Luis Benjamín Cisneros: Neoprotectionist Turn

For Pardo and countless rail pamphleteers, rural manufacturing was imagined as one beneficial, if natural, side effect of national

[126] See Samuel Velarde, Deuda externa y ferrocarriles del Perú (Lima, pam., 1886); Rory Miller, "The Making of the Grace Contract: British Bondholders and the Peruvian Government, 1885-1890," JLAS 8 (1976): 73-100; Miller, "Railways and Economic Development"; Mallon, Defense of Community, ch. 5; Peter Klarén, Modernization, Dislocation, and Aprismo: Origins of the Peruvian Aprista Party, 1870-1932 (Austin, 1973), 71, 125. By 1915 rail renationalization became a formal anti-imperialist (and later APRA) cause, yet even free-traders (like Gubbins in 1900) attacked foreign transport monopoly.

integration and a productive use of guano. A more concerted, intricate, and striking industrial proposal appeared in 1866: Luis Benjamín Cisneros's landmark study, Ensayo sobre varias cuestiones económicas del Perú, usually heard as a clarion call for fiscal reform.^[127] Apart from its profound impact on the fiscal restructurings of the late guano age, Cisneros's 150-page book marks three innovations in Peruvian diversification thought. First, in a novel "structural" analysis of Peru's rapidly gathering crisis, Cisneros brings the state back in—to save it from its own self-destruction. This was a broad plan for forced and accelerated diversification, which could no longer be left to the magic of markets or railways. Second, Cisneros does not blithely pass over thorny issues of consumption trade-offs or tariffs; he critically reformulates protection as a key component in Peru's diversifying development. Third, Cisneros departs by championing manufacturing as a direct solution to Peru's impending crisis, backed by a new and wider set of institutional supports. In short, the Ensayo sobre cuestiones económicas was an unmistakably work of the external crisis, whose urgency had become unmistakably clear in the six years since Pardo's warnings. Though this was still not as comprehensive (or political) a response as would come in the 1870s, Cisneros came to critical thought through local dilemmas, apparent in the very form of his neoprotectionist argument. Why did Cisneros push to overhaul Peruvian fiscality? Was his the narrow technocratic answer usually supposed?

A well-traveled and well-versed intellectual and activist, Luis Benjamín Cisneros and Pardo shared remarkably similar careers, social standings, and legacies. Through most of their lives the two budding statesmen relished close personal and business ties, ties finally cut by their political differences of the 1870s. Born in the late 1830s, as a youth Cisneros (like Fuentes) absorbed the last burst of artisan politics; his brother served as legal adviser to the Lima guilds in their troubled year of 1850. By the late 1850s Cisneros had emerged as a leading civil reform thinker, first disseminating his ideas from the platform of the Revista de Lima . A lawyer, senator, and European-based diplomat (his 1866 book was written and published while he was commercial attaché in France), Cisneros went on to become a leading civil ideologue, best known for his contributions to constitutional theory. He also pioneered the romantic novel in Peru: Julia (1860), a scathing critique of Limeño

[127] Luis Benjamín Cisneros, Ensayo sobre varias cuestiones económicas del Perú (Le Havre, 1866), rpt. in Cisneros, Obras completas 3:16-140.

materialism, published serially in the Revista de Lima, and Edgardo (1864), an ambivalent portrait of the volatile caudillo figure.^[128]

Cisneros was also a wealthy banker, among the most active stockholders in Pardo's Banco del Perú and in the late 1870s director of the prominent Banco de Lima. With Pardo, Cisneros crusaded for railroads and public works, heading up the emergency 1867 commission that put Peruvian railway construction on the fast track, as part of the civil team around the Prado regime.^[129] Only in the 1870s did Cisneros and Pardo part political ways, though not so far as to prevent Cisneros from serving as vice president for Pardo in 1872 and on prestigious educational posts. The dissension began in 1869 with Cisneros's outspoken role as principal national defender of the Dreyfus contract—which Pardo hammered against as spokesman for spurned national guano contractors. (To end the controversy, the regime finally ignored the supreme court's verdict against Dreyfus.) Apart from being one of Dreyfus's main Peruvian business partners, Cisneros hoped that the European contract would help rationalize the state (by distancing it from the demands, frauds, and bunglings of national financiers) and thus best expand funding for the development projects all parties were banking on. It was a stance consistent with Cisneros's fiscal reforming zeal, and posed in equally patriotic terms. Later Cisneros embraced the oppositional liberalism of Piérola, leading congressional charges of "socialism" against Pardo's presidential banking regulation.^[130] One of Meiggs's closest associates and friends in Lima, Cisneros in the late 1870s became founder and director of the Peruvian Nitrate Company—Pardo's state-sponsored corporation for extending the fertilizer bonanza. Cisneros's entrepreneurial and political life, obviously, took many turns. Following the Pacific War, Cisneros, like his poet brother Luciano, retreated into his lifelong literary pursuits.

Economic history remembers Luis Benjamín Cisneros best as archi-

[128] Basadre, Historia 3:1742, 1886-87; Revista de Lima (1860); Comercio, 20 Aug. 1850, for brother's artisan involvement (defending against Echenique merchant contracts); Edgardo, in Basadre's reading, was a call for "peace, order, and social and national solidarity."

[129] Milla Batres, Diccionario biográfico, vol. 1; Camprubí, Historia de bancos, 188, 208, 249, 289, 346; Cisneros, Memoria sobre ferrocarriles (1868).

