Ideology & Human Development

How real are Cuba’s accomplishments in health and education since the revolution? How do they compare with the situation prior to the revolution? Was the Soviet Union’s subsidy to Cuba crucial to its human development? Did the US hostility to the Cuban Revolution have an impact?

{ Edit-Addendum 26 Nov. 2016: This blogpost was written 2.5 years ago as a rejoinder to with commenter Matt in a debate about human development in Cuba as well as Kerala, China, South Korea, West Bengal, etc. So it may make references not immediately obvious from the context. See Debate with Matt. }


Years ago some astute person noted that I was a hypocrite for being centre-left in the context of discussing political economy in developed countries, but rather centre-right when it came to the Third World. He was right, except that it’s not hypocritical. In already-rich countries with already-efficient economies, the levels of income redistribution that are in political play are typically not so great as to endanger efficiency. The productivity of the core OECD economies is high enough that social democracy is fundamentally affordable. One can think of Germany, for example, as being able to manage a strong welfare state despite a low labour force participation rate (compared with the United States), because German output per hour is so high.

However, there’s a much greater trade-off between economic efficiency and income redistribution in poorer countries. In the moderate scenario you have a case like the macroeconomic populism of Argentina under Peronism, where consumption transfers to the public were financed by budget deficits and money printing. In the extreme, a variety of Marxist-Leninist regimes expropriated, controlled, and managed all productive assets. But most of those regimes did divert national resources toward ending mass poverty and toward healthcare and education. Thus, under communist rule, the Soviet Union, its Eastern European satellites, Mongolia, the People’s Republic of China, and Cuba achieved better outcomes in literacy, infant mortality, life expectancy, and years of schooling than countries with comparable levels of per capita income.

In most of these countries, the human development might have occurred under capitalism anyway, but probably with a delay. So they sacrificed higher incomes in the long run for the immediate alleviation of poverty. However, since the sample of countries that have been governed by Marxist regimes for any length of time under conditions of peace and stability is quite small, we really don’t know whether this “human development” pattern is a general tendency of actually-existed Marxist regimes, or merely a cultural characteristic of those particular societies. With the exception of Cuba, they are all European or East Asian. (Yes, I’m aware there were other Marxist regimes, but their lifespans were much shorter and/or they were embroiled in war.)

There was a time when I entertained the idea that the poorest countries were so inept at capitalist economic development that most of them might actually be better off under a totalitarian redistributionist regime. But I don’t think that any more, because even when it comes to central planning socialism some countries are just less good at it than others. Administrative competence varies.

Nonetheless, the fact that mass poverty persists lead some left-wing observers to question the moral difference between democratic capitalism and something as extreme as Maoism. For example, Noam Chomsky made the case in his column on The Black Book of Communism that India killed even more people than Maoist China, just more slowly and less visibly :

Like others, Ryan reasonably selects as Exhibit A of the criminal indictment the Chinese famines of 1958-61, with a death toll of 25-40 million…. The terrible atrocity fully merits the harsh condemnation it has received for many years, renewed here. It is, furthermore, proper to attribute the famine to Communism. That conclusion was established most authoritatively in the work of economist Amartya Sen, whose comparison of the Chinese famine to the record of democratic India received particular attention when he won the Nobel Prize a few years ago. Writing in the early 1980s, Sen observed that India had suffered no such famine. He attributed the India-China difference to India’s “political system of adversarial journalism and opposition,” while in contrast, China’s totalitarian regime suffered from “misinformation” that undercut a serious response, and there was “little political pressure” from opposition groups and an informed public (Jean Dreze and Amartya Sen, Hunger and Public Action, 1989; they estimate deaths at 16.5 to 29.5 million).

The example stands as a dramatic “criminal indictment” of totalitarian Communism, exactly as Ryan writes. But before closing the book on the indictment we might want to turn to the other half of Sen’s India-China comparison, which somehow never seems to surface despite the emphasis Sen placed on it. He observes that India and China had “similarities that were quite striking” when development planning began 50 years ago, including death rates. “But there is little doubt that as far as morbidity, mortality and longevity are concerned, China has a large and decisive lead over India” (in education and other social indicators as well). He estimates the excess of mortality in India over China to be close to 4 million a year: “India seems to manage to fill its cupboard with more skeletons every eight years than China put there in its years of shame,” 1958-1961 (Dreze and Sen).

In both cases, the outcomes have to do with the “ideological predispositions” of the political systems: for China, relatively equitable distribution of medical resources, including rural health services, and public distribution of food, all lacking in India. This was before 1979, when “the downward trend in mortality [in China] has been at least halted, and possibly reversed,” thanks to the market reforms instituted that year.

Overcoming amnesia, suppose we now apply the methodology of the Black Book and its reviewers to the full story, not just the doctrinally acceptable half. We therefore conclude that in India the democratic capitalist “experiment” since 1947 has caused more deaths than in the entire history of the “colossal, wholly failed…experiment” of Communism everywhere since 1917: over 100 million deaths by 1979, tens of millions more since, in India alone.

Thus, for Chomsky, the social inequities of capitalism in the Third World — regardless of whether they are caused by capitalism or merely tolerated under the system — are so evil that any political programme which does not redistribute wealth for the immediate remedy of these inequities is as lethal as the worst excesses of Stalinism or Maoism.

For many on the left, the “human development” accomplishments and aspirations of the old socialist states like Cuba still compare favourably with the evils of capitalist development in the Third World.

But are Cuban accomplishments real and impressive?

Life Expectancy

I argued that since the Cuban government has total command of all resources on the island and marshals them without democratic constraint, Cuba’s HDI score is not all that impressively greater than the Dominican Republic’s. Matt replies I understate the disparity :

“…if we look at non-income HDI (which we should be able to, given that Cuba’s and DR’s per capita GDPs are comparable), we find that Cuba’s is 0.894 and DR’s is 0.726, a difference of 0.168. Cuba not only does much better than DR on this measure, it actually scores within the same range as the UK (0.886) and Hong Kong (0.907), despite far lower per capita income.”

The “Human Development Index”, which is generated by the United Nations Development Programme as a way of capturing human welfare and living standards which are only imperfectly measured by GDP, is a composite score of per capita income, educational attainment, and life expectancy. Non-income HDI is therefore simply a composite of life expectancy and educational attainment, which I will examine separately.

First, an empirical note about life expectancy: the relationship between GDP per capita and life expectancy is approximated by the Preston curve :

PrestonCurve2005For low incomes, increasing income can lead to hefty gains in life expectancy, but as income gets higher the “returns” to income diminish. Yet, at the same time, there’s a pretty large variation in life expectancy values even for fairly low levels of per capita income. So countries such as Mexico, Syria, Honduras, and Bangladesh have values in the 70s. In other words, it’s not that onerous, in terms of income requirement, to raise life expectancy to within 10 years of the richest countries in the world. Quite apart from simply having more food to eat, the job can be done by fairly low-cost public health measures that raise micronutrient intake, inoculate populations, and improve sanitary standards (e.g., relating to water and sewage). Which is why life expectancy at birth has grown more steadily than per capita income in the developing countries :

esperance de vie

(Sorry it’s in French, I could not find a comparably detailed time series by region in English.)

So, at first approximation at least, it’s a matter of politics, whether societies choose to make those relatively inexpensive outlays to improve the conditions that prolong life. (Africa’s progress has been depressed by AIDS, particularly in southern Africa.) Of course it requires a certain amount of administrative competence and social cohesion in order to implement basic public health measures in the first place. These capacities are not uniformly distributed in the world. But what ever the causes of the global variation in institutional capacity and administrative competence, they are clearly very difficult to modify if there is a vicious circle, a stable equilibrium, of bad institutions => low growth, low human development => bad institutions, etc.

Infant Mortality

The World Bank data peg Cuba’s and the Dominican Republic’s life expectancy at 79 and 73, respectively. According to UNSTAT, life expectancy at 60 is roughly the same for Cuba and the Dominican Republic. This implies that most of the difference in their average population longevities is due to their differences in neonatal and under-five mortality.

During the Middle Ages, childhood was the most dangerous period in a person’s life, but once you survived it, you generally could expect a fairly long life. Likewise, the epidemiological difference between a developing and a developed country is that there is a high probability of dying of childhood and communicable diseases in the poorer country, than in the richer country where there is a high likelihood of dying from the noncommunicable diseases of old age and affluence, such as heart disease, cancer, and diabetes.

Wikipedia has UNSTAT’s data for infant mortality (neonatal) spanning over six decades. The World Bank has the U5 child mortality rates over a similar period. Cuba’s infant mortality rate of 5-6 per 1000 live births is not quite as low as the range seen in the developed countries (2-4), but fairly close. Thus, mortality in Cuba very much mirrors the developed world pattern: most people die of the diseases of old age. The Dominican Republic’s neonatal mortality, however, is in the range of 25-30 per 1000 live births.

Now, I had already said “I have no problem with the view that, all else equal…, a redistributionist political regime in a poor country is more likely to improve HDI than a non-redistributionist one”. Clearly, Cuba has put a large share of its scanty resources into prenatal and postnatal care, whilst the Dominican Republic has not done to the same degree. Matt finds it “remarkable” that Cuba has achieved this (along with other things) despite numerous obstacles. But I’m not so impressed.

First, as I’ve already argued, it’s not very expensive and it’s not technically difficult to improve such indicators as life expectancy and infant mortality. It’s largely a matter of importing technology and getting one’s administrative act together, given the political desire to do so. And compared with most developing countries with their institutional deficiencies, a central planning dictatorship with exclusive control over resources and without traditional constraints can probably exercise more brute administrative competence. (More on this below.)

Second, it was inherently easier for Cuba to lower its infant mortality rate than for the Dominican Republic. Why? Because it was already lower for Cuba in 1950 and 1960, than in most of the rest of Latin America and the Caribbean. Look at the UNSTAT data. Cuba’s infant mortality rates in 1950-55 and 1955-60 were well below the average/median for Latin American and the Caribbean. In fact, only Uruguay, Puerto Rico, Argentina and various non-Hispanophone Caribbean countries beat Cuba in this regard. The Dominican Republic was about average for the region. (But the Latin American country in 2012 that’s most improved relative to its rank in 1950, would appear to be Chile.)

The same thing for life expectancy and literacy. Cuba in 1950-60 was already more advanced in these areas than most other Latin American countries and certainly more than the Dominican Republic.

Another way to look at it: today, Cuba’s social metrics are marginally better than Costa Rica’s, but these were achieved at huge cost in terms of lost output and lost freedoms. But Cuba without Castro would have been at least Costa-Rica-like anyway.

The Production of Cuban Health

The Soviet production system was famously wasteful. Resources (energy, raw materials, labour, machine-time etc.) were used to generate a unit of output which was relatively undesirable or maybe even worth less than the inputs. For example, the Soviets harvested Kamchatka crab but their canneries converted them into dogdy tins of semi-preserved arthropodic matter, along with a lot of “leakage”. That’s why ultimately the Soviets could not afford their system; at some point you just can’t throw more and more resources to salvage your production targets.

Input-ouput issues also matter in healthcare. Cuba’s health-related finances are opaque, but there’s one simple proxy for the amount of resources the Cubans have thrown at producing their health outcomes: physicians per 1000 population. It’s astronomical! 6.7 per 1000 is the second highest in the world and is astounding by any standard, let alone for a poor country like Cuba. Most rich countries have 3-4 per 1000. I’ve also read that Cuba has the highest doctor-patient ratio in the world, but I can’t find a proper citation (as opposed to a bunch of rubbish sites saying it). People think this is a good thing, but it is not. It’s clearly a misallocation of resources, just like those Soviet tinned crabs.

Maybe we shouldn’t be talking about productivity when it comes to saving the life of the extra infant or two per 1000. Perhaps, but the issue speaks to how “impressive” the achievement really is. No normal society with a market economy, even with a large welfare state and nationalised healthcare system, would allocate so many resources to producing so many doctors. And short of authoritarian central planning socialism it probably could never happen, especially in most developing countries with weak institutions. Just think of Pakistan, where mobile health workers offering child vaccinations meet resistance from parents or are terrorised by religious fanatics. Cuba’s health outcomes almost certainly require intrusive, authoritarian measures.

There’s a lot of propaganda and misinformation about Cuba, on both left and right, so I’m wary of available sources. But this article cites anthropologist Katherine Hirschfeld, author of this book which I have read and found reliable :

“Cuba does have a very low infant mortality rate, but pregnant women are treated with very authoritarian tactics to maintain these favorable statistics,” said Tassie Katherine Hirschfeld, the chair of the department of anthropology at the University of Oklahoma who spent nine months living in Cuba to study the nation’s health system. “They are pressured to undergo abortions that they may not want if prenatal screening detects fetal abnormalities. If pregnant women develop complications, they are placed in ‘Casas de Maternidad’ for monitoring, even if they would prefer to be at home. Individual doctors are pressured by their superiors to reach certain statistical targets. If there is a spike in infant mortality in a certain district, doctors may be fired. There is pressure to falsify statistics.”

I find the above credible because Cuba has one of the highest reported abortion rates in the world. (Most communist or ex-communist countries are above average.) The link is to a publication associated with Planned Parenthood, so I think it’s not biased against Cuba or abortions. It’s also believable because, for Cuba, health has become what Olympic gold medals had been to the East bloc: an international badge of prestige to showcase the achievements of socialism. So while I do believe the official health data are probably accurate, it’s likely draconian means are used and material deprivations are exacted on the populace, in order to achieve or maintain those outcomes.

Cuba’s “Obstacles”

Matt has cited numerous “obstacles” in the way of Cuba’s achieving human development outcomes.  These include :

  • the US trade embargo against Cuba ;
  • the loss of Soviet foreign aid after 1990 ;
  • high military expenditure on the part of Cuba, made necessary by unremitting “terrorism directed from Miami and Langley”
  • the flight of a large number of educated Cubans to the United States after 1960

I argued that the US trade embargo against Cuba was more than offset by a combination of Soviet subsidies and trade with other countries. Cuba sold sugar to the Soviet Union at a loss relative to the world price during the 1960s, but in the 1970s the Soviet price was more than a third above the world price. By the late 1980s the Soviet subsidy to Cuba implicit in the official price of sugar was 11 times the world price. [Source]

cp3emzfvuaqpakk

Matt has countered that Cuba lost this sugar daddy 23 years ago. That’s true, but he fails to consider that the fixed costs of investment in schools, universities, hospitals, sugar-refineries, disease eradication, etc. are front-loaded. Even those skilled Cubans who received their education in the late 1980s are still only at the mid-point of their working age. Likewise, if the Castro regime mostly eliminated dengue fever through the use of pesticides and water management, that continues to produce health returns today.

Besides, Cuban GDP per capita began its slow recovery in 1993 and reverted to the 1990 level by 2005. This was caused by a combination of tourist receipts, increased remittances from Cuban-Americans, barter trade with Venezuela, foreign investment, and debt accumulation with European and Japanese banks. Despite the embargo, US financial flows to Cuba were sizeable in the 1990s and are today the largest single source of foreign currency for Cuba.

Matt has argued Cuba’s human development spending was all the more impressive because US hostility required Castro to spend so much money on the military. But Castro’s adventurism in Africa in the 1970s totally belies the claim that its military expenditure was fundamentally defensive.

Angola was a real war for Cuba, with actual military operations conducted by up to 35,000 troops against South African forces in 1975-76 and 55,000 troops in 1987-88. [Source : Castro’s own words.] The total number of Cubans who ever served in Angola in 1975-1991 is on the order of 400,000. [Source, page 146.] Nearly 20,000 Cuban combat and support troops also saw action in the Ogaden War between Ethiopia and Somalia. I reproduce the following from Porter :

cubanadventurism

All of the above was luxury consumption for Castro. Nothing forced him to divert resources away from human development toward adventurism in Africa.

Cuban education

One half of the non-income HDI composite is just years of schooling. That doesn’t really tell us anything about how Cuban students actually perform in comparison with other countries, and Cuba doesn’t participate in PISA. But its students do take the SERCE exams administered by UNESCO. Here are the results :

sercemath

sercereading

sercescience

Amazing! Cuba’s score in each category is more than 1 standard deviation above the mean. If the above scores are representative of these countries’s students, then, according to these calculations, that implies Cuba’s IQ would be 2 std above Ecuador’s and the Dominican Republic’s, and at least 1 std above Cuban-Americans — the very group Matt has claimed is disproportionately comprised of the pre-revolutionary elite. If that’s true, then Cuban teachers have accomplished something that no one else, anywhere else, has ever done. ¡Viva la Revolución!

Or, another possibility is suggested by this chart from the same SERCE report :

sercescoredistribution

Apparently an assistant forgot to tell the Cuban minister of education that schools must not perform the academic equivalent of electing a president with 99.9% of the vote. What do American education researchers call it? Creaming ? Another potential term: Potemkin schools.

Matt argues that an additional handicap for Cuba was the emigration of at least 10% of the country’s population who were disproportionately skilled and educated. The Dominican Republic, he contrasts, emitted less skilled immigrants to the United States. Here are the educational characteristics of Cuban-Americans and Dominican-Americans :

cubanamericans

dominicans

Ideally, these cohorts should be matched by various characteristics, such as age and generation, and that’s possible through data from the Census Bureau and the American Community Survey, but Matt will have to pay me to do it. All the same, Cubans who actually left Cuba do not look particularly more elite than Dominican-Americans. Native-born Cuban-Americans look better educated, but not by so much. It only makes sense: there were three major waves of Cuban emigration, and most of the skilled and educated were concentrated in the first wave whereas the last wave (the Mariel) were clearly the opposite of the upper stratum.

Edit-addendum (26 Nov 2016): For some reason this post is getting a lot of traffic this week… Since posting this two and half years ago, I have read Carnoy’s Cuba’s Academic Advantage, which tries to explain Cuba’s extraordinary results in SERCE. Unfortunately its point of departure is that Cuba’s results are real and representative and does not question it. This is more or less all that Carnoy has to say about it:

carnoy

Even by Carnoy’s own description of the Cuban education system, it is tightly controlled, authoritarian, and centralised. So, in the face of strong incentives to treat education and healthcare as internationally prestigious projects, kind of like the Olympics; and in light of the extraordinary SERCE results, scepticism about them is justified and we need more than UNESCO assurances.

Originally I did not mention urban-rural disparity. I’m predisposed to believe Cuban results would show a smaller difference between urban and rural areas than most other Latin America. But this is quite amazing and another cause for scepticism:

cyrlz6xwiaefnwa

{End edit}

Conclusion

My overall point can be summarised thus. It’s not technically difficult or financially onerous to substantially improve life expectancy and infant mortality even for a poor country. What usually gets in the way is a combination of politics, institutional capacity, and cultural predispositions. Cuba’s accomplishments in human development are real, but not nearly as impressive as boosters claim. First, its social indicators were already advanced in 1960 compared with its natural peers. Second, Castro’s regime was massively subsidised by the Soviets in overcoming the fixed costs associated with improving human development to near-developed country levels. Third, Cuba’s social development outcomes were facilitated by an authoritarian central planning regime with few political and social constraints faced by most human societies. Cuban doctors and educators treat health and educational metrics like Gosplan production targets to be met at all cost. The Cuban government allocates resources to health and education by severely restricting consumption elsewhere and reducing overall welfare.

Also see: Ward & Devereux, “The Road not taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective”; and Smith & Llorens, “Renaissance and Decay: A Comparison of Socioeconomic Indicators in Pre-Castro and Currenty-Day Cuba”.

Edit (December 2016): See José Ricón’s posts “The surprising human development index of Cuba” (also in Spanish); and “The Paradox of Cuban GDP” (also in Spanish); and Vincent Geloso’s “Coercing Cubans into Health” and “Cuba’s Fake Stats“.

 

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86 Responses to Ideology & Human Development

  1. Matt : I couldn’t get to South Korea and West Bengal. I will reply to your last remarks on those subjects here in the comments section a little later.

    Also I’ll probably do a separate blogpost addressing Kerala, West Bengal and Sri Lanka.

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  2. Matt says:

    Thanks for this. I will address your points about Cuba tomorrow or the day after. In the meantime, let me address the issue of the Chinese infant mortality rate.

    The collapse of the rural health insurance system began in 1981 with the privatization of communal agriculture. So, the rise in infant mortality rates began 2-3 years before this, as Hussain and Stern “caution”. However, according to Sen (Table 6, p. 17), the number of barefoot doctors began decreasing from 1975-1980. So, perhaps this decline is at least partly responsible for the infant mortality increase from 1978/79 to 1981. (The numbers then declined over twice as much from 1980-1984, following decommunalization, as they had from 1975-1980.)

    Why did the number of barefoot doctors begin decreasing prior to the reforms? Zhu et al. observe that, in the counties they studied, “The number of barefoot doctors… decreased from 1978 to 1985, especially after 1982….” They conclude that this was because the barefoot doctor program, a product of the Cultural Revolution, was perceived by local administrators to have fallen out of favor with the central government after Deng’s rise to power: “some local leaders… contended that the CMS [Cooperative Medical System] was considered by the central authorities to be a product of the Cultural Revolution, and, as such, should be discarded” (p. 435). In other words, after Deng’s victory over the Gang of Four in 1977, there was a general backlash against all things associated with Mao and the Cultural Revolution. The local administrators of the Cooperative Medical System could feel the tide turning against them, and they started giving up even before that system was formally dismantled.

