5
International Crises and Popular Movements in Latin America
Chile and Peru from the Great Depression to the Cold War

Paul W. Drake

In export economies highly susceptible to foreign influences, international crises have presented unusual opportunities for and obstacles to political change. The myriad ways in which Latin America's reform movements have interpreted, responded to, and been molded by external shocks have, along with domestic factors, determined the fate of those movements. Common outside forces have engendered similar political phenomena in many of the republics. At the same time, distinctive local reactions and conditions have produced divergent political outcomes.

In this chapter I sacrifice the intricacies of national histories and variables in the interest of highlighting the impact of international changes on the evolution of popular movements in Chile and Peru. The term "popular movements" mainly refers to the major reform parties representing organized labor: in Chile the Socialist and Communist parties, and in Peru the Communist party and the American Popular Revolutionary Alliance. My analysis emphasizes how similar external influences were refracted through different internal political prisms.

Global events exerted exceptional influence during three great, interconnected transformations in the twentieth century: the Great Depression, World War II, and the Cold War. Throughout the period 1930–1945 Latin America had to adjust to the massive disruption of the global economic and geopolitical order; after 1945 it had to respond to and accommodate the consolidation of U.S. hegemony in the name of capitalism and anticommu-

nism. In the late 1940s reinvigorated capitalist growth within the orbit of the United States called for containment of demands from labor and the left.

In many parts of Latin America the Great Depression ignited a crisis of the oligarchic order, which had been under stress since World War I. The collapse of the international economy called into question the nineteenth-century model of elite rule based on laissez-faire and free trade. The depression capsized international flows of trade and finance and in some countries activated the masses as a political contender while energizing the reform parties. These reform parties demanded simultaneous state action on industrialization and social reform, especially in the mushrooming cities.

The way countries dealt with the crisis, and with the resulting populist challenge, shaped political developments for decades to come. By the time World War II was over and the Cold War had set in, a new international order had been established under the auspices of the United States. Latin America accommodated itself to the international regime by resolving the political conflicts spawned by the Great Depression. The key issue for Latin American politicians was how to adapt to the changing world system and simultaneously cope with labor and the left.^[1]

Analytical Framework

This prolonged process of adaptation can be illuminated by comparing Chile and Peru, which offer both striking commonalities and striking contrasts. In some political aspects both cases approximated the norm in Latin America as a whole. Although certain regional political patterns were discernible in Latin America in the 1940s, the decade overall did not display a lasting secular pattern toward either democracy or dictatorship. After authoritarianism swept the hemisphere in the 1930s, a mixed picture emerged in the early 1940s. Then, from 1944 to 1950, ten governments switched from being nonelected to being elected, but seven others reverted from democracy to dictatorship.^[2] From this perspective the 1940s brought no clear trend toward democracy.

Yet from another angle this period marked some important changes and political reorientations. In the 1930s populist reform movements convulsed both Chile and Peru, though rightist governments prevailed. In the mid-1940s, as World War II drew to a close, both Chile and Peru—like most of the hemisphere—experienced an opening to democracy and the left. With

the onset of the Cold War in the latter years of the decade, however, the mid-decade opening to mass politics swiftly closed; both nations joined most of Latin America in turning to the right and aligning with the United States. By the early 1950s both governments were ruled by strongman presidents aloof from party politics. Throughout these years the two countries were caught between the United States and domestic popular movements; the external and internal forces that appeared reconcilable at the end of World War II soon after proved to be incompatible.

Despite the common tendencies noted above, Chile and Peru followed opposite paths of political economy from the Great Depression through World War II. The two countries present contrasting developmental responses to the crises of growth, distribution, participation, and legitimation during the 1930s and World War II (see table 16).

Why were their responses to similar international crises and popular movements so different? If we follow the analytical approach employed by Cardoso and Faletto, the answer lies mainly in the different ways the two countries were connected to the international economy and in their contrasting domestic social structures and political systems. These differences—as mediated through intervening political variables and national peculiarities—helped produce divergent governing coalitions and policies.^[3]

Partly because Chile relied overwhelmingly on sales abroad of nitrates and copper controlled by U.S. corporations, its upper class was weaker than its counterpart in Peru, less dedicated to export-led development, and more amenable to populist promotion of industrialization and mild welfare measures for urban groups. The Chilean elites were more willing to allow the

state to interfere in the foreign sector to protect domestic capitalists. Moreover, Chile was already more industrialized and urbanized than Peru, and therefore possessed a stronger basis and constituency for the promotion of manufacturing and welfare in the cities through forms of state capitalism. The larger middle class and labor sectors had a much greater role in Chile than in Peru, where the agro-exporting elites and the military remained more powerful.

The Peruvian oligarchy kept popular movements at bay from the depths of the depression until the close of World War II. The Peruvian export sector suffered less from the depression than its counterpart in Chile and recovered more quickly. In contrast with Chile the leading export products in Peru from 1930 to 1950 were mainly in local hands; whereas foreign companies accounted for over 60 percent of Peru's exports at the end of the 1920s, they produced less than 30 percent by the close of the 1940s.^[4] Control over most export production helped the Peruvian oligarchy to continue to rule directly through its own representatives or the armed forces. In sum, the relative success of the more diversified export economy in Peru protected the political standing of the domestic owners of many of those means of production.

While the ruling class in Peru relied on the military to protect its interests, upper-class groups in Chile discovered that the armed forces were unreliable. The Chilean military was closer to the middle than the upper class, divided ideologically, and discredited politically. Having ruled the country from 1927 to 1931, the armed forces took the blame for the depression and the chaotic conditions it provoked. From 1931 the Chilean military returned to its traditional role outside the civilian political arena. In contrast to the violent confrontations between the military and the American Popular Revolutionary Alliance in Peru, a leader of the Chilean armed forces gave birth to the Socialist party, and despite the military's ingrained anticommunism, it did not oppose the Popular Front. By the same token, fueled by higher levels of urbanization and industrialization, the left and organized labor were stronger in Chile than in Peru. A stronger tradition of democratic party politics also facilitated the expansion and inclusion of new popular forces. As a result the reform movement was able to climb to power in Chile but remained blocked in its northern neighbor.