[130] See Luis B. Cisneros, "El negociado Dreyfus 1870," in Obras completas 3:187-227; and later (1874) policy critique of his "joven y ilustrado presidente" in "¿Que no hay remedio?" 3:358-69. Diario de debates, Sept. 1876 (and 1870 for Dreyfus controversy); Stewart, Meiggs . Ulloa, Piérola, is about the only modern book to defend Piérola strategy; but Hunt, "Growth and Guano," 66-67, shows that at the least Peru even raised its profit margins with Dreyfus—to over 100 percent, excluding unknown costs.

tect of Peru's fiscal reform of the 1860s—a Limantour of the guano age. In Peru, unlike científico Mexico, lucid and stringent budgets were not drawn to entice foreign capital in a concerted bid for a stable international "investment climate." The country enjoyed an ample investible export surplus and copious capital flows—from 11 to 20 percent of national product in recent estimates.^[131] Peru's dilemma was how best to manage, absorb, and invest its available funds.

Along this line, scholarship tracing the reform movement that grew into civilismo points to Cisneros, on a par with Pardo, as its ideological mentor. The Ensayo sobre cuestiones económicas served as a precision model for Peru's fiscal and budgetary reforms of the late 1860s. Exploiting the praetorian powers and platform of the anti-Castilla Prado regime of 1866-1867, Cisneros and Pardo began the task of rebuilding Peru's domestic tax systems (liberally and foolishly abandoned in the mid 1850s) and of putting an end to the chaotic guano consignment systems.^[132] The general thrust of export and budgetary reformism, promulgated in varied ways by varied regimes over the next decade, was to transform guano into a strictly managed and predictable regularized income, with significant portions earmarked for diversion into public works. The short-term goal was to reverse the fiscal deficits, overseas stopgap borrowing, and financial disarray that had become so destabilizing during the mid-1860s conflict with Spain. Coronel Prado's project was joined by virtually every leading liberal of the age (the two Gálvezes, Lissón, Pacheco, Casós, Químper, and Tejeda among them), despite their militarist aversions; such advisers added a pinch of liberal constitutionalism to the caldron of top-down economic reform. Cisneros's stamp also marked the emergency measures of the Balta-Piérola years (1869-1872); this regime, with its burgeoning ties to Dreyfus and European developmental loans, has been too easily depicted as a clearcut example of entreguismo . Piérola's movement, too, encompassed important reforming elements, as seen in Cisneros's many defenses.^[133]

[131] Hunt, "Growth and Guano," 93-96. Peru's capital surplus (apart from absorption problems) is one reason why Peruvian thinkers and statesmen prove far more flexible with and critical of foreign capital and investment, than say, Mexican counterparts. On Mexican climate, see Alexander Dawson, "Mexico—The Treasure House of the World: Perceptions of Economic Development in Porfirian Mexico" (M.A. thesis, University of Calgary, 1991).

[132] Maiguashca, "Reinterpretation of Guano Age," chs. 3-—which integrates Cisneros's literary and fiscal concerns.

[133] On Piérola and Dreyfus, see n. 130, above. See fine analysis of Prado group in Basadre, Historia, vol. 4, chs. 63-64; critical historiography in Bonilla, Guano y burguesía, 54, ("[Pardo] y más tarde Luis Benjamín Cisneros, son los principales inspiradores de la política económica de la emergente elite económica"), 70-116; Cotler, Clases, estado y nación, 104-7; Yepes, Peru 1820-1920, 68-75.

From 1872 to 1876 Cisneros's fiscal blueprint continued to serve Pardo's party, the new civil militants of budget organization and retrenchment. And just as in Pardo's case, Cisneros's original developmental visions remain lost, perhaps in his flurry of public activism and positions. Historians charge that liberal fiscal reform, ignoring the country's structural and social flaws, was as escapist a reform valve as were the civilist railroads. But what was, to Cisneros, the grand purpose of Peruvian fiscal reform? What might a firm hand on export monies achieve?

On the surface, the Ensayo sobre cuestiones económicas reads as another call to avert the looming commercial and fiscal crisis of guano exhaustion. Cisneros dedicates his package to Prado's closest circle of advisers—notably the beleaguered "Secretary of Hacienda and Commerce, Manuel Pardo"—with hopes of winning their immediate approval.^[134] It seems neither the ultraliberal nor "neomercantilist" plan variously depicted by historians. It proved a workable policy document—and much more than that in its imagined development.

Characteristically, the Ensayo sobre cuestiones económicas opens with a sweeping diagnosis of Peru's commercial boom since the 1850s. It was guano alone that has allowed Peru's two-decade binge of consumption, as most other exports faded. Tapping his own sources and methods, Cisneros reestimates the true Peruvian import bill in 1865 at more than $34 million—double the official figure (of $15 million) and probably an exaggeration. Flattering reader sensitivities, Cisneros takes pains to laud the "progress" worked by this commercial revolution. Guano affluence revived Peru's languishing coastal cities and heralded a new capitalist spirit, remarkably so among merchant activities joined to world trade.^[135] But now, in 1866, this whole style of development has reached its limits—and directly imperils the Peruvian future.

Recalling Pardo's rhetorical query, Cisneros asks, "What will happen when guano is depleted or artificial fertilizers mades?" (The latter prob-

[134] Cisneros, Ensayo sobre cuestiones económicas, dedication, 30. The "neomercantilist" label is (liberal-orthodox) Romero's, "Perú" (310-12), seeing Cisneros as regression from Pardo liberal modernism—a "groserío mercantalismo monetista," obsessed with colonial-style "trade balance." This, too, is a reading corrected by analyzing Cisneros's developmental and budgetary aims.

