germany would fight "a civil war in every nation of the hemisphere" in its own quest for Latin America's foodstuffs, minerals, and markets, claimed one observer.[51] The Nazis, suggested another commentator, were plotting to flood Latin America with manufactured goods produced by slave labor, and a string of pro-Nazi coups d'état would immediately follow German commercial expansion in the region.[52]
The tactics employed to strengthen the position of the United States in Latin America rapidly grew more forceful. For example, Nicholas John Spykman from Yale University, urged "total war" along the lines of recent Nazi practice in Europe, recommending "propaganda attacks on the ideol-
ogy of the opponent, fifth columnists, trade embargoes," blacklists, and close associations with the Latin American military, or in other words "ideology blended with coercion," in which "military assault [became] only the last weapon in the struggle ... used only if other forms of coercion fail[ed] to bring surrender."[53] In 1940 the United States used strong-arm diplomacy to nullify the influence of the German settler community in Guatemala, and in October it supported the overthrow of Panamanian president Arnulfo Arías, an early nationalist reformer whom the State Department regarded as a supporter of the Axis.[54]
Links between the United States and Latin America continued to strengthen throughout the early 1940s, with trade acting as the main bond. After mid-1940 all the markets of continental Europe except Spain and Portugal lay under German control, blockaded by the British, and beyond the reach of Latin American exporters. Consequently, by early 1941 the U.S. share of trade with Latin America, at 54 percent, had already climbed beyond the peak of 52 percent attained during World War I in 1917; in the first half of 1941 more than 60 percent of Latin America's imports came from the United States compared with only 55 percent in 1917.[55] The flow of minerals from Latin America to the United States intensified, as exports of Chilean copper, Brazilian rubber and manganese, Mexican zinc and other commodities swiftly doubled.[56] Growing numbers of Latin American officers attended military schools in the United States. In October 1941 the United States extended the Lend-Lease Act to include Latin America, and soon after Pearl Harbor in December 1941 nearly all the Latin American republics broke diplomatic relations with the Axis powers as the prelude to a declaration of war.[57]
This swift realignment behind the United States became particularly striking in Mexico and Brazil. In 1938 the nationalization of oil by Cárdenas led to serious tensions between Mexico and the United States, but the conflicts swiftly subsided in 1940 when the war closed Mexico's access to Western Europe, leaving the United States as its only large foreign market and source of imports.[58] By early 1942 the oil dispute was indefinitely shelved, and during subsequent years economic ties between the United States and Mexico became closer than ever before.[59] As the United States poured resources into Mexican railroads and mines, thousands of Mexican braceros (farm workers) crossed the border to labor in the United States.
In Brazil, in language reminiscent of the Fascists, Vargas greeted the fall
of France in June 1940 as the "new age" that marked the end of "improvident liberalism."[60] But as his contacts with the Axis powers dwindled and the United States flooded Brazil with military and economic aid, Vargas too crossed over into the inter-American alliance. Soon there were American military bases in the strategic Brazilian northeastern "bulge," the closest part of the American continents to Europe and Africa, which the military strategists feared would be the most probable target of a German invasion.[61] At the inter-American conference at Rio de Janeiro in February 1942 the United States promised military supplies to the Latin American nations and preferential access to its shrinking pool of manufactured goods; in return the Latin Americans agreed to the "economic mobilization of the Americas" to support the war effort.[62]
Throughout this period the only country to resist the Pan-American alliance was Argentina, a country with close commercial and cultural links with Europe but very few ties with the United States. In 1940–1941 the Argentine government attempted to increase exports of grains and meat to the United States, but when these efforts failed it became increasingly obstructive. At the Rio de Janeiro conference in early 1942 Argentina attempted to create a neutral bloc of Latin American states opposed to the United States. Although this move failed, the Argentine delegation succeeded in modifying a resolution to break relations with the Axis from an obligation into a mere recommendation. During the next two years, despite growing U.S. opposition, Argentina stood alone among the Latin American nations in upholding relations with the Axis.[63]
The chief objective of the United States during the war was to increase the flow of exports from Latin America, in particular the minerals needed to feed defense production. As a result wartime investments by the United States in Latin America focused on extending railroad links between the mining regions and the ports. In 1940 the United States financed the Volta Redonda steel project in Brazil but only because Vargas threatened to approach Nazi Germany for assistance. Overall, U.S. agencies like the Export-Import Bank favored much smaller projects that once peace returned were likely to extend or protect markets for U.S. exports. The United States invariably opposed the industrial development of Latin America by protectionist tariffs.[64] Similarly, trade concessions by the United States to Latin American nations during the war applied mostly to minerals and raw materials rather than industrial goods. As critics such as the hostile Argentines suggested, the "partnership"
proclaimed by the United States was all too obviously both one-sided and short term.