After success in the 1930s reformers in much of the hemisphere encountered frustration and failure in the 1940s under the constraints of World War II and the ensuing Cold War. The political shifts from left to right in the latter

half of the 1940s occurred within the international and national frameworks erected from 1930 to 1945. By the start of the 1950s the popular challenge had been contained almost throughout Latin America through co-optation and repression.

Even when both Chile and Peru curved left in the mid-forties and then right at the end of the decade, the cumulative differences between them established earlier remained. Within Chile's more open, progressive system the leftward turn after World War II gave a greater role to the Communists than in Peru. Similarly, although the rightward turn in Chile during the Cold War excluded the Communists, it did not include a crackdown on the populist Socialists. Chile's veer to the right, unlike Peru's, did not entail a restoration of oligarchic authority and laissez-faire economics. Instead, Chile retained a significant role for the middle class, the state, and import-substituting industrialization. The defeat of the left in Chile in the late 1940s was only partial, and by the 1950s and 1960s the leftists were reasserting themselves.

In Peru during the late 1940s, in contrast, the agro-exporting, free trade elites reestablished their hegemony. They had emerged victorious during the depression and, after a brief opening to popular forces in 1945–1948, continued to prevail thereafter. In comparison with Chile, Peruvian industrialists, middle sectors, organized laborers, mass parties, and democratic institutions were still too frail to dislodge the traditional ruling class. From the late 1940s onward the more effectively repressed popular movement in Peru capitulated to the established order.

The dominant sociopolitical coalitions in the two countries is summarized in table 17.^[5]

Chronological Framework

In the wake of the depression both countries witnessed an upsurge of mass movements, headed by the Socialists and Communists in Chile and the Apristas, followers of the American Popular Revolutionary Alliance (APRA), in Peru. The Chilean Socialists and the Peruvian Apristas, despite important differences, saw each other as kindred spirits and aligned themselves with similar populist brethren throughout the hemisphere. Although more Marxist in orientation, the Chilean Socialist party resembled APRA in its populist emphasis on nationalism, statism, industrialization, and the unification of the middle and working classes against the oligarchy and the imperialists.

Both parties blamed the depression on the United States and the local ruling class, vowed to eliminate international as well as local inequalities, and rejected ties with political organizations outside Latin America. Equally, both parties were committed to a "third path" to national development that was neither capitalist nor communist. Indeed, much of their political history was bound up with their tensions with the United States externally and the Communists internally.^[6]

From 1932 to 1945, however, the trajectories of these popular movements sharply diverged, as they encountered inclusion in Chile and exclusion in Peru. At the start of the 1930s the Socialists as well as the Apristas missed chances to seize power and subsequently concentrated on the electoral route to political supremacy. Both countries possessed rightist governments in the mid-thirties that were succeeded by more centrist (and in Chile slightly left-of-center) administrations at the end of the decade. Both these centrist governments at the end of the 1930s ruled under the slogan To Govern Is to Educate. Presidents Pedro Aguirre Cerda and Juan Antonio Ríos Morales (1938–1945) in Chile and Manuel Prado y Ugarteche (1939–1945) in Peru presided over a cooling of ideological and class conflicts from the 1930s. Both the right and the left moderated their antagonisms toward each other and toward the United States and the Soviet Union during World War II.

In the early 1940s these civilian governments tried to consolidate liberal democracies, although to a much more restricted extent in Peru. The military

seldom threatened to overthrow these moderate presidents. Under the constraints of wartime the administrations of both countries increasingly preferred to place growth before redistribution. Both nations suffered from inflation, agricultural stagnation, and shortages, especially of imports and capital goods. Their exports, however, did relatively well, and foreign exchange accumulated. Even though to a much lesser extent than in Chile, the Peruvian government expanded, as it sought to reward urban industrialists and the middle class. In both countries demands from workers and peasants were stifled, and most gains accrued to the middle or upper classes.

Despite their broad similarities the Aguirre Cerda-Ríos and Prado administrations were built on very different political coalitions. While the Chilean rulers welcomed support and participation from Socialists and Communists, the Peruvians outlawed the Apristas. Chile handled rising demands from middle- and working-class sectors in the cities through popular front politics: incorporating labor and the left into the electoral system and the populist state. It was easier to integrate the left while the United States was crusading against fascism. Without destroying the oligarchy, the Chilean governments before 1948 promoted state expansion, industrialization, and welfare benefits for the most highly organized employees and workers.^[7]

In Peru the traditional elites continued to rule directly in collusion with the armed forces and kept the growth of the state, import-substituting industrialization, and social reforms at lower levels than in Chile. Despite international shocks they retained more elements of laissez-faire. In Peru during this period populism was postponed.^[8]

At the end of World War II, as politicians temporarily revived the reformist rhetoric and expectations of the 1930s, both countries provided a release for pent-up demands by swerving to the left. For two years Presidents Gabriel González Videla (1946–1952) in Chile and José Luís Bustamante y Rivero (1945–1948) in Peru led prolabor coalition governments that included the parties most despised by the armed forces: the Communists in Chile and the Apristas in Peru. Both countries, however, quickly switched to the right and banned those parties.

The right-wing reactions of the late 1940s responded mainly to mounting economic difficulties and labor unrest, but at the same time to pressures from the United States at the inception of the Cold War. The involvement of the United States in Chile was much more intense than in Peru because of larger investment and the greater strength of the Chilean Communists. Neverthe-

less, the basic pattern in both countries was similar to that continentwide: as the reserves accumulated during the war ran out and inflation intensified, governments cracked down on workers and their political allies. The broader objectives of these actions were to favor capital accumulation, encourage foreign investment, and promote stable growth in alignment with the United States. In this way the Chilean and Peruvian governments moved more closely to the United States and in return received investments, loans, and military assistance. Even some Chilean Socialists and Peruvian Apristas aligned with the United States in the Cold War and with the Inter-American Confederation of Workers (Confederación Interamericana de Trabajadores [CIT]), a body of the American Federation of Labor and the Congress of Industrial Organizations (AFL-CIO). The pattern was particularly marked in Peru. Having been less willing to adopt state expansion and industrialization during the depression, Peru now adopted an unusually strong commitment to economic liberalism.

