The Century of U.S. Capitalism in Latin America (review)

The Century of U.S. Capitalism in Latin America. By Thomas O'brien. Diálogos. Albuquerque: University of New Mexico Press, 1999. Photographs. Notes. Glossary. Bibliography. Index. xiii, 199 pp. Cloth, $45.00. Paper, $19.95.

The title notwithstanding, this short and very readable history of U.S. business in Latin America surveys both the nineteenth and the twentieth centuries. It is a tour de force, giving an overview from the days of U.S. merchants to those of manufacturers-- covering en route investors in agriculture, mining, and public utilities. O'Brien argues that U.S. business reshaped culture in Latin America and did so deliberately. U.S. businessmen thought Latin Americans were "inherently inferior" (pp. 26, 54) and needed direction and "uplifting" (p. 31). Thus the companies sought to transfer to Latin America U.S. material values and work habits, along with consumerism. The companies modernized production processes. These transfers are fundamental in O'Brien's story.

His book has five chapters, each of which represents an overlapping phase. The first is on American merchants (1776-1872), including Moses Taylor, who made his fortune in Cuban sugar and became president of National City Bank in New York (1856-82), and James Stillman, who supported the rise to power of Porfirio Díaz in Mexico and who subsequently served as president of National City Bank (1891-1909), and then as Bank chairman from 1909 to 1918.

The second chapter, "The Golden Age," covers the involvement in Latin America of Standard Oil of New Jersey, United Fruit, Asarco, General Electric, National City Bank, and International Telephone and Telegraph. The reader may have reservations about O'Brien's selection of 1876-1921 as the "Golden Age," but his point is well taken: In the late nineteenth and early twentieth century, U.S. companies could enter into business in Latin America easily. They spilled over the border into Mexico, invested in the Caribbean, and then moved further south throughout Central and South America. O'Brien chose 1921 as the "cut-off" date because a sharp plunge in commodity prices that year heralded problems for primary product producers. Quite appropriately, his second chapter does not adhere to the 1876-1921 dates, but includes information through the 1920s.

The third chapter turns to "resistance and populism," 1922-1939. Once more the dates are rough and O'Brien does not follow them strictly, but his argument holds: as American businesses established themselves in Latin America, they were often not welcomed. Latin American "elite's open door policy" of prior years gave way "to strident economic nationalism" (p. 75). The pace in each country was different. Workers were discontented; O'Brien is excellent in documenting and explaining labor unrest and the periodic strikes. The culmination was the Mexican expropriation of the oil industry in 1938.

O'Brien believes that in the 1930s President Roosevelt took a proactive role "to protect and advance the Latin American interests of U.S. corporations" (p. 99). In a short volume, O'Brien has to oversimplify (and usually there is little resulting distortion). His generalizations on "the pro-business orientation" (p. 107) of the New Deal do, however, ignore the vigorous late-1930s anti-business sentiments in Washington and the strong belief by U.S. businessmen that their government was more sympathetic to the Mexicans in the 1938 oil expropriation than to U.S. corporations.

Chapter four, on war and nationalism (1939-59), documents the mounting economic nationalism in Latin America, including the problems faced by American & Foreign Power and ITT in Argentina right after the Second World War and by United Fruit in Central America in the 1950s, finishing up with the rise to power of Castro in Cuba in 1959. chapter five, "From Revolution to Neoliberalism" (1960-99) completes the expropriation-nationalization "wave"--from the Castro takeovers in 1960, to the Peruvian ones 1968-74, to the Allende measures...