Growing contact with the United States during the war thus fostered an export boom in much of Latin America but did little to meet growing aspirations in the region for industrial development and higher living standards. In the United States liberals often recognized these limitations and led campaigns for a broader commitment to Latin America's future. "The best way to improve trade with Latin America," argued Samuel Inman, for example, "is to raise its standard of living. A modest industrialization, with working conditions guarded by enforcement of labor laws, is one way for countries to modernize their colonial economies."[65]
However, most conservatives in the United States condemned increased aid to Latin America as "boondoggling."[66] The conservative position was to "deny that the other American republics, even those most favored...[could] ever attain a high degree of industrialization. [The conservatives] consign[ed] these countries to the status of large-scale producers of foodstuffs, minerals and other raw materials, and small-scale manufacturers of easily worked goods for local consumption."[67]
As the war progressed, there were signs of growing disenchantment among Latin Americans with the limited scope of U.S. policy. Latin Americans demanded broader trade concessions from the United States in favor of their expanding manufacturing sectors; they criticized the preferences of the United States to offer loans rather than trade in manufactures as a recipe for eventual stagnation and chronic indebtedness; growing numbers of Latin Americans found the United States insensitive to the mounting social problems of the region that resulted from inflation and the rapid growth of the cities. "To achieve a (genuine) common front," declared the leftist Peruvian writer Luis Alberto Sánchez, "the United States must demonstrate that it is concerned with the welfare of the common man in Latin America."[68] Throughout Latin America fears of U.S. domination were reviving. "We see the United States advancing as a giant," declared a Mexican diplomat in 1943, "but in the degree the giant grows, its shadow falls upon us."[69]
Growing Rifts, 1940–1948
By this point, around 1943, other issues were pulling the United States and Latin America still further apart. The Pan-American movement was based on
the isolationist assumptions of the 1930s that were now glaringly outdated. From the fall of France in mid-1940 onward, growing numbers of Americans recognized that "if the battle for Latin America was going to be won at all, it would have to be won on the other side of the Atlantic, for a Hitler who triumphed in Europe would be a Hitler capable of triumphing in much of Latin America."[70]
As the commitments of the United States spread to a world arena far beyond the confines of the hemisphere, Latin America's privileged standing under the Good Neighbor and the Pan-American movements was threatened. After the war, declared Secretary of State Cordell Hull in 1943, "there [would] be no longer any need for spheres of influence, for balance of power, or any other of the special arrangements" that guided policies before the war.[71] By 1944, as the United States steadily focused its attention away from Latin America and toward Europe and the Pacific, "all was far from well in the inter-American family." The Pan-American movement, complained Whitaker, was "a living organism; it need[ed] sunshine and exercise, and by 1944 it was growing pale and wan through lack of both."[72]
The change in attitude toward Latin America in the United States during the war found a striking illustration in Nicholas John Spykman's America's Strategy in World Politics . Written in 1940–1941 and published soon after Pearl Harbor, this often meandering but revealing tract began on the isolationist assumption of Latin America's critical importance to the United States; it ended, however, by suggesting entirely the opposite.
On the isolationist premise that the "struggle for the hegemony of Latin America [would] be one of the most important phases of the war," Spykman first conducted a long review of inter-American relations. This review, however, led him to conclude that the United States could not survive an Axis takeover of Europe and the Far East, as the isolationists argued, by retreating into a closed hemispheric system. Much of South America, above all Argentina, Spykman observed, depended heavily on trade with Europe. These areas had to "find a market or perish, [and] our good neighbors [had to], therefore, continue their efforts to balance our power by means of European or Asiatic affiliations."[73] Because of trade, countries like Argentina remained constantly vulnerable to Axis penetration and were likely to enlist immediately with Germany in the event of a German conquest of Europe.
