(^314) THE WEALTH AND POVERTY OF NATIONS
privileges going back to feudal times. They knew the darkest secrets of
the confessional, held the keys to salvation. Not a recipe for popularity.
But aside from alcohol, sex, and violence, the Church offered the only
serious antidote to despair. The trouble was, it saw all intellectual and
political novelty as subversive. A few liberals believed in fine slogans and
sought to pull the people into the present. Much of their political en
ergy was spent in a running war with the clergy.
As a result, newly independent Latin America saw few economic
changes. As before, the key sectors were mining (gold, silver, copper),
agriculture, cattle raising, forestry. The aim: to produce a surplus that
could be traded for foreign manufactures. Litde was done for industry,
and litde industry was done. As any good British classical economist
would have advised, these cobbled political entities stayed with com
parative advantage. Besides, manufactures were potentially antisocial.
They would compete for scarce labor and generate a discontented pro
letariat. The Latin American countries had no program, then, no vision
of economic development. Where Alexander Hamilton summoned a
young America to develop industry and compete with Europe, the vis
count of Cairu in Brazil "superstitiously believed in the 'invisible hand'
and repeated: 'laissez faire, laissez passer, laissez vendre/ '*
So the nations of South America remained, after independence as be
fore, economic dependencies of the advanced industrial nations: Britain
to begin with; then Germany toward the end of the nineteenth century,
reflecting its scientific and technological gains; and from the twentieth
century, the United States. Foreigners built the railways and port fa
cilities, in large part to tap the surpluses of the interior (just as in
India).^7 Foreigners lent money at high rates to poor regimes and their
opponents (bad borrowers pay, and should pay, more). Foreigners built
arsenals and plants and ran them. Naturally, foreigners were blamed for
all the shortcomings of these economies. This cultivation of resent
ment, partially justified but dogmatically exaggerated, made every
thing worse. It ideologized economic policy, turned practical matters
into issues of principle.
(The irony—but not unconnected—was that in colonial times, the
Spanish and their clergy had done their utmost to keep foreigners out.
Here are the comments of a ship's officer visiting Manila in 1788:
"Since the Spanish make a rule of prohibiting entry to foreigners, the
inns, the furnished hotels, all those amenities so necessary to hospital
ity are absolutely unknown, and one has to be ready to sleep in the
street when all one has is money and no personal connections in the
place.")^8
nora
(Nora)
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