By the end of the decade and the beginning of the 1950s labor and the left were demobilized in both countries. Independent unions were crippled and in disarray, their federations divided by repression and by the competition between Moscow and Washington for their allegiance. Peasants remained on the margins of political life. Finally, at the close of the period under study both countries turned to militaristic, personalistic leaders: Presidents Carlos Ibáñez del Campo (1952–1958) in Chile and Manuel A. Odría (1948–1956) in Peru. These conservative caudillos were influenced in some degree by the populist style of Peronist Argentina but avoided its laborite policy orientation.

At the termination of this era both Chilean and Peruvian reformers expressed severe disappointment with their meager achievements. Although Chilean popular movements had participated in government and accomplished far more than their Peruvian counterparts, at the end of the 1940s both were seeking new ways to fulfill unkept promises to their followers. Center-left coalitions had failed to produce nationalistic development or significant benefits for the masses, even in the burgeoning cities. Many of APRA's former comrades in the Chilean left decided that more radical, ideological, independent politics were necessary to advance their agenda. In contrast, APRA concluded that it would have to moderate further, intensify its anticommunism, and collaborate with more rightist groups to win acceptance from the oligarchy and the military. In subsequent years the Chilean left

attempted to move beyond Popular Front politics, while APRA aimed for electoral and office-holding successes similar to those the Chileans had gained earlier.

In this essay I compare these two experiences by stressing the impact of international influences on the thought, behavior, and trajectory of these popular movements. I shall attempt to underscore the elements of cross-fertilization among Chilean, Peruvian, and other Latin American reformers. The emphasis on interaction between external and internal forces, however, is not meant to deny the often primary importance of domestic factors in national political development. Instead I use the international framework to spotlight and to reexamine certain neglected commonalities and contrasts among these labor parties during this period.

The Depression

Chile, 1930s

As in Peru the government that restored order in Chile soon after the onset of the depression represented the right: the economic magnates and the Conservative and Liberal parties.^[9] In contrast with Peru, however, the Chilean right managed to resist the most reactionary and intransigent right-wing elements and gradually responded to the new threat from popular forces by means of inclusive, flexible strategies. By acquiescing in democratization and state activism, the elites opened the door to the eventual victory and incorporation of the left and urban labor. Since the upper class saw the military as unreliable, it opted for piecemeal concessions to preserve its privileged position. The bargain that evolved in the 1930s and 1940s consisted of ceding political office holding to middle-class representatives of the masses and encouraging industrialization, while preserving conservative sanctuaries in the countryside by barring the peasantry from mobilization and benefits.^[10]

Among the Chilean reformers the Socialists were inspired by numerous foreign influences, including the Spanish and French Popular Fronts and the New Deal in the United States. However, the strongest alien influence was that of APRA. The Chilean Socialists met frequently with Aprista leaders such as Luis Alberto Sánchez. Learning from APRA's catastrophic confrontations with the Peruvian army, the Chilean Socialists tried to cultivate good relations with the military. The Chilean Socialists and APRA also felt kinship with Acción Democrática of Venezuela, the Socialists of Argentina, progres-

sive factions of the Colombian Liberals, the revolutionary party of Mexico, and, later, some of the reformist currents of Argentine Peronism.^[11]

Meanwhile, the Chilean Communists responded to international signals to establish a popular front in alliance with the Socialists and the centrist Radical party. Agents of the Communist International from the Soviet Union, Germany, Argentina, and Peru visited Chile to persuade the Communist party to adopt the Popular Front strategy. Subsequently, the Chilean Communist party moderated its ideology, broadened its social composition beyond the proletariat, and devoted itself to elections rather than rebellions. Like the Apristas the Communists argued that a socialist revolution had to await the completion of a bourgeois industrial revolution in semifeudal Latin America.

The Chilean Popular Front closely resembled APRA and other populist movements in the hemisphere. It boasted similar multiclass components and a programmatic emphasis on democracy, nationalism, and state intervention to promote industry and welfare. Apristas exiled in Chile backed the Front. Thus foreign influences helped Chilean popular forces both to moderate their objectives and to ascend to power.^[12]

Peru, 1930S

In Peru the depression resulted in violent clashes between the Apristas and the armed forces that led first to dictatorship under Oscar Benavides, and then at the end of the decade to the stabilizing government of Manuel Prado. Although he professed himself an anti-imperialist, Aprista chief Víctor Raúl Haya de la Torre feared an American armed intervention in Peru like those in Nicaragua and elsewhere, and therefore he always approached the United States cautiously. As the 1930s wore on, Haya became increasingly friendly toward the United States. He responded favorably to the Good Neighbor policy, declared his support for the United States in the battle against fascism, and vainly hoped for U.S. support against his domestic adversaries. Earlier Marxist influences on APRA waned in the 1930s, as it established links with analogous nationalist and populist parties in Latin America. In its struggle against the armed forces, for example, APRA secretly requested financial assistance from socialists in Bolivia and from the Revolutionary party of Mexico.^[13]

The military regime of Gen. Oscar Benavides (1933–1939) defended the

interests of the oligarchy against APRA's populist challenge. Benavides outlawed both the Apristas and the Communists on the grounds that they were foreign parties alien to Peruvian interests, and he heavily repressed unions affiliated with those parties. In 1935 the tiny Peruvian Communist party adopted the Popular Front line and proposed a joint People's Front to APRA. The Apristas spurned these overtures, hoping that an anti-Communist position would win them greater acceptability. Although Haya de la Torre applauded the Popular Front in Chile, he opposed such coalitions in Peru because, as he claimed, APRA already represented a broad front in itself. In the semicompetitive 1939 presidential election, the Communist party threw its votes to Prado on the grounds of creating an alliance against fascism. Banned from running themselves, many Apristas too voted for the conservative, plutocratic Prado in the hope that he would legalize their party.^[14]

World War II

The aims of the increasingly hegemonic United States in Latin America during World War II were to gain allies against invasion or subversion, to reduce the economic links between the Latin American nations and the Axis, and to obtain safe and reliable access to vital Latin American raw materials. Throughout the hemisphere the United States encouraged increased production of strategic commodities at controlled prices, improvements in communication and transportation, and smoother mechanisms for exchange transactions. To help the Latin American nations to surmount wartime disruptions, and to increase its own economic sway in the region, the U.S. government guaranteed the purchase of strategic and surplus exports, supplied minimal import necessities, and sent technical and military assistance, including lend-lease military equipment. To some extent the United States also became willing to grant public loans for the industrial development desired by many Latin Americans.