The "closed New World" of the isolationists, Spykman continued, was unsuited to American interests for other reasons. If Germany defeated Brit-
ain, as seemed quite possible in late 1940 and 1941, it could then impose an embargo on European imports of U.S. and Canadian grain. Such an embargo, Spykman believed, would be "fatal for the temperate zone of North America." Alternatively, as some American policymakers were urging, the United States could acknowledge South America's links with Europe and abandon this part of the continent to the Axis while keeping control over the "quartersphere" north of Panama. Withdrawal to Panama, however, Spykman retorted, could not be justified from a military standpoint, since it would leave the United States without access to the mineral wealth of South America and would place the Axis in a position to attack the Panama Canal.[74] The obvious solution to the whole problem, Spykman concluded, was winning control over Europe:
[Victory in Europe is] an absolute prerequisite for the independence of the New World....There is no safe defensive position on this side of the oceans. Hemispheric defense is no defense at all....The Second World War will be won or lost in Europe and Asia. The strategic position demands that we conduct our military operations in the form of a great offensive across the oceans. If our Allies in the Old World are defeated, we cannot hold South America; if we defeat [the Axis] our good neighbors will need no protection.[75]
In the postwar period, Spykman continued, it would be "cheaper in the long run to remain a working member of the European power-zone than to withdraw," since withdrawal risked allowing the rise of a new dominant force in Europe that would again threaten the western hemisphere.[76] Thus having begun by focusing on the inter-American issues stressed by the isolationists, Spykman ended his study by concentrating exclusively on the interests of the United States in what he called, in the language of geopolitics, the "rimlands" of Western Europe and Asia.
Spykman died within a year of the appearance of this book, but in a second work published immediately after his death in 1943 he did not once mention Latin America. His new position found expression in a single maxim: "Who controls the rimland rules Eurasia; who rules Eurasia controls the destinies of the world."[77] Spykman now urged that after the war Germany "should be broken up to prevent European unification on the basis of German domination."[78] He foresaw a successful balance of power in postwar Europe based on an Anglo-American alliance in control of the Western
nations, which he thought would remain stable so long as the Soviet Union stayed out of the "rimlands."[79]
By late 1944 an element of friction had appeared in inter-American relations. Latin Americans objected strongly to the plan produced by the Allied conference at Dumbarton Oaks for a future United Nations dominated by a Security Council that would include the great powers alone. This concept, the Latin Americans held, contradicted the idea of the equality of sovereign states embodied in the Pan-American movement.[80] In 1944 Latin Americans objected too to the Bretton Woods conference on monetary and trade issues, in which the Allies pledged themselves to free trade and opposed protectionism.[81]
In this period Argentina remained a third major source of friction. In June 1943 a military coup in Argentina brought a faction of anti-American nationalists to power. In March 1944 the United States finally forced Argentina to break diplomatic links with Germany after discovering that the nationalist regime was attempting to purchase weapons from the Nazis. But in 1944 the diplomatic break brought no immediate improvement in U.S.—Argentine relations, and this issue became a pretext for Latin American critics to accuse the United States of returning to the bullying interventionism that had preceded the Good Neighbor policy.
