When Boys Became Men

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Review of 'Silent Revolution', Duncan Green, Latin America Bureau £13.99

Duncan Green's book explains how the policies of neoliberalism have swept Latin America over the last 25 years. Silent Revolution first appeared ten years ago. As Green writes in the preface to this new edition, back then 'critics of neoliberalism were derided as fools or nostalgics'. The decade since the first edition appeared has seen the economic implosion of the Argentinian economy, the Zapatista uprising in Mexico, the election of Lula's Workers Party in Brazil and the rise of a global anti-capitalist movement. The new edition takes all of these developments into account.

Neoliberal policies first took root in Latin America under the Pinochet dictatorship in Chile. As Green puts it, 'Over 3,000 people were slaughtered to clear the way for the new Chile.' As the iron fist of dictatorship was used to smash the powerful Chilean workers' movement, the 'Chicago Boys' - a new generation of economists trained at the University of Chicago - took over the running of the economy. They used Chile as a laboratory for the ideas of neoliberal economists like Hayek and Friedman.

Green explains how, in the 1980s and 1990s, governments across Latin America were won over to neoliberalism - a process he calls the silent revolution. Up until the early 1980s policies known as 'import substitution' were the orthodoxy for most Latin American economists. Governments sought to develop local substitutes for goods that were traditionally imported. The failure of these policies as the world economy tipped into recession, and governments found they could no longer repay the huge debts they had accumulated over the preceding decade, led to Latin America's 'lost decade' of sluggish growth and hyperinflation.

Sections of the ruling class saw neoliberalism as a solution to their problems. Institutions like the IMF, the World Bank and the governments of North America and Europe also pushed these ideas. Loans issued by the IMF to temporarily alleviate the effects of the debt crisis were tied to structural adjustment programmes that involved rampant privatisation and cuts in state spending. Governments were encouraged to specialise in the production of a narrow range of agricultural commodities for export. This specialisation was catastrophic for the small peasants driven off the land to make way for huge agricultural enterprises. As commodities such as coffee or soya flooded into the world market, prices slumped, causing more economic chaos. Under these policies 100 million more Latin American people have been driven into poverty in the last 20 years. 'IMF riots' and other forms of resistance have swept the continent.

Green's book is well written and extremely detailed. He provides clear explanations of complex economic issues, using anecdotes to illustrate each point. For example, he uses the poor quality of Brazilian disposable nappies to help explain the problems of import substitution. At every stage Green distinguishes between the yardsticks for progress used by mainstream economists, such as GDP, and the impact of economic policies on the people living under them.

The main weakness of Silent Revolution is that it fails to draw any positive conclusions. Green remains within the framework of capitalist economics - drawing on radical economists like Joseph Stiglitz to back up his argument. All he can offer as a solution are models based on the 'Tiger economies' of South East Asia or the strategies of the UN Economic Commission for Latin America. He ends up advocating a middle way between neoliberalism and state planning.

Despite this weakness, Green's book will be welcomed by anyone who wants to find out more about the economics of Latin America and the impact of neoliberalism.