Chile has been most successful in applying the neo-liberal model. Chile has a comparative advantage since it is counter seasonal and is able to produce products that no one else can at that time. Chile was well off from the beginning since it was under a stricter more prosperous dictatorial reign which helped balance out some of the equality. Once democracy reentered, equality came about. Chile had less political corruption in the government; therefore it was more efficient in helping them become equal. The party system was also more centralized. Learning from the dictatorship, they learned that polarized parties brought about disaster and instability. Polarized views were destructive. Chile became the most successful neo-liberal Latin American country because of the foundation that the Pinochet regime instilled.

Why Latin America is so poor

From the beginning, Latin America was built on the foundation of inequality. The Spanish came to Latin America to exploit the land rather than to begin a new life like the British. The economic system of Spain was mercantilism which kept the trade balance between themselves and Latin America making sure that Latin America only needed to trade with Spain. Latin America was rich with large supplies of labor which made labor cheap. Latin America had large pieces of land that were conducive to plantation farming and produced good cash crops. The combination of cheap labor and big plantations led to serfdom. Spanish colonies were owned and operated by a small number of land owners causing inequality from the beginning. Private enterprise was not used but a repressed form of capitalism was instituted. There was no profit to be made or moving ahead of any sort; only the elite profited. There was no frontier to expand to either. Latin America had a different structure than the U.S. and a different society.

Latifundism furthered the inequality gap between the rich and the poor. It involved a tremendous amount of power at the local level and couldn’t be regulated by government causing total control. It was inefficient and was the basis for Latin American capitalism. The hacienda owners had no incentive to be efficient and didn’t encourage education but rather they encouraged ignorance in order to manipulate and control those working for them. This structure causes a high degree of inequality and kept most of the population outside of the economy.

Once Latin America had seen how much the U.S. had prospered they began to try to pull away from Spain and trade with Britain. Napoleon invaded Spain giving Latin America the chance to pull away from Spain and trade quickly grew between them and the British. Independence unleashed social turmoil. The collectivism of the Indians was rejected as was Spanish intervention. Elites then seized the opportunity to take charge and instituted liberalism and kept the mercantilist economy. Democratic society was unable to flourish in a hierarchical society where only two percent of the population votes. Although the elites were ideologically liberal and had similar constitutions to the U.S., they were in a society that was only ruled by a small number of people which did not promote the ideas of democracy. The liberals encouraged free trade since they were the ones who owned the land and sold the crops. This new system made the rich richer and the poor poorer and further spread the gap of inequality.

The pattern of inequality followed through. Populism became a widespread phenomenon that swept through Latin America. People thought that through populism they could have their voices heard and make real change. Populism, however, only created a boom and bust cycle. Populist leaders didn’t really solve any problems. Since the poor kept getting worse off they became risk takers. They wanted to change the status quo and were more inclined to make liberal choices. They began to support neoliberalism in order to make things better because things were only getting worse off anyway. Neoliberalism was installed in Latin America as a solution to the economic problems of the poor countries, however many found it to be a new form of mercantilism. The debt crisis of the 1980’s suggested that most Latin American countries have promoted export-oriented growth through trade liberalization with a view to sustain economic growth. However, as opposed to South East Asian countries, Latin American countries have liberalized trade before having a strong export capacity, therefore imports increased more rapidly than exports, contributing to growing trade deficits. Economists believed that Latin America needed to open itself up more and needed to adopt policies of globalization. Latin America, through neoliberalism and globalization, has opened itself to the free market and painstakingly integrated itself into the world economy. Unfortunately, neoliberalism has not been the ultimate solution to economic problems as Latin Americans had hoped. Chile has prospered but many others have ultimately failed.

Castro

Since his overthrow of President Batista in 1959, the degree of influence that Fidel Castro has exercised over worldwide political and military events has been shocking. Castro's was the first guerrilla movement in Latin America to defeat the military. Castro proved to be a skillful political and military strategist.

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