Harvest of Empire : a History of Latinos in America I Juan Gonzalez
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VIKING Published by the Penguin Group Penguin Putnam Inc., 375 Hudson Street, NewYork,NewYork 10014, U.S.A. HARVEST Penguin Books Ltd,27 Wrights Lane, London W8 5TZ,England Penguin Books Australia Ltd, Ringwood, OF Victoria,Australia EMPIRE Penguin Books Canada Ltd, 10 Alcorn Avenue, Toronto, Ontario, Canada M4V 3B2 Penguin Books (N.Z.) Ltd, 182-190 Wairau Road, Auckland 10, New Zealand Penguin Books Ltd,Registered Offices: A History of Latinos Harmondsworth, Middlesex, England First published in 2000 by Viking Penguin, in America a member of Penguin Putnam Inc. 3 5 7 9 10 8 6 4 Copyright © Juan Gonzalez, 2000 All rights reserved Library of Congress Cataloging-in-Publication Data Gonzalez,Ju an. Harvest of empire : a history of Latinos in America I Juan Gonzalez. JUAN GONZALEZ p. em . Includes bibliographical references ISBN 0-670-86720-9 1. Hispanic Americans-History. 2. Immigrants-United States History. 3. United States-Emigration and immigration-History. 4. Latin America-Emigration and immigration-History. 5. United States-Relations-Latin America. 6. Latin America-Relations United States. 7. United States-Territorial expansion-History. 8. United States-Ethnic relations. I. Title. E184.S75G655 2000 973'.0468-dc21 99-33526 This book is printed on acid-free paper. I§ Printed in the United States of America Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic,mechanical, photo VIKING copying,recording or otherwise),without the prior written permission of both the copyright owner and the above publisher of this book. 13 Free Trade: The Final Conquest of Latin America After two centuries, England has found it convenient to adopt free trade because it thinks that protection can no longer offer it anything ...my knowledge of our country leads me to be lieve that within two hundred years, when America has gotten out of protection all that it can offer, it too will adopt free trade . -Ulysses S. Grant Latin America was where neoliberal globalization assumed its most pernicious form ...with an unprecedented concentration of wealth and power into the hands of a small minority. -Ximena de Ia Barra, "Latin America after the Neoliberal Debacle" uring the second half of the twentieth century a momentous shift Doccurred in American economic life. U.S. transnational firms searching for cheap labor and maximum profit shifted much of their manufacturing to Third World countries, especially to Latin Amer ica. As part of the shift, the U.S. government led a worldwide campaign for "free trade." It pressed developing nations to lower tariffs on im ported goods and to create new export-oriented manufacturing zones, largely to serve the needs of those foreign firms. But free trade, as we shall see in this chapter, deeply distorted many Latin American economies. It became a key pillar during the 1980s and 1990s for a new "neoliberal" economic strategy. Sometimes dubbed the "Washington Consensus," that strategy also included the mass sell-off of public assets, the privatization of basic government services, and the sub mission of national governments to the financial and trade dictates of agencies like the International Monetary Fund, the World Bank, and the World Trade Organization.1 While foreign investors and a domestic elite prospered from the boom in expanded trade, the Latin American nations that rushed to adopt the i49 �50 HARVEST OF EMPIRE HARVEST (LA COSECHA) neoliberalmodel soon discovered it did not produce the miracle progress Sixty years of U.S. free trade policies, however, have left a lasting imprint for ordinary people its proponents had promised. By the late 1990s, not only on Latin America, but also on Latino migration to this country. wealth disparity had grown so rapidly that the region was reporting the The modern Latino presence in the United States, in fact, cannot be un biggest income gaps in the world between rich and poor. Ironically, Latin derstood without first grasping the origins and development of our gov America, which historically had been a major destination for millions of ernment's free trade policies in Latin America. immigrants from around the world, was transformed into a giant ex porter of its own people-and the bulk of those migrants headed for the THE RISE OF FREE TRADE ZONES United States. Perhaps nowhere was the free trade model more enthusiastically em North Americans at first ventured into Mexico, the Caribbean, and Cen braced than in neighboring Mexico, which formally entered a permanent tral America during the nineteenth century to buy up land and build economic union with the United States and Canada through the North massive transportation projects: Vanderbilt's Nicaraguan Tr ansit Com American Free Trade Agreement (NAFfA) in 1994. NAFfA set off a pany, Minor Keith's Central American Railroad, Aspinwall's Panama stampede by U.S. and other foreign investors to gobble up key portions Railroad, for ex ample. By the early twentieth century, the main methods of Mexico's manufacturing, agricultural, and banking industries. The sud of exploitation had shifted to ex tracting raw materials-bananas, sugar, den infusion of foreign capital, however, drove so many small Mexican coffee, oil-and to financing the operations of Latin American govern manufacturers and farmers out of business that millions of people were ments. The region grew to be so important that by 1914, U.S. companies dislocated and unemployment mushroomed. Thus, instead of reducing had $416 million in direct investments in Mexico alone, the highest of the pressure on Mexicans to migrate, NAFfA increased it. any country in the world, and Latin America overall accounted fo r The deepening crisis of poverty throughout Latin America ignited a nearly half of all U. S. foreign investment in the world.2 firestormof popular discontent by the late 1990s.One after another, local The period after World War II brought a third shift, as U.S. apparel, governments that had espoused neoliberalism were toppled from power then electronics, plastics, and chemical companies, started closing down by massive protest movements, or they were routed in national elections. factories at home and reopening them abroad. That of fshore production The new leaders who took office invariably sought a more socially is at the heart of the free trade model the United States has promoted conscious road to economic growth, one more independent of U.S. con and perfected in Latin America. It is a model that has so far developed trol. Their governments swept to power thanks to complex alliances be in four main stages: tween traditional left-wing politicians and labor leaders and newer civil society organizations. Many of those civic groups were based in sectors 1. Panama and Puerto Rico (1947) long ig nored by the established political parties and economic elite of 2. Mexico's border industrialization program (1965) Latin America: indigenous peoples, poor farmers, urban slum dwellers, 3. The Caribbean Basin Initiative (1985) racial minorities, and lower-level civil servants. 4. NAFfA (1994) With the elections of Hugo Chavez in Ve nezuela in 1998, Brazil's Luis Im1cio "Lula" da Silva in 2002, Argentina's Nestor Kirchner in 2003, and As quickly as industrial plants were shuttered in the Northeast and Evo Morales as Bolivia's first indigenous president in 2005, Latin Amer Midwest, scores of shiny new industri al parks and factory towns, usually ican leaders began to chart foreign and domestic policies that could no called free trade zones (FfZs) or export processing zones (EPZs