[135] Cisneros, Ensayo sobre cuestiones económicas, 1-27; presumably, Cisneros's insider trade data came from his duties as commercial agent in France.

lem was already emerging in Europe.) All of Peru's midcentury advance "is due to this accidental wealth of the fertilizer of Chincha"—framing guano as the most artificial of Peruvian "industries." As his critique shifts into full gear, Cisneros dubs commercial prosperity as merely superficial: "If we employed all the productive forces of Peru to buy foreign manufactures, as some insist, just how will our cities continue to progress?"^[136]

For a fiscal thinker, Cisneros's boldest move was, in fact, to shift discussion away from technical fiscal recipes to a deeper commercial and structural analysis of balance-of-payment dilemmas. Peru's import mania was the root cause of the country's external crisis. So far, Cisneros cogently points out, only $6 million of guano revenues go to meet foreign debt payments, despite the bad publicity around them. Current budget deficits are even less demanding. What needs much sharper attention, then, are the many millions more—Cisneros's $34 million—needlessly "wasted" on unproductive imports. If Peru wants government to underwrite railways and nationhood, then it must first address those losses. Peru's national dilemma is not how to pay off debts and consume French luxuries but how to reduce drastically its commercial dependence. Cisneros's answer is a rigorous and permanent cut in imports.

Cisneros's critical eye on guano consumption was not so uncommon by the mid 1860s, and it was not the prerogative only of miserly and jealous artisans. For example, Carlos Lissón (a leading liberal educator, Prado adviser, pioneer sociologist, and later civilista founder) wrote scathingly of fictive prosperities in his 1865 La república en el Perú, a social study steeped in the anti-Spanish nationalism of the day. Lissón decried Peru as a truly "poor" country, dangerously deluded by illusions of export wealth, lacking in true and progressive entrepreneurs. Its "Indians, agriculturalists, mestizos, tailors, and shoemakers" are all choking in the lap of others' passive luxury. More generally still: "A country's wealth is not some easy deduction of its soil. That can be very poor and its inhabitants very rich, and vice versa. Just look what happened to Potosí and Pasco. What will be left in time from guano?"^[137] Instead of a "lottery" of giveaways to the country's "nobility," Lissón calls on Peru to

[136] Cisneros, Ensayo sobre cuestiones económicas, 26, 29-31.

[137] Carlos Lissón, La república en el Perú y la cuestión peruano-española (Lima, 1865), 73-74; we explore anti-Spanish nationalism with artisan politics in ch. 5, below. Lissón, a volunteer artisan teacher, explores issues further as positivist in Carlos Lissón, Breves apuntes sobre la sociología del Perú en 1886 (Lima, 1887), 69. Basadre, Historia, vol. 3, chs. 52-54. Cisneros shared in anti-imperial movements: see poem "Al Perú" (1864), rpt. in Obras completas 1:121-22.

educate and produce a productive citizenry. Cisneros codified these growing misgivings into a concerted government program. Pardo had evinced idealisms of productive diversification; Cisneros demanded that the state make them happen.

The core chapter 2 of Ensayo sobre cuestiones económicas is titled simply "Industria"—that nineteenth-century catchall term for all kinds of productive work. Here Cisneros covers the usual array of formulas to foster Peruvian "industry": stable public peace, less urban welfare empleomanía, irrigation schemes (like his brother's for the south), public investment banks, scientific schools and experimental stations for regional agriculture and mining, chartered companies for resource development—and, of course, Andean railroads. Regarding the latter, Cisneros proves as devoted to the creed as Pardo: "The wealth that railways are destined to create and develop in the interior of the republic will be sudden and beyond our wildest expectations."^[138] Yet Cisneros knows that mere faith in the good works of railways no longer suffices.

Along with these projects runs a retrospect critique of letting commercial progress run an unguided course. Cisneros's synopsis of the first half of the export age could have awakened Peru's Casanovas from oblivion: "And had we devoted the huge revenues of guano to create new industries, to foster those we have, or to help exploit the overflowing commercial resources that nature gave us—in this way, we would have opened in the country a thousand spheres of industrial activity, in which every man and family would have found their elements of subsistence—and future."^[139] To Cisneros, undisciplined commercial growth was not just behind Peru's macroeconomic instabilities but, as artisans would have it, was the root of the country's unsettling social problem. The pervading social theme of Ensayo sobre cuestiones económicas is this struggle against "empleo-necesidad." Cisneros invents this term for bloated public employment to emphasize diminishing possibilities in the private sector—idleness caused by Peru's rentier economy.^[140] Public employment not only drains the national treasury but is politically

[138] Cisneros, Ensayo sobre cuestiones económicas, ch. 11, "Industria," 29-37 (quote p. 34). Cisneros's Memoria sobre ferrocarriles (1868), discussed above, was largely technical, not developmental, study.

[139] Cisneros, Ensayo sobre cuestiones económicas, 31.

[140] Maiguascha, "Reinterpretation of Guano Age," chs. 3-5, analyzes this theme. Hunt, "Growth and Guano," 80-83, however, dispels the notion of public employment itself as a wasteful cause; not only were real salaries and expenditures decreasing, but much of this spending was "developmental"—in education, health, public works.

explosive for the state, the calling card of restless caudillos and clients everywhere. Industria for the masses is the sole guarantee of civil rule, regional peace, and development, by now a ubiquitous standard. Paradoxically, in Cisneros, building an autonomous and stable state—his ultimate aim—requires its productive activism.