    Another possible explanation is that, after Deng’s rise to power, and even prior to the implementation of the reforms, one could “feel” that the reforms were coming. So, some of the more ambitious of the barefoot doctors left for the cities, anticipating that the economy was about to open up and provide more opportunity.

    As further evidence that the dismantlement of the Cooperative Medical System led to increased infant mortality, Zhu et al. note that “in Shanggoa, the [infant mortality] rate increased by 8.7% [from 1980 to 1985], while, in Loaan it jumped… [by] a 25.1% increase.” However, over the same period, in Fengxian, where the CMS remained resilient, “The infant mortality rate decreased by 30.4%” (p. 438). Other health indicators followed a similar pattern.

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  3. Vijay says:

    As a person who was born 12 miles from the border of the state of Kerala, I want to add a comment. Essentially, the existence and functionality of Kerala has no comparison with any other region in the world. All of the income or earnings come from out of state. People migrate out and send their earnings to family back home to female-led households. The only possible comparison is to El Salvador or Dominican republic. Outside of tourism and migrant receipts, the GDP is minimal and driven by rubber and coconuts. In addition, much of the migrant receipts flow below the tax radar. Much of the GDP and HDI plots shown for Kerala show large HDI for small GDP for this reason:- Keralites do not work in-state.

    I feel that the Kerala model is not workable anywhere else in the world. Migration as a sole source of revenue, is, for the lack of a better word, ridiculous, nor can be recreated. The existence of migrant revenue to support large extended undivided families is a unique feature of an Indian stat. We need to throw out the Kerala data point as a ridiculous outlier.

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  4. Yes, I largely agree. Kerala is sui generis and its remittance-based economy is probably unsustainable in the long run. I briefly alluded to Kerala’s family structure in the earlier exchange ( https://pseudoerasmus.com/2014/06/24/debate-with-matt/ ) where I mention Todd. I was going to expand on that with a new blogpost on Kerala but you already opened the bag !

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  5. Vijay says:

    A few additional points to consider for your blog post on the kerala exceptionalism:

    1. Area of 15,000 square mile with 5 K habitable; rest is mountainous forested or covered with water.
    2. Habitable area is almost continuously populated by villages and town; helpful for schools and medical facilities; however, very limited farming (mainly coconut, rubber and pepper hich are grown because they can b grown with limited and feminine labor)
    3. Almost every adult male with a reasonable IQ leaves town, but maintains a house with extended family live on remittances.
    4. In-state income is very low but per-capita spending is exorbitant, unencumbered by taxes (sales or income)
    5. Female-led house hold system rare in India, but very suitable for remittance-based economy.
    6. The bizarre economy is lopsided with everything, including food, clothing, cement, fuel, goods all imported from outside the state. Not only all goods are imported, but labor is also imported!
    7. Investment in state is primarily two items; houses and gold! Industries are considered beneath the dignity of the people.

    I have seen a comparable remittance-based economy only in the villages of northern china; however, there, remittances are from the south, and agriculture still exists.

    The additional point to be noted is the Kerala model (low GDP high GDI) is not comparable to Srilanka (differences in remittances) or Cuba.

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  6. CaoMengDe says:

    As somebody who was born right after the Death of Mao (1976) and grew up in China in the 80s, I am surprise to see the statistics
    of rising infant mortality after 1979.

    But looking at the methodology they used:

    “extrapolated from the reporst by female respondents of the dates of past births and the number of surviving children”

    I am begin to wonder if soemthing else is in play here.

    1979 also correspond to the start of the implementation of one-child policy nation wide.

    The consequence of one-child policy in this nation with strong cultural preference for sons is well known:

    rise in female infanticide and abandonment of female children

    since 1991 when foreigners are allowed to adopt Chinese babies,

    between 1991 and 2005, “a total of 62,906 children adopted by U.S. citizens ” mostly girls

    http://english.cntv.cn/program/china24/20120617/103417.shtml

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  7. Matt says:

    CaoMengDe,

    That’s a good point. We’d have to the infant mortality statistics into female and male rates. Judith Banister did this in her book China’s Changing Population (cited here, Table 2.2, p. 47). From this table, we can see that female infant mortality underwent a sharp increase beginning in 1979. In contrast, the male rate continued to decrease, although it underwent a dramatic slowdown, declining by an average of only 1.4% in the years following 1979, whereas in the years before 1979 it had dropped by an average of 7.8%. The author cautions that “The [Banister] data might overestimate the number of female infant deaths” (ibid).

    So it is likely that the one-child policy, along with the collapse of the Cooperative Medical System, contributed to the rise in infant mortality rate, by encouraging selective neglect and infanticide.

    However, it is also possible that decollectivization contributed to the rise in female infant mortality. The author of the bachelor’s thesis cited above comments (pp. 52-53):

    “The disparity between female and male infant mortality was partially due to the introduction of the Household Responsibility System [i.e., decollectivization of agriculture], which, coupled with a lack of state initiatives supporting gender equality, reduced the social position of Chinese women. During the collective period, rural women enjoyed a degree of support from agricultural collective arrangements, which reduced the burden of child rearing and gave women a greater say in family planning matters. Although female labor was valued less than male labor, the state made a conscious effort to expand female employment before reforms. Once reforms began sweeping the cities, the security of the state sector’s ‘iron rice bowl’ was shattered. In the countryside, traditional patrilineal patterns resumed, and many rural women no longer participated in outside employment. By constraining female status through household and labor arrangements, land reform played an indirect role in affecting rural health.”

    The study cited appears thorough, although, since it is only an undergraduate thesis, it is worth following up on the citations given. One of the citations is Gale Summerfield, “Economic Reform and the Employment of Chinese Women,” Journal of Economic Issues, 28 (3). On pp. 720-21, Summerfield discusses the consequences of the rural reforms with respect to health:

    “The household responsibility system has combined with other reforms (specifically the reorganization of the rural health care system and the one-child policy) to threaten the capability of survival for rural girls as illustrated by the adverse sex ratio…. While the figures are national, the adverse effects are experience mainly by rural girls because of the incentives associated with the combination of rural reforms. The household responsibility system reinforces the value of male children who, in contrast to girls, are expected to contribute to family welfare even when they are grown. Although girls can generate income by dropping out of school and working, the net benefit of a male to the family exceeds that of a girl, and the future earnings of girls can be expected to be reduced by the lack of education. By placing a quota on the number of children a family can have, the one-child policy provides incentives for making sure that child is male.”

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  8. CaoMengDe says:

    Matt,

    Well, China had traditionally been a patrilocal society where bride go lives with the husband’s family. Without nation wide social safety net, sons are basically relied upon to provide for parents’ retirement. Chinese literally has a saying “Yang er Fang Lao” which translate to “raising a son for one’s retirement”. In this context, daughters are seen as eventually her husband’s family’s labor force. This attitude is especially strong in rural countryside where vast majority of Chinese lives back then(80% in the 80s).

    But I don’t think this should be blamed on the household responsibility system. It’s a cultural phenomenon. Even under Mao, despite the “women holds up half the sky” rhetoric, tradition dies hard in rural China.

    Even my Dad who is a graduate from China’s top elite college, still typifies the traditional “Zhong nan qin nu” preference for son attitude. He lavishes far more attention on me, a son who would carry on his family name , than my elder sister.

    Overall, the switch to Household Responsibility System from collectivization have seen almost immediate boost of agricultural output which is to the benefit of everyone.

    I do not deny that there have been a back slide toward the traditional (read : sexist) gender roles in Chinese society since the Reform, but on the other hand, my female cousins in China have whole wide range of possibilities opened up for them now where it would not have been possible or imaginable back in their mothers’ days.

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  9. Matt says:

    CaoMengde,

    Thanks for your response. Your descriptions of your personal experiences with Chinese gender roles are interesting.

    But I don’t think this should be blamed on the household responsibility system. It’s a cultural phenomenon. Even under Mao, despite the “women holds up half the sky” rhetoric, tradition dies hard in rural China.

    But no one is claiming the Household Responsibility System (HRS) created sexist cultural practices. The question is whether the HRS exacerbated pre-existing sexist cultural practices, thereby providing increased incentives for neglect and infanticide of girls.

    Overall, the switch to Household Responsibility System from collectivization have seen almost immediate boost of agricultural output which is to the benefit of everyone.

    That’s accurate. More generally, the reforms have increased economic opportunity for everyone, including women. However, if we want to look at the full effect of the reforms, we have to look at the full story, including their impact on health, education, and gender equality. When we do that, we might come to a more nuanced evaluation.

    China appears to have recently reintroduced some of the best aspects of the pre-reform era without sacrificing economic productivity. Hopefully it will continue to do this.

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  10. Matt says:

    I should also point out that the economic growth of the post-reform era is largely built on the foundations of the achievements of the pre-reform era in terms of education, health, the emancipation of women, etc. This is generally acknowledged in mainstream sources.

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  11. I agree with that. But I don’t think that’s acknowledged generally.

    On the other hand, it’s not as though Chinese outside the PRC needed communism to achieve the same things.

    Like

  12. Paul says:

    Matt says “the economic growth of the post-reform era is largely built on the foundations of the achievements of the pre-reform era in terms of education, health, the emancipation of women, etc.”

    Doubtful re women’s emancipation. Hong Kong Chinese were subject to the Great Qing Legal Code until 1971. Nobody would say the traditional Qing Legal Code emancipated women, but Hong Kong had stellar economic growth in the 60s under its patriarchal sway.

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  13. Matt says:

    Pseudoerasmus,

    It’s usually acknowledged on the sly, and you kind of have to read between the lines. I could probably dig up an example.

    Chinese outside the PRC? Where? The Chinese in Malaysia and Indonesia are a merchant elite. Singapore and Hong Kong are city-states. The PRC is vast expanse of land with an (during the period in question) overwhelmingly rural population. The closest comparison I guess would be with Taiwan (ROC), but it’s not very close. And besides, the ROC was basically established by conquest, exogenously imposed on the native population by the Guomindang generals.

    Paul,

    The question is, “What would Hong Kong’s growth had been had women had more opportunities?” I take it as a truism that refusing to educate half your population is extremely wasteful.

    Like

  14. Matt : “Chinese outside the PRC? Where? The Chinese in Malaysia and Indonesia are a merchant elite.”

    For the relatively small communities in Indonesia, Thailand, the Philippines, Vietnam, etc. but not the Chinese of Malaysia.

    Actually I’ve debated this very issue fairly recently and there are few hard data on the socioeconomic characteristics of Chinese in colonial & precolonial Malaya.

    Sowell on Malaysia from his book Affirmative Action Around the World :

    “British-ruled Malaya was just one of the countries in Southeast Asia to which vast numbers of immigrants from China moved during the era of European imperialism.’ These Chinese immigrants were typically poor and illiterate, and so started at the bottom, working in hard, dirty, and menial tasks that the indigenous peoples of the region largely disdained. In British-ruled Malaya, the Chinese provided much of the labor of field hands working on rubber plantations, while people from India predominated among the miners working in the country’s tin mines, as Malaya became and remained for many years the world’s leading producer of these two products. The capital and management for these enterprises were supplied by Westerners, while the labor was supplied by the Chinese and Indians, leaving little role for the Malays in the development of their own country’s modern sectors.

    However, the Malays owned land and thus many were in a position to spurn the lowly and arduous jobs filled by the poverty-stricken Chinese and Indian immigrants. Where some Malays did work alongside the Chinese on rubber plantations, their output per worker was less than half that of the Chinese.’ As the inflow of immigrants from China continued over the years and generations, the Chinese population of the Malay states rose from an estimated 1oo,ooo in 1881 to more than a million just 50 years later.’ By 1941, the Chinese out-numbered the Malays in British Malaya.8 Although the Chinese began at the bottom economically, their frugality enabled them to begin to move out of the ranks of laborers by setting up small businesses, usually tiny retail shops. While more than half of all the Chinese in Malaya in 19 1 1 were laborers, either in agriculture or in the mines, just twenty years later only 11 percent were still in those occupations.`’

    …

…The frugal Chinese lifestyle, for example, was very different from that of the Malays, who were known for free spending and for going into debt for the sake of social celebrations.L’ Population growth rates and infant mortality rates among the Chinese were both roughly half of these rates among the bumiputeras…

Over the years and generations, the Chinese built up businesses across Malaya, creating whole new industries in the process. In addition to innumerable small retail establishments, the Chinese also went into some larger ventures. For example, by 1920 Chinese-owned mines produced nearly two-thirds of the tin in Malaya, though Europeans later overtook them in tin production.’2 Retail trade, however, continued to be dominated by the Chinese, who eventually came to own 85 percent of all retail outlets in the country.13 Although the Chinese had begun in Malaya much poorer than the Malays, their incomes rose over the years until they were earning more than double the average income of the Malays. Most of the capital invested in the country was owned by foreigners but, among the domestically owned corporate equity, most was owned by the Chinese.”

    AAAW is a very polemical book, but Sowell’s bias is usually to depict ethnic minorities as culturally self-selected, which would be closer to Matt’s point than to mine.

    Besides, the real, outsized success of the Chinese in Malaysia came after 1945 and was based on modern economic development. As late as the 1940s, enough Chinese in British Malaya were poor enough that their poverty was cited as a major cause of the guerrilla insurgency during the “Malaya Emergency”. I think the best one might say is that the ancestors of Malaysia’s Chinese were emigrants self-selected for their motivation and drive, not that they were from the very beginning a highly prosperous mercantile community.

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  15. Matt : Singapore and Hong Kong are city-states. The PRC is vast expanse of land with an (during the period in question) overwhelmingly rural population. The closest comparison I guess would be with Taiwan (ROC), but it’s not very close. And besides, the ROC was basically established by conquest, exogenously imposed on the native population by the Guomindang generals.”

    What does any of that have to do with anything ? Communism was not required to achieve the very high human development indicators in the ethnic Chinese societies of Singapore, Hong Kong and Taiwan. Likewise, presumably, for the Chinese in Malaysia, though I haven’t seen Malaysian HDI decomposed by ethnicity. The fact that these are small countries and not a “vast expanse of land” might be relevant to the difficulty of achieving “human development” but not to the predispositions of the Chinese.

    The question is, “What would Hong Kong’s growth had been had women had more opportunities?”

    You must be joking. The 4 East Asian “Tigers” had such high growth rates in the 1960s, 1970s and 1980s, I don’t see how they could have been any higher. GDP/cap growth, accounting-wise, is a combination of growth in efficiency and capital accumulation. It’s difficult to imagine how more gender equality might have contributed to squeezing more output from a unit of inputs. And the Tigers’ capital accumulation was already astronomical, and you can only accumulate capital so fast without running into diminishing returns.

    ”I take it as a truism that refusing to educate half your population is extremely wasteful.”

    You can look at http://data.worldbank.org/indicator/all and check the sex ratios in primary, secondary and tertiary enrolment. These data only go back to ~1970, but the sex ratios are even for primary & secondary, and skewed only in tertiary but that gap gets closed by the late 1990s.

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  16. Matt says:

    That’s very interesting. I’ve always had the impression that the Chinese of Malaysia were rather like the Jews of Europe: sympathetic to socialism because they had disproportionate wealth and suffered from ethnic prejudice: two things socialism promised to do away with. But I really don’t know very much about the Malaysian Chinese. (Didn’t the Indonesian Chinese support the Communist Party in that country? Isn’t that why they were disproportionately targeted in 1965-66? And were the Indonesian Chinese also a mercantile elite?)

    Still, it’s not really comparable to the PRC. On the one hand you’re talking about a huge country with a huge population, the largest in the world and overwhelmingly rural. On the other hand, you’re talking about a relatively self-selected immigrant minority (that may have been poorer than I thought) in another country.

    One more thing about Taiwan: prior to the establishment of the one-party KMT state, it was ruled by the Japanese from 1895. When the KMT took over, they continued the Japanese colonial development model: state-directed promotion of heavy industry, fierce repression, etc. Taiwan didn’t democratize until the 1990s. So for a century, Taiwan was basically ruled as a colony by foreigners (Japanese and mainland Chinese).

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  17. Besides, there’s no evidence being a “merchant elite” or rich makes you less gender-biased. In fact, both China and India suggest, higher wealth might simply give you more resources with which to enact your prejudices, such as with sex-selective abortions.

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  18. I still don’t see what the size of the country has to do with anything in this particular regard. At all scales, whether Chinese or not Chinese, the East Asian “development model” seems to be uniformly orientated toward “human development”. The orientation seems strongest with Chinese, Koreans and Japanese, but East Asia in general is more HD-orientated than other non-European regions.

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  19. Matt says:

    The fact that these are small countries and not a “vast expanse of land” might be relevant to the difficulty of achieving “human development” but not to the predispositions of the Chinese.

    I still don’t see what the size of the country has to do with anything in this particular regard

    What are we talking about? Are we talking about the predispositions of the Chinese/East Asians or about the difficulty of achieving human development in mainland China? I could agree with you that East Asians in general have done a better job at development than others, but still maintain that it was harder to do in mainland China, and so that stands out as a more impressive achievement than the other East Asian success stories.

    By the way, I don’t think “Communism” was necessary for mainland China’s development. At least I hope it wasn’t. I hope and I believe that dictatorship and repression aren’t a pre-requisite for achieving human development and economic growth, but that seems to have been how it’s happened, in almost every case, in East Asia so far.

    Re: Gender equality

    You can look at http://data.worldbank.org/indicator/all and check the sex ratios in primary, secondary and tertiary enrolment. These data only go back to ~1970, but the sex ratios are even for primary & secondary, and skewed only in tertiary but that gap gets closed by the late 1990s.

    OK, but I wasn’t saying that Hong Kong refused to educate its women. I was saying that the PRC’s education of its women contributed to its future economic growth.

    Besides, there’s no evidence being a “merchant elite” or rich makes you less gender-biased.

    The question is: “Does being less gender-biased (at least, up to a certain point) make a country more rich?”

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  20. Matt says:

    The disagreement between Pseudoerasmus and myself is partly empirical and partly ideological. Since empirical issues are easier to sort out then ideological ones, I think it would be more fruitful if I first posted my rejoinder to the empirical points made by PE. We can then discuss this until some sort of dialectical equilibrium has been reached (or until one or more of us just gets tired). Once this has been achieved, we can then hammer out the ideological disputes.

    Health Care

    PE claims that “it was inherently easier for Cuba to lower its infant mortality rate than for the Dominican Republic. Why? Because it was already lower for [pre-revolutionary] Cuba… than in most of the rest of Latin America and the Caribbean!” (emphasis his).

    This is true. However, it’s important to disaggregate the data. Aviva Chomsky quotes Medea Benjamin, Joseph Collins and Michael Scott:

    “While Cuba had the highest hospital beds to population in the Caribbean, 80 percent were in the city of Havana. Havana province had 1 doctor for every 420 persons, but rural Oriente province had 1 for every 2,250 [Cf. McGuire and Frankel, 101]. Unsanitary housing and poor diets made curable diseases widespread. The World Bank reported in 1951 that between 80 and 90 percent of children in rural areas suffered from intestinal parasites [cf. ibid., 102]. In 1956, 13 percent of the rural population had a history of typhoid and 14 percent tuberculosis.”

    The argument you make here has been made in far greater detail by http://lasa-2.univ.pitt.edu/LARR/prot/fulltext/vol40no2/McGuire.pdf“>James W. McGuire and Laura B. Frankel. Nevertheless, McGuire and Frankel observe that although Cuba only 940 doctors per person in 1953, 62 percent of them worked in metropolitan Havana circa 1955 (p. 104). This was good for the poor of Havana, and the situation of the rural poor was somewhat mitigated by the ability of the rural poor to use Cuba’s relatively developed transportation system to visit doctors in the cities. However, in 1943, over half of “rural families lived along roads that vehicles could not use in the wet season” (ibid., 104).

    One of the major achievements of the revolution has been to expand access to health care to virtually the entire population. As you can see from table 13.3 in A. Chomsky, life expectancy in 1995 was virtually uniform throughout the island, ranging from 74.2 to 76.0.

    Another thing to keep in mind is that despite Cuba’s low pre-revolutionary doctor to patient ratio,”three thousand doctors or approximately half the physician population” left the island after 1959 (Julie Feinsilver, p. 33)

    According to another source, 2000 physicians left Cuba, causing the ratio of physicians per 10,000 people to decline from 9.2 in 1958 to 5.4 in 1962, a drop of over 40 percent. It took Cuba until 1975 to surpass the pre-revolutionary figure (p. 330, 331, Table 2).

    We should also examine why Cuba had such good health indicators in the pre-revolutionary period. A large part of it had to with proto-socialist, though largely non-state, efforts. “Mutualist” cooperatives provided much of the health care, serving “nearly half the people in metropolitan Havana by 1927…” (McGuire and Frankel, 102).

    “In 1938,” McGuire and Frankel write, “the communist-led transport workers’ union launched a contributory healthcare plan funded by payroll deductions…. The transport workers soon opened their plan to workers outside the sector, and by 1959 it had 25,000 members, some from outside Havana.” Unlike the mutualist cooperatives, the transport workers did not discriminate against black Cubans (ibid, 103).