In this atmosphere the rifts between north and south continued to widen. In February 1945 the United States sponsored a Pan-American conference at Chapultepec, Mexico, to gather Latin American support for the launching of the United Nations at a second conference in San Francisco in March. Although the Latin American nations did pledge their support in San Francisco, Chapultepec again exposed the deep divisions in the Pan-American movement. U.S. delegates led by Undersecretary Will Clayton urged free trade and private enterprise throughout the hemisphere and opposed Latin American pressure for continuing economic aid after the war; the Latin Americans, in contrast, demanded more economic aid and vigorously defended protectionism and state corporations.[82] Overall Chapultepec produced nothing but "a clarification of [divergent] attitudes."[83] "The long range consequences of this rift," predicted Whitaker, were "very serious, if the economic policy question. . .should prove a decisive factor."[84] The United States, he pleaded, should "revise its policies" to prevent the "dismantling of Pan-American morale."[85]
But the next twelve months brought more conflicts as the United States
launched an attack on economic nationalism in Latin America. According to Spruille Braden, the undersecretary of state for Latin America, "the exaggerated nationalism, now so prevalent everywhere" had to be "completely extirpated."[86] The disputes over economic nationalism appeared in the wake of Braden's acrimonious conflict with Juan Perón, now the leading figure in the Argentine junta, while Braden served as American ambassador in Buenos Aires in mid-1945. As ambassador, Braden campaigned against the Argentine junta's nationalist policies and its "fascist" affiliations while supporting the "democratic" opponents of Perón. But in this battle Perón emerged the victor. In September–October 1945 Perón survived the attempts of his opponents to overthrow him, and in February 1946 he routed his opponents in elections.[87]
In 1944–1945, particularly during the preparations for the San Francisco conference to establish the United Nations, the United States supported the democratization of Latin America. But it then grew noticeably less interested in democracy once the United Nations had been formed and as the realization grew that democracy was likely to cast up popular nationalists like Perón.
Immediately after the war the United States canceled its contracts for minerals and other strategic supplies from Latin America. Trade boomed in the region in 1945–1947 as the Latin American nations used their dollar reserves accumulated during the war to finance a flood of imports from the United States. But as exports to the United States started to fall, and the wartime dollar reserves in Latin America disappeared, the trade boom abruptly stalled. In Mexico a balance of payments deficit forced a devaluation in July 1947.[88] Brazil devalued its currency in 1948. In Argentina imports from the United States increased fourfold in 1945 and 1946 and by an additional two and a half times in 1947. Yet there too the postwar boom collapsed in 1948, and Argentina's imports failed to regain the level of 1947 until 1960.[89]
By 1945–1946 only a shrinking group of liberals in the United States continued to demand policies to accelerate the economic development of Latin America. Sumner Welles, for example, one of the architects of the Good Neighbor policy but now retired from the State Department, acknowledged that isolationism was defunct and that the United States was bound to assume a world role. Yet he urged his country to seek "the continuous perfection of the existing inter-American system. The United States [had to]
continue wholeheartedly its policy of economic cooperation with its American neighbors. Such bread cast upon the waters [would] come back to this country a hundredfold. One of the most profitable opportunities for American investment and for American foreign trade [lay] with the neighboring republics of the hemisphere."[90]
In 1945 Laurence Duggan, another State Department liberal, perceived "a militant determination" in the United States "to protect fundamental human rights,...encourage democratic institutions, and promote the transfer of political and economic power to more progressive classes" in Latin America. But he criticized the abrupt termination of wartime trade contracts by the United States and its failure to assist Latin America to adjust to the new peace economy. The United States, Duggan argued, should adopt "an understanding and tolerant attitude toward tariff protection in Latin America."[91]
In a second book published in 1946 Welles claimed that "good relations" with Latin America were "of vital significance [to] security [and] prosperity....The survival of democracy and the peace of the world depend[ed] on the restoration of the inter-American system."[92] Unless economic aid were resumed, Welles predicted social and economic dislocation in Latin America and the further spread of communism. Already "Communists were taking advantage [of] recent United States policy...to arouse suspicions and hostility toward the American people," he declared.[93] To end this threat the United States should support the rapid industrialization of Latin America "as the best means of raising living standards."[94]
But warnings and appeals like these passed unheeded. As the Cold War supervened and the Soviet Union intensified its pressure on the European "rimlands," the position that Spykman had advocated in 1941–1943 continued to gain strength. The wartime flow of funds from the United States to Latin America rapidly dwindled and in 1946–1950 amounted to only 2 percent of total U.S. foreign assistance.[95] After the war Latin America received virtually no foreign aid from the United States, and for around a decade, except in Mexico and oil-rich Venezuela, the inflow of private foreign investment was negligible. In contrast, between July 1945 and December 1951 the United States provided $8.6 billion to its former enemies, led by Germany and Japan, and $5.6 billion to its former Western European allies, led by Britain and France. The sum allotted to Latin America during the same period was a mere $2.6 million, mostly for defense.[96] In 1947 the U.S. Congress at first rejected new military aid to Latin America ostensibly
on the grounds that such aid upheld the power of "dictators," but the fact was, at least for the time being, that no military aid was needed.[97] According to Welles the "good relations" between Latin America and the United States during the depression and early war years now lay in "advanced disintegration. . . .Suspicions and animosity toward the United States" prevailed throughout Latin America.[98]
As Arnold Toynbee described the year 1947, "the governing event in world history...was the failure of the victors in the Second World War to maintain their war-time co-operation, and the consequent re-partition of the world into two hostile camps."[99] The decisive stage in the development of U.S. policy occurred that same year as the Truman administration committed itself to the defense of Western and Southern Europe and Japan against the threatened encroachment of the Soviet Union. In March 1947 the Truman administration was compelled by the imminent withdrawal of Britain from the Balkans to pledge financial aid to Greece and Turkey in the struggle against Communist insurgents. The breach between the two superpowers became final following the conference of foreign ministers in Moscow in March and April. In May 1947 Communists were expelled from the cabinets in France and Italy. In June Secretary of State George C. Marshall proclaimed the plan bearing his name for the reconstruction of Western Europe.