Having isolated Peru's social and fiscal quandary, the Ensayo sobre cuestiones económicas abruptly turns to more specific "Industrias de fábrica y manufactura." Over the next pages Cisneros presents, as the centerpiece of reform, a plan for state-sponsored industrialization—or as he puts it, "the road to an industrial future." The journey begins, however, by turning back to Peruvian historical experience. Like others, Cisneros knows his European theory (the book was composed and published there), but he grounds his analysis in Peruvian realities, in what we would now consider a structural argument. The shortage of native manufacturers was driving Peru's import overload—reaching the breaking point with the 1860s hike in world industrial prices. The roots go deeper, however, into the historic market orientations of would-be native import substituters.

Everyone knows that the scarcity or, better put, total absence of factories and grand manufactories has made it necessary for Peru to import virtually everything needed for a comfortable life. Sure, our artisans work with some regularity on shoes, clothing, and furniture. But naturally they have never achieved the level of perfection of the Europeans—which is why the majority of such goods consumed throughout the republic fare from foreign lands.^[141]

Quoting Fuentes to establish his points on consumption, guilds, and factory failures, Cisneros paints that conventional image of a guano-age Peru clothed "from head to foot" by foreigners.^[142] This "shortage" of national goods has a cause, but it is not the liberals' imagined shortage of native labor. Cisneros's analysis zeroes in on the misdirected luxury orientation of urban artisan production; local crafts stood little chance of competing with overseas goods in refined, Westernizing elite markets. This conundrum originated in deeper historical-commercial trends—intensified since Peru's 1820s opening to Atlantic trade—which ingrained

[141] Cisneros, Ensayo sobre cuestiones económicas, 29.

[142] Cisneros also uses Fuentes, Estadística de Lima, on tariff needs; sole study mentioning Cisneros's industrial idea is Maiguashca, "Reinterpretation of Guano Age," 131, 157.

the "taste, need, and economy for European imports throughout Spanish America . . . and which has made us realize the low quality, vulgarity, or primitiveness of all our industries."^[143] In other words, Cisneros is not talking about cost factors, as Casanova and Pardo had in their different ways; indeed, he has little to say on comparative advantage or even terms of trade. Colonially forged tastes and colonially structured crafts could not survive Peru's critical nineteenth-century moment of incorporation into the Atlantic world—leaving discontinuities and gaps in indigenous production. Cisneros's diagnosis approaches modern structural analyses of lagging industrialism in the commercially and culturally created Third World.^[144]

Cisneros cannot romanticize Peru's backward ("vulgar") artisans, who remain just as hooked on imported styles as urban elites. For example, he discusses at length the bustling Limeño tailoring trade requiring reams of costly European cloth. But Cisneros seems to be reacting mainly against the plutocratic version of "civilization," code word for their colonized, imported life-styles. For industrial efforts to succeed in balancing trade, local taste and productive orientations would have to be matched. From Cisneros's pen, this becomes justification for a new type of Peruvian protectionism. To distinguish it from the traditional sorts easily debunked by free traders, Cisneros dubs his "the intelligently applied system of protectionism."^[145] Cisneros takes his protectionist turn.

There are four elements in intelligently applied protectionism, but these "all reduce to one: consolidate the exceptional wealth of guano in order to make it infinitely productive." First, Cisneros comes out for industrial subsidy incentives to cover start-up costs of new factories. Dubbed the "system of direct protection," such guano subsidies bring to mind Casanova's early scheme or the tradition of Continental state workshops. But the state, insists Cisneros, should award monies only to factories that use raw materials abundant in Peru and that enjoy efficient scale. Cisneros thus rules out the "artificial," import-dependent, and petty production of guilds—which neither display dynamism nor con-

[143] Cisneros, Ensayo sobre cuestiones económicas, 41-42.

[144] See similar concerns in Celso Furtado, "Subdesarrollo y dependencia: Las conexiones fundamentales," in Furtado, El desarrollo económico: Un mito (Mexico, 1978), 92-114, or David Felix, "De Gustibus Disputandum Est: Changing Consumer Preferences in Economic Growth," Explorations in Economic History 16 (1979): 260-96.

[145] Cisneros, Ensayo sobre cuestiones económicas, 37-38, 57.

serve precious foreign exchange. Later Cisneros illustrates the subsidy plan by examples, showing how far a modest annual fund of $200,000 could go in incipient factory enterprises.^[146]

Second, Cisneros extolls the "intelligently applied" use of customs duties—which means applying them only where indispensable, only for industries that can truly be established and multiply, only on a temporary basis, and only with careful foresight and selection. Such strict criteria were informed by Peru's fruitless prior attempts at industrial tariffs and privileges. Cisneros also factors in what is now known as "effective protection"—lower duties for industrial tools and inputs—with its potent protectionist incentives (though at another point he speaks of special subsidies for factories supplying national inputs). Interestingly, with so many criteria to settle Cisneros never specifies Peru's required tariff levels. But his vision is clearly not of a closed economy. He is too sophisticated to pose protection as the liberals' zero-sum choice between related external and internal markets. But his is an explicit plan to reorient Peruvian trade and consumption—the issues that Pardo found too hot to handle.

In part, Cisneros's "intelligent" protection simply affirms a productive and balance-of-payments priority on mass-consumption lines, as others had before. But he is also taking on the free-trader bugbear of "artificial" industries, seemingly confirmed by indiscriminate craft tariffs and factory failures. Cisneros's insistence that guano is the most "artificial" and fleeting "industry" looms central here. Guano revenues must be diverted into productive lines to "free us from the tyranny of foreign markets and procure an element of our own life. The benefits they lend the country are everlasting and thus inestimable."^[147]

What remains murky is why tariffs become the policy tool—if taste preferences (rather than cost) had driven consumers abroad. One suspects that Cisneros, in his budgetary zeal, was simultaneously looking toward revenue raising. The focus on articles of everyday use is decisive, though, for in mass necessities tastes need not pose an insuperable obstacle. Consumer preference might be shifted with temporary tariffs, equal to any premium placed on overseas origin, until buyers learned the insignificance of quality difference. Cisneros opines:

It would be absurd to try to establish now in Peru factories for certain luxury

[146] Cisneros, Ensayo sobre cuestiones económicas, 37, 44.