Washington believed that economic development would make the Latin American nations more politically stable and thus more reliable allies. Under the Good Neighbor policy the United States maintained neutrality toward authoritarian or democratic regimes so long as they were friendly toward its security and economic interests. Latin American progressives were favorably impressed both by the Good Neighbor policy and by the state planning involved in the New Deal and the war effort.^[15]

Chile, 1938–1945

In Chile the governments of Radical party leaders Aguirre Cerda and Ríos incorporated the Marxist left into a state capitalist program for import-substituting industrialization. Following the death of Aguirre Cerda in 1941, Ríos promoted national unity, social stability, and rising productivity under the conservative slogan To Govern Is to Produce. Although he had the backing of the Marxists, Ríos did not establish a formal pact with the leftist parties. However, they pressured him to join the Allies, which he finally did in January 1943 on the grounds of Chile's overwhelming economic interest in siding with the United States.^[16]

The main agent in the efforts of the two Radical presidents to raise productivity, particularly in industry, was the new Development Corporation (Corporación del Fomento [CORFO]), which relied heavily on small credits from the U.S. Export-Import Bank. These loans were made available in part to attract Chile to the Allied side, but they were also devices to assist American exports, since under normal circumstances they could be spent only on goods and services from the United States. During World War II the Chilean government furnished more financial assistance for industrial development than any other in Latin America.^[17]

The creation of CORFO pulled the Chilean left into a more conservative position. To win the approval of conservatives for the legislation that set up CORFO, the Communists and Socialists curbed labor mobilization, especially in the countryside. Government officials representing the Socialist party negotiated with the United States for loans for CORFO and for a stable and programmed schedule of purchases of Chilean exports, particularly copper.^[18]

Events abroad both inspired and disrupted the Popular Front government. The Spanish Civil War, for example, convinced many members of the Front to exercise caution in order to avoid a similar conflagration in Chile. The Hitler-Stalin pact of August 1939 lessened the Communist party's willingness to cooperate with domestic rivals in the cause of antifascism. At this point the Communist party briefly revived the radical rhetoric of the early thirties, as it denounced middle-class reformers, especially Socialists, as deceivers of the proletariat. In October 1939, to the chagrin of the Socialists and the government, both of which desired loans from the United States, the Communists began assailing the United States when Chile repealed its neutrality

laws in order to furnish arms to the Allies. Nevertheless, Aguirre Cerda vetoed attempts to outlaw the Communists.^[19]

Castigating the Communists as antinational, antidemocratic, and insufficiently antifascist, in early 1941 the Socialists quit the Popular Front but remained in the government. Subsequently, the Socialists assumed a pro-American position, arguing that "democratic imperialism" was preferable to "totalitarian imperialism." Inspired by Franklin D. Roosevelt, Henry Wallace, and Haya de la Torre, many Socialist leaders proclaimed that World War II would result in greater peace and social equality among nations and classes. In the view of the Socialists industrial production had to be increased and the war concluded before class conflict and major reforms for the workers could be carried out. Referring to Haya de la Torre's pro-American position toward the war in 1941, Marmaduque Grove, the leader of the Socialist party, declared, "We follow the same line and are oriented toward the same propositions related to Latin American policy and the concept of our relations with the United States and the interpretation we give to the Good Neighbor."^[20] Similarly, on the death of Roosevelt in 1945 Chilean Socialist Salvador Allende Gossens proclaimed: "the highest human value of the twentieth century has disappeared, the most solid guarantee for the small countries, especially for South America."^[21]

Despite their professed adherence to revolutionary Marxism the Socialists upheld links with other populist, nationalist movements in the hemisphere. In 1940 they hosted the First Latin American Congress of Leftist Parties. They excluded Communists from this gathering, but included the Socialists of Argentina and Ecuador, the APRA of Peru, the Democratic Action of Venezuela, and the Revolutionary party of Mexico. Dominated by Aprista doctrines, all the parties endorsed solidarity with the United States against fascism, even though expressing their common longing for greater economic independence for their nations.^[22]

When the Soviet Union joined the Allied cause in mid-1941, the Communists became more conservative. In Chile as well as Peru the Soviets promoted the international policy of National Unity, a program that pledged the Latin American Communist parties to almost any alliance and any sacrifice to further the war effort. Consequently, the Communist party backed the Ríos government almost unquestioningly. Between 1941 and 1944 the Chilean Communists accepted the view of Earl Browder, leader of the Communist party of the United States, that class collaboration would be the vehicle

for progress both during and after the war. During the war the Chilean Communist party won prestige by virtue of its link with the Soviet Union, whose desperate and heroic struggle against Nazi Germany aroused widespread admiration in Latin America. This close identification backfired after the war, however, when old animosities toward the Soviet Union reemerged, intensified by rising nationalism and the Cold War.^[23]

Peru, 1939–1945

In Peru, Manuel Prado found that he needed to use only relatively mild repression to hold the lid on an increasingly moderate APRA. World War II engendered a period of unity and tranquillity in Peruvian politics, buttressed by an export boom. Broad national support for the democratic side in the war strengthened democratic practices domestically while discouraging armed civilian or military uprisings against the government. Prado's pro-United States administration enjoyed widespread, nonpartisan support from civilian and military sectors alike following the brief war with Ecuador in 1941. At this point even APRA rallied around the flag. After decreeing neutrality in September 1939, Peru severed relations with the Axis in January 1942, although it waited until 1945 to declare war.^[24]

The Prado administration outlawed and persecuted APRA, sometimes brandishing the quite unjustified accusation that the party was pro-Nazi. In fact, APRA supported the Allies, but it continually questioned U.S. aid to the Prado government in the form of Export-Import Bank loans and guaranteed purchases of the cotton crop. How, Haya de la Torre asked repeatedly, in the war for democracy could the United States embrace an undemocratic ally? Haya vainly lobbied the U.S. government to pressure the Prado administration to grant his party full rights as part of the Allies' international crusade against "totalitarianism." Although still opposed to the Prado government, APRA nevertheless restrained its criticisms of the administration in the interests of a broad consensus against fascism. Increasingly frustrated by his failures at home, Haya began to regard Chile's sturdy democratic system with envy.^[25]

World War II caused the Apristas to tone down their anti-imperialism and to behave more favorably toward the United States.^[26] They praised Roosevelt and Wallace for their commitment to end imperialism and to implement the "Four Freedoms." Their increasingly fervent opposition to fascism led the

Apristas to place growing emphasis on their own dedication to democracy, particularly in opposition to the oppression they faced in their home country. The Apristas continually drew analogies between the struggle led by the Allies against fascism and their own fight against dictatorship.

