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What are commodities?
What kinds has Latin America typically exported?
- Commodities are the raw materials that drive the world’s economy.
- Latin America exported oil, copper, wheat, coffee, bananas etc.
what is meant by the commodity lottery
a region or country will export what it can according to what the rest of the world is willing to purchase
what has happened (on a general level) with: indigo
- indigo - Export of indigo declined after the production of synthetic dyes
- guano - Artificial fertilizer replaced the need for bird feces to be exported
- bananas - large land and labor is needed. Emphasis on a “concession” - lending land to foreign people to help the industry
- petroleum - A lot of global interest. More money for exploration and money for foreign engineers is required. All profits go to multinationals rather than home country
- cocaine - illegal drug produced and traded through various routes around the world
Know the difference between coca leaves and cocaine -
- Coca leaves is a plant that similar to bay leaves that is less stimulating than coffee when chewed. Treats altitude sickness
- Cocaine is a drug that has gone through a chemical process in order to produce a certain stimulating effect.
Be familiar with US “war on drugs” and the case of Plan Colombia, and what kinds of outcomes this has had on different kinds of individuals -
- Fumigation → kills everything else too
- after: land taken away from them, horror stories, too violent to go there
- deaths from tobacco = WAY higher, also kills other people (passive smokers)
- Counter insurgency: re-introductin of slavery, increased incarceration rate, black lives criminalized (in jail forever)
Understand the significant trends in economics between 1950s/60s; the 1970s; the 1980s; and the 1990s (be familiar with the debt crisis and the responses)
1950s/60s - WW2→ surge of need for primary products until 60s. Import substitution: protect national industries, produce locally. In order to keep wage costs down (in national industries) government also kept food prices down which then negatively affected the peasantry.
1970s - The Lost Decade. Countries such as Brazil, Agentina, Mexico (and others) borrowed heavily during the 1970s to fund industrialization projects. With OPEC and increase in oil prices of mid 70s, Latin American importers of oil faced higher import costs; a the same time world economy slowed down.
1980s - In the early 1980s interest rates also inceased in the US and Europe. As growth in most Latin American countries slowed down they struggled to repay even the minimum foreign debt payments. By 1984 almost all Latin American countries had made a deal with the IMF about how to make their debt payment plan. IMF coerced countries to cut social spending. In the late 1980s many governments began to sell away their countries’ industries, privatizing businesses formerly under state control. Politically to the right (right wing US capitalist allies)
1990s - according to neoliberalism there was this idea that people were responsible for the service aspect of their community. “opening up” and de-regulating the economy in the name of the “free market”. Created better climate for foreign investment. Privatizing state companies (mining, oil, water), and basic services (infrastructure, health care, education). Curtailing state-sponsored services and programs, private sector or NGO initiatives to fill the vacuum left by the State.
Understand what neoliberalism is and know some key examples of its effects; and the different kinds of industries it tends to create in LA and what kinds of working conditions workers are exposed to -
- theory of political economic practices that proposes that human well-being can best be
- advanced by liberating individual entrepreneurial freedoms and skills within an
- institutional framework characterized by strong private property rights, free markets, and free trade
- still dependent upon the state
- Reconceptualization of comparative advantage:-
- May be about cheap labor (low wages, no job security, no unionization, etc)- May be about cheap land
- May be about fewer environmental protections. “eat shit” - Levy.
Economics: “Liberalization”, laissez faire, less state involvement, lifting international trade barriers, Ideologies: people feel responsible for their own needs (education, health care etc)
Understand the role of the IMF (institute of misery and famine) and neoliberalism with Latin American economies -
Latin American countries neoliberalism was imposed by the IMF, World Bank etc.
“opening up” and de-regulating the economy in the name of the “free market”
- Created a better climate for foreign investment
Individuals and local communities were now responsible for meeting basic needs