[147] Cisneros, Ensayo sobre cuestiones económicas, 44; recall Basadre's "fictious prosperity" periodization—allegedly from Copello and Petriconi (1876)—and more important, the rhetorical and conceptual reversal here of free-trader "fictitious" industries.

goods, for fine cloth for instance, for which we enjoy neither the elements nor advanced industrial skills. But we can create industries for less difficult and widely consumed products. Factories for coarse cottons and woolens, for eating utensils for the poor, for farming tools, and for building materials merit the preferred protection of public power.^[148]

In short, Cisneros wanted to push the style of development previously only fantasized by Pardo—doing so in product lines with decent chances of survival, in lines weighing down the import bill, in lines with wide employment spin-offs, in lines of basic technology. He heralds the successful precedents of Garmendia's Cuzco woolens mill and the sparkling new home-market sugar refinery in nearby Callao. Later Cisneros avers that import quotas would make the most direct instrument for project selection and foreign exchange savings.^[149] If confusions remain, at least Cisneros had the clarity (or courage) to confront needed trade-offs of present consumption for long-term productive investments—issues obscured by those evading tariffs in their plans.

A third element of "intelligent protection" is rejection of all exclusive industrial privileges—a condition harking back to the controversial (and failed) technology monopolies of the half century since independence. This stance also accentuates the liberal spirit and expansive scale of Cisneros's developmental vision, which shares in the wider technological mission of civilist railroad writers.^[150] Finally, returning to Peru's miserable artisans, Cisneros demands "unlimited protection" for the just-opened Lima School of Arts (which we explore later). Such schools will improve their techniques and style, the only way for viable craft competition in upscale markets. And Cisneros, echoing the new regionalist imperatives, is adamant that analogous schools be placed in "every province of Peru" (something civilistas would try). Cisneros thus actively pursues technological innovation and spread, which, significantly, he joins to "intelligent" protection. Ultimately, rural manufacturing will offer steady "work and salary" to poor families, including the debased "indigenous" ones.^[151] Alone, none of these ideas seem startling, having floated around since the advent of the export age. The novelty lay in

[148] Cisneros, Ensayo sobre cuestiones económicas, 40-41.

[149] Cisneros, Ensayo sobre cuestiones económicas, 37, 41, 76; in 1872 Garmendia and Cisneros would serve as Pardo vice presidents.

[150] Cisneros, Ensayo sobre cuestiones económicas, 37; for analysis of monopoly policies, see Gootenberg, "Artisans and Merchants," 101-7; or Salcedo, Memoria de hacienda de 1860, pt. 14, for vast contemporary criticism.

[151] Cisneros, Ensayo sobre cuestiones económicas, 37, 40; influence of school seen in ch. 5, below.

Cisneros's integration of these elements into an urgent, encompassing, and activist program.

Peru's last elite protectionist ideas had issued from Casanova virtually two decades before. Cisneros's "intelligently" applied tariffs were a more critical and conditioned variety and came embedded in a new array of positive social supports. His critical edge was sharpened in contrasts with outmoded artisans and with the cutting critiques of a liberal generation. In anticipating potential drawbacks to protection, the Ensayo sobre cuestiones económicas exudes a modern flavor (akin to current Latin American and neoliberal critiques of twentieth-century import substitution). Cisneros was concerned that industry genuinely relieve external imbalances, foster appropriate and dynamic technology, and break through monopoly or retrogressive patterns of consumption and distribution—not exacerbate them.^[152]

It is crucial to observe how Cisneros, one of Peru's most cosmopolitan intellectuals, addresses the critics of protectionism, at this the height of free trade's international prestige. At first Cisneros denies his colors: "We are not partisans of the protectionist system; on the contrary, we are zealous for an unlimited liberty of commerce. But in the present economic situation of Spanish America there are exceptional circumstances that make it imperative to grasp the terms of this grave issue."^[153] The disclaimer is not fully disingenuous, for the Ensayo sobre cuestiones económicas does embrace expansive tenets of contemporary liberalism.

To define the "exceptional" contexts, Cisneros turns to history, of the proximate nineteenth century, in his defense. His are not just the age-old potshots at Europe's "hypocritical" past. Lagging Latin America won its independence, Cisneros points out, just when Europe was making its greatest strides in industry and marine transport. Overseas goods and examples quickly antiquated Latin American skills, yet they paradoxically inspired desires for national emulation and development.

Now once one grasps these conditions, what system should be employed to create and develop the industries for which we are suited? When the economists discuss the principles of protectionism and free trade, no doubt they have not placed themselves in the perspective of countries without roads and

[152] See, e.g., survey by Catherine Conaghan, James Malloy, and Luis Abugattás, "Business and the 'Boys': The Politics of Neoliberalism in the Central Andes," LARR 25 (1990): 3-30.

