Political Order and Political Decay (41 page)

The formal structure of Spanish rule in the New World was an authoritarian system built around the Council of the Indies (Real y Supremo Consejo de las Indias). The council, along with the Casa de Contratación overseeing economic matters, wrote laws and issued autocratic decrees—some four hundred thousand by the year 1600. These executive agencies were balanced by a parallel system of
audiencias
or administrative courts run by lawyers or judges who were not allowed to marry local women or otherwise get involved in the politics of the regions over which they presided.
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This structure broke down as the sixteenth and seventeenth centuries progressed under the pressures of fiscal constraint and resistance from the Creoles who increasingly sought a voice in government.

However much the Spanish state may have wanted to deliberately shape New World institutions, it did not have either the power or the authority to impose its will on its colonies. This problem was crystallized in the saying “Obedézcase, pero no se cumpla” (Obey, but do not comply). The reconquest of the Iberian peninsula from the Moors had been accomplished not by a modernized state but rather by “free-lances” operating under royal contract, and many of these individuals, like Cortés and Pizarro, were quasi-independent agents. It took the Spanish Crown the better part of the sixteenth century to bring these individuals under control, by use of institutions like the
encomienda
that gave the settlers control over people rather than territory. But by that point the peninsular government back in Europe was itself weakening, with mounting debts from its European and Mediterranean wars. The same practices of venal officeholding resorted to in Spain itself were gradually exported to the New World colonies, shifting the balance of power there to local elites. The
regimientos
and
cabildos
—institutions of local government that had earlier been elected—were by 1600 sold by the Crown as heritable property. State institutionalization thus went into reverse, from a modern, bureaucratic system to a patrimonial one.

Ideas mattered a great deal as well in the evolution of institutions. In the first centuries of colonial rule, there was no Spanish Hobbes or Locke to tell the settlers that they possessed natural and universal rights as human beings. What they had instead were particularistic feudal privileges that they had inherited or bought. In contrast to the British settlers of North America, the Creole populations of Latin America were thus much more likely to demand protection of their privileges than of their rights.
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The ideas exported from Spain began to change again, as James Mahoney points out, during the liberal Bourbon phase of empire that began around 1600. In line with reforms taking place on the peninsula itself, the Crown prohibited the sale of
audiencia
seats—the bulk of which had gone to Creoles—beginning in the 1650s, and began staffing administrative courts with more professional officials brought from Europe whose offices were appointive rather than purchased. The intendant system borrowed from France was extended to the colonies, where professional appointed delegates replaced the corrupt local
corregidores
and
alcaldes mayores
. Trade was liberalized through Charles III's Decree of Free Trade: the old restrictions limiting exports to certain ports and ships were abolished, and direct trade with North America became legal. An effort was made to erode the power of merchant monopolies in Peru and Mexico, and to increase the ability of new actors to compete within the economic system.
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The impact of these new institutions was dramatic. The center of gravity within the empire began to shift from its old centers in Peru and Mexico to temperate, more lightly settled areas farther south in Argentina and Chile. Argentina, which had been part of the Viceroyalty of Peru, became the seat of its own viceroyalty in 1676. The population of the port of Buenos Aires grew to fifty thousand by the year 1800. Trade expanded significantly with the shift away from mercantilism; between 1682 and 1696, the value of goods exported to Spain increased tenfold. In response to this rising prosperity, emigrants from Europe began shifting their destinations to these new areas and constituted social groups distinct from the entrenched Creole landowners and merchants who made up the old elite. These immigrants themselves also had more liberal ideas and set the stage for the vicious conservative-liberal political conflicts that would dominate the politics of postindependence Latin America.
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Ideas mattered once again in the wake of the American and French Revolutions, which spread notions of equality and made slavery progressively more unacceptable in moral terms as time went on. The American Revolution did not of course have any direct effect on the institution of slavery in the American colonies. It did, however, give all New World settler populations the idea that they too might become free of European tutelage, and it helped bankrupt France and prepared the ground for the events of 1789. The French Revolution had an immediate and direct impact on the large slave colony of Saint-Domingue, where a slave rebellion broke out in 1791 under the leadership of Toussaint Louverture and continued in several phases until the colony won complete independence under slave leadership in 1804 as the new country of Haiti. The British Parliament ended the slave trade in 1807, and the British navy was deployed over the succeeding decades to enforce the ban on slave trading off the African coast. Religious ideas were critical, such as those of William Wilberforce whose conversion to a form of evangelical Protestantism led him to found the Society for Effecting the Abolition of the Slave Trade. Slavery itself was not ended in the British colonies until the Slavery Abolition Act of 1833. The practice hung on in the United States until passage of the Thirteenth Amendment in 1865, and continued in Cuba until 1886 and Brazil until 1888.

LATIN AMERICA'S BIRTH DEFECT

Latin America was born with a birth defect. The Spanish and Portuguese implanted their own authoritarian and mercantilist institutions in the New World, responding to the economic opportunities they saw there. In so doing, they reproduced the class structure that existed back on the Iberian peninsula, as well as a political system in which an authoritarian state was nonetheless partially captured by local elites and consequently never able to dominate them. This class structure differed in an important way from the one that existed in Europe, however, because economic class came to correspond in many Latin American countries to racial and ethnic divisions, which were far more difficult to overcome.

When the countries of Latin America began to win their independence from their colonial masters early in the nineteenth century, they inherited this legacy. The constitutions of most of these newly independent states were nominally representative; many, indeed, were modeled on the presidential system that had been established in the United States in 1787. But all the countries in this region with a very few exceptions had big problems thereafter both in sustaining stable democracy and in maintaining consistent levels of economic growth.