The same year, the U.S. Congress appropriated $1.6 billion in foreign aid for the support of "free" Europe, 25 percent of which was destined for Greece and Turkey alone. The year 1947 also marked the failure of the campaign led by former vice president Henry Wallace, another of the leading champions of Latin America during the era of the Good Neighbor, to secure a rapprochement with the Soviet Union based on joint support for the United Nations. Meanwhile, Communist-orchestrated coups d'état, starting in Poland and ending in Czechoslovakia, consolidated the rule of Stalin throughout Eastern Europe.[100] In 1947 too a succession of Latin American governments, led by Brazil, Chile, and Cuba, banned the Communist parties, purged Communists from the labor unions, or severed diplomatic relations with the Soviet Union.
The same year, Marshall himself attended the inter-American conference at Rio de Janeiro. In this meeting he reiterated the views of the United States expressed at Chapultepec two years before. Unlike Europe, he argued, the development of Latin America required private enterprise, "a type of collaboration in which a much greater role [fell] to private citizens than in a
program [like the Marshall Plan] designed to aid European countries to recover from the destruction of war."[101] A year later at another inter-American conference in Bogotá, Marshall took the same line. "The basic economic trouble," he declared, in an argument that once again evoked Spykman,
has been the collapse of the European economy....The recovery of Europe is therefore a prerequisite to the resumption of trade relationships....We propose to provide the free nations of Europe with that marginal material strength they require to defend the free way of life and to preserve the institutions of self-government. If human rights are blotted out in Europe, they will become increasingly insecure in the new world as well. This is a matter of as much concern to your countries as it is to mine."[102]
Concerning U.S. assistance to Latin America, Marshall stated:
We have already agreed to certain principles...in the Economic Charter of the Americas [at Chapultepec]....The American republics proclaimed their common purpose to promote the sound development of their national economies. The Charter pointed the way toward the realization of their aim through the encouragement of private enterprise and the fair treatment of foreign capital....My government is prepared to increase the scale of assistance it has been giving to the economic development of the American republics. But it is beyond the capacity of the United States government itself to finance more than a small proportion of the vast debt needed. The capital required during the coming years must come from private sources, both domestic and foreign.[103]
As the United States focused on Europe and the Far East and away from Latin America, the Good Neighbor lapsed into the "Good Spectator." "Today," wrote Duggan in 1949, "we are paying a minimum of attention to New World problems, and this neglect is all the more marked because only yesterday we were making an all-out effort to persuade our neighbors of our friendship."[104] Surveying political conditions in Latin America, Duggan concluded pessimistically: "In general the situation is not at all encouraging."[105]
Contemporary observers like Duggan and Welles thus regarded the early
postwar period in the same way as many Latin Americans: the United States had been ready to support Latin America with funds, technical assistance, and market incentives while its interests in the region were threatened, but as it emerged victorious from the war and then faced the new threat from the Soviet Union, it began focusing exclusively on Europe. Latin Americans were now constantly complaining about the reorientation in policy and the growing fixation of the United States on Western Europe. The United States, they declared, was interested only in "defense treaties" to consolidate its grip over Latin America. During the war the United States had purchased Latin American commodity exports at fixed and relatively low prices, but these prices had now fallen even lower as the world market was reconstructed and alternative sources of supply emerged. In the discussions on continental security—now virtually the only issue the United States would allow to enter the agenda—the Latin Americans vainly attempted to redefine the concept of aggression to include "economic aggression" of the type they accused the United States of inflicting on them.