[153] Cisneros, Ensayo sobre cuestiones económicas, 41; from Casanova on, critics emphasized "exceptional circumstances."

dense populations, and deprived of all types of factories and manufactures. Their doctrines are based on the industrial systems of the European states, more or less rich in workshops and factories. Their own partisans defend the doctrines under the principle of the reciprocal convenience of states, referring only to themselves, and without ever thinking of the situation of the new, small, and distant republics of Spanish America.^[154]

It is not a bad reading of Smith's original realpolitik, though it comes closest to List's national economic system, posed in an "Americanist" idiom. (Cisneros partook of the pan-American movement against midcentury Spanish and French regional imperialism.) Several ideas are packed in here. One is identification of a pressing national development gap: could trade alone bridge it? Another is historical relativism: political economy had indeed ignored non-European lands (save for its orientalist brush on Asia). Were its universalist assumptions of factor mobility, for example, correct here, or did new states have to take a leading role in forging market conditions? At the least, Cisneros contests that natural-selection version of static comparative advantage that had filtered to free-traders in the Americas, so amenable to colonial-physiocratic partisans of a país minero y agrícola. Cisneros focuses a nationalist lens on a pivotal juncture in world economic history. Peru must struggle, in its national interest, against being relegated to the lower rungs of economic specialization. Other writers would follow up, in a kind of local, nineteenth-century dependency thought. Analogies aside, Cisneros genuinely argues against all "imitative" systems, as, for example, when taking swipes at statist French models. Each "constellation of states"—Spanish America in his case—must decide its own preference, and if it be protection, it must follow the "general interests of the nation."^[155]

Of greater historical import is why protectionist thought revived in the Peru of the mid 1860s. Two speculations, ideological and political, help make sense of Cisneros and relate to his mission of bolstering the Peruvian state. The first concerns the ideological power of free trade among the guano-age elite, an appeal that had outlived its usefulness to emerging state builders.

At its apex in the early 1860s, free trade was largely an ingrained

[154] Cisneros, Ensayo sobre cuestiones económicas, 42; mention of transport bottlenecks, of course, is not accidental.

[155] Cisneros, Ensayo sobre cuestiones económicas, 42-43; see analogy in Senghass, "List and Problem of Development," or Will, "Classical Economics in Chile." Esteves and Copello and Petriconi, below, for "dependency" notions.

legacy of the successful liberal state building of the previous generation (i.e., its coeval rise with elite political stability and capitalization of the 1850s). It was a congratulatory ideology synonymous with elite order and progress.^[156] But by the 1860s free trade had assumed a stultifying rigidity. In 1864 Peru's minister of finance was still busy extirpating ghostly "ideas of the protective system, mistaken in theory, absurd in practice"; Peru needed only its "natural industry" of agriculture and mining, "which are recognized by science over fabrication, which still can't root in our soil." Congress took similar extremes, for example, rejecting any supports for national foodstuffs farmers in 1862 on the grounds that contagious "protection is all illusion." In 1864 even the military's plans to build a reliable national armory (on the Springfield system) in the secure Jauja valley were thrown out, as Deputy Silva Santisteban put it, "because manufactures are not for all countries"—gleefully reciting the fate of Casanova's cottons!^[157] In liberal Peru not even national security made a tenable exception to laissez-faire, not even as Spanish fleets besieged Callao. Official liberalism took its starkest form in that classic, guano-soaked slogan of Silva Santisteban: "'Tis better to pay for all manufactures than know how to make 'em."

Cisneros stood this slogan on its head. To concerned statesmen, such ignorance was no longer better. Clearly, it would soon be impossible to pay for lavish imports—as drilled home in the 1860s by topsy-turvy terms of trade brought about by the U.S. Civil War, the cotton famine, swinging guano revenues, and the frightful experience of the Spanish war, which exposed the almost lethal frailty of public finance. The state needed the flexibility now to set priorities regarding import consumption, fiscal and military survival, expansion of services, and national development. Peruvians were even resisting the modicum of domestic taxation as a confiscatory market infringement. As Peru's fiscal breakdown became imminent, unbending allegiance to free trade was becoming an anachronistic threat to the viability of the state—and the state was the life force of Peruvian liberalism and its Limeño constituency.^[158]

[156] Gootenberg, "Beleaguered Liberals," 79-89. For sample contemporary ultraliberal view, see El Perú y la influencia europea (Paris, 1862), 13, 23, 27—a virtual call for liberal neocolonization of the country.

[157] Ignacio Noboa, Memoria que el ministro de hacienda y comercio presenta al congreso de 1864 en los distintos ramos de su despacho (Lima, pam., 1864), 27-28; Diarios de debates, Oct.-Dec. 1862, July 1864. Silva argues: "It is necessary to grasp that not all pueblos are fit for all things—look at the results obtained when the cottons factory was tried, full of illusions, then disillusions. Manufactures are not for every country" (171).

[158] Pardo, Memoria de hacienda y comercio (1867); Cisneros always argued with state "autonomy" in mind, as in "Negociado Dreyfus" (1870), which defends (211) contract as the "2 de mayo de nuestra hacienda pública"—date of Peru's triumphant 1866 victory over Spain. See Topik, Political Economy of Brazilian State, for general model of export-led polities assuming interventionism for reasons of state; or Ronald Berg and Frederick Weaver, "Toward a Reinterpretation of Political Change in Peru During the First Century of Independence," Journal of Interamerican Studies and World Affairs 20 (1978): 69-84, for (ambiguous) Peruvian political class autonomy.

Cisneros (despite his later assaults on Pardo's fiscality) is interesting for the ideational flexibility he reveals among high financial, official, or commercial circles. Men such as Cisneros and Pardo did not have to regard an export economy as a zero-sum game with domestic development, nor did they necessarily fear elevated tariffs. To them, policy was not religion but a political, practical, and protean reason of state.