The two phenomena of unstable politics and poor long-term economic performance are closely related to the underlying problem of inequality. The class structure and unequal distribution of resources created sharp political polarizations, in the nineteenth century between liberals and conservatives, and in the twentieth between conservative governments and a variety of Marxist or populist opponents. Economic growth occurred in Latin America in different periods, particularly in the late nineteenth century and in the middle of the twentieth, when a number of countries there were able to close the gap with the developed world to some degree. But the gap reopened as a result of political instability that interrupted normal economic life and reversed the gains from earlier periods. Economic elites were able to dominate nominally democratic political systems to maintain their social status, thereby blocking more democratic access to economic opportunities.
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The impact of this historical legacy can be best seen in Mexico, one of the two seats of the Spanish Habsburg Empire in the New World. Efforts to liberalize the economy under the eighteenth-century Bourbons had limited effect as the economic elites in Mexico City fought to protect their positions against new entrants. In the countryside as well a system of mobile wage labor did not take hold as it did in the newly opened lands of Argentina. Rather, large landowners were able to control masses of peasants through debt peonage and other semicoercive means.
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The eighteenth-century mining boom was already slowing when the Mexican War of Independence began in 1810; as will be detailed in the following chapter, it began as a social revolution led by two priests and their armies of impoverished followers, and was extraordinarily prolonged and turbulent. The war continued into the mid-1820s and destroyed Mexico's mining industry, its major source of exports.
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In the wake of this upheaval, Mexico remained unusually unstable politically, with six coups bringing to power a series of caudillos over the next forty years.

In contrast to the United States, where the revolution only briefly disrupted economic growth, Mexico's economy did not recover until the rise of Porfirio Díaz. He ruled the country for a total of thirty-five years (1876–1911), in a dictatorship known as the Porfiriato. Inheriting a country that was essentially bankrupt from decades of conflict and low growth, he needed economic allies. He got them by creating a banking sector in which a small number of government-connected banks could make large amounts of money. This gave the government access to resources that it could use to suppress lawlessness and provide essential political stability. This led to an extraordinary period of economic growth in which Mexico succeeded in partially catching up to both North America and more liberal emerging powers such as Argentina. Díaz did not, however, create an open or liberal economic order but rather a system we would today label crony capitalism. It was similar in certain ways to the old mercantilist system, only run by local elites rather than the Spanish Crown.
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It did nothing to empower the mass of the Mexican population either economically or politically. The resulting social tensions exploded in the Mexican Revolution, another convulsive affair that led to Díaz's overthrow in 1911 and lasted until 1916. Indeed, the country was not really stabilized until the rise of the Partido Revolucionario Institucional in the 1940s, meaning that economic growth stagnated or indeed went into reverse for a generation.

The PRI would remain the dominant party controlling Mexican politics until 2000, when it lost the presidency to Vicente Fox, a candidate of the rival Partido Acción Nacional. The 1950s and '60s, in particular, were years of strong economic growth that saw Mexico once again begin to close the gap between itself and the United States. But the fundamental problem of inequality and class had not been solved. The PRI did have some significant accomplishments to its credit: it undertook a major land reform in the 1930s that broke up Mexico's large haciendas, and just as important, it created a strong sense of national identity by continuing the revolution's revival of pre-Columbian symbols. But it achieved stability through the clientelistic distribution of state resources to favored political groups, which limited competition and prevented Mexico from developing a strongly competitive private sector. While the Mexican economy has liberalized substantially (particularly after negotiation of the North American Free Trade Agreement in 1994), it is still dominated by large oligopolies and neomercantilist restrictions on trade. The PRI returned to Los Pinos (the president's residence) in 2012 after a twelve-year absence, this time hopefully more committed to a program of serious structural reform including liberalization of the critical energy sector.

Climate and geography were among the original sources of the Latin American birth defect. The extractive slave economies established by the Spanish in Mexico, Peru, and elsewhere left a legacy of inequality that persisted long after the last silver mine closed and slowed the creation of a North American–style open economy.

But although these material conditions influenced the nature of political institutions in Latin America, they did not altogether determine them. Formal institutions evolved over time in a democratic direction, just as in Europe. What remained much more constant was the region's class structure—its division into whiter, wealthier elites, and poorer, darker masses—which then shaped the way that formal institutions operated. This meant that the emergence of formal democracy in the nineteenth and twentieth centuries did not necessarily lead to empowerment of ordinary people but rather to the continued indirect elite domination of democratic political systems that maintained the social status quo.

 

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DOGS THAT DIDN'T BARK

How war, which was critical to the formation of modern states in China and Europe, was much less prevalent in Latin America; why this was so, and how the incentives for state modernization were much weaker; whether we should regret the fact that Latin America experienced lower levels of violence

To say that Latin America was born with a birth defect of social inequality does not, in a way, say anything particularly interesting. In the year 1808, when the Latin American wars of independence began, few societies in any part of the world were characterized by high degrees of economic or social equality. With the exception of more liberal England and Holland, most of Europe consisted of agrarian orders ruled by feudal elites with deeply entrenched privileges. China didn't have feudalism, but it did have a powerful authoritarian state, a class of landlords, and a vast mass of dependent and impoverished peasants. The same could be said of all the other great agrarian empires in India, Turkey, Persia, and in the kingdoms of Southeast Asia. North America was one of the few parts of the world not encumbered by such deeply rooted social inequality, at least for its white population. And apart from France, hardly any countries had modern states.