    However, both the union-provided and the private sector health care played a relatively small role in the pre-1959 Cuban medical system. Thus, prior to the revolution, Cuba had neither a state-controlled, nor a “capitalist” medical system. It had a mutualist or proto-socialist one. The state-controlled system of the revolutionary era may in some ways have grown out of the mutualist cooperatives: “The small role for the private sector and the unions, and big role for the mutualist associations, may have made it easier to socialize the medical system in the 1960s” (ibid.).

    Labor union (often Communist-led) militancy also contributed to health outcomes. By 1960, 60 percent of the Cuban workforce was unionized, making it the second most unionized country in Latin America. Unlike in other Latin American countries, moreover, Cuba’s unions represented disproportionately poor workers. Of the over 1.2 million workers in the Cuban Workers’ Confederation, about half of them were sugar or tobacco workers. “[T]he significant share of poorer agricultural workers who did belong to unions in Cuba may well have enabled labor strength to contribute to… the decline of premature mortality…. [T]heir penetration of rural areas and success at securing wage hikes meant that union members could use health facilities that existed primarily for other reasons” (ibid., 109).

    The unions were especially militant, too. After Batista’s first coup in 1934, the unions responded with “massive strike activity.” Batista, the eminence grise, countered with heavy repression, but the unions proved themselves capable of withstanding this assault. “By 1936… Batista… was seeking to legitimate his rule, and was concerned that the power and militancy of the communist-led labor movement could threaten stability…. Because most of his political opposition came from the left, Batista could move toward the center, where most of the votes were, by adopting more populist, pro-labor policies” (ibid., 108).

    In part because of the strength of the unions, Cuban workers enjoyed European-level wages: in 1957 they received “US$6.00 in then-current U.S. dollars for an 8-hour day, compared to US$5.80 in Norway and US$4.29 in France…. [E]mployee compensation in 1958 represented 66.6 percent of national income in Cuba, the second highest share… among the nine Latin American countries for which data are available.” These high wages may have given workers better access to health care.

    The period of democracy from 1940 to 1952 may have also improved health, “competition during this era was mainly between leftist parties and coalitions, so candidates often courted votes by promising and enacting social programs” (ibid., 109).

    In other words, pre-revolutionary Cuba is actually a better example for my position than for PE’s: a poor Third World country dramatically improving its health indicators through leftist, cooperative efforts (although these were not primarily carried out by the state).

    PE quotes Hirschfeld making a common rejoinder to citations of Cuba’s low infant mortality rate: that the IMR is artificially lowered by abortion. This claim is widespread in discussions about Cuba, but is it true? McGuire and Frankel quote Feinsilver, who acknowledges that abortion may play a role in low infant mortality. “Feinstein also reports, however, that genetic diagnosis followed by abortion reduced infant mortality by less than 1 per 1000 at a time when the official rate was 10 per 1000. Hence, although Cuba’s high abortion rate may contribute to its low infant mortality rate, the effect is probably small” (ibid., 94).

    Education

    The statistics on Cuba’s performance look fudged (and are quite amusing), but I don’t know why PE brings this up. I never claimed anything about Cuba’s levels of academic attainment. I only cited the (non-income) HDI, which includes years of schooling. It is sufficient for my position that Cuba provide wider access to education than the rest of Latin America, and that it have high quality of education by Latin American standards.

    Cuba’s high Education Index score (0.993 in 2007, tied for highest in the world) indicates high access to education.

    As for quality, remember, I do not need to claim miraculous results in this regard. It is not surprising that a poor country does not have a mean IQ of 100. But there are some indications that the quality of Cuban education is quite good by Third World and Latin American standards.

    First, the literacy rate is 99.8 percent, the highest in Latin America and tied for second highest in the world.

    Second, the extremely low doctor to patient ratio indicates quality medical education.

    Third, Cuba’s impressive (for a poor country, anyway) pharmaceutical industry further suggests quality levels of education.

    None of these things would be possible if Cuba’s educational attainment wasn’t relatively high.

    It is true that Cuba had a low doctor to patient ratio before 1959. I have discussed this above.

    It is also true that Cuba had a high literacy rate prior to 1959, at 79 percent, the fifth highest in Latin America, and an increase of 61% from 1900. However, the Castro regime brought this up to 97 percent in 1995, still the highest in Latin America and an increase of 86% since 1960, the most rapid rise in the region over the same period by a wide margin.

    Soviet aid

    The various estimates given in your source for the effective subsidy represented by Soviet sugar purchases are quite high. However, Cuba’s relationship with the Soviet Union was not without its costs either. Dependency on the USSR exacerbated monocultural dependence on sugar as an export crop, which had already been cultivated during the periods of Spanish and American dominance. This left Cuba especially vulnerable after the collapse of the USSR, when it suffered a severe recession.

    We also still don’t know exactly how much the US embargo cost Cuba. A left-wing journal cites “the Cuban government” giving a current figure of $685 million a year, but I don’t know if we can trust this reference (or the Cuban government).

    Several studies and reports (1, 2, 3, 4) have concluded that the embargo has had significant adverse consequences for Cuban health in the post-Cold War era.

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  21. Matt says:

    One last point about China. PE writes:

    On the other hand, it’s not as though Chinese outside the PRC needed communism to achieve the same things.

    But it’s a moot point, because the Chinese in the PRC couldn’t sustain the achievements with regard to infant mortality after they abandoned communism (I think there is a rough consensus now on this last empirical point. I’m just going to declare victory on this unless someone has further interesting information).

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  22. Paul says:

    Matt’s indefatigable partisanship on behalf of the achievements of the Left in the Third World is getting dull. But it does at least raise the question of how and why the Left succeeded relatively more in some places than others.
    It seems to run thus. (1) African Left: a shambles (note that Matt is silent on the achievements of the Afromarxist regimes and movements). (2) Latin American Left: middling (see Cuba). (3) NE Asian Left (such as PRC or NKorea) comparatively effective, whether at targeting infant mortality or mass killing or since 1980 capitalistic growth.
    This is pretty much just what HBD would predict.

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  23. Paul says:

    Since the original post began as blog comments, I am wondering what other parts of pseudoerasmus’ oeuvre needs hoisting from some obscure comment thread.

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  24. Pincher Martin says:

    Paul,

    “Matt’s indefatigable partisanship on behalf of the achievements of the Left in the Third World is getting dull.”

    I’m not at all ideologically predisposed to Matt’s conclusions, but he’s making solid arguments with a lot of data to back them up, so I think he deserves a fair hearing and intelligent responses to his points.

    Like

  25. CaoMengDe says:

    pseudoerasmus

    I have also thought about the East Asian development and various Chinese communities living under disparate political economic models. At first glance, the HBD model seem to be able to explain why despite the widely differently surroundings, Chinese population were eventually able to thrive whether in entrepot city-state of Singapore and HongKong, or Island of Taiwan, authoritarian Mainland, or among Malays in Malaysia.

    But perhaps there may be a different explanation for this.

    All the above states have effective governance that allowed almost universal primary education, basic Healthcare and infrastructure development.

    Of course, this explanation is not mutually exclusive with the HBD argument.

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  26. Some quick responses to Matt :

    (Didn’t the Indonesian Chinese support the Communist Party in that country? Isn’t that why they were disproportionately targeted in 1965-66?)

    No, the (correct) association of ethnic Chinese with communism was in British Malaya. In Indonesia, it was mostly not true, but in the anti-PRC atmosphere of the time the ethnic Chinese were suspected of communist sympathies. The Chinese were targeted but most of the hundreds of thousands killed in the 1965 elimination of PKI were actual PKI members, and most of them were rural Indonesians, disproportionately Javanese.

    But it’s a moot point, because the Chinese in the PRC couldn’t sustain the achievements with regard to infant mortality after they abandoned communism (I think there is a rough consensus now on this last empirical point.

    But you were just imploring with me but a few hours ealier, to recognise the communists’ glorious achievement of conquering disease, ignorance and predatory jinns in so vast and complex a place as the Middle Kingdom, compared with a sesame seed like Hong Kong or that turd floating across the straits. The same token should apply to the market reforms of 1979. How could a central planning mandarinate in that vastitude of a land anticipate the potential side-effects of agricultural liberalisation on rural medicine (if there were any) ? The same reasoning that Sen used to explain the Chinese famines of the 1950s applies with greater force here : unintended consequences which are a risk for any policy maker are magnified in a top-down administrative system with poor information flows. In fact which would be easier in a polity like the old communist China ? Issue an administrative edict that all village and township water works must henceforth chlorinate the local supply (and thus reduce child mortality from diarrhoea), or conduct a free-ranging debate with input from local apparatchiks about the possible collateral effects of decollectivisation ? Besides, the Chinese eventually took care of the problem and reversed the reversal in infant mortality trends, didn’t they.

    The disagreement between Pseudoerasmus and myself is partly empirical and partly ideological

    I don’t think I said anything which depends on an ideological difference between us. I have no problem with investments in “human development”. So unless you think those are best done in a socialist command economy, I don’t see our disagreement on the topic of our debate as ideological, even though we clearly differ in ideological orientation.

    However, it’s important to disaggregate the data. Aviva Chomsky quotes Medea Benjamin, Joseph Collins and Michael Scott… Havana province had 1 doctor for every 420 persons, but rural Oriente province had 1 for every 2,250 [Cf. McGuire and Frankel, 101]. … This was good for the poor of Havana, and the situation of the rural poor was somewhat mitigated by the ability of the rural poor to use Cuba’s relatively developed transportation system to visit doctors in the cities.

    One of the major achievements of the revolution has been to expand access to health care to virtually the entire population. As you can see from table 13.3 in A. Chomsky, life expectancy in 1995 was virtually uniform throughout the island, ranging from 74.2 to 76.0.

    I don’t understand how this affects my argument. Yes, I think it’s perfectly believeable that the capital city or commercial hub of a developing country has better health indicators than the rest of the country. And it’s perfectly believable that under Castro this regional disparity was mitigated or even eliminated. But so what ? The mean is the mean. The regional disparity prior to 1959 only implies Castro had less work to do in the 2 or 3 biggest cities and could use more of his resources outside those areas. Perhaps you have some specific argument as to why the bigger prerevolutionary variance in health implies Castro accomplished more than meets the eye (given that Cuban health averages were already pretty good before he came to power) ?

    In other words, pre-revolutionary Cuba is actually a better example for my position than for PE’s: a poor Third World country dramatically improving its health indicators through leftist, cooperative efforts (although these were not primarily carried out by the state)

    You are confused. My position is that Revolutionary Cuba’s achievements are overstated, overhyped and not terribly impressive.

    I am not opposed to the improvement of health and literacy in Third World countries. It really does not bother me how that gets done — whether at government-owned clinics, or via trade-union initiatives, or in crypto-Mormon kibbutzim, or by a mobile army of petit-bourgeois reformists selling organic fair-trade ganja — as long as the country isn’t being communised or the economy destroyed in the processed.

    ”However, Cuba’s relationship with the Soviet Union was not without its costs either. Dependency on the USSR exacerbated monocultural dependence on sugar as an export crop, which had already been cultivated during the periods of Spanish and American dominance. This left Cuba especially vulnerable after the collapse of the USSR, when it suffered a severe recession”

    Your argument is tantamount to saying Cuba should have had market reforms decades ago, well before the collapse of the Soviet Union. That would have been obligatory, had Cuba wished to sell anything other than primary goods, because centrally planned economies can’t build anything which consumers would actually buy, at least voluntarily. Which communist country ever exported non-military, non-primary goods to non-captive markets (i.e., free consumers in non-socialist countries) ? The only examples that come to mind are communist countries which have implemented market reforms, like China or Vietnam, or Yugoslavia in its last days with the Jugo. Another possible exception is many European firms set up shop in East Germany, IKEA being the most (in)famous example.

    And if Cuba had had market reforms in 1970, you think infant mortality rates would have been unaffected ?

    That’s all I can address at the moment. I will return at the weekend for further replies.

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  27. CaoMengDe says:

    Matt,

    Regarding infant mortality data, I noticed that it only goes to as far as 1984. Assuming the rise female infanticide and female baby abandonment caused by One Child Policy didn’t affect the data significantly (Big IF), as as you say

    “because the Chinese in the PRC couldn’t sustain the achievements with regard to infant mortality after they abandoned communism”

    Then perhaps there is a point to pseudoerasmus’ claim about effectiveness of investment. As result of the abandoning communism and adopting Reform in last 30 years, China have becoming a much wealthier country than say 1984.

    I would wager that the infant mortality rate for 2014 is much lowered than 1979.

    To phrase it another way,

    Perhaps rather than “Chinese in the PRC couldn’t sustain the achievements with regard to infant mortality after they abandoned communism” , it’s communism system (including its achievements) that was not sustainable in the long term, and its replacement by a long term sustainable model is only rational.

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  28. “I would wager that the infant mortality rate for 2014 is much lowered than 1979.”

    Of course it is, the deteriorating trend in infant mortality in 1979-89 apparently got reversed by the early 1990s. It’s like 10-12 per 1000 now but 5-6 in the cities.

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  29. CaoMengDe says:

    Hmm… interesting. Ultra-sound scan was also introduced in the late 80s into China, allowing for sex-selective abortion which renders female infanticide and female baby abandonment less neccessary.

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  30. Matt says:

    The same token should apply to the market reforms of 1979. How could a central planning mandarinate in that vastitude of a land anticipate the potential side-effects of agricultural liberalisation on rural medicine (if there were any) ? In fact which would be easier in a polity like the old communist China ? Issue an administrative edict that all village and township water works must henceforth chlorinate the local supply (and thus reduce child mortality from diarrhoea), or conduct a free-ranging debate with input from local apparatchiks about the possible collateral effects of decollectivisation ?

    That’s exactly the argument Sen did make. From an article I cited in our original correspondence:

    “In recent years Indian democracy has made considerable progress in dealing with some of these conditions, such as gender inequality, lack of schools, and widespread undernourishment. Public protests, court decisions, and the use of the recently passed “Right to Information” Act have had telling effects. But India still has a long way to go in remedying these conditions.

    “In China, by contrast, the process of decision-making depends largely on decisions made by the top Party leaders, with relatively little democratic pressure from below. The Chinese leaders, despite their skepticism about the values of multiparty democracy and personal and political liberty, are strongly committed to eliminating poverty, undernourishment, illiteracy, and lack of health care; and this has greatly helped in China’s advancement. There is, however, a serious fragility in any authoritarian system of governance, since there is little recourse or remedy when the government leaders alter their goals or suppress their failures.

    [description of rising mortality rates]

    “In a functioning democracy an established right to social assistance could not have been so easily—and so swiftly—dropped.”

    “Your argument is tantamount to saying Cuba should have had market reforms decades ago”

    It should have. My general impression is that the reforms they are introducing now are long overdue, although I don’t know much about them specifically.

    “And if Cuba had had market reforms in 1970, you think infant mortality rates would have been unaffected ?”

    I have no idea. I know that, had the government tried to implement them, it should have done everything possible to prevent a reversal in health outcomes. I also know that that would have been much easier in a democracy.

    I am not opposed to the improvement of health and literacy in Third World countries.

    My apologies. I misunderstood you. When you said that you were “centre-left” with regard to developed countries and “centre-right” with regard to underdeveloped ones, I assumed that you were generally pessimistic about the prospects for improving health and literacy in underdeveloped countries, and that you wanted them to focus on growth instead. I thought we were having a debate about the viability of redistributionist measures aimed toward human development in poor countries. But if we’re not having a debate about that, I confess I don’t know what we’re having a debate about anymore. It’s certainly not about Stalinism vs. democracy, because we don’t disagree about that.

    Attn: I am not now nor have I ever been a member of any Communist party. I hope that clears some things up.

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  31. I thought we were arguing, in the main, about Cuba and whether its accomplishments were all that, plus you were comparing South Korea vis-a-vis US assistance, with Cuba vis-a-vis Soviet assistance. Those are fighting words !

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  32. Matt says:

    Now that Cuba is opening up, I imagine that many more doctors are going to become taxi drivers or hotel managers.

    Does your argument predict that Cuba’s non-income HDI will decline in the coming years, or at least slow down? Should it be declining or slowing down already? Or am I missing something?

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  33. Paul says:

    “Which communist country ever exported non-military, non-primary goods to non-captive markets (i.e., free consumers in non-socialist countries) ?”
    Lada, Skoda, Yugo – crapwagons all.

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  34. Does your argument predict that Cuba’s non-income HDI will decline in the coming years, or at least slow down?

    I guess that would be an implication of my argument.

    Should it be declining or slowing down already?

    Well first I’d like to know how many, if any, of the few Cuban infants per 1000 who die are preterm. The rich country pattern is that about half the infant mortality rate is due to preterm births. In rich countries most preterm births survive but the ones that die account for about half the mortality rate. So if Cuba doesn’t have the same pattern then something might be fishy.

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  35. Matt says:

    Assuming that low birth weight is a proxy for premature births, see pp. 92f of McGuire & Frankel . Three Cuban hospitals in the 1990s reported a very low combined percentage of babies under 1500 g. This could be due to underreporting, or it could be due to prenatal care.

    In general, I’m not sure that market reform necessarily have to lead to increased infant mortality. As I’ve already mentioned, in Fengxian, infant mortality declined by 30.5 percent from 1980 to 1985, even as it went up in the rest of China. This is because Fengxian managed to preserve the rural health care system even as it introduced quasi-privatized agriculture. On the other hand, it’s much easier to manage something like that if you have democracy and free information flow.

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  36. Toddy Cat says:

    A possibly significant difference between Cuba and the Dom Rep:

    Cuban ethnicity:
    64.1% White, 26.6% Mulatto / Mestizo, 9.3% Black (2012)

    DomRep:
    ” In the mid-1980s, approximately 16 percent of the population was considered white and 11 percent black; the remainder were mulattoes. ”

    Given that there are some pretty large differences between the races with regard to infant mortality, that could explain a lot.

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  37. I had looked the demographic information as well, but Latin American racial self-reporting is notoriously unreliable about the degree of admixture, and there are no genetic studies of Cubans in Cuba, as far as I know. But I’m certain the racial composition differences do matter to the infant mortality statistics.

    It’s actually a very interesting topic, racial differences in infant mortality. When I was looking into it, I couldn’t really get a sense of how one might apportion the US black-white differences in infant mortality to genetic health differences, SES, obesity, the slight difference in gestational length, educational/cognitive differences that result in different prenatal experiences, whatever.

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  38. Toddy Cat says:

    BY the way, liberal economist Brad DeLong has a great time shooting down the glories of the Cuban Revolution here:

    http://delong.typepad.com/sdj/2008/02/los-gusanos–th.html

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  39. Matt says:

    Brad DeLong compares Cuba to Costa Rica, northern Mexico, Puerto Rico, and Portugal. By the “racial differences” argument, Cuba is much more “disadvantaged” than all of these places. Costa Rica is 83.6% white/mestizo, 8.8% black/mulatto, and northern Mexico is overwhelmingly mestizo. Mestizos do not have higher infant mortality rates than whites in the US. Much more relevantly, in my opinion, Costa Rica, and to a lesser extent Mexico, have been exceptions to the general rule in 20th Century Latin America: democracies (or quasi-democracies in the case of Mexico for most of the 20th century) with a relatively high degree of social provision, as opposed to neoliberal juntas.

    Portugal and Spain are white countries. They’ve also received a lot of subsidies from Europe, and they used to be largely remittance-based economies. Puerto Rico has been a US colony since 1898 (talk about subsidies).

    As for social democracy being better than Leninism, you’ll get no argument from me. But that’s not really what we’re talking about. Or at least that’s not what I’m talking about.

    He says that Begin and Sharon held elections. I’m all for elections in Cuba, but let’s not kid ourselves. Begin and Sharon held elections in Israel. Not in the Occupied Territories. Or in Lebanon.

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  40. Matt says:

    Here’s my position: I prefer social democracy, in rich countries and in poor ones. I prefer it to Leninism and I prefer it to neoliberalism. It might not be my absolute theoretical preference, but it seems to be a lot better than most of the actually existing alternatives. I don’t think, in principle, that there has to be a substantial trade off between health, education, and growth, even for poor countries, although, given the circumstances in Cuba, there may end up being one.

    As for Cuba: Cuba is a good place to the extent that it has universal health care and literacy, and maybe a few other things. It’s a bad place to the extent that it has total central planning, dictatorship, no free speech, political prisoners, torture, etc. Many other Latin American countries have been good places to the extent that they’ve had high economic growth, if that, and some degree of “economic freedom” as that’s usually conceived. Those countries have been bad places to the extent that they’ve had terrible health standards, massive illiteracy, terrible inequality, child beggars in the street, death squads, genocide, dictatorship, no free speech, political prisoners, torture, etc.