Second, Cisneros was also likely grappling with the rise of a more rigid and genuine class (not just ideological) interest in free trade—though we still know precious little of these elite configurations. By the early 1860s a new Peruvian planter export group was rapidly taking root along Peru's central and northern coast. The planters' progress leapfrogged with the decade's remarkable world cotton and sugar prices (the result, again, of the U.S. and Cuban civil wars), with more than 250 modernized plantations dominating nonfertilizer exports by the mid 1870s. Millions of soles of guano revenues recycled through Lima's new agrarian mortgage bank, the Banco Hipotecario Territorial, infused the coast, in one of the few diversifying developments of the decade. The nouveaux riches, such as the Aspíllaga clan of Pisco and Saña or the agrarian banker Aráoz, quickly positioned themselves in politics, organizing their neighbors and clients into a unique lobby on Lima and intertwining with the country's top commercial and financial circles. To Peruvian planters, unlike erstwhile merchant and political elites, free trade and laissez-faire were indeed bald economic imperatives: for securing low-cost imported machinery, for competitively placing their products abroad, for preventing dreaded export levies, and for halting the diversion of scarce labor into alternative activities.^[159] The sugar planters were the germ of the rigidly liberal Peruvian ruling group that would plague crisis-prevention efforts such as Cisneros's, placing constraints on the notable autonomy of the guano-age state. By 1867 they had already forced Minister Pardo's resignation over his fiscal plan

[159] Engelsen, "Social Aspects of Agricultural Expansion," ch. 5, and esp. ch. 7; Pablo Macera, "Las plantaciones azucareras andinas (1821-1875)," in Macera, Trabajos de historia 4:116-50; MacEvoy, "Manuel Pardo," 221-22; or Vincent Peloso, "Entrepreneurs and Survivors in Rural Peru: Planters, Peasants, and Cotton in the Pisco Valley, 1840-1940" (typescript, Howard University, 1991), ch. 2, on export development and emergent planter politics.

(based on Ensayo sobre cuestiones económicas ) to enact a trifling 3 percent export tax. (Pardo later confessed, "It collided with a great number of interests, from the most elevated sectors of our society.") In the early 1870s planters joined the civilists in droves, organized regional Juntas de Agricultura, and set themselves up in a potent Sociedad Nacional de Agricultura, further complicating or neutralizing autonomous policy initiatives. In part, sugar was becoming king because it was producing royal amounts of foreign exchange (over 12 million soles in 1876, three-quarters of agrarian exports)—most of it out of the state's needy reach. Neoliberalism was as contagious as protection.^[160] By then Cisneros himself had turned antistatist, in the congress defending bankers against Pardo's tyrannical "socialism" (i.e., efforts to stabilize unbacked bill emissions and establish a workable national currency).

In the mid 1860s Cisneros, of the wide-ranging and literary urban elite, was exposing the dangers of a structurally embedded liberalism. His scant detail on recommended levels of taxation and tariffs may well have reflected this general political purpose. Still missing, however, was a political strategy for gathering a national developmental coalition to push through his imagined reforms. That would have to wait until the new actors of the 1870s, notably Copello and Petriconi. In any case, the timely interventionist thought of the 1860s hardly arose from thin air.

A host of other detailed and heterodox proposals permeate the Ensayo sobre cuestiones económicas . There are plans for apt agroindustries, such as silks and dyes, and here Cisneros speaks obliquely of a colonization "land reform." Quinine ("Peru-bark") collection in the southern Andean rain forest must advance to a "fabrication stage" before export. A full chapter explores the long-controversial issue of a merchant marine, which Cisneros hopes to "Peruvianize" (a term echoed by much later reform-

[160] Despite literature just cited, we lack elite studies precise enough to determine if debates themselves reflected discrete elite economic factions. See Cisneros, "¿Que no hay remedio?" (1874) for his own conversion; quote, Manuel Pardo, Memoria que el exsecretario de estado en el despacho de hacienda y comercio presenta al jefe supreme provisorio de la república (Lima, pam., 1867), 350.

See García Calderón, Estudios sobre el banco hipotecario (1868), for striking example of new agrarian laissez-faire. (He calls for full specialization in coastal exports, partially on the grounds that "Peru can't be a fabricating nation. . . . The Lima factories of silk, cottons, and glass absorbed huge capitals, dying right after birth" [17].) Linked with Piérola's anti-Pardo group, Francisco García Calderón was among the most influential thinkers of the 1870s; e.g., his codifying Diccionario de la legislación peruana (Lima, 1879) brims with invectives against "gremios," "industria," privilegio," etc. See also agrarianist Fernando Casós, La minería y la agricultura al punto de vista del progreso (Lima, pam., 1876).

ists) in state-sponsored shipyards, though to the benefit of all "America." This question galvanized protectionist-liberal polemics of the mid 1860s, with Pardo coming down on the other side.^[161] All sorts of industries must "nationalize" in Peru, claims Cisneros.

Another chapter confronts difficulties at customs, where free-traders always found potent ammunition in the state's fiscal reliance on customs duties and the costly smuggling spurred on by tariffs. In painstaking detail Cisneros forwards administrative reforms to thwart contraband. In an innovative twist he ultimately attributes pandemic contraband to Peru's global structure of commercial dependence; saddled with such an unwieldy variety and complexity of imports, bureaucratic procedures are tough to rationalize and easy to evade. Cisneros also assails government subservience to free-trader merchants as the deeper cause for declining customs revenues.^[162] Tax reform proposals—to counter the fit of liberal generosity in the mid 1850s that left Peru bereft of nonguano revenues—include novel upper-class consumption and export duties, those that Pardo found so hard to realize.