During the late 1940s and 1950s Latin America paid a price for its physical location "outside the main international arena."[106] By the time of the inter-American conference held in Bogotá in 1948, Latin America's democratic opening of mid-decade was collapsing. In Venezuela and Peru new democratic regimes were overthrown in 1947 and 1948; in Colombia in 1948 the popular reformist leader Eliécer Gaitán fell to an assassin's bullet. In Argentina, Chile, Brazil, Paraguay, Bolivia, and many of the Caribbean and Central American countries incumbent regimes moved sharply to the right, launching repressive campaigns against the Communist parties in each country, repressing the labor unions, and silencing the reformers.[107] Typical of the trend were the breakdown of democratic practices and the brief civil war in Costa Rica in 1948. If José Figueres, the leader of this rebellion, later won a reputation as a leading Latin American democrat, in 1948 he stood at the head of a conservative movement opposed to the so-called caldero-comunistas who had hitherto dominated the country.[108]
Thus popular government was becoming extinct. Writing in 1952, Germán Arciniegas perceived a "vast conspiracy against democracy, liberty, and respect for human rights" in Latin America: "Congresses have been closed by force. Universities have been brought under government domination....The judiciary has been packed. Political leaders have been reduced to silence."[109] In this era the United States protected its interests in most of
Latin America through conservative oligarchs or military dictators. In supporting the dictators, the United States invoked the provisions of the Military Security Act of 1951 that allowed military assistance "to any nation whose ability to defend itself is important to the United States."[110] In the early 1950s Secretary of State John Foster Dulles advanced Marcos Pérez Jiménez, the dictator of Venezuela, as an "ideal leader" for Latin America, because he made his country "attractive to foreign capital." If all Latin America were like Venezuela, Dulles held, "the danger of Communism and social disorder would disappear."[111] After a fact-finding tour of Latin America in 1953 Milton Eisenhower acknowledged the region's need for capital investment but insisted that capital had to be "attracted" not "induced." Eisenhower condemned economic nationalism in Latin America as the work of "Communist agitators."[112] The bilateral defense pacts, Eisenhower declared, that Washington was now pursuing were the key to the hemispheric system: they would protect the access of the United States to the raw materials of Latin America, safeguard U.S. property and investments, and protect the region against Communist infiltration.[113] In a message to the U.S. Congress in 1954 President Dwight D. Eisenhower echoed these ideas as he urged: "Military assistance [to Latin America] must be continued. Technical assistance must be maintained. Economic assistance can be reduced."[114]
Conclusion
World War II and its aftermath thus promised radical change in Latin America but eventually failed to deliver it. In Latin America there were attempts to link social and economic change to a transition to popular government. By 1945 the transition was taking shape, but it then collapsed on the advent of the Cold War and the slump in foreign trade in 1947–1948. The 1940s began in an atmosphere that suggested the United States might eventually align itself with progressive forces in Latin America and have a leading part in the region's economic and political development. This atmosphere was gradually stifled, however, as the United States turned its attention first to the destruction of Nazism and then to the containment of communism. Policy followed the directions Spykman had suggested: if the United States defeated its enemies abroad, its "good neighbors [would] need no protection." The lesson of the 1940s was that when powerful foreign nations dominated the strategic regions of Europe and Asia the United States
turned toward Latin America; if the United States itself controlled these regions, it turned away from Latin America almost to the point of forgetting its existence.
For more than a decade after 1945 the United States was closely involved in Latin American affairs in one issue alone: that of the ill-fated Arbenz regime in Guatemala, the single survivor of the progressive movements of the 1940s. But by the late 1950s, as Richard Nixon discovered during his uncomfortable tour of the region in mid-1958, new radical forces were emerging in Latin America as the region faced endemic inflation, burgeoning population growth, stagnant industry, and escalating popular discontent.