Although continuing to criticize economic exploitation by the United States, the Apristas softened their previous diatribes against international capitalism. In 1940 Haya de la Torre publicly acknowledged that the "twenty isolated and divided Indoamerican countries only subsist[ed] because the United States guarantee[d] their existence and sovereignty." Welcoming the Good Neighbor policy, he then called for "a democratic interamericanism purged of imperialism." Haya argued that Peru needed more capitalist development, fueled by foreign investment, before it could contemplate a transformation to socialism. Thus APRA echoed the Popular Front doctrine of its Communist adversaries, while remaining opposed to any pact with the Communist party because of that party's totalitarian orientations and principles. The Aprista program for industrialization and democracy aimed to create an alliance of the middle and working classes that would keep the former away from fascism and the latter away from communism. Like the Chilean Socialists the Apristas argued that the war demonstrated more than ever the wisdom of their program for state activism, for industrialization, and for the unification of Latin America as a counterweight to imperialist threats from Europe or the United States.^[27]

Attempting to consolidate its base for the future, APRA strengthened its hold on organized labor, which was now expanding in size and militancy along with the growth of war production and the increasing impact of inflation. In 1944 APRA joined the Communists in organizing the Confederation of Peruvian Workers (Confederación de Trabajadores Peruanos [CTP]). When APRA finally regained legal standing at the end of Prado's administration, it urged restraint on organized labor so as not to interfere with the party's prospects for electoral victory in 1945.

Thus APRA and the Communist party replicated the alliance between the United States and the Soviet Union by cooperating briefly to consolidate the union movement. In this endeavor they were aided by the international Confederation of Latin American Workers (Confederación de Trabajadores de América Latina [CTAL]) led by Vicente Lombardo Toledano in Mexico, which at this point enjoyed the backing of both the United States and the Soviet Union. Nevertheless, even though both parties sustained a similar

reformist vision for the worker movement, they remained bitter rivals. As the Apristas attacked the Communists, the latter replied with the accusation that APRA was dominated by cryptofascists.^[28]

From mid-1941 Prado received solid support from the Communists because he shared the stances they were taking on the war. In return for this support Prado relaxed persecution of the Communists and granted them seats in Congress. Subsequently, the Communists increased their following among unions but curtailed labor agitation while heeding Browder's exhortations to support national production for the war effort. The Communists argued that their cooperation in Peru flowed logically from the wartime alliance between the socialist and capitalist nations. In the 1945 election the newly legalized Communists threw their support to the candidacy of José Luis Bustamante, who also had the backing of APRA.^[29]

Victory for Democracy

World War II left the United States and its brand of liberal democracy and capitalism indisputably hegemonic in the hemisphere. To an even greater extent than during the war Latin America and its popular movements were now faced with the task of adjusting to the United States. In the early postwar period the United States faced no competition in Latin America and consequently took its supremacy for granted. The only potential rival, the Soviet Union, at this point possessed no significant economic or military ties in the region. Although the U.S. government later provided some capital through the World Bank and the Export-Import Bank, it expected Latin America to rely mainly on private investment and opposed any large-scale commitment of public funds to heavily statist and protectionist development programs. In short, the United States preferred Latin America to emphasize private enterprise and the free market and to develop as an active participant in an expanding world economy.^[30]

Subsequently, the United States and the Latin American economic development plans, which had remained compatible during the war, now increasingly came into conflict. The United States pressured the Latin Americans to begin servicing debts they had defaulted on during the depression, to lower trade barriers, to curb economic nationalism, and to welcome foreign capital. In contrast, most Latin Americans wanted their export commodity prices

stabilized or raised, their industries protected, their economies insulated from foreign control, tariff walls in the United States lowered, and financial assistance from the United States amplified.^[31]

The defeat of Germany and Japan reversed economic relations between Latin America and the United States. During the war the scarcity of goods from the United States propelled import-substituting industrialization, while heavy demand for Latin American exports multiplied foreign exchange reserves. Following the Allied victory, however, imports from the United States threatened local industries. Meanwhile, demand in the United States for Latin American exports declined, as the former sought alternative suppliers and even reimposed tariffs on some Latin American commodities.

In the second half of the 1940s the terms of trade turned increasingly against Latin America. After a spurt of prosperity immediately after the war, recession came in 1947. As Latin America tried to satisfy delayed demands for consumer and capital goods, its surplus of foreign exchange evaporated quickly. At the same time, inflation escalated rapidly.^[32]

Meanwhile, the United States compounded Latin America's difficulties by refusing to provide more than token economic assistance. Even so, the assistance that did arrive in the form of meager Export-Import Bank loans, and the appetite this inflow kindled for more, helped to convert the governments of Chile and Peru into staunch anticommunist allies. Following the reconstruction of Europe during the late 1940s, the United States turned its attention and resources to the Korean War. This conflict improved Latin America's export sales and balance of payments, which again convinced Washington the region did not require an injection of public funds from the United States. Meanwhile, foreign investment—nearly 70 percent of it from the United States—increased in both Chile and Peru.^[33]

Chile, 1945–1947

The death of Ríos was followed in 1946 by the elevation to the presidency of another stalwart of the centrist Radical party, Gabriel González Videla. Although on the campaign trail he sounded like a nationalist firebrand, González Videla realized the importance of cooperating with the United States. Between his election and inauguration he informed the U.S. ambassador: "I know that the future of Chile, its industrial development, its economic

well-being, is dependent to a considerable extent on the friendship and collaboration of the United States. Chile needs capital and wants North American capital, and can guarantee fair treatment."^[34]

At the time of his election González Videla and the Communists believed that they were still fighting the battles of World War II against fascism and the local oligarchy. Supported most strongly by the left wing of the Radical party and the Communists, the new president revived the social reform commitments of the original Popular Front. For the Communist party, fighting fascism translated into restraining extreme demands and backing centrist reformers against right-wing contenders. During González Videla's initial months as president, the Communist party occupied three cabinet posts for the first time, thereby emulating its counterparts in postwar Italy and France. In 1946 Communist strength among Chilean unions and the electorate ballooned.^[35]

Exhilarated by the victory of the Soviet Union in Europe, the Communists declared that socialism was on the march. In their eyes the end of hostilities opened up new vistas for progressive movements. However, during the confusing transition of 1945–1946 from the collaboration of World War II to the confrontation of the Cold War, they vacillated between moderation and militancy. On the one hand they called for "a democratic bourgeois revolution" but on the other began to voice the view that national unity in the name of antifascism, if correct tactically, led to too many concessions to the upper class and too little commitment to proletarian demands. Many Communists now believed that the detour into moderation during the war explained their failure to grow more rapidly at the polls.