There is the better-known plan for rationalizing the guano trade itself, which found instant and effective partisans in the state. The reform ended long-standing merchant advances, cost-leaky consignments, and international pricing irregularities, not only to raise public profit shares but, equally important, to free guano funds from the pressures of ordinary (and political) expenditures. Its ultimate aim was fiscal austerity not for its own sake but for liberating both the state and ample funds for developmental projects. From a rationalized budget of 25 million soles, some 7 million could then be devoted to "roads, public works, and industries."^[163] In context, "Guano," the final chapter of the book, had been prefaced by five sections laying out the coveted developmental projects. Export and railway reforms, as history tells, proved the easiest to assimilate by Peru's civil elite—because effective political constituencies were already in place and, one suspects, because they could be had without deferred prosperity.

[161] Cisneros, Ensayo sobre cuestiones económicas, chs. 3-4; quinine ideas from M. E. de Rivero studies. See Perú, Congreso, La protección y la libertad: Debates del senado y otros documentos (Lima, pam., 1868), for polemics following Prado purchase of three boats for a "Compañía Nacional de Navegación," after Cisneros's notion. Congressional free-traders killed the project, for "there can be no vacillation. Liberty is alone our cult—for she resolves all social problems" (89)—invoking a bit of liberal social utopianism, too.

[162] Cisneros, Ensayo sobre cuestiones económicas, ch. 4, esp. 78-80.

[163] Cisneros, Ensayo sobre cuestiones económicas, "Huano" and conclusions; see Maiguashca, "Reinterpretation of Guano Age," chs. 3-5, for reform movements.

Finally, Cisneros's perspective on the popular classes deserves a fresh look as well, for it proves more elusive than a starkly defined divide between elite and the masses. The technocratic Ensayo sobre cuestiones económicas was not openly an essay on the social question. The most obvious social message, from beginning to end, is the forging of social peace through employment—never a revolutionary insight in Peru—and Cisneros's idiosyncratic worries about the pressures of political employment ("empleo-necesidad") on the workings of the state—an exaggerated concern, as modern studies show.^[164] Fiscal reform was sold as a way to ensure "twenty years without anarchy and civil war," the time needed to place Peru on a steady growth path. Throughout Cisneros brandishes a national standard, along with blatant criticism of oligarchic mismanagement and rentier values. The more concealed message is that to progress, Peru must somehow involve its people in production. Surely the mounting urban social unrest of the mid 1860s was on his mind (with xenophobic and bread riots now an inescapable fixture of the urban scene), intensifying his generational obsession with orderly and civil political process. But few of Cisneros's specific proposals reveal a particularly popular bent: at his most radical he calls for enhanced technical training (for decades a guild aspiration) and some lower duties on goods and inputs for popular sustenance and production.

Above all looms Cisneros's larger conception of development itself as the antithesis to fleeting guano abundance and unbridled consumption. Executives and congress must promote "an industrial future" because it is "human work, not minerals, that makes the measure of real wealth."^[165] This was neither the value notion of classical economy nor the industrial ethic of Saint-Simon, nor the capitalist civilizing dreams of nineteenthcentury liberals. It was also a concept that many a local artisan could relate to, as it shared in their own customary ethos of "honorable" and "skilled" trabajo .

Yet at the same time Cisneros firmly rejects the artisan protectionist standard and was clearly not trying to develop or cater to a popular following. The guilds, he claims, cannot be trusted, on their own, to

[164] I.e., Hunt, "Growth and Guano," 80-83, showing declining real welfare transfers and (Cisneros-like) rising developmental funding. Cisneros, Ensayo sobre cuestiones económicas, conclusions; see also Cisneros, "Consideraciones sobre el contrato de 17 de aug. de 1869" (Obras completas 3:225-35), where he promotes Dreyfus contract as a blow against an upper-class "banker-merchant monopoly" and as "solving forever" "the thirst for material progress."

[165] Cisneros, Ensayo sobre cuestiones económicas, 57.

promote productive industry. Such skepticism was understandable after the initial trials of republican trade policy, when guilds still wielded influence. Cisneros knew of the last haphazard artisan campaign of 1849, when each craft promiscuously demanded ever higher tariffs, with scant thought to Peru's fiscal or developmental horizons. The Ensayo sobre cuestiones económicas thus cuts directly to deep-seated (and essentially political) dilemmas of applying protection intelligently. Rather than dismiss artisans out of hand (a free-trader reflex of the 1850s), Cisneros proposes here an institutionalized process of industrial and protective project selection. This he conjures as a sort of state control board to avert the irrational sway of popular and parochial group interest:

The government should, for the first time, conduct a serious, careful and effective survey, taking in the views of the guilds of industries in all corners of the republic. In this way, we can discover their true necessities and clearly recognize which industries are those that require a just protection; which would harm the consumer without benefit; and which are ready for even lower duties. This is how protection must be formed, rather than letting them demand of the government. In the latter case, all industries will simply plead for "protection"—without the data and opinions that must be collected by a commission of illustrious and practical men.^[166]

Cisneros, like Fuentes, Pardo, and the railway promoters, was not a democrat in the popular sense of the word. The best turn for policymaking was depoliticizing the state—hardly an inclusive move in a society that naturally excluded most everyone in the streets, villages, and fields. His stance exuded a suspicious class bias and a top-down technocratic sensibility, along with the sensible aversion to the traditional passions of liberal and protectionist politics. In another national context Cisneros would have made a good fiscal científico, working toward a more independent and still exclusionary state.^[167] Later writers, whom we turn to next, would pick up on and extend the dilemmas of popular participation in development. For Cisneros and others of the reformist elite, neither his fellow elites nor the people alone could save Peru from its impending crisis.

[166] Cisneros, Ensayo sobre cuestiones económicas, 76, 74-75.

[167] Cf. Hale, Transformation of Liberalism; or Trazegnies, Idea de derecho (but which omits legal corpus of this "traditional modernizer").