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  41. Toddy Cat says:

    If you believe in “social democracy” and hate “Leninism”, can you please explain why you are so keen on the Cuban Revolution? And in defending it, you seem to believe that Cuba can be compared to other countries when it’s to Cuba’s advantage (ie, DomRep), but when it comes to comparisons that are to Cuba’s disadvantage, the qualifications start to come out (U.S. colony, remittance economies, EU aid, etc., etc.), and suddenly Cuba is not comparable to anyone. Ditto Communist China. The PRC is comparable to India (!) when it’s to China’s advantage, but it’s not comparable to other Chinese countries when China suffers by the comparison. You seem to be oddly eager to defend totalitarian revolutions for a social democrat. I say that with all due respect, you’re obviously an intelligent guy, but I simply cannot see why a social democrat would want to defend a brutal dictatorship whose social accomplishments are not really very impressive.

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  42. Matt says:

    I think should say a few words about how we got to this point.

    I was arguing with others about something far removed from the current topic of discussion (whatever it is): the moral advisability of HBD research. I had been arguing, roughly, that HBD ideas would have few positive consequences and many negative ones. My interlocutor mentioned that HBD tells us that diversity is a bad thing, and so we should “keep populations separate.” I replied, in passing, that I didn’t think diversity was such a bad thing, and mentioned Kerala. Now, keep in mind, that this was not my main point. My main point was that, if diversity was such a bad thing, we don’t really need HBD to tell us that. So, my point about Kerala was an aside.

    Pseudoerasmus challenged me about Kerala. Eventually he told me to read Amartya Sen, because Sen explains that the “proximate cause” of Kerala’s high levels of development is the strong showing of Marxist parties in its electoral politics. I replied that I had read Sen, and I agreed with this explanation. As an aside (to an aside!), I cited one of the many pieces where Sen makes the comparison between China and India, and in which he claims that, while India’s success compared to China in preventing famines is due to its parliamentary democracy and free press, China’s success compared to India in reducing mortality rates was due to its Marxist ideology. In fact, let me just quote Sen:

    “In China, where the driving force has come from inside the state and the party rather than from the opposition or from independent newspapers, the basic commitment of the political leadership – not unrelated to Marxist ideology [my emphasis] – to eradicate hunger and deprivation has certainly proved to be a major asset in eliminating systematic penury, even though it was not able to prevent the big famine [of 1958-1961], when a confused and dogmatic political leadership was unable to cope with a failure they did not expect and could not explain [my emphasis.]” (“Indian Development: Lessons and Non-Lessons,” p. 385).

    Read in its full context, this is hardly an endorsement of “Marxist ideology” as such. In fact, he is harshly critical of it, claiming that it led to a famine that killed perhaps 30 million people. Sen merely says that Marxist ideology was related to the Chinese state’s commitment to reducing and eradicating certain kinds of misery. He does not say that totalitarian Marxism is necessary for this kind of commitment. He mentions non-Marxist states that have accomplished similar things: Sri Lanka, for example. He mentions the increase in life expectancy in England and Wales due in part to public intervention, by democratically elected governments, on behalf of the working class. He discusses Kerala, whose achievements in this regard rivaled and even surpassed China’s in some cases, and which was run by governments that, though Marxist, were democratically elected and permitted opposition. He mentioned this alongside authoritarian Marxist states like China and Vietnam. Sen is clearly not making an argument for authoritarian Marxism, he is arguing that sustained and committed public intervention on behalf of the wretched can lead to dramatic improvements in health and education. This commitment can stem from Marxist ideology, or it can stem from something else.

    PE responded by pointing out that West Bengal had also been run by Marxist governments, and its development was abysmal. He basically argued, that China’s success under Mao in reducing mortality was due not so much to Marxism, but to East Asian racial characteristics. He claimed that East Asian countries had achieved egalitarian development because they were East Asian countries. Such efforts were doomed to fail in most of the rest of the Third World.

    I attempted to defend Sen’s point by listing all the examples Sen himself gave (except for England and Wales, given that we were talking about the developing world), as well as the Seychelles (formerly a one-party Marxist state, now a multi-party democracy with the former-Marxist party in power) and Cuba. I also mentioned China’s post-reform rise in mortality.

    I was not attempting to defend authoritarian Marxism-Leninism. I was attempting to defend redistributionist efforts aimed at human development in poor, non-European, non-Northeast Asian countries. Unfortunately, most examples of such regimes have been, until recently, authoritarian ones. (Some non-authoritarian redistributionist regimes may not have been given much of a chance). So those are the ones I mentioned. I was not defending authoritarianism.

    Now, Costa Rica is something of an exception in this regard. Its also something of an exception in that it was relatively free from US intervention in the 20th Century (although the CIA helped Anastasio Somoza invade it in 1955, until the State Department, aware of the US’s poor standing in Latin America following the Guatemala coup, negotiated a political settlement. Apparently, one Dulles brother told the other to knock it off).

    If you go back and read my initial posts on this thread, you’ll see that from the beginning I’ve said thing that are inconsistent with support for totalitarian state-socialism. When CaoMengDe said that China’s agricultural reforms increased food output, “to the benefit of everyone”, I responded: “That’s accurate. More generally, the reforms have increased economic opportunity for everyone, including women.” Does that sound like a Maoist? Here’s me again:

    “…I don’t think ‘Communism’ was necessary for mainland China’s development. At least I hope it wasn’t. I hope and I believe that dictatorship and repression aren’t a pre-requisite for achieving human development and economic growth…”

    Uncle Joe Stalin couldn’t have said it better himself.

    This is totally ridiculous, because the the person who has come closest to advocating Stalinism throughout this whole discussion has been our generous host himself, who, he tells us, once “entertained” the imposition of totalitarianism on Sub-Saharan Africa. To be fair, he ultimately decided against it. Not because totalitarianism is inherently evil, mind you, but only because those savages “probably would have botched” the implementation.

    And I’m the one who gets labeled a Stalinist. You can’t make this shit up.

    But yeah, you got me. I’m a crypto-Stalinist who goes around pretending to be a social democrat in the comments sections of obscure racialist blogs. Now, if you’ll excuse, there are some kulaks that I need to liquidate.

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  43. For the record, I like Matt and do not believe he is a Stalinist or has defended Stalinism. I think he is a social democrat who thinks we can extract some good lessons out of some failed experiments. That’s why I compared him with Chomsky, a democratic socialist who always expressed disapproval of both communism and capitalism.

    But, yes, I do think most of the East Asian experience in economic & social development is not transplantable to other developing countries — short of methods Matt disapproves of.

    By the same token, I do not believe the gulag inheres in socialism. Contrary to what irritating libertarians believe, I do not think putting democratic socialists into power paves the road to serfdom. Otherwise, Clement Attlee would have set up concentration camps in the Hebrides.

    The communist experience has been so bloody because it has been principally about the coercive modernisation of poor, backward, non-western cultures, where traditional society was destroyed to begin everything anew.

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  44. Paul says:

    With Matt, there is scope for more redistribution in Third World countries. Perhaps in the form of conditional cash transfers.

    Against Matt, an effective social-democratic welfare state is beyond the capability of most poor countries, just as the neoconservative claim that democracy can be imposed on the Middle East, or the neoliberal idea that free markets can work everywhere are utopian. Even nationhood does not work everywhere — as hbdchick diagnoses.

    Scandinavia has effective redistribution, and free markets (scores high in ease of doing business, openness etc), and democracy, and nationhood. The HBDer suspects it is something about Scandinavians that makes them good at social democracy, and the free market, and democracy, and the nation.

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  45. Getting back to an earlier point made by Matt :

    PE quotes Hirschfeld making a common rejoinder to citations of Cuba’s low infant mortality rate: that the IMR is artificially lowered by abortion. This claim is widespread in discussions about Cuba, but is it true? McGuire and Frankel quote Feinsilver, who acknowledges that abortion may play a role in low infant mortality. “Feinstein also reports, however, that genetic diagnosis followed by abortion reduced infant mortality by less than 1 per 1000 at a time when the official rate was 10 per 1000. Hence, although Cuba’s high abortion rate may contribute to its low infant mortality rate, the effect is probably small” (ibid., 94).

    If you follow the Feinstein citation, you will see that it ultimately leads to a Cuban genetics official. I’m not say it therefore must be false, but it’s not independently corroborated. And the whole passage surrounding the issue of abortion show the extraordinary lengths to which Cuban doctors go to reduce infant mortality, “irrespective of cost”. Just think about the cost of all the prenatal screening in the 1980s. Feinstein reports over 80% of pregnant Cubans were tested for elevated alpha fetoproteins. I wonder how much that cost per test in the 1980s. All the same, it’s consistent with my view that in countries with a per capita income as low as Cuba’s the only political system that could allocate resources in such a way, is an authoritarian one. In a politically free system consumers would demand a better standard of living (not just more food, but also more clothes, more variety of clothes, more TVs, more cars, etc.), and the state would have to divert resources away from the medical sector to accomplish that, short of economic liberalisation. But as we’ve seen in the last 25 years, economic liberalisation is a tough thing to manage and the social sectors become particularly vulnerable.

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  46. (Some non-authoritarian redistributionist regimes may not have been given much of a chance).

    I think views like this simply ignore the financial constraints on poor countries.

    Had Arbenz been given a chance, how different could his economic regime have been from Allende’s ? Chile in 1970 was about 2.5 times richer than Guatemala, on a per capita basis. Set aside the politics and concentrate only on the finances. Like every other Latin American populist regime, Allende ran up massive budget deficits and printed money to pay for them (in addition to redistributionist policies). Other regimes borrowed money from abroad, but ultimately with the same results. Here are the aggregates for Chile 1970-73 ( source ):

    ¡¡ Fiscal deficits of 25% of GDP in 1972 and 30% in 1973 !! That must be a record for countries not engaged in overseas wars. Even at its height in 2009 Greece’s budget deficit was 15-16% of GDP. By the way, “internal financing” is a very gentle euphemism for printing money.

    ( And please don’t use Nixon’s “invisible blockade” as an excuse.)

    Maybe a third of Chile’s fiscal problem in 1972-72 was due to a fall in the international price of copper. Which is of course part of what I’m arguing : developing countries have only so much economic tolerance for redistribution because their productive basis is weak and volatile, and with a smaller pie any redistributionist effort will meet more political opposition than with a bigger pie. Now, whether one likes it or not, in a highly unequal and divided society like Latin America’s, you can’t find as much money as implied in the net increase in public spending under Allende, without either printing it, or borrowing it from abroad, or confiscating wealth at levels which would provoke grave opposition. We’re not talking about some minor-league, tame Piketty wealth tax. And when faced with strong opposition the temptation to continue the redistributionist policies via authoritarian methods would be too strong. Otherwise if you lost the next election those policies might get reversed !

    So there is, I believe, an endogenous tendency toward authoritarianism when poor countries, especially ones not growing very fast, get ambitious about trying to improve human development indicators. You don’t even need to invoke “racialism”.

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  47. Paul says:

    Is there a reason for putting a space before question and exclamation marks thusly ?

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  48. Matt says:

    Let’s say that Cuba’s infant mortality rate is falsified and/or systematically downwardly biased. How high is the real rate then? Is it as high as Costa Rica’s? If so, then Costa Rica has achieved what Cuba has without authoritarianism, and despite its low income (not much higher than Cuba’s).

    In particular, Costa Rica reduced its IMR by over 70% from 1970 to 1980, in large part through public investment in the health sector. Even after the recession and structural adjustment of the 1980s, the IMR continued to decline, though much more slowly (Figure 5).

    For the last decade, Costa Rica’s IMR has remained roughly flat. That’s probably one reason why, after decades of neoliberal policies by the nominally social democratic ruling party, a left-wing candidate won by a landslide in the recent election. We’ll see how he does.

    [W]ith a smaller pie any redistributionist effort will meet more political opposition than with a bigger pie. Now, whether one likes it or not, in a highly unequal and divided society like Latin America’s, you can’t find as much money as implied in the net increase in public spending under Allende, without either printing it, or borrowing it from abroad, or confiscating wealth at levels which would provoke grave opposition…. And when faced with strong opposition the temptation to continue the redistributionist policies via authoritarian methods would be too strong. Otherwise if you lost the next election those policies might get reversed ! So there is, I believe, an endogenous tendency toward authoritarianism when poor countries, especially ones not growing very fast, get ambitious about trying to improve human development indicators.

    I don’t actually disagree with this. The only thing I would add is that this isn’t solely the fault of the left: the right too resorts to increasingly authoritarian measures in order to hold on to its wealth. (And in fact, I would argue, at least in Latin America, the right has been more brutal then the left).

    So what you’re saying amounts to this: massive inequality tends to produce authoritarian politics, on the left and the right. But this isn’t news. We’ve known this since Aristotle. That’s one reason why its really, really important to reduce inequality.

    Whether one likes it or not, in a highly unequal and divided society like Latin America’s, people are going to get ambitious about reducing inequality and improving human development from time to time. It’s in everyone’s long-term interest to accommodate them. Of course, Latin American elites aren’t known for their far-sightedness, but one thing Americans can do is to stop intervening on their behalf. That’s an “exogenous” factor that can be pretty easily removed.

    I do think most of the East Asian experience in economic & social development is not transplantable to other developing countries — short of methods Matt disapproves of.

    Well, one thing to keep in mind is that East Asian development didn’t, for the most part, happen through non-authoritarian methods either.

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  49. Sure, you might use Costa Rica as a model. But how representative is Costa Rica of Latin America ? This is a country which has had democracy since the mid-19th century, with only two brief episodes of civil violence, and which abolished the armed forces in the 1940s. It’s clearly an atypical country for Latin America, because it’s been unusually prone to consensual politics without instability. I don’t know why that is, but in Lawrence Harrison’s Underdevelopment is a State of Mind there’s a fascinating comparison between CR and Nicaragua. His theory for the difference is that because of its ecology (CR’s land was less fertile and promising) it attracted a very different class of Iberian settlers than elsewhere in Central America with its latifundist planter class. It’s kind of sort of similar to Acemologu’s theory of “inclusive institutions”, but Harrison’s book was written in the 1980s.

    But Costa Rica still has high income inequality — about average in Gini terms for Latin America, but lower than most in terms of the top decile’s share of total income. But it’s still more unequal than the United States, the most unequal developed country.

    I don’t actually disagree with this. The only thing I would add is that this isn’t solely the fault of the left: the right too resorts to increasingly authoritarian measures in order to hold on to its wealth. (And in fact, I would argue, at least in Latin America, the right has been more brutal then the left).

    There’s no left & right for me in Latin America. Just Latin Americans.

    So what you’re saying amounts to this: massive inequality tends to produce authoritarian politics, on the left and the right. But this isn’t news. We’ve known this since Aristotle.

    I didn’t mean it as some grand revelation or anything, and there’s no shame in being upstaged by Aristotle, but you’ve missed a crucial point : it’s not just inequality, it’s inequality given the absolute level of average income. If universal prenatal screning were desired, it would be far more possible politically in Chile than in Guatemala, even though both are very unequal societies.

    Of course, Latin American elites aren’t known for their far-sightedness, but one thing Americans can do is to stop intervening on their behalf. That’s an “exogenous” factor that can be pretty easily removed.

    But how much do you believe those interventions have mattered ?

    Well, one thing to keep in mind is that East Asian development didn’t, for the most part, happen through non-authoritarian methods either.

    The difference, of course, is that outside the PRC East Asian regimes were committed to both capitalism and human development. Latin America has had difficulty doing both at the same time !

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  50. Matt says:

    There’s no left & right for me in Latin America. Just Latin Americans.

    Well, just from an analytical standpoint, there are clearly different groups with interests who are politically opposed to each other, who can be at least roughly categorized as “left” and “right”, just like in almost any society. It doesn’t get us very far to just lump all LAs together.

    it’s not just inequality, it’s inequality given the absolute level of average income. If universal prenatal screning were desired, it would be far more possible politically in Chile than in Guatemala, even though both are very unequal societies.

    OK, but my point still stands. We both agree that inequality and general poverty tend to produce authoritarian politics. You think that’s a reason not to try to reduce both at the same time. I think it’s a reason to try to reduce both at the same time. That’s roughly what Aristotle proposed, and I can’t see that anyone has come up with a better idea in 2500 years.

    You argue that “grave opposition” to ambitious social reform is a fact of life in poor, stratified countries, and this opposition can only be overcome by authoritarian means. I argue that ambitions for social reform are also a fact of life in poor, stratified countries, and these ambitions can only be suppressed through authoritarian means.

    So the answer is to improve overall human development. Cuba and Kerala have improved social indicators without high growth. Brazil has achieved high growth without much improving social indicators. The trick is to do both at the same time, like the Asian economies have done. The way they did it is through heavy state intervention.

    Now, that doesn’t mean that everyone is going to do as well as the Asian economies with the same policies. There could be all sorts of reasons for that. But those policies (hopefully without the dictatorship and authoritarianism that characterized 20th century East Asia) are the best chance that poor countries have for overall human development. State intervention may not be a sufficient condition for overall development, but it sure seems like a necessary one.

    After all, East Asian countries have been East Asian for a long time. They didn’t start developing until they adopted statist policies.

    And when Latin American countries adopted protectionist trade policies in the 1870s, they started growing at the fastest rate in the world, while Asian countries, under low-tariff regimes imposed on them by the West in quasi-colonial arrangements, grew at the slowest rate (except for Japan, which escaped the quasi-colonial fate of its neighbors) (p.11, Table 2; Chang also cites Clemens and Williamson, who argue that a third of the difference in growth between Latin America and Asia was due to tariff policies).

    Now that doesn’t show that Latin America and East Asia will do equally well under the same policies, but it does show that policies matter.

    But how much do you believe those interventions have mattered

    How much do you believe that the USSR’s (comparatively fewer) interventions in Eastern Europe mattered to the longevity of Stalinism in that region?

    What do you think Costa Rica’s fate would have been if one faction of the American Deep State had beat out the other faction, and it was conquered by Nicaragua?

    Cuba might be a particularly good example. One might expect that U.S. corporations in Cuba would provide some of the strongest political opposition to the policies of the early Castro regime, since they had the most to lose, except perhaps for the Cuban elite. But one would be wrong. The U.S. business community tried to press the U.S. government for an accommodation with Castro. After all, they had fixed, long-term investments in that country. But it was to no avail, and it was too late anyway. Almost immediately after Castro came to power, and long before there was any hint that he was flirting with Moscow, the U.S. began plotting to overthrow the government and assassinate Castro, and even bombing the island.

    And besides the effect of any individual intervention, there’s the general psychological effect. Even if none of the US interventions had any significant impact by themselves (a big “if”), there’s still the psychological impact on the elites of knowing that they have the virtually unconditional backing of the most powerful country in the world. That will inevitably tend to harden reactionary opposition. After all, in the worst case scenario, you can always flee to Miami and continue plotting against your hated enemies there, with almost unlimited support from Washington.

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  51. And when Latin American countries adopted protectionist trade policies in the 1870s, they started growing at the fastest rate in the world, while Asian countries, under low-tariff regimes imposed on them by the West in quasi-colonial arrangements, grew at the slowest rate (except for Japan, which escaped the quasi-colonial fate of its neighbors) (p.11, Table 2; Chang also cites Clemens and Williamson, who argue that a third of the difference in growth between Latin America and Asia was due to tariff policies).

    Most of the growth in Latin America in 1870-1914 took place in three countries : Argentina, Chile and Uruguay. And it took place because they were exporting wheat, beef and other agricultural goods (plus copper and silver in the case of Chile) to an industrialising Europe. And it could take place because, at the start of the period (1870), most of these countries had a low population density, lots of very fertile land, there would be high returns to investment in the agricultural sector, and European capital was very willing to invest. But with immigration, population growth, and diminishing returns to agricultural investment, long term growth eventually slowed down. The best summary statistic to capture all that is GDP per capita relative to the income frontier (UK and USA).

    (The chart is mine, constructed from income data at the Maddison Project.) Notice the long-term downward trend for Argentina, Chile and Uruguay. Also their massive fluctuations typical of commodity exporters. By contrast, stagnant Brazil seems almost stable until the 1970s !

    Well, just from an analytical standpoint, there are clearly different groups with interests who are politically opposed to each other, who can be at least roughly categorized as “left” and “right”, just like in almost any society. It doesn’t get us very far to just lump all LAs together.

    Sure, but I was responding to you who were saying “it’s not just the fault of the left, it’s also the fault of the right”, as though I was blaming the one more than the other in Latin America. I do not. My view is that Latin American societies appear to be intrinsically less egalitarian than East Asian ones, in the sense that their Gini coefficients do not reflect the outcome of a shallow political process, but some deeper differences between the two societies. I’m not sure what those differences are exactly, but they have something to do with the greater heterogeneity in Latin America.

    I really don’t know whether Latin American elites are simply less apt to share with the masses who are ethnoracially different (even if existing in a colour continuum) ; or whether that heterogeneity makes a social compact less likely. Another possibility is that the variance of ability in a typical Latin American society is so big, that much more redistribution is required to lower inequality. A very abstracted hypothetical : suppose you want to convince an East Asian oligarchy that they would be better off in the long run if they coughed up some of their wealth (say, by land reform) to invest in education for the masses. If the returns to educational investment are high, then in a sense you reduce the size of future redistribution. Rising incomes amongst newly educated households mean that you don’t need to be supporting low market incomes with post-market transfers. But if the returns to schooling are low, then income growth is low and you will continue to have highly unequally distributed market incomes, with the attendent political pressure for persistent redistribution. Just an idea in my head.

    How much do you believe that the USSR’s (comparatively fewer) interventions in Eastern Europe mattered to the longevity of Stalinism in that region?

    That hardly matters, since the Soviet Union actually installed those regimes and they could mostly maintain themselves. The Soviets only intervened when they could not, or deviated too much.

    And besides the effect of any individual intervention, there’s the general psychological effect. Even if none of the US interventions had any significant impact by themselves (a big “if”), there’s still the psychological impact on the elites of knowing that they have the virtually unconditional backing of the most powerful country in the world. That will inevitably tend to harden reactionary opposition. After all, in the worst case scenario, you can always flee to Miami and continue plotting against your hated enemies there, with almost unlimited support from Washington.

    During the Cold War, as long as you weren’t flirting with communists or the Soviet Union, you clearly had a lot of leeway with economic policies. After all, you just got done talking to me about ISI policies. Dozens upon dozens practised them without being molested by the United States. South Korea largely closed its economy to American goods and American FDI until the late 1980s, even though South Korea owes its existence to the United States. At least in one case (Peru under the left-wing General Velasco) you could even flirt with the Soviet Union with total impunity. How many decades of Peronism was Argentina perfectly free to indulge in ?

    Chile under Allende’s predecessor Eduardo Frei implemented land reform and nationalised foreign-owned copper. (Allende only nationalised the 50% of the copper conerns that Frei had not nationalised.) Yet Frei was not bothered by the United States.

    But my favourite example is the Shah of Iran, widely considered a puppet of the Americans. He was certainly restored to power by the USA and the UK after being overthrown by Mossadegh. Yet this pro-imperialist puppet himself nationalised Iranian oil. And what kind of puppet leads the drive, as the Shah did in 1974 as member of OPEC, to quadruple the price of oil, an act which brought economic chaos to his puppet master’s country ? And the Shah of Iran was an economic progressive. He had implemented a land reform in the 1960s in which millions of hectares were distributed to landless peasants. The list of “progressive” programmes under the Shah, ranging from healthcare to free education to compulsory ownership stakes to workers, are numerous.

    In fact, I often marvel at how much economic policy autonomy Third World governments enjoyed during the Cold War and how little “imperialist” interference there was. For every Nkrumah supposedly overthrown by the CIA there was a Julius Nyerere. There was a massive structural shift in the economies of the Third World between 1914 and 1950. In 1914, most of the capital assets in developing countries were owned by foreigners or colonial powers, but by 1950-60 most of that was totally gone from a combination of the depression, second world war, colonial independence and Third World socialism.

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  52. Matt says:

    I had already read your debate with Anonimo and I didn’t think you were a neoliberal. I was making an argument I thought you would at least half-agree with. But I’m curious: if you don’t think that neoliberalism works for the Third World, and you don’t think ISI works, what’s your policy prescription? Or, put it this way: what’s a poor, non-NE Asian country that you think has done about as well as a poor non-NE Asian country can do, and could possibly serve as some kind of model? Do you have a favorite case?

    I’m certain that you know more about economic history than I do, so I won’t challenge you on that. But what’s your take on Clemens’ and Williamson’s argument?

    I’ll confine the remainder of my remarks to something I do know a bit about: US foreign policy. You mentioned Perónism, so I’ll focus on Argentina, drawing mainly but not exclusively from this book. I’ll also talk about the other examples you mentioned, though more briefly.

    US policy toward Perón was quite hostile in the early years. We hated his economic nationalism, his non-aligned foreign policy, and his anti-Yankee rhetoric. We were worried about his nascent nuclear program, and we had (not unfounded) suspicions that he was harboring Nazis. US Ambassador Spruille Braden was notoriously combative. In the 1946 election, we tried to sabotage Perón’s prospects for victory by disseminating propaganda to the effect that he was pro-Nazi (Rock261).

    In 1948, Truman prohibited European countries from using Marshall Plan funds to buy Argentine exports. When Peron heard about this, his old anti-American bluster mysteriously disappeared, as he prostrated himself before the “Yankee imperialists.” (Rock 292, Sheinin 97).

    These sanctions, along with Peronist mismanagement, contributed to a recession. In 1949, the Perón government adopted austerity measures and opened the country to more US investment, which pleased the US: “A radical change in economic policy by the Perón government in early 1949 signaled the end to what the Americans saw as irresponsible economic policy and the beginning of improved bilateral ties” (Sheinin 100). A $125 million Export-Import Bank loan followed, as well as $75 million from private banks (Sheinin 98-99), which was in turn followed by further reforms (Sheinin 100). This coincided with a pro-West foreign policy turn. Unsurprisingly, relations with Washington thawed.

    Why didn’t the US take harsher measures against Argentina during this period? Partly because the measures it did take seemed to suffice reasonably well enough, but also because the Truman Administration was preoccupied with Greece, Berlin, Korea, etc. Latin America was not a priority for Truman. The region received more attention under Eisenhower.

    Liberalization, and improved relations, continued under Eisenhower, though not as quickly as Eisenhower would have liked. US companies won contracts to build power plants, steel mills, and automobile factories (Sheinin 107-108, 109). The US even won Argentin’s support for opposing the United Nations Economic Commission for Latin America (UNECLA)’s program of protectionism and ISI. By 1954, “Perón viewed his relations with the United States as better than ever, as did his nationalist critics” (Sheinin 109). But this wasn’t good enough, and when Perón was overthrown in a military coup the following year, US officials were happy to see him go: “They saw the period after Perón’s fall and before… [the return to civilian rule] in 1958 as a golden period in bilateral relations” (Sheinin 111).

    This “golden period”, again unsurprisingly, coincided with rapid increase in the pace of liberalization. The electricity sector was opened to foreign investment. Contract disputes with US companies were settled on favorable terms. “Government spending was slashed, price subsidies on exports were cut, and export taxes were eliminated. Perhaps most significant, the new regime set in place an open foreign exchange market that allowed free capital movement in and out of the country” (Sheinin 109). The Export-Import Bank financed another loan of $100 million, although it was stalled by American frustration over the pace of reforms, which still weren’t happening quickly enough for Washington (Sheinin 112f).

    In 1958, the military permitted elections, and Arturo Frondizi came to power. Despite winning the election with Perónist backing an a dessarollista platform, by the end of the year the Frondizi administration began moving “faster and more effectively than any government since the 1920s in reversing the country’s economic nationalist policies,” even restoring property to German nationals that had been confiscated during the war over a decade ago (Sheinin 115f). Massive loans followed, so that by the end of the Frondizi administration, the Export-Import Bank had had promised “$486 million, $230 million of which had been disbursed” (Sheinin 116).

    In 1959, Frondizi even took the radical step of essentially handing over control of economic policy to the military by appointing the military’s favored candidate for the economy ministry, Alvaro Alsogaray, in order to assuage the military’s fears that Frondizi was unable to handle growing labor unrest.

    With the advent of the Cuban Revolution, Frondizi was deemed, by both Washington and the Argentine military, as insufficiently ant-Castro. He also permitted the Peronists to participate in legislative and regional elections in 1962, thinking he could beat them. When the Peronists made a strong showing, the military deposed Frondizi. This was both encouraged and welcomed by the Kennedy administration, which then rewarded the Argentine generals with a $160 million aid package (Rabe 62). Stephen G. Rabe comments, perhaps too tamely:

    “The Kennedy administration did not bear primary responsibility for Argentina’s political turbulence in the early 1960s. President Frondizi fell from power for indigenous reasons, and his difficulties reflected the larger problems that have beset Argentina for much of the twentieth century. But the administration declined to defend a constitutional leader and friend of the United States at a critical moment, and it exacerbated tensions in a politically volatile country by encouraging the aggressive and ambitious Argentine military to oppose Frondizi over his Cuban policy” (Rabe 63).

    Ironically, the military’s choice for Frondizi’s successor, the conservative Arturo Illia, was more economically nationalistic than Frondizi had been. He angered the US by canceling contracts with US oil companies, raising wages, and withdrawing from the IMF. The US responded by suspending aid, and Argentina could not get World Bank loans for the next two and half years (Sheinin 142f). The US Ambassador to Argentina predicted that another military coup was “inevitable” (Rabe 63).

    The hoped-for coup arrived in 1966, and more liberalization followed. Despite squeamishness from some liberals like Robert Kennedy and Jacob Javits, who delayed recognition of the Onganía regime for 18 days, and banned the sale of certain weapons, “US-Argentine relations remained strong” (Sheinin 146).

    Extensive military cooperation followed: “Between 1964 and 1970, more than two thousand Argentine officers received military training in the United States and the Panama Canal Zone” (Sheinin 147), including lovely individuals like these.

    The military regimes of Levingston and Lanusse were were more nationalistic than Onganía in the economic sphere. This may have annoyed the Americans, but with Argentina threatened by leftist insurrection, they were not eager to rock the boat. Military aid to Argentina skyrocketed as Argentina’s importance as a bulwark of “regional security” increased under the “Nixon Doctrine” (Sheinin 157).

    Surprisingly, the US took a relatively pragmatic attitude to the return of Perónism in 1973. Sheinin (154) notes in this regard that “Americans kept their heads in the face of developments that would certainly have been viewed as crises a generation earlier” and that “American policy makers showed none of the alarm that had marked earlier dealings with Perón…” (160). I don’t know why this was exactly, but off the top of my head I can think of two reasons: (1) Nixon and Kissinger were preoccupied with Chile, and (2) they were wary of undermining Perón in the face of increased activity from the Montoneros and other left-wing insurgents (cf. Sheinin 160).

    Although there is no evidence of direct US involvement in the 1976 coup, US officials both knew about and supported it. The Videla regime, of course, instituted a neoliberal paradise. The “human rights” campaigns of the Carter administration led to some modest and half-hearted pressure on Argentina, but no such scruples were observed under the Reagan administration, which used Argentine officers to train the Contras in Honduras. The Falklands War put an end to friendly US relations with the regime (and the regime itself) although some like Jeanne Kirkpatrick wanted to back Argentina against the UK.

    As you can see, over the period surveyed here, with some exceptions there is a significant positive correlation between US warmness toward Argentina and Argentina’s willingness to adopt investor-friendly economic policies. The best that can be said about US policy toward Argentina in this period is that it never actually directly organized a coup. But:

    A) It didn’t need to. In Argentina, you could always count on a coup happening sooner or later.

    B) At various points, such as the late 1940s and perhaps the early 1970s, the US was preoccupied with other affairs on the world stage.

    C) Most of the leaders of the 1976 coup and the subsequent regime had been trained by the US, such as Seineldín, Martinez, Viola, Videla, and Galtieri.

    D) General US policies and attitudes toward Latin America in this period encouraged coups in the region (and elsewhere). The Argentine generals believed that after a coup, US money, weapons, and training would be forthcoming, and they were right. This is part of my point that US interventions harden and embolden Latin reactionaries.

    As for Peru and Gen. Velasco, a few things. Velasco came to power in 1968, when the US was obviously distracted with other matters. Also, the general strategy for undermining leftist or nationalist regimes is to use the military, but in Peru, Velasco was the military, so that option was unavailable. Richard J. Walter makes these points here.

    On Chile: The US is not omnipotent. It cannot conjure up the political reality it desires in a foreign country out of thin air. Chile was a relatively rich country with a long democratic tradition by Latin standards (like Argentina, to a lesser extent). It could not be pushed around like Guatemala. So the US had to work with the available options, and in Chile those options were between Frei and Allende. The US chose Frei, and in the 1964 election it massively backed Frei’s campaign with covert funds.

    The general strategy of US foreign policy in the Third World, and especially Latin America, during the Cold War was to promote a “favorable investment climate.”

    It was also the strategy before the Cold War: the peak of US intervention in Latin America was 1898-1933; for half of this period there were no “commies” in existence, and for the other half they were hardly a serious threat. Generally, US desire to dominate the region dates back to the Monroe Doctrine and before. And the strategy continues today. But since there aren’t any credible foreign enemies left, we have to invent new ones. That’s why Rick Santorum is constantly going on about how Hizballah has set up shop in Ecuador, or whatever. (And LA countries are more independent and better able to resist the US now. The attempted coup in Venezuela in 2002 would have succeeded a generation ago).

    Now, I repeat: US foreign policy is not omnipotent. We have limited resources, and we cannot do away with all the things we dislike at once. Since Communism was the greatest threat to favorable investment climates, we tended, at any given point, to focus most of our resources on combatting movements that were explicitly Communist or which we perceived to be Communist. This leads some people to believe that we only opposed Communism, and were just fine with democratic nationalism and other threats to the American-dominated international economic system. But this is the wrong moral to draw from the Cold War. It only sometimes looks as if this were true because we tended to focus less effort on opposing non-Communist nationalists, since Communism was the greater threat. But that doesn’t mean we liked economic nationalism, and it doesn’t mean that we didn’t do what we could to oppose it when it was feasible to do so.

    The US also opposed fascism before and during World War II, especially from Japan. Why? Because fascism creates an inhospitable investment climate, or at least an imperfect one. The Japanese Greater East Asian Co-Prosperity Sphere would have put an end to US plans for an Open Door in Asia (even as it strove for a relatively closed one in the Western Hemisphere). The US also opposed European imperialism after WWII, and for the same reasons. Except, of course, where the alternative was worse, like in Indochina. Noam Chomsky made this argument, with particular reference to Indochina, in Chapter 1, Section V (pp. 31-66) of this book.

    You mention South Korea, Iran, and Turkey (why not Taiwan too?), all US allies with nationalist economic policies. Notice something about these countries: they were all on the periphery of the Communist world. The US needed these countries as bulwarks against the Soviet Union and China. They needed to be prosperous and militarily powerful. We could not afford for South Korea to be Honduras.

    Indeed, US planners had no plans for South Korea’s development prior to the Korean War. We saw it as a country of stupid, backward rice farmers without much promise. It didn’t show up on our radar, which is why we were surprised by the North Korean invasion. Initially, too we were skeptical of its economic policies, but we soon shut up when we saw the results.

    In Iran and Turkey, the story is similar. These countries bordered the Soviet Union and had strong militaries. Iran in particular provided a range of services to the US, including extensive espionage against the USSR. That’s one reason why “losing” Iran in 1979 was such a big blow to the US.

    You could have also mentioned Israel, the largest recipient of US aid and hardly a free market paradise, especially before the Begin government. Israel, Turkey, Iran, and Ethiopia signed the “Periphery Pact” in 1958, which the US backed. This was a military alliance of states on the periphery of the Arab world. The idea was to isolate and contain Arab nationalism, which the US was becoming hysterical about at this point. (Israel itself has long sought close relations with other “peripheral” states and peoples, including the Kurds. Israel even continued to sell arms to Iran for a time after 1979).

    After Israel’s defeat and humiliation of Nasser in 1967, the US was finally sold on Israel’s value as a strategic asset in the region, whereas before it had been skeptical because of its perceived closeness to Britain and France (think Suez 1956). Even Walt and Mearsheimer think that Israel’s net strategic value to the US was positive during the Cold War.

    As for Africa… I’ll admit I don’t know as as much about this region. But, like I said before, US resources are limited. The more we needed to worry about Lumumba, or Nkrumah, or the Derg in Ethiopia, or the MPLA in Angola, or FRELIMO in Mozambique, or Cuban intervention… the less we could worry about a Julius Nyerere or a Jomo Kenyatta. Secondly, Africa is such a poor place that it may have been less important to preserve a favorable investment climate. Finally, most of Africa already belonged to the spheres of influence of European powers, especially France.

    I could go on, especially about Latin America and the Middle East, but that would require another essay-length comment.

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  53. We’ve now arrived at a phase of any debate about the Cold War which inevitably arrives : a conflict of irreconcilable priors about the motives behind the US engagement in the Cold War. If one’s prior is that the United States engaged in it in order to create/maintain a favourable investment climate for itself in the world, then all decisions can be rationalised around that premise. If the United States didn’t seem to be bothered by countless instances of economic nationalism or social democratic experimentalism in countries which were either neutral or pro-US in the Cold War, then those must have been because their strategic value was more important than their investment value, or their markets just weren’t that big anyway, or the USA was not omnipotent and had to prioritise their resources. It’s not possible to falsify such a premise with individual cases. Anyway, that issue must await a separate blogpost — one of many I’ve now committed myself to and I already have two dozen draughts saved but unfinished !

    I itch to comment on the Israel part of Matt’s remarks, but I think the response would be better if it were packaged as part of that blogpost on US motives during the Cold War.

    But on Argentina I will reply right now :

    Matt’s account is a pretty tendentious reading of the foreign economic relations of Argentina in the post-war period.

    Farmers were key constituents of the New Deal coalition and there were large surpluses sitting in the United States. There was no way Marshall Plan funds were going to pay for foreign wheat, Argentine or otherwise. These weren’t “sanctions”.

    Nor did these “sanctions” have much to do with the financial crisis of 1949 in Argentina. Most Latin American countries made a killing off the Second World War : they exported to the allies, but since the allies pretty much diverted all production to the war effort, they weren’t selling anything back. So Latin American countries let their reserves accumulate, by default.

    But when the war was over, there was an import boom all over Latin America — pent-up demand, basically. In Argentina it was also fuelled by the fact that Peron had paid huge wage increases to labour throughout the 1940s. In 1946, Argentina still had a big trade surplus and was therefore exporting capital. In 1947, the trade balance was in deficit territory which implies capital has to come into the country in order to finance the deficit. But Peron had all these capital controls and multiple exchange rates and so on. At the same time, the production of beef — Argentina’s chief foreign exchange earning — had been stagnating throughout the 1940s but a larger percentage of the beef output was being consumed domestically at the same time. In 1948, the trade balance and the capital balance were both negative — meaning, Argentina was importing more than exporting, but there were not enough inflows of capital to finance the difference and therefore the country was running down reserves. This is just a classic unsustainable balance of payments situation, and in 1949 it came to a head. End of story. The United States had nothing to do with it.

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  54. Paul says:

    Matt says: “Israel, Turkey, Iran, and Ethiopia signed the “Periphery Pact” in 1958, which the US backed. This was a military alliance of states on the periphery of the Arab world. The idea was to isolate and contain Arab nationalism, which the US was becoming hysterical about at this point.”

    This is misleading. There was no “Pact,” and no signing, no military alliance, and it was not done at US behest or because of US “hysteria”.

    The “Alliance of the Periphery” or “Periphery Doctrine” was just a grandiose Israeli name for its policy of cultivating ties to non-hostile states in the region. It began around 1950 when Israel established diplomatic relations with Turkey and Iran, the only Muslim countries prepared to do so, and Ethiopia, the only independent African country at the time.

    During the 50s, Israel’s closest military relationship was with France, not the US.

    There was CENTO, (an actual military alliance, signed 1955) but that involved UK, Turkey, Iraq, and Pakistan, and Iran. Not surprisingly it was a waste of time.

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  55. Matt says:

    Paul,

    You’re right. I was being very sloppy. There was no formal public alliance, but there was extensive military, intelligence and security coordination. And the United States did not instigate this, but it was pleased with the developments. Here is how Ben-Gurion described the idea to Eisenhower, according to Ben-Gurion’s official biographer:

    “Our purpose is the creation of a group of states, not necessarily an official and public pact which… will be capable of standing firm against the Soviet expansionism with Nasser as its middleman…. This group will include two non-Arab Moslem countries (Iran and Turkey), one Christian country (Ethiopia), and the State of Israel.”

    The United States did not instigate this, but Israel actively sought the US’s approval, and the US was eventually pleased with the development. Eisenhower and John Foster Dulles were initially lukewarm about the plan, “but finally, when Dulles replied to Ben-Gurion, he expressed a positive opinion and encouraged Ben-Gurion to establish the peripheral pact” (Bar-Zohar 197).

    You said that Israel’s closest relationship at this point was with France. That’s true, and I said about as much in the next paragraph after the one you quote:

    “After Israel’s defeat and humiliation of Nasser in 1967, the US was finally sold on Israel’s value as a strategic asset in the region, whereas before it had been skeptical because of its perceived closeness to Britain and France (think Suez 1956).”

    US Near East policy at this time was dominated by the oil companies and State Department Arabists. Israel was seen a liability to US relations with the conservative Arab states, and its closeness to the old European imperial powers was troubling. If one had to pick a year to say when US attitudes to Israel began to turn around, it would be 1958. That was the year of the Lebanon crisis and Col. Qasim’s coup in Iraq, which is when CENTO had to drop its colloquial name “the Baghdad Pact”.

    US hysteria over Arab nationalism was quite real at this point. Eisenhower frantically raved about a Nasser-led “campaign of hatred against us” whose purpose was to “destroy the Western world,” although he conceded that the “campaign of hatred” was led not by the Arab “government but by the [Arab] people. The people are on Nasser’s side.”

    By this point, certain elements within the US foreign policy establishment began arguing for a tilt toward Israel. A 1958 NSC document summarized the debate. The Arabist line was that it was “essential to any permanent reconciliation with the Arab populations that the United States demonstrate its intent to limit Israel’s future immigration, to ameliorate the refugee situation, and to affect reasonable territorial adjustments.” On the other hand, “if we choose to combat radical Arab nationalism and to hold Persian Gulf oil by force if necessary, the logical corollary would be to support Israel as the only strong pro-West power left in the Near East.”

    For Israel’s part, Ben-Gurion strove from the early 1950s to present Israel as a strategic asset to the US, even as the US remained mostly aloof. According to Israeli historian Avi Shlaim, Ben-Gurion’s “overriding aim was to turn Israel into a close ally of the United States in the struggle against international communism and Arab radicalism.” He boasted that “America should know that there is a potential for a quarter of a million soldiers who are destined to fight and who are prepared to fight and this cannot be dismissed so easily.” Israel even carried out false-flag terrorist attacks on US (and British and Egyptian) targets in Egypt in 1954 an effort to turn the US away from the Arabs.

    The US increasingly looked favorably on Israel throughout the 1960s. “[B]y the early 1960s,” Mearsheimer and Walt concede, the Kennedy administration concluded that Israel deserved more support in light of growing Soviet aid to Egypt, Syria, and Iraq,” although major conflicts remained, especially arising from Kennedy’s non-proliferation efforts and Israel’s pursuit of nuclear weapons. In the Six Day War, Israel finally proved its worth by discrediting Arab nationalism and the Soviet Union’s value as an ally to the Arabs with “a vivid demonstration of Israel’s military prowess” (Mearsheimer and Walt, ibid.). Israel further demonstrated its value in 1970 by acting to prevent Syrian efforts to stop the slaughter of thousands of Palestinians by the Jordanian Army. It was from this point on that the US-Israeli “special relationship” was fully cemented.

    I have more to say but I’ll save it for PE’s future post.

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  56. Paul says:

    Overall, the US has behaved worse in Latin America and the Middle East than in other regions.

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  57. Matt says:

    Farmers were key constituents of the New Deal coalition and there were large surpluses sitting in the United States. There was no way Marshall Plan funds were going to pay for foreign wheat, Argentine or otherwise. These weren’t “sanctions”.

    “The ambassador [to Argentina, James Bruce]…, reminding his superiors that ‘the United States is the lifeline to the Argentine,’ argued in December 1947 that the United States should limit dollar expenditures in Argentina. If Perón were allowed to acquire dollars ‘without any conditions attached, we would have no ammunition for trading purposes’: thus, the state department should set up the Marshall Plan in a way that gave the US government ‘discretion in permitting Argentina to benefit.’ Nonetheless, this must be done surreptitiously: ‘it will antagonize even the Argentines who our friends if we appear to gloat over Argentina’s present discomfiture.’ [Bruce’s assistant Guy] Ray added that provided the Marshall Plan did not inadvertently rescue Perón, ‘Argentina’s dollar situation is deteriorating rapidly, and things will come to a head within the next few weeks in such a way that it will be easier to deal’ with him [Perón].”

    Glenn J. Dorn, pp. 338-39 (emphasis mine).

    Richard Bissell, assistant deputy minister of the Economic Cooperation Association (ECA) told the Senate in May 1948 that no Marshall Plan purchases are contemplated in the near future in Argentina, and none whatever will be made so far as we control them.” The Europeans were told that “present ECA policy [was] not to approve procurement authorizations for materials from Argentina” (Dorn 339) (The head of the ECA, by the way, was Howard Bruce, the cousin of James Bruce, ambassador to Argentina!)

    Dorn’s paper, if you can access it, explains in great detail all the dirty tricks used by the Truman administration against Argentine trade.

    As for the objective impact that these measures had, see Dorn and also Rock pp. 290ff, which explain how these and other measures such as Britain’s denial of convertibility of sterling undermined Argentina’s chance for a recovery in the late 1940s. In general Rock’s Chapter 7 is an excellent overview of the failures and achievement’s of Peron’s first term, detailing the Argentine economy’s many problems, foreign and domestic.

    But even if Perón was entirely at fault for Argentina’s poor economy, that doesn’t really speak to my point, which was that US relations with Argentina improved as its economy liberalized. After Perón reversed course in 1950, relations improved, and they improved even further with the coup in 1955, and so on.

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  58. But even if Perón was entirely at fault for Argentina’s poor economy, that doesn’t really speak to my point, which was that US relations with Argentina improved as its economy liberalized. After Perón reversed course in 1950, relations improved, and they improved even further with the coup in 1955, and so on.

    Per my previous remarks, the question of US motivation during the Cold War cannot be addressed on a case-by-case basis, but on a global basis, which I will do soon.

    Britain’s denial of convertibility of sterling undermined Argentina’s chance for a recovery in the late 1940s

    Britain suspended convertibility of sterling because it was bleeding capital, not because it wanted to hurt Argentina. Besides, perhaps the Argentines deserved that treatment given the hard bargains they were driving in 1945 and 1946 at the time of the greatest food scarcity in Europe. Even your own source (Rock) mentions the rather difficult attitude of the Argentines in the immediate postwar period as well as this.

    By the way, your own source, Dorn, depicts the Truman administration as, not so much trying to create a “favourable investment climate” in Argentina, but trying to combat what they saw as just another instance of European fascism :

    “For the Truman administration, however, Peron’s statist approach ap-peared to be the resurrection of the nationalist tactics used by European Fascists in the 1930s. In the eyes of the United States, excessive statism had spawned ‘unnatural’ or ‘artificial’ industries, constricted global trade, and led to depression and war. Although Peronism had little in common with European Fascism,2 US policy-makers believed that the two movements shared a commitment to a nationally ‘organized community’ and govern-ment-driven economic development. In this regard, Peron appeared to be ‘keeping the old pirate flag afloat93a nd endangering their efforts to create a liberal capitalist world order based on multilateral trade, freely convertible currencies, and private enterprise…”

    Of course, this was in the post-New Deal 1940s, so it’s not as though what the United States was advocating at the time was the same as the neoliberal policies of the “Washington Consensus” in the 1990s and 2000s.

    All the same, that Dorn piece is a blinkered, nanoscopic examination of a sideshow from an irrelevant and deformed angle. Dorn actually seems to think the use of Marshall Plan funds was decided with Argentina in mind.

    You can bypass the entire argument of the Dorn piece by actually examining the agricultural policy of the United States. The actual Marshall Plan legislation required its administrator, the Economic Cooperation Agency, to authorise European purchases of third-party products using MP funds, only when the United States did not have a surplus.

    Here is the actual text of the legislation :

    http://marshallfoundation.org/library/wp-content/uploads/sites/16/2014/06/Foreign_Assistance_Act_of_1948.pdf

    The interpretation is supported here (page 268), as well by a World Bank assessment in 1948, from which I quote its summary of the domestic bias provision :

    “The Administrator has substantial latitude in making purchases from outside the U.S., since procurement may be “from any source”. There is no specific limit on the total amount of such purchases outside the U.S. There are several clauses, however, which affect such procurement… In the case of surplus agricultural commodities, the Administrator may authorize the purchase of such commodity only in the U. S. This latter provision, however, is subject to certain technical exceptions. “Provided, That this restriction shall not be applicable (i) to any agricultural commodity, or product thereof, located in one participating and country, intended for transfer to aniy participating country, if the Administrator, in consultation with the Secretary of Agriculture, determines that such pro- curement and transfer is in furtherance of the purposes of this title, and would not create a burdensome surplus in the United States or seriously prejudice the position of domestic proclucers of such surplus agricultural comnodities, or (ii) if, and to the extent that any such surplus agricultural commodity is not available in the United States in sufficient quantities to supply the requirements of the participating countries under this title.” Sec. 112 (d) (1)”

    But, in 1947, the United States did not have surpluses to spare. So it had been envisioned that Canada and Argentina would supply most of the food sales to Europe. That had been the conclusion of an American commission on international relief aid in 1947 : http://fraser.stlouisfed.org/docs/historical/martin/13_01_194711xx.pdf

    On the basis of preliminary analysis, the Committee feels that even the scaled-down estimates of import requirements for grain – 25 million tons a year – will be very difficult to meet. The CEEC hopes to obtain 9 to 10 million tons of grain a year from the United States. During 1946-47, with total United States grain exports, the largest in history, of roughly 15 million tons, the participating countries and Vifestern Germany got seme-thing like 9 million tons. If weather during the next three years is about average for bcth wheat and corn, the United States might be able tc export 10 million tons of grain (about 370 million bushels wheat equivalent) to all destinations but the entire quantity would not be available tr> Europe. The CEEC also expects R to 1© million tons of grain yearly from other American countries, mainly Argentina and Canada. This amount is probably within their capacity to supply. Most of the balance is expected to come from “the anticipated reappearance of traditional exportable surpluses in the U.S.S.R. and Eastern Europe.”

    But that situation changed after the passage of the Marshall Plan legislation. The United States had quite a lot to export. You can actually check the wheat exports betwen 1947 and 1949 via the Survey of Current Business, for July 1948 and November 1949 :

    https://bea.gov/scb/pdf/1948/0748cont.pdf

    https://www.bea.gov/scb/pdf/1949/1149cont.pdf

    This extract ( http://www.pagina12.com.ar/diario/suplementos/cash/17-3878-2009-05-03.html ) from an Argentinian book on US-Argentine relations takes essentially the same view. It’s in Spanish, but it mentions everything I just said : record harvests of wheat in North America, US farm support policy, the US farm lobby, the legal bar to offshore procurement in the presence of surpluses in the United States, etc. It also refers to the 1948 elections in the USA ; the fact that farm states were strongly contested by Republicans ; assurances made by the US secretary of agriculture during the congressional debate on the MP that markets would be guaranteed for US farm products ; and a State Department memorandum which stated explicitly that the MP funds were “discriminatory toward Latin America” and “discriminatory in favour of the United States”.

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  59. Matt says:

    Britain suspended convertibility of sterling because it was bleeding capital, not because it wanted to hurt Argentina. Besides, perhaps the Argentines deserved that treatment given the hard bargains they were driving in 1945 and 1946 at the time of the greatest food scarcity in Europe

    But I never said that Britain wanted to hurt Argentina, and I never said anything about whether or not Argentina “deserved” to be hurt. All I said was that Britain’s suspension of convertibility of sterling hurt Argentina (You got awfully defensive when I brought up the UK!)

    By the way, your own source, Dorn, depicts the Truman administration as, not so much trying to create a “favourable investment climate” in Argentina, but trying to combat what they saw as just another instance of European fascism

    And US policymakers opposed fascism because it created unfavorable investment climates. I’ll quote myself:
    “The US also opposed fascism before and during World War II, especially from Japan. Why? Because fascism creates an inhospitable investment climate, or at least an imperfect one.”

    Even though Perón wasn’t actually a fascist, US policymakers described him as one, because its easier to demonize an opponent if you depict him as a foreign threat. In most times and places during the Cold War, that threat was “Communism”; in Argentina for a time after WWII, it was “fascism”.

    I’m not saying that US policymakers were insincere, either. I’m sure they really believed that Perón was a fascist, just like I’m sure they really believed that Arbenz was a Communist. But that’s not because they based those beliefs on objective evidence; it’s because the US foreign policy establishment selects for people with those kind of beliefs.

    Of course, this was in the post-New Deal 1940s, so it’s not as though what the United States was advocating at the time was the same as the neoliberal policies of the “Washington Consensus” in the 1990s and 2000s.

    You seem to be under the impression that the economic policies a nation adopts at home must be the same ones it promotes abroad. I don’t see any evidence for that contention.

    All the same, that Dorn piece is a blinkered, nanoscopic examination of a sideshow from an irrelevant and deformed angle. Dorn actually seems to think the use of Marshall Plan funds was decided with Argentina in mind.

    You can’t refute an argument by attacking its conclusion. And anyway, I don’t see that the conclusion is prima facie implausible. The Marshall Plan was designed with many things in mind. One of them could have been Argentina, and, according to the evidence marshaled by Dorn, it appears that it was. Maybe it wasn’t, but you’d have to actually engage Dorn’s argument to show that it wasn’t.

    The actual Marshall Plan legislation required its administrator, the Economic Cooperation Agency, to authorise European purchases of third-party products using MP funds, only when the United States did not have a surplus.

    And the ECA heavily discriminated against Argentina. The State Department, which was less eager to provoke a diplomatic confrontation with Argentina than the rest of the US government, investigated the ECA and “found thirty-three cases of discrimination against Argentina” (Sheinin 97). “All in all, throughout 1948 the ECA financed a meager $1.1 million of purchases from Argentina, while purchases from Canada, Australia, and other food-producing countries were financed to the tune of $360 million” (Dorn 340). Finally, the Truman administration announced that it “would now welcome ECA purchases in Argentina as elsewhere”, although “the boycott continued” until 1950 (Dorn 341).

    But, in 1947, the United States did not have surpluses to spare. So it had been envisioned that Canada and Argentina would supply most of the food sales to Europe.

    That’s what Dorn says. On p. 338, he says the initial plan was that:

    “The Economic Cooperation Administration (ECA) would allocate Marshall Plan dollars to European states to spend in the Western Hemisphere through a programme labelled offshore procurement, and Latin American states would earn the dollars they needed to restimulate the triangular trade. The secretary of state, George Marshall, estimated the amount they might earn as high as $10 billion, and Argentina seemed to be set up to take the lead. Howard Bruce, the ECA’s acting administrator and the ambassador’s cousin, seemed to agree; he estimated in December 1948 that Argentina might receive ‘several hundred million dollars’ in sales through the Marshall Plan.”

    Dorn then goes on to describe how and why this plan was scrapped.

    Certainly it was also true that domestic farm interests and the like had a lot to do with the design of the Marshall Plan as well. But that doesn’t mean that the US wasn’t trying to undermine Argentina. After I said this:

    Me: “The US denied Argentina Marshall Plan purchases in order to punish it for its economic and foreign policies.”

    You responded with this:

    You: “The main, driving force behind the allocation of funds for Marshall Plan purchases was the domestic farm lobby.”

    But that’s not inconsistent with what I’ve said.

    In any case, US protectionism at home is the other side of the coin of US attempts to undermine protectionism abroad. It’s one policy.

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  60. Pincher Martin says:

    Matt writes:

    “The US also opposed fascism before and during World War II, especially from Japan. Why? Because fascism creates an inhospitable investment climate, or at least an imperfect one.”

    The U.S. opposed fascism during WW2 because “fascism creates an inhospitable investment climate”?

    Whatever might have been the causes leading to WW2, I’m pretty sure the U.S. opposed fascism during the war because they were actually fighting fascist governments. With Japan’s surprise attack on Pearl Harbor and the immediate, subsequent German declaration of war on the U.S., no economic rationale was needed for opposing fascism.

    I’m also surprised no one called Matt on this earlier comment contesting Brad DeLong’s comparison of Cuba and Israel:

    “[DeLong] says that Begin and Sharon held elections. I’m all for elections in Cuba, but let’s not kid ourselves. Begin and Sharon held elections in Israel. Not in the Occupied Territories. Or in Lebanon.”

    Israel did help hold an election in Lebanon, and the Israelis’ Phalangist ally (Bachir Gemayel), who was elected president in that protested election, showed a great deal of independence from Israel in his very short-lived presidential career. Not that it mattered.

    But when has Castro ever allowed competitive elections? Anywhere? So even if it were true that Israel under Begin did not want to see elections held in Lebanon under any pretenses in the eighties, it would be ridiculous to believe this undermines DeLong’s larger point. In fact, the domestic resistance in Israel to the Lebanon War helped end Begin’s government and sent Sharon into temporary retirement. Good luck finding a comparison with that in Castro’s Cuba.

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  61. Matt states :

    You can’t refute [Dorn’s] argument by attacking its conclusion

    Actually, both you and Dorn are arguing in circles. Argentina was excluded from Marshall Plan purchases. But why? This is the kernel of Dorn’s argument :

    The Truman administration had created the ECA not only to allocate resources to Europe, but also as a weapon in its global campaign to bring down trade barriers. In short, its function was to promote multi-lateral trade and US-style liberal capitalism, while ‘discouraging] totalitar-ianism and highly centralized governments’.

    The above is assumed to be the principle that guided US relations with Argentina in 1947-50, and without that assumption Dorn’s article is nothing more than an account of perfervid cables streaming out of US Embassy Buenos Aires.

    But at least Dorn’s account argues for a credible motive — the creation of a liberal multilateral trading regime which would prevent war and depression. The United States did seek to create such a system so that’s not an impossible motive in the case of Argentina — though unlikely for reasons already stated.

    You, on the other hand, prefer a lot more reductive motive. You admit that the United States may have actually believed Peron was a fascist, and I agree he was not. But for you that hardly matters because, as far as you’re concerned :

    …US policymakers opposed fascism because it created unfavorable investment climates

    And that is your axiom, unsupported by anything other than episodes of US foreign policy which are interpreted in light of that very axiom.

    An interpretation which does not require the worst possible reading of the Marshall Plan as a premise, is that the United States intended it simultaneously as a foreign aid programme and a domestic support programme in which other supplier countries could participate, depending on US supply conditions. After all, Europe was able to buy wheat from Australia and Canada in 1948.

    But Argentina might have been excluded because it had been a Nazi-sympathising country, whereas Canada and Australia were war-time allies. But more likely, Argentina would not ratify the military treaty signed in Rio. Your own source Sheinin certainly treats the ratification of the treaty basically as a quid pro quo for the Ex-Im bank loan that Argentina got in 1950. And an earlier Argentina mighted have voted against the Korean War resolution in the General Assembly, rather than merely abstained as it did.

    And, yes, the United States was attempting to recreate the sort of global liberal trading regime that had existed before the 1930s. But how do we know this was such an important consideration in the Argentine case, or that it was a consideration at all ? Your answer is basically that US-Argentine relations improved after the 1949 austerity plan.

    Both you and that Sheinin guy totally blow the events of 1949-50 out of proportion, as though a fundamental restructuring of the Argentine economy had taken place. It’s an anachronistic back-projection of the 1990s.But what did Peron do ? Raise interest rates, cut the budget deficit and reduce money printing. Those are the broad outlines.

    You seem to be under the impression that the economic policies a nation adopts at home must be the same ones it promotes abroad. I don’t see any evidence for that contention

    No. I am under the impression that I know what “austerity policies” before the 1980s were like. They were not your radical restructuring of economies that you saw in the late 1980s to early 2000s. Your own source Sheinin describes some of what Peron did in his “radical” reforms of 1949. Argentina in the 1950s continued with the very opposite of a liberal trading regime — exports were funneled through state-owned control boards, based on a multiple exchange rate system for different products, with the government taking a cut or “export tax”).

    And “opened up for investment” seems to be largely confined to US companies bidding on electricity and oil contracts with state-controlled authorities. Is that so mind-blowing ?

    If there was a “thaw”, it was more likely because Argentina sort of fell into line on the diplomatic-military front. Nonetheless the hostility seems to have been mostly on Argentina’s side and the United States treated it as an irritant, so busy were the late 1940s and early 1950s with other regions of the world that actually mattered.

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  62. Matt says:

    You started off denying any possibility that Argentina could have been excluded from Marshall Plan purchases. Now you admit that “Argentina was excluded from Marshall Plan purchases”, and it might have been because Argentina was interfering with plans to establish a multilateral liberal trade framework, but more likely it was because of diplomatic-security issues. So let’s examine that hypothesis.

    First, notice just how strong it is. You ask “how… we know this [the creation of an international liberal system] was such an important consideration in the Argentine case, or that it was even a consideration at all?” You think it more likely that the impasse between Argentina and the US was due to diplomatic-military factors, such as Argentina’s refusal to sign the Rio Treaty.

    Prima facie, though, it seems quite plausible that it was both: Truman administration planners disliked Perón both because of his statist policies and because of his refusal to participate in a “united front” against the USSR.

    Now, I happen to think that these motivations are related, but that’s another story, for another blog post. Suffice it to say for now that, a priori, the “both… and” explanation seems more reasonable than the “either… or” explanations.

    After all, even you concede that Dorn’s thesis is “plausible,” since “the United States was attempting to create the sort of global liberal trading regime that had existed before the 1930s” in order to “prevent war and depression” (did the global liberal trading regime that existed before the 1930s prevent war and depression?)

    OK, so that’s what we have so far. I think that both diplomatic-security factors and economic ones played a role in Argentine-US relations in the late 1940s to early 1950s (and that they were related), and you think it was only diplomatic-security factors. A priori, my explanation seems more plausible. But let’s look at the evidence that might help us decide between these two hypotheses, and see how they stack up comparatively.

    You think that unless Dorn begs the question, his “article is nothing more than an account of perfervid cables streaming out of US Embassy Buenos Aires.” I admit that I’m confused by this, because it seems to me that the cables (and State Department memoranda, and other documentary evidence) are evidence for the conclusion. I don’t really know how else a historian is supposed to establish an hypothesis except by looking at the documents (well, I can think of a few other ways, but this is the main one).

    So let’s look at what the cables say. The following is drawn mostly from Dorn, and I have tried as far as possible to just excerpt the direct quotations found in his article, and to leave out his editorial comments. Unless otherwise noted, all quotations from the Dorn article are direct quotations from US officials.

    For example, Dorn (334) quotes a State Department memo arguing that, while “‘Argentine co-operation is something less than a prerequisite for a successful system of international commercial liberalism,’ it claimed nonetheless that the spread of Perón’s brand of economic nationalism might ‘mean the breakdown of any efforts toward economic peace’.” In other words, Argentina itself might not be so important, it was necessary to dissuade other American republics from following in its example, perhaps even setting up a regional trade bloc to the exclusion of the US. This fear shows up again and again, as when an Embassy cable expressed worry over “neighboring countries who may be tempted to follow Argentina’s example” (Dorn 337). Another Embassy cable from Buenos Aires speaks of “discourag[ing] totalitarianism and highly centralized governments” (Dorn 339).

    This fear doesn’t just show up in documents, either. It shows up in actions too. “Until as late as 1948,” writes David Rock (269),

    “the Americans were still concerned with Argentina’s wartime attempts to establish a southern block in opposition to the Pan American Union…. In 1947, for example, Argentina and Chile agreed that all maritime trade between them should be reserved for their own vessels to the exclusion of outsiders. The agreement brought immediate American protests, and when the Latin Americans tried to buy ships in the United States, sales restrictions were imposed to defeat the project…. In late 1946 he [Perón] proposed an economic ‘union of the souther lands’… with Chile and Bolivia. The United States immediately intervened with generous counteroffers that frustrated the plan.”

    But perhaps all these actions were merely designed to pressure Argentina into signing the Río Treaty, and perhaps the documents are just inconsequential “perfervid” rantings. Perhaps, but it isn’t likely. If the US was merely concerned with Argentina’s “Third Way” foreign policy, and had no economic concerns vis-a-vis Argentina, why did the Embassy go after Miguel Miranda, the ultra-Peronist head of the Central Bank and the IAPI import-export agency, so vigorously?

    Dorn catalogues how Ambassador James Bruce, even as he publicly posed as a friend of the Argentines and an opponent of the draconian tactics of the “long-haired boys” of the ECA (Dorn 341), went behind Perón’s back to conspire with the Argentine military to place pressure on Perón to dismiss Miranda and replace him with an economic conservative.

    Bruce, aware that the “Army is determined to effect [Miranda’s] downfall” in “an atmosphere suggesting a coup d’état” (343-44), tried to build a relationship with the Argentine military by encouraging arms sails. Weapons sales offered “the best hope of getting the armed forces and military leaders on our side,” Bruce said. (He also, to be sure, assured the State department that this [and this is Dorn speaking now] “would buy Argentina’s adherence to the treaty… signed at Rio…, which the Truman administration deemed a key instrument of indirect control” (Dorn 344).)

    Bruce made his motivations quite clear in a conversation with Secretary of State George Marshall: “At some point Perón will have to clean out Miranda and the other crooks associated with him, or else the Army will probably clean out Perón… we do not know which way the cat is going to jump, but when it does the chances are that we will land with it on a better spot than the one we left” (Dorn 345).

    When, in late 1947, the Peronist movement became divided over whether to expropriate the property of Standard Oil. Lieutenant-General Willis Crittenberger and Bruce’s assistant Guy Ray came to Argentina to negotiate arms sales. While there, they met with Gen. Sosa Molina, minister of war and a “moderate Peronist”. After the meeting, Molina, who had previously been a “lukewarm supporter of expropriation” [Dorn’s words], came out against it, and Perón soon decided against it as well (Dorn 344-45).

    There is no question about Bruce’s desire to undermine Peronist statism. He repeatedly gave speeches to his Argentine government contacts on the magic of the market. He told the Argentine Ambassador at Washington that “every state-dominated economy is a will-o’-the-wisp” that is “no substitute for private enterprise”, and that as soon as “all decrees, laws and regulations setting up restrictions on trade” were removed, “Argentina would be back on its feet within 90 days”, and could sell $500 million of exports to the US (Dorn 346).

    Bruce and other US officials attempted to cultivate contacts with the minister of economy, Orlando Maroglio, who by this point had grown skeptical of Miranda’s statism. Bruce was particularly upset about the “restrictions imposed by IAPI.” Maroglio grew so weary of being lectured about this that he once pleaded with US officials, “don’t let’s ever mention IAPI again,” to which they responded that it was “pretty difficult to get on to any discussion of Argentine trade without touching on IAPI” (Dorn 346).

    Apparently, the lectures had some effect, since Maroglio issued a report at the end of 1948 calling for what amounted to the “elimination of IAPI” (Dorn 347), which enraged Miranda..

    When Eva Perón, up to now Miranda’s greatest (and perhaps at this point only) ally, turned on him, Perón fired him in January 1949.

    The United States was not directly involved in Miranda’s dismissal, but that does not mean it was not happy with the result. Bruce said so himself: “we have been hoping for [this] for over a period of many months… it looks now as if there is at least a chance of getting this economy on a reasonably sound basis” (Dorn 348). The Argentine Ambassador assured Washington that Argentina “had completely reorient[ed] economic and financial policies… Argentina should not attempt to become an industrial nation. Its wealth is in exporting… agricultural products.” (ibid).

    Now, here’s the kicker: the decision to approve an Ex-Im loan to Argentina was approved by the end of 1949, before Argentina had ratified the Rio pact, and this decision was given an explicitly economic rationale. Argentina had already applied to Ex-Im and had been turned down, and officials like Guy Ray though that we should basically tell the Argentines to go to hell (both because they hadn’t ratified the Rio tracy and because they were stalling on dismantling IAPI). The new Assistant Secretary of State Edward Miller, however, argued that a loan would “give the United States an opportunity to influence the Argentine government toward sounder business practices” (Dorn 349), and shortly after, the loan was approved. Now, of course, the US used the prospect of a loan offer to leverage further concessions out of Perón, including ratification of Rio, but it is significant the decision to put forward a loan offer was made apparently independently of Perón’s willingness to sign the treaty, and apparently in order to influence Argentina “toward sounder business practices”.

    You say that I ascribe a “more reductive motive” to US planners than does Dorn. I may be missing something, but I can’t see any inconsistencies between what I’ve said and what Dorn says.

    I think that US officials sincerely believed that Perón was a fascist, just like I think that Khrushchev sincerely believed that the Hungarian revolutionaries of 1956 were fascists in the pay of Wall Street, and like Hitler sincerely believed that there was international Jewish conspiracy out to defile the German race. I believe that people create self-serving fictions in order to give a disinterested veneer to interested actions, and that they come to sincerely believe these fictions, so as to be better able to act on them. I believe that institutions select for people who believe fictions, so as to be better able to act on them. I believe that Americans and American institutions are not immune to this flaw.

    You and I both believe that the US wanted to create a multilateral liberal trade framework. You say that this was because US planners believed that this would “prevent war and depression.” I agree, but I would only add that this framework also had the convenient side effect of promoting a favorable climate for US investment.

    You claim that Argentina’s post-1950 liberalization was not severe, and I agree. But I could make the same argument against your preferred explanation: What did Argentina’s “sort of falling into line on the diplomatic-military front” actually amount to? They abstained rather than voted against the Korean resolution? They signed the Rio pact? Why was that important? Because of the ever-present danger that Stalin would invade South America, and that, if he did, formidable Argentina would join him?

    Argentina market reform were far from drastic, as Dorn acknowledges. What mattered was not Argentina itself, but the hemisphere. Through a combination of US measures and its own internal failings, Peronism had been discredited and contained. By reversing course and accepting a US loan, [Dorn is speaking now]:

    “Perón was tacitly admitting that his statist economic program me had failed, making it impossible for him to pose credibly as the standard-bearer for anti-US nationalists across the hemisphere…. Even if Perón did not reverse his policies completely and, in the 1950s, periodically intensified his ant-capitalist propaganda, strengthened Argentina’s economic ties with the Soviet bloc, persisted in his efforts to find allies within the hemisphere, and never completely dismantled the IAPI,… [Argentina would be] unable to boast of ‘economic independence or of having found a viable alternative to the US liberal capitalist model [and] could never mount a serious challenge to the United States’s imperialist agenda in Latin America…. While Perón’s economic experiment might well have failed without US intervention, the early strength of Peronism exemplified the challenge that volatile, homegrown nationalism posed to the US vision of the Western Hemisphere nestling under the umbrella of US ideals and leadership. The Truman administration, fearful that Perón’s alternative programme would handicap their efforts to forge a more open international economy based on convertible currencies and multilateral trade, ensured that it did not” (Dorn 350-51).

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  63. Matt says:

    Pincher Martin,

    Obviously the immediate cause of US involvement in WWII was the Japanese attack on Pearl Harbor. My point was that the Pearl Habor attack arose out of tensions between the US and Japan over Japan’s attempts to extend its own Monroe Doctrine across Asia and the Pacific, and US attempts to keep the Open Door policy alive.

    As for Israel:

    (1) Elections in Lebanon have always been far from the democratic ideal. Before the Taif Agreement of 1989, Christians were given a guaranteed majority in the legislature, the Presidency (in an executive-dominated system) was set aside for the Maronites (it still is). The Palestinians, of course, had (and have) about as many rights medieval European Jews did, and live in ghettos as despised helots. This is one of the main reasons why the Lebanese Civil War was fought in the first place: the Muslims wanted proportional representation. If there had been an actual, one-person one-vote election, the Lebanese National Movement would have won. The Maronites knew this, which is why they fought so hard to maintain the confessional system.

    (2) Israel invaded Lebanon partly in order to influence the Lebanese elections in favor of there Phalangist allies, which is why they invaded about a month before these elections. This, at least, was the conclusion of the respected Israeli military analyst Ze’ev Schiff, correspondent for Ha’aretz (quoted here, behind a paywall). Schiff argued that in addition to “root[ing] out” the PLO, Begin, Sharon and Shamir sought to make Israel the “policeman of Lebanon”, able “to decide even how the members of the Lebanese parliament vote when it comes to the election of the next Lebanese president.”

    (3) Of course Gemayel didn’t want Israel to stay permanently. No Lebanese, of any sect or political persuasion, wanted to see Israel set up permanent shop in the southern part of their country. The Phalangists twice made the stupid and treasonous decision to welcome foreign armies in to help them crush their domestic enemies (once in 1976 with the Syrians, again in 1982 with the Israelis), but they did not plan on having them stay for decades afterwards. That was not part of the deal. Oh well, sucks for them (and, unfortunately, for that beleaguered country).

    And that’s my point. Israel didn’t hold any elections in the part of Lebanon that they occupied for 18 years. In particular, it didn’t hold any elections on the most crucial issue facing the residents of the “Security Zone”: namely, the Israeli occupation itself. If they had, they would have been overwhelmingly thrown out. Hell, if there had been a referendum outside of southern Lebanon on whether the Israelis should stay, they would have been thrown out, because just about the only thing that Lebanese agreed on at this time was that they didn’t want foreigners occupying their country. Finally, Israel was kicked out, but by Hizballah, not elections. For Israel to have ignored the overwhelming will of the Lebanese people for 18 years, only to leave after being thrown out by guerrilla warfare, indicates a pretty serious contempt for democratic principles on the part of the Israeli political and military leadership, at least when it comes to matters beyond the legitimate borders of Israel.

    And of course, this is even more clear when it comes to the occupation of the Palestinian territories, which you do not mention, and which has just recently entered its 47th year. The Palestinians under occupation have almost every aspect of their daily lives controlled by a government that they have not voted for and cannot vote for. Israel controls when and where Palestinians can work, what roads they can drive on, what streets they can walk on, how much water they can use, how many wells they can dig, and on, and on, and on. Journalists are attacked and imprisoned. Hundreds of people, including children, are held in “administrative detention” without charges or trial, and those are tried are sentenced in kangaroo military courts with conviction rates approaching %100. They live under the near-constant threat of having their property, or even their lives, destroyed by fanatical and criminal settlers, whose attacks go routinely unprosecuted by Israeli police.

    And that’s the West Bank; I’ve said nothing about Gaza, which is under blockade and siege by Israel and the odious al-Sisi dictatorship, and which is currently being bombed by F-16s.

    If this was happening in Cuba today, it would be considered an international humanitarian crisis. NATO airstrikes would be forthcoming.

    Now, it’s true, democracy survives, in a distorted and ugly form, within the Green Line. For how much longer, I don’t know. The right-wing ruling coalition has passed a series of undemocratic laws prohibiting Palestinian citizens of Israel from observing their people’s “Catastrophe” (Nakba) on “Israeli Independence Day”, cracking down on foreign NGOs, etc. Even before the current crisis, fascist soccer hooligans would march through the streets shouting “Death to Arabs” (maven la’aravim), engaging in pogroms against African migrants. Mainstream Israeli liberals are no longer afraid to use the “f-word” (fascism) to describe the direction their country is headed.

    If you want to get a taste of what modern Israel is like, read Max Blumenthal’s Goliath. Or just pick up a newspaper.

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  64. Oh my dear Anônimo, I’m so sorry, Angel Hayek did not smile today. There are defeats and there are defeats, but really, how cruel can things be.

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  65. No, Matt, I do not believe Argentina was deliberately singled out and excluded from the Marshall Plan purchases of wheat. I merely postulated, if indeed Argentina was deliberately excluded, then the reasons can bear other explanations which are consistent with the scant evidence that Dorn does adduce. I believe Argentina was a country of no consequence that barely figured in the global decisions taken by the United States in the late 1940s and early 1950s. But inconsequential countries often believe the actions of great powers revolve around them and Dorn simply panders to that egocentrism, as exemplified by the very last paragraph you quote about the USA cutting Peron’s economic nationalism to size. It’s not as though that actually did anything to stem the tide of economic nationalism in Latin America !

    And if indeed the Ex-Im Bank loan had been approved before Argentina’s ratification of the Rio Treaty, on account of its sounder financial practises following the minor 1949 austerity, then wouldn’t that make the US administration look better, not worse ??? Me, I say it’s simply normal, that a loan is or is not approved on the basis of financial conditions. Argentina wasn’t entitled to a loan no strings attached, especially given its absurd practises, and the strings seemed rather modest, judging by the mild austerity practised in 1949-50. Out of this molehill you want to build a portentous mountain of the USA combatting a “viable alternative to the US liberal capitalist model”.

    (Besides, how viable was that model if it was subjecting the country to balance of payments crises that could only be alleviated with handouts from Washington ? Earlier I may have criticised neoliberalism, but that doesn’t change the fact that economic-nationalist regimes mostly self-destructed in the period 1973-80.)

    The idea that the Truman administration was actually “combatting” the Peronist movement, as opposed to merely disliking it, is inference from almost nothing. To the contrary, the only actual action taken by the Truman administration mentioned by Dorn is that it began lifting sanctions against Argentina in 1946, which were related to its “neutrality” in the war. Dorn’s assertion that the “Wall Street wolves” of the ECA had already agreed with Amb. Bruce on Argentina is footnoted with a reference to a book which makes no mention of Argentina, at all. Later Dorn mentions that several ECA administrators made impolitic remarks openly boasting of Argentina’s exclusion. He says these remarks were published in the Journal of Commerce, but Dorn’s reference is to La Prensa. He quotes every other damned thing he could get his hands on, so why didn’t he quote from the Journal of Commerce ? JOC still exists and its archives must be easily available at American libraries, whereas editions of La Prensa from 1948 must be a bit of bother to locate. I might concede the narrow point, depending on what they actually said, that the ECA administrators were prejudiced against Argentina if Dorn had actually quoted from the JOC.

    Just as Dorn interprets ECA behaviour relating to Argentine wheat in light of Truman’s global multilateralism, even though its relevance to the Argentine case is not demonstrated, so have I done the same with US farm policy, i.e., interpret ECA behaviour in light of US domestic interests.

    And you’re missing my point about US embassy cables. I did not dispute Amb. Bruce’s hostility toward Argentina. Dorn’s piece is strong on commentary and analysis by people who were not decision-takers. But it’s quite short on actual documentation of decisions taken — the standard of evidence we normally associate with diplomatic history and international relations. No one skimps on those when the subject at hand is Truman’s decision to drop the atomic bombs on Japan, or the Korean War, or the Vietnam War or the Iraq War.

    Quoting embassy cables or functionaries well down the hierarchy and making inferences about government decisions, is the staple of left-wing analyses of US economic imperialism. But it’s been 65 years now. If there was a deliberate policy of discrimination against Argentina with respect to Marshall Plan spending, we should actually have the minutes of ECA discussions on the subject, for ECA was the actual day-to-day administrator of the Marshall Plan funds. Instead, by Dorn we are treated to low-level chatter, and I don’t care how much Amb. Bruce disliked Perón or the IAPI. That’s no evidence of decisions taken. The documentary situation is rather like that for Pinochet’s coup : whilst there’s been undoubted evidence since the Church committee hearings of the mid-1970s that the United States attempted to prevent Allende’s assumption of the presidency (and other doings before and after), there is still, after all these years, no evidence of US complicity with the 1973 coup itself. Yet that doesn’t discourage the default analyses, based on inference from low-level indirect evidence, that the USA was intimately involved. (Don’t get into Chile for now, please, we don’t need to open that big tanker full of worms. We can do that in September…)

    Dorn says :

    Not only was IAPI [Argentina’s trade control board] in clear violation of US principles, but many accused it of trying to profit from the global food shortage. Seeing bilateralism, statism, and IAPI’s ‘economic blackmail’as malevolent relics of the 1930s, ECA officials saw no reason to reward Peron’s Argentina for the sort of behaviour it had been set up to eliminate in Europe. On the contrary, in the oft-cited words of one ECA official, D. A. FitzGerald, it was a ‘good time to beat the Argentine to its knees’.

    You interpret the above in terms of the USA promoting a “favourable investment climate” and playing dirty tricks to get that done. Once again, provided that Argentina had indeed been deliberately excluded, I find it much more plausible that US officials in Washington, removed from the field in Argentina, disliked Peron because they associated him and his policies with the period 1933-45 and might have acted out of such prejudices. I also referred to the reputation developed by Argentina in 1945-46 for rapacity & exploitiveness in financial negotiations with the UK, which the above alludes to with the phrase “economic blackmail”.

    You say the pre-war liberal trading regime did not prevent war & depression. But you ignore that leading up to 1914 the great powers were increasingly in commercial rivalry with one another, with even the UK increasingly favouring intra-imperial trade and Germany and the United States erecting tariff barriers. The trend in the 1920s and 1930s was more autarky and state-directed bilateral trading regimes. I myself do not believe these things measurably contributed to the world wars. But it’s an established part of the intellectual history of the Bretton Woods system that its architects believed the major cause of war and depression was the protectionist and autarkist policies of 1900-1940. Even to this day you hear about the Smoot-Hawley Tariffs and their contribution to the Great Depression. That entire Bretton Woods edifice cannot be separated ideologically from the other multilateral institution that was founded at the same time — the United Nations.

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  66. Anônimo says:

    Pseudoerasmus: “Oh my dear Anônimo, I’m so sorry, Angel Hayek did not smile today. There are defeats and there are defeats, but really, how cruel can things be.”

    It was a slaughter. My wife cried; I’ve friends who were there in Mineirão… However, Brazilians can’t help being happy. Just now we were laughing a lot now with “world cup disaster” memes that already are proliferating in our Facebook feeds. The “acceptance” phase of grief has settled.

    And let’s not forget the silver linings… The probability of a second round in the presidential elections that will occur next October just went through the roof. My fellow citizens have a history of punishing governments for bad soccer performance and that is awesome in the present circumstances: in fact, Brazil’s governing party is slightly to the right of Matt of this thread. We’ve been the shame of the BRICs; we’ve managed to grow even less than conflagrated Venezuela in the previous four years!

    With a little luck, we’ll manage to return to the good old days of neoliberal/third way politics of PSDB – the party of Fernando Henrique Cardoso, the president that reformed the state and brought (hyper)inflation to single digit territory.

    Even so, I would prefer my country to win World Cup. Better a sunny bad governed country, than one humiliated by Germany with a “goleada”. And not a smallish one.

    Tree goals in just three minutes… SEVEN goals overall… This is blitzkrieg; this is overkill. Now we know how French defense felt back in 1940…

    p.s.: Great discussion, btw. Matt’s a great fencer.

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  67. Pincher Martin says:

    Matt,

    It’s a strange and tendentious argument to use Israel’s 18-year occupation of the security buffer zone in Lebanon to highlight Israel’s lack of commitment to democracy – especially when it’s for the purpose of showing Israel’s respect for democratic norms are not any better than Cuba’s under Castro. (Brad DeLong did not praise Begin and Sharon’s commitment to democracy; he simply compared it favorably to Castro’s.)

    Israel’s invasions of Lebanon were driven by national security aims which they finally – belatedly – realized they could not achieve, not by a desire to promote democracy or nation-build or acquire new territory. Lebanon’s system of government was irrelevant to those national security goals. The Israelis didn’t care whether democracy or tyranny gave birth to the threat in Lebanon. All they cared about was removing it.

    One can criticize Israel for unrealistic military aims. Or for its treatment of Lebanese civilians. Or for the disproportionate use of force. Or for making a bad situation in Lebanon worse. Or for any number of other reasons. I might not agree with some of those arguments, but I can understand why someone would make them.

    I find it bizarre, however, that someone looks at that occupation and wonders why the Israelis never held elections with the locals to ratify it, and then deduces from that fact that the Israeli governments who oversaw that occupation – all of whom were democratically elected – must not care about democracy any more than do the Castro brothers.

    At least with the West Bank and Gaza, your argument is on much stronger ground. Even so, if Castro was ruling the Jewish State, surely almost everyone would agree that Israel, the occupied Palestinian territories, and Lebanon would all be substantially less free than they are today.

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  68. Matt says:

    Pseudoerasmus 2014/07/08 at 22:51:

    No, Matt, I do not believe Argentina was deliberately singled out and excluded from the Marshall Plan purchases of wheat.

    Pseudoerasmus 2014/07/07 at 2:20:

    Argentina was excluded from Marshall Plan purchases.

    Now, if you didn’t really mean the latter statement, or you want to take it back, that’s fine. But I can’t be faulted for responding to what you wrote, rather than to what you didn’t write.

    Since there now appears to be some disagreement over this, I’m going to have to first establish that the ECA did discriminatorily exclude Argentina. Only then will we be able to determine why.

    You write:

    Dorn’s assertion that the “Wall Street wolves” of the ECA had already agreed with Amb. Bruce on Argentina is footnoted with a reference to a book which makes no mention of Argentina, at all.

    But this reference is not meant to establish that the ECA had already decided to boycott Argentina. It is merely meant to provide a source for the use of the phrase “Wall Street wolves” to describe the ECA administrators. It’s an inconsequential aside.

    In the very next paragraph on that page, Dorn cites ECA official Richard Bissell’s testimony the Senate Appropriations Committee on May 25, 1948. I found this testimony through a database.

    The relevant portion begins with Sen. Styles Bridges (R – New Hampshire), Chairman of the Appropriations Committee, expressing concern over a memorandum he had obtained that predicted that Argentina would receive $800 million through sales of wheat, corn and meat to Marshall Plan recipients. Bissell responded:

    “It [the $800 mil figure] sounds a little high for me, but I would have to examine the facts of the matter, and I do believe it should be strongly emphasized that no expenditures whatever are contemplated in the near future in the Argentine, and none whatever will be made, so far as we control them” (Economic Cooperation Association, HRG-1948-SAP-0028, p. 191).

    Bridges further expressed worry that “Argentina has a Government corporation which is reputed to be controlled by President Peron, which does all of the exporting of Argentine goods, and which imports most of the goods brought into that country today” and that “it has a record of buying goods from the citizens at low prices and selling them for export at top prices.” (ibid). Bridges further noted that “there are some 240 American firms doing business in Argentina today, having invested some $350,000,000 in that country. Presently they are absolutely forbidden to tae home to the United States any profits from their business there and their imports are being restricted to nothing by the [Argentine] Government’s refusal to permit the United States dollars for the payment of goods brought in by individuals.” Bridges wanted “some steps [to] be taken to protect the taxpayers of this country, the Government of the United States and the American businessmen doing business in Argentina.” He then asked if Bissell “Do you agree to that philosophy?” (ibid). Under a section in the archives titled “EMBARGO ON ARGENTINE PURCHASES”, Bissell responds:

    “We do, and it is exactly for that reason that we have refused to authorize any expenditures [in Argentina] whatever, pending… negotiations with the Argentine Government…” (ibid, 192).
    After being interrupted for a few moments by other Senators, Bridges pressed on, asking whether it would be necessary for the Senate to write in regulations that would “restrict and guide purchases from a country [Argentina] where all exports are controlled by a Government corporation”. ECA official Paul G. Hoffman, formerly an executive at Studebaker, responded that that would not be necessary, and that the ECA “will attempt to deal with the Argentine question as you clearly indicated you want to deal with it, and, frankly, as we would want to deal with it” (ibid, 195). Senator William F. Knowland (R – California) expressed confidence in Hoffman, and said that “there might be fewer restriction in the legislation itself, and certainly as long as Mr. Hoffman and the present people are operating the program” (ibid.).

    But Bridges wouldn’t let it go, waiving around a “memorandum… from some Members of the Senate who want me to bring out the point in connection with this Argentine thing to you.” Hoffman responded: “I think you have made it quite clear to us, sir, what you want us to do, and we happen to be in full accord with the point that, as far as American dollars which would go into Argentine purchases are concerned, we see that those dollars go in such a way that they get good, fair prices, and that we also use those purchases to bring about perhaps a more satisfactory situation for American business in Argentina” (ibid., 196).
    Bridges brought the matter up yet again, and Bissell reassured him that “what we are working for its establish, in conjunction with the Europeans, an effective control over any dollars that are spent in the Argentine” (ibid., 235).

    On June 1st, Bridges pressed on with “this Argentine thing” with Secretary of the Treasury John Wesley Snyder, again upset that “Argentina does all of her export selling through a Government corporation” and reminding the Secretary that “We now have several hundred American businesses with huge investment down there…” (370). Snyder, however, declined to comment, noting that “whenever I refer to a particular country, I would like it to be off the record” and preferring to address the matter in a letter (ibid.).

    I’m beginning to think that Congressional pressure, and not just ECA self-initiative, played a role in Argentina’s exclusion from the Marshall Plan.

    Dorn also cites a State Department memo titled “Instances of Apparent Discrimination” from January 25, 1949 (339n5, 340n4). I’m guessing that this memo was the result of a State Department investigation finding ECA discrimination against Argentina. Sheinin (98) also says that the State Department found 33 cases of ECA discrimination against Argentina. One of Sheinin’s sources is this book by Harold Peterson, which alleges that State found “at least thirty instances of outright discrimination against Argentina by ECA officials” (p. 476). Peterson also claims that “Of the first $155,665,750 ECA aid spent in Latin America, Argentina received only $1,274,456.” Peterson cites three New York Times articles. I found two of these articles through a database (I was not able to find the one from July 23, 1948).

    One of them is from October 11, 1948, available here behind a paywall. In this article, the Times indeed states:

    “After six months of Marshall Plan operations, the ECA had spent $155,665,750 throughout Latin America, according to official figures from Washington. Fourteen of the twenty republics figured, and Argentina, with vastly greater food resources than any other, ranked eighth, with $1, 274,456.”

    The other article, from June 11, 1949, titled “Buenos Aires sees a US Policy Split,” by Milton Bracker (the author of the previous article), mentions a “confidential list… prepared at the State Department purporting to show more than thirty instances of ECA discrimination against Argentina.” Presumably, this is the memo referred to by Dorn.

    Further evidence of the existence of this memorandum comes from a Ph.D thesis by Norma Delia Gonzalez. On p. 58, Gonzalez refers to a “State Department… investigation of ECA activities that revealed at least 33 instances of discrimination against Argentine products.” Her source (p. 81n22) for this is a State Department memorandum dated 25 Jan. 1949, the same date as the one cited by Dorn.

    Rock (293) writes that Argentina earned only $21 million in Marshall Plan dollars in total. here are his sources for that.

    Now that we know that the ECA boycotted Argentina, the question is: why did the ECA boycott Argentina? You say that American planners associated Perón with autarkic fascism, and believed that he stood in the way of a multilateral liberal trade regime.* I agree that they believed this, but I find it too large a coincidence that this belief coincided with the interests of American capital. But we’ll have to have that debate when you write-up your next post.

    You write that Argentina was not very important to US foreign policy during this period. I agree; in fact I was the first to bring that up:
    Why didn’t the US take harsher measures against Argentina during this period? Partly because the measures it did take seemed to suffice reasonably well enough, but also because the Truman Administration was preoccupied with Greece, Berlin, Korea, etc. Latin America was not a priority for Truman.
    You’re the one who brought up Argentina, referring to all the many “decades of Peronism… Argentina was perfectly free to indulge in“. In actuality, though, Peronism during the cold war lasted, not “decades, but a total of 12 non-consecutive years (15 if you count Peron’s three years as Labor Minister from 1943-46). During 7 (or 10) of those years, the US was busy with more important matters (World War II, the early stages of the Cold War, and Korea). During this period, the US still managed to muck around in Argentina, first hamfistedly under Braden, then more elegantly under Bruce.
    So that leaves two years under Eisenhower, when Perón was pursuing a relatively US-friendly and conservative policy, and in which he was soon overthrown by a golpe anyway; and three years under Nixon and Ford in which the US took an admittedly cautious stance, followed by a coup staged by an Argentine officer corps that the US had spent more than a decade arming and training in “counter-insurgency” techniques, which they then put to “good” use.

    P.S. – Anônimo, does that mean that if Argentina wins the Cup, the Kirchnerists will be reelected?

    *Before, you said that this was “unlikely for reasons already stated”, and you asked skeptically “how… we know this was such an important consideration in the Argentine case, or that it was a consideration at all ?” Now it seems you’ve changed your mind. Again, that’s perfectly fine.

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  69. I don’t think I had changed my mind, but I won’t argue what’s been said and how, because it’s now besides the point. With the Congressional testimony you’ve established the ECA deliberately excluded Argentina. That evidence is much more compelling than anything else you’ve cited in specific respect of the ECA.

    You’re the one who brought up Argentina, referring to all the many “decades of Peronism… Argentina was perfectly free to indulge in“. In actuality, though, Peronism during the cold war lasted, not “decades, but a total of 12 non-consecutive years

    That’s a narrow reading of “Peronism”. Peronist political economy did not just vanish after he himself disappeared from the scene. But you know that already. Argentina has had brief episodes of shallow liberalisation before the 1980s (mostly, but not exclusively, in the form of fiscal austerity). The way you are talking, would imply that Menem had nothing much to do in the 1990s, when in fact he reversed decades of accumulated policies and policy effects, not just what Peron did, but also what various juntas had done.

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  70. Pingback: The Political Economy of US Foreign Policy | Pseudoerasmus

  71. Matt says:

    Pincher Martin,

    Of all the wars Israel has fought, the “security” argument is least persuasive for its 1982 Lebanon invasion (It isn’t very good for the other ones, either, IMO). Remember, there was a cease-fire in place with the PLO – and Israel engaged in a series of “provocations” designed to goad Arafat into giving Israel an excuse to invade. But he didn’t give them one. The PLO largely kept to the Habib cease-fire. Israel used the Abu Nidal Organization’s attempted assassination of the Israeli Ambassador to the UK as a pretext to invade. Abu Nidal had split from the PLO long ago and had been at war with Arafat for years.

    Indeed, Begin and Sharon (mainly Sharon) had been planning the invasion since August 1981. Read Benny Morris on this (pp. 509ff).

    You write that Israel’s 1982 invasion was motivated “not by a desire to promote democracy or nation-build or acquire new territory.” It certainly wasn’t about promoting democracy, and it seemed aimed more toward nation-destroying than nation-building. As for territory, I hope you can forgive me for disagreeing.

    Zionists have long sought to acquire southern Lebanon as territory for the Jewish State. In 1937, The Zionists, in keeping with the policy of seeking alliances with “peripheral” states and peoples, had wanted a common border with the Lebanese Maronites, who lived mainly north of the Litani. Morris (p. 494), observes that “The map of the prospective Jewish state presented by the Zionist Organization at the Versailles Peace Conference in 1919 included southern Lebanon up to the Litani.” Ben-Gurion spoke of “a political need for a common frontier with Lebanon,” (ibid.) and Moshe Sharett wrote that “it is vitally important for the Jews that the area of their settlement should remain contiguous with the [Christian] Lebanon” (ibid., 495).

    Ben-Gurion (quoted here, p. 30) described Lebanon south of the Litani as “the northern part of western Israel” (“eastern Israel” being what is today called the Hashemite Kingdom of Jordan).

    Some Israeli officials in the 1950s seriously contemplated conquering southern Lebanon. Sharett wrote in his diary that then Chief of Staff Moshe Dayan advocated the invasion of Lebanon and the creation of “a Christian regime which will ally itself with Israel. The territory from the Litani southward will be totally annexed to Israel and everything will be alright.”

    The Litani, of course, would be an important source of water for a water-hungry desert country, like Israel. Water plays a big role in Israel’s territorial ambitions in the West Bank, too.

    There were also other territorial ambitions involved in the Lebanon war. This territory wasn’t in Lebanon, though; it was in Palestine. As Morris writes (p. 509), “Begin and Sharon had a broader objective: the destruction of the PLO and its ejection from Lebanon. Once the organization was crushed, they reasoned, Israel would have a far freer hand to determine the fate of the West Bank and the Gaza Strip.” They hoped that the war would permanently crush Palestinian nationalism and force the Palestinians to accept living in Jordan, rather than the West Bank or Gaza. Sharon even contemplated overthrowing the Hashemite monarchy in order to facilitate this “solution.”

    You write:

    if Castro was ruling the Jewish State, surely almost everyone would agree that Israel, the occupied Palestinian territories, and Lebanon would all be substantially less free than they are today.

    I most emphatically would not agree with that. I very much doubt that Raul Castro could do a better job of displacing and torturing Palestinians if he ruled “the Jewish State” (I guess that includes the West Bank and Gaza?) than the current set of characters in Tel Aviv. What’s more, I think they would be very insulted to hear that you disagree. They’ve been working so hard at it, after all.

    As for Israel-proper, I’ll concede that things are freer there, even for Arabs, than in Cuba. Israel is still (some sort of) democracy within the Green Line (for now). Granted, that’s largely because they drove out or expelled the vast majority of the indigenous inhabitants in 1947-49, then stole or destroyed their property and wouldn’t let them back in, then it subjected the ones who remained to martial law until 1966. (As they say, Israel is a democratic and Jewish state: democratic for the Jews, and Jewish for the Arabs). But OK, Israel is an (ethno-)democracy, and Cuba isn’t even that.

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  72. Israel is still (some sort of) democracy within the Green Line (for now). Granted, that’s largely because they drove out or expelled the vast majority of the indigenous inhabitants in 1947-49

    I have an upcoming blogpost, not specifically relating to Israel, but which starts with that very observation.

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  73. Anônimo says:

    Matt: “Anônimo, does that mean that if Argentina wins the Cup, the Kirchnerists will be reelected?”

    Argentina will not win the Cup. They don’t deserve it; Germany is the better team. We — Brazilians — don’t deserve it: they’re still commemorating the 1 x 0 over Brazil back in 1990!!! Every time they can (it’s so distressing!). America Latina does not deserve it either: a bunch of Colombians soccer fans were chanting the following hymn with us in the stadium: “A-mé-ri-ca Latina! Menos Ar-gen-ti-na!” (That is: “Latin America! Except Argentina!”

    Argentinean arrogance, boorishness and general jerkiness and impoliteness in all soccer related matters is proverbial here in Latin America. We would be very happy cheering for any other Latin American soccer team — Costa Rica, Uruguai, Chile, Colômbia –, and even for US…

    Argentina? NEVER! They are the scum of the Earth (but only when it comes to football… Their women and culture and food and beautiful country is alright).

    Now, speaking seriously: I was half joking. Brazilian politicians always try to capitalize World Cup victories, but the effect is too short lived to really work, and there is a loooong — for Brazilian airy minds — time interval between July (date of World Cups) and October (date of presidential elections). Dilma Rousseff’s chance of winning a reelection in just one turn (heads of government need to win 50% or more of the popular vote, otherwise there is a “second round” with the next after candidate in overall votes received) was seen as remote last year. Her government is in this situation not because of the Germany 7 x 1 Brazil in Mineirão, but as a result of the Inflation 7% x 1% Growth from the previous 12 months. Stagflation is not a good electoral canvasser anywhere in the world. Even so, I don’t think she will lose the presidential elections in the end (neither does the market – though it does shot fireworks when her electoral prospects slide a little down in polls).

    p.s.: Loved your touché on Pseudoeramus earlier this day! It is a pleasure to lurk over such a lively exchange! 🙂

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  74. Pincher Martin says:

    Matt,

    You’re looking at the discrete tactical events that preceded the 1982 invasion of Lebanon too narrowly, and yet, paradoxically, judging Israel’s intent in that invasion too broadly.

    Begin saw the PLO and Syria’s presence in Lebanon as a threat he would not allow to go unchallenged. So all this talk about “cease fires” and “provocations” is beside the point. Begin was not interested in coming to some quid pro quo with a hated enemy. He wanted to extirpate that threat, and that was his rationale for invading. One can argue about the wisdom of this decision or how it was carried out, but not with his reasons for doing so. Even your own sources (Benny Morris, Nubar Hovsepian) spell out the Israeli military aims and objectives of the invasion in terms I’ve already laid out. They say nothing about goals for territorial conquest or access to water which were contemporary to the invasion.

    Since you can’t find any evidence Begin wanted to colonize Lebanon and start Jewish settlements along the southern banks of the Litani river, you’re left with a Ben-Gurion quote from more than six decades before the 1982 invasion commenced and desultory wet dreams from various Zionists ever since. The one exception is the 1955 quote from a diary that claims Moshe Dayan wanted to annex southern Lebanon. But that is a full twenty-seven years before the 1982 invasion and nearly half a century before Ehud Barak had the IDF pull up stakes and depart the country, and there’s no evidence connecting it to the decision to invade taken a generation later.

    So it does not follow that because southern Lebanon was a gleam in Ben-Gurion’s eye that Menachem Begin felt compelled to invade it six decades later. You dodge this lack of evidence on Lebanon by sidestepping to the West Bank and Gaza. But I’ve already admitted that the occupied Palestinian territories are a better case for your thesis than Lebanon. The Israelis clearly didn’t want to give up the land and didn’t want to make citizens out of the Arabs living there. For the longest time they tried to find some way out of this dilemma that wouldn’t make them bigger international pariahs than they already were. They failed to do so.

    But even in Gaza and the West Bank, the Israelis have been forced to make concessions to democracy and statehood that Castro has never made with any part of Cuba.

    As for Israel-proper, I’ll concede that things are freer there, even for Arabs, than in Cuba. Israel is still (some sort of) democracy within the Green Line (for now).

    I view this as no more of a concession than I would if you told me you conceded you have a nose on your face.

    By any measurement of freedom, Israel is far superior to Cuba. Only a loon would even try to debate it. Take any of the various NGOs and scholarly outfits which measure freedom and democracy around the world, and you will find Israel well above Cuba.

    The Economist Democracy Index.

    Israel – 37th (just below Taiwan and Chile and just above India and Jamaica).

    Cuba – 127th (just below Kuwait and Russia and just above Angola and Rwanda).

    Global Democracy Ranking, 2013

    Israel – 21st (just below Japan and Portugal and just above Estonia and Uruguay).

    Cuba – unranked

    World Democracy Audit

    Israel – 30th in Democracy rank; 35th in Press Freedom rank; 26th in Corruption rank.

    Cuba – 122nd in Democracy rank; 144th in Press Freedom rank; 47th in Corruption rank.

    Freedom House

    Israel – Free: On a scale of one to seven, with one being the highest and seven the lowest, Israel gets a score of one on political rights and a score of two on civil liberties.

    Cuba – Not Free: On a scale of one to seven, with one being the highest and seven the lowest, Cuba gets a score of seven on political rights and a score of six on civil liberties.

    So there’s no debate about this. You can speculate with foreboding about what the future will bring, but Israel has a long track record of democracy and freedom that Cuba has not approached at any time in the last forty years.

    Granted, that’s largely because they drove out or expelled the vast majority of the indigenous inhabitants in 1947-49, then stole or destroyed their property and wouldn’t let them back in…

    Yeah, that was so different from what Castro did. A million Cubans have left the country, and they’re still leaving, despite the wonderful HDI scores you tell me are to be found in Cuba. Perhaps the Israelis should have consulted Castro on the best way to get the natives to pick up stakes and settle abroad.

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  75. Vijay says:

    There may be a lot of misunderstanding on the part of many regarding capitalism and socialism in Latin America. Mexico and south wards, the overarching feature of capitalism or socialism or communism is demagoguery. That is why a Chile or a Costa Rica of the present day stands out. Bachelet or arias or solis does not make random decisions. On the other hand, consider every decision of Chavez/madero and the kirschners (and Allende and peron) make or made executive decisions on a one man against whatever they feel is bunched up against them. I exclude Cuba and the castros from this because they know no better. An analysis of socialism based on peron/krchners and Chavez would make a laughing stock of what socialism or communism is.

    May be the Argentinians and the Venezuelans got the rulers they deserve. To be honest, india has always had the rulers that Indians deserve.

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  76. Plain Jane says:

    Recently came across this, about Cuban doctors working in Venezuela:
    http://www.latimes.com/world/mexico-americas/la-fg-venezuela-cuba-doctors-20140911-story.html

    Like

  77. Pingback: El sorprendente Índice de Desarrollo Humano de Cuba | Níntil

  78. Pingback: Castro: Coercing Cubans into Health | Notes On Liberty

  79. Pingback: Monday assorted links - Marginal REVOLUTION

  80. Pingback: Thoughts prompted by Cuba | croaking cassandra

  81. Reblogged this on Musings On The Right and commented:

    This is quite possibly one of the best articles on the economic development of Cuba. I’ll have a quick piece of my own up soon, but the myth that Castro’s model is vindicated by Cuba’s advancements over 5 decades needs some cold water dumped onto it.

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  82. Pingback: A response on Castro – King's Debates

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  84. Pingback: The surprising Human Development Index of Cuba | Nintil

  85. Pingback: Castro's Final Legacy | MadisonsCPC

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