Following the line taken by the French Communist party, the Chilean Communists were soon denouncing Browder's disavowal of class struggle. Although a few Chilean Communists continued to endorse Browder's position, the majority wanted it stamped out and now rejected Browder's claim that the victory over fascism meant that the working class and the poorer countries could achieve their material needs peacefully in cooperation with capitalists.^[36]

As the Chilean Communist party grew increasingly radical, tensions between Moscow and Washington contributed to clashes that eventually sundered the national labor federation. Taking their cue from the Soviet Union, the Communists grew increasingly determined to increase their control over the labor unions even at the cost of rupturing unity. Within months after the

end of the war the Communists had launched an attack on the Socialist party and its labor affiliates.^[37]

Meanwhile the Socialist party leadership was becoming increasingly social democratic and friendly to the United States. In 1944–1946 the head of the party was Bernardo Ibáñez, secretary-general of the national labor federation and a strong supporter and friend of the AFL-CIO in the United States. In Latin America Ibáñez emphasized fraternal relations with populist movements, specifically APRA, Democratic Action, Peronism, and the Brazilian labor party of Getúlio Vargas; in Chile Ibáñez turned the Socialists against the Communists and their unions.^[38]

Peru, 1945–1947

Both the Apristas and the Communists backed the 1945 election of José Luis Bustamante y Rivero, who projected a more moderate reform image than González Videla. The members of Bustamante's National Democratic Front saw themselves as the victors over the oligarchy and as the bearers of the triumphant banner of democracy. Admirers of the achievements of the interventionist state abroad during the war, the leaders of the Front were committed to expanding the state's role in income distribution and industrialization. Like the Peruvian Communist party APRA now called for a "planned democracy," modeled on Roosevelt's New Deal. Bustamante himself hoped to repeat Chilean President Aguirre Cerda's success at incorporating and mollifying the leftist and popular forces through a broad coalition government.

In part APRA was persuaded to enter this centrist coalition—rather than struggle for power on its own—by Aprista exiles in Chile. APRA maintained frequent contact with the Socialist party of Chile through meetings like the 1946 Interamerican Congress of Socialist and Democratic Parties held in Santiago whose great highlight was the visit of Haya de la Torre. The delegates at the congress endorsed a struggle against imperialism and totalitarianism, as well as a campaign for democracy, economic planning, industrialization, and social justice.^[39]

In Peru APRA promised "bread with liberty." It toned down its radical demands of the 1930s to placate its adversaries by stressing that it did not want to "take away wealth from those who [had] it but create wealth for those who [did] not have it." Thus APRA now placed little emphasis on

social leveling. After enduring a decade of dictatorial repression, which its orators compared with the suffering of the European Allies during the war, APRA underscored its devotion to Western democracy.^[40] In 1945 Chilean Socialist Senator Salvador Allende, en route to Venezuela to congratulate his friend Rómulo Betancourt of Democratic Action on taking over the presidency, visited his Aprista colleagues in Lima. During his visit Allende made a speech in the Peruvian Parliament saluting APRA and the National Democratic Front. He extolled their victory as a manifestation of the tide of democracy, economic liberty, and social justice rolling over Latin America in the wake of World War II.^[41]

APRA had come to see not only democracy but also the United States as a progressive force that could help the party in its struggle against the oligarchy. Haya continually praised the New Deal and the alliance of capitalist and socialist powers during the war. A new era, he declared, had dawned of cooperation between North and South America alongside the "worldwide shift to the left." Although still wary of the possible effect of APRA's nationalism on foreign investments, the United States now viewed that party much more favorably as a bulwark of democracy against fascism and communism. The United States, however, paid little attention to Bus-tamante's government but focused instead on Peru's outstanding debt obligations, which in fact remained unresolved until the 1950s.^[42]

In 1946, like the Communist party in Chile, APRA received three cabinet posts. Although it was also dominant in Congress, it proved unable to achieve major reforms for its constituents beyond a few enactments raising wages and benefits for the middle and working classes. During the opening months of the Bustamante government APRA increased its standing among the labor unions and took control of the national labor federation from the Communists. With government support unions expanded their numbers and demands. At this point, despite its setback among the unions the Communist party was also growing thanks to the legal freedoms it enjoyed for the first time in more than a decade, but it was soon distancing itself from the Bustamante administration and the hated APRA. Once again the convergence between the Communists and APRA had proved ephemeral.^[43]

The Cold War

In the early postwar period the United States preferred democratic governments, parties, and labor organizations in Latin America and thus helped to

open up a political space for popular movements. Yet these democratic preferences possessed a much lower priority than broader strategic and economic objectives. As the Cold War began, U.S. support for the Latin American democracies was quickly superseded by relentless opposition to Communists and those deemed "soft on communism."^[44]

During the war reformers and leftists were able to discredit their conservative adversaries as fascists or cryptofascists. The Cold War, however, rapidly turned the tables and permitted the right to demonize all popular forces as Communists or fellow travelers. Armed with this weapon and encouraged by the United States, the conservative ruling groups in Latin America thus manipulated the discourse of the Cold War to discredit, then to disenfranchise, and finally to repress their opponents.

Chile, 1947–1950s

Like the Peruvians the Chileans now drove the left out. They did so to place more emphasis on economic growth, price stabilization, foreign investment, and to achieve an alignment with the United States during the Cold War. Industrial development and social welfare were the tandem goals of populism inherited from the 1930s that now came into conflict with the growing emphasis on accumulation emerging at the end of the 1940s. At this point most Latin American governments decided to clamp down on labor and to restrain its demands on their fragile, inflation-ridden economies. By suppressing leftists and workers, rulers believed they were defending democracy by removing the conditions that would justify right-wing military plots.

Under pressure from conservative elites and the United States, after only five months in office González Videla threw the Communists out of his government and then into illegality. Having begun his presidency in the belief he was still waging World War II, he soon began to act as if he were fighting World War III. Indeed some of the president's advisers warned him that a new global conflagration was imminent and that he should now explicitly align his government with the United States against the Communists.

As the Cold War took hold, González Videla believed that the Communists were no longer his reformist allies but aggressive revolutionaries acting under the direct orders of Joseph Stalin. The Communists, he complained, were attempting to control him like "a useful fool." He resented their attempts to persuade him to follow the Soviet line in foreign policy and to

oppose the various proposals and projects of the United States: the Truman Doctrine, the Marshall Plan, and the Continental Defense Pact for the Americas. González Videla especially worried about the strength of the Communists in the mines, which produced Chile's main exports and would be vital to the West in the event of war with the Soviet Union. Finally, he justified repression with the spurious claim that the Communists, at the behest of their Soviet masters, were planning an uprising to overthrow him; the Communists, he insisted, were attempting to take over in Chile as they had succeeded in doing in Eastern Europe and were attempting to do in countries like Greece and France.^[45]

The United States helped persuade González Videla to move against the left and labor, especially in the mines, by withholding credits from the Export-Import Bank and from the international Bank for Reconstruction and Development. After González Videla had taken action against the Communists, the flow of technical assistance, loans, and investments from the United States began to increase. Chile now received credits for CORFO, loans to cover foreign exchange shortages, and lower taxes on copper imports. The State Department and the American copper companies became willing to accept slightly higher Chilean taxes on copper. Washington also signed a military assistance pact with Santiago.^[46]

Following their expulsion from the cabinet in 1947, the Communists launched protests and strikes; the government lashed back with military repression. In response to a Communist strike in the coal mines González Videla obtained emergency coal shipments from President Harry Truman. Applauded by the United States, González Videla escalated the conflict by severing relations with the Soviet Union, Czechoslovakia, and Yugoslavia. He arrested Communist leaders and in 1948 supported the "Law for the Defense of Democracy," which effectively banned the Communist party for a decade.

The Communists blamed this bombardment on the global war against communism led by North American imperialism. But rather than fighting back, the Chilean Communists retreated into clandestinity. They continued to seek middle-and working-class alliances and to cooperate with the "patriotic bourgeoisie," and they still hoped to promote reform, industry, and democracy as the first step on a long road to socialism in what they saw as their semifeudal country. By the beginning of the 1950s the proscribed Communist party was upholding the same reformist and collaborationist

position it had been defending since 1935. The only important differences were greater emphases on hostility toward the United States and on the need for the proletariat to lead any multiclass reform coalition to avoid another betrayal by the bourgeoisie and centrist politicians.^[47]

Influenced by the United States, APRA, and the Venezuelan Democratic Action, the Chilean Socialists committed themselves to reducing the role of the Communists in the labor movement. Having strongly supported the Allies during the war, the Socialists and their unions received crucial support from the United States. From 1946 the United States government, the American Federation of Labor, the United Mine Workers, and their international representatives donated organizers and money to help divide Chilean labor into communist and anticommunist camps. The Socialists were denouncing the Communist party and its participation in the González Videla government even before the president turned against the Communists. Although officially neutral in the Cold War, the Socialist party described its struggle with the Communists as a battle between "democratic" and "totalitarian" forces.^[48]

Alleging it was dominated by Communists, the Socialist party also broke with Lombardo Toledano's Confederation of Latin American Workers (CTAL) in Mexico. To counter the CTAL the Socialists and the Apristas helped the AFL-CIO to launch the rival Inter-American Confederation of Workers (CIT). Socialist Bernardo Ibáñiez became the chairman of the confederation and the North American labor leader George Meany and Aprista Arturo Sabroso its vice chairmen. With the blessing of González Videla the CIT established its headquarters in Santiago. By 1948 international influences had played a major role in dividing and debilitating the Chilean left, as well as weakening leftist forces continentwide. The effects of these measures became particularly marked in Chile, where the leftist groups enjoyed unusual strength.^[49]

The majority of Socialists sided with neither the United States nor the Soviet Union in the Cold War, accusing both of imperialist ambitions. Gradually distancing itself from past populist counterparts such as APRA, the Socialist party groped for alternative socialist models, such as Titoism in Yugoslavia. Officially the Socialists opposed the onslaught against the Communists led by González Videla, although Bernardo Ibáñez and a handful of his followers joined the government's anticommunist crusade, thereby splitting the party. This issue became another illustration of the

way the Cold War further factionalized and weakened popular forces in Chile.^[50]

In the 1952 presidential election Carlos Ibáñez del Campo, the ex-dictator from the late 1920s, offered to end the petty quarreling and the chaotic multiparty coalitions of the past twenty years. Ibáñez attacked the Radicals for having sold out to the United States and even managed to attract a few Socialists who were attempting to create a labor movement like that under Perón in Argentina. Other Socialists, along with many proscribed Communists, sought to stake out an independent Marxist strategy for the future and in 1952 supported the token candidacy of Salvador Allende. From their opposition to President Ibáñez in subsequent years, the Socialist and Communist parties began to construct the political alliance that in 1970 eventually led to Allende's fateful election victory.^[51]

Peru, 1947–1950s

In Peru the democratic opening to the left under Bustamante proved equally short-lived. In a period of economic decline the government was soon under increasing pressure from conservative groups—especially the export barons—to squeeze APRA and the demands of the lower classes. The International Monetary Fund was recommending drastic budgetary reductions to stanch inflation. The government and APRA alike both increasingly favored North American investment but were unsure of how to use it and how to control it. When APRA proposed exploiting American support in its battle against the oligarchy, the latter joined the Communists in denouncing the Apristas for attempting to sell out to the United States. Meanwhile, rather than providing aid and moving in the directions Haya wished, the United States withheld loans and cut purchases of Peruvian exports. Haya became particularly disenchanted with the way Henry Wallace, the once powerful former U.S. vice president, abruptly disappeared from the political scene. Subsequently, the Apristas found it increasingly difficult to reconcile their progressive program with their willingness to cooperate with the United States under the wartime slogan "democratic interamericanism without imperialism."^[52]

Although APRA officially supported democracy, it still contained violent elements that attacked opposition newspapers and plotted insurrections. As anti-APRA sentiments mounted, Bustamante found himself in a position

similar to that of González Videla, trapped between the right and the left. He now turned against the party. Angry at APRA's attempts to usurp his powers, in January 1947 he ejected its members from the cabinet.^[53]

Under Bustamante labor organization and activism grew. In 1947–1948 strikes proliferated in protest against rising prices and the persecution of APRA. In his war with APRA Bustamante, to the consternation of the United States, sometimes sided with the Communist against the Aprista unions. In this internal clash the United States began to favor APRA as the best instrument to support its campaign for an anticommunist labor federation in Latin America. In 1947 and 1948 Haya visited the United States as a guest of the AFL, and switched the support of the Confederation of Peruvian Workers (CTP) from the Mexican Confederation of Latin American Workers (CTAL) to the American-backed CIT (Inter-American Confederation of Workers). This body was founded in Lima in 1948 on the initiative of the Peruvian Apristas and the Chilean Socialists. Subsequently in 1951 the CIT became the ORIT (Organización Regional Interamericana de Trabajadores [Inter-American Regional Organization of Workers]), which became even more firmly dominated by the AFL-CIO.^[54]

When a faction of APRA tried to mount an uprising against the government in late 1948, Bustamante again turned on the Apristas, this time destroying their revolutionary, insurrectionary segments once and for all. This purge left the banned party entirely in the hands of Haya and the more moderate, democratic elements. Bustamante's administration then hounded the national labor confederation into submission; it became an easy victim once the Apristas had been ousted from the government.

Finally, in late 1948 Gen. Manuel A. Odría, the instrument of the export aristocracy, overthrew Bustamante. Odría escalated the repression against APRA, prohibited all CIT activities in Peru, and forced Haya to spend no less than five years (until 1954) in asylum in the Colombian embassy. Other Aprista leaders fled to Chile, Argentina, and elsewhere. Observing the defeat of popular forces throughout the hemisphere, a leading Aprista concluded: "the year 1948 was terrible for everyone. Some sinister hand had decided to crush our hearts, not only mine, not only those of the Apristas, but the hearts of all Latin Americans. Every day brought the announcement of another calamity."^[55]

At the end of 1948, reflecting the idea ingrained in the Peruvian military that the Communists and the Apristas were virtually indistinguishable vil-

lains, Odría outlawed the Communist party. This step helped him to win support from the United States. Like APRA the Communist party responded by retreating into moderation. During this period, as it lost the support of workers, the Communist party sought allies among reform sectors of the bourgeoisie. By the early fifties both Peruvian labor parties and their union adherents were severely weakened.^[56]

Although the United States appeared to regret the failure of APRA in the Bustamante government, it soon came to accept Odría as a staunch anticommunist ally, particularly as he shifted the country toward laissez-faire, export-led growth and openness to foreign capital after the brief experiment with state activism and industrial promotion under Bustamante. The Peruvian elites now regarded themselves in step with the current global trend away from the state interventionism that had prevailed during the war. Odría's shift toward the free market, which received the enthusiastic support of the Peruvian upper classes, followed recommendations from the IMF and a financial mission from the United States. North American investment in Peru now greatly increased, especially in mining and petroleum. The ousted Bustamante complained that the international resolutions favoring democracy had failed to prevent the illegal and undemocratic Odría regime from winning diplomatic recognition. As he watched democracy wither throughout the hemisphere, Bustamante urged future international nonrecognition of de facto governments.^[57]

Conclusion: International Crises and Political Resolutions

By the early 1950s, having survived the challenges of the depression, World War II, the onset of the Cold War, and the upsurge of antagonistic popular movements, the United States had fully consolidated its economic, military, and ideological hegemony in Latin America. Whether openly authoritarian or formally democratic, governments throughout the region turned toward the right. Popular movements were eviscerated, defeated, and bankrupted. The Communists were under ban while other leftist or reformist forces scrambled to adjust to the domination of the United States and the local elites. By the 1950s the aspirations for social change kindled in the 1930s had been pulverized.

In Chile Popular Front politics was discredited, although the earlier coalitions between Marxists and centrists were to reappear in different guises and

to continue to influence the strategies of the left. Henceforward the approach changed: a sense of disappointment and frustration at their experiences in 1938–1952 persuaded the Socialists and Communists to abandon the multi-party coalitions led by centrists and to place greater emphasis on movements controlled by themselves and their worker followers. The leftist groups responded to the failures of the 1940s by focusing more narrowly on redistribution and taking up a much more hostile position toward capitalism and the United States. Turning away from the approach developed by the Apristas, they became less populist and more socialist.^[58]

While the Chilean left believed that its experience in government in the 1940s showed that a more radical stance was needed, APRA concluded that the fiasco of 1945–1948 demonstrated the need for greater moderation. The Apristas now recognized that the boundaries of acceptable change were much narrower in Peru than in Chile, and they plotted their future course accordingly. Having failed to capture the executive branch directly in the 1930s, and having enjoyed only a limited share of power in the 1940s, APRA swerved farther to the right. In taking this position the Apristas were aspiring to gain respectability among conservative groups, hoping that this approach would eventually enable them both to win the presidency and to implement their programs.^[59]

Between the 1930s and the early 1950s the profound shifts in the world arena continually altered the paths that became available and were taken by popular movements in Chile and Peru. Although the options available were mainly determined by the balance of internal political forces, they were also shaped and limited by external factors that filtered into the domestic economic structures, social hierarchies, political systems, and ideological lenses. Under these conditions there were both striking parallels and major differences between the histories of reform movements in Chile and Peru.

The strategies adopted by both the Chilean Marxists and the Peruvian Apristas eventually led them both to power, in Chile during the early 1970s under Salvador Allende and in Peru under Alan García during the late 1980s. During these periods both movements finally enjoyed the opportunity to implement their decades-old promises of economic nationalism and redistribution. But both these governments ended in disaster: externally they proved unable to challenge the dominance of the United States; internally they failed to deliver lasting power or benefits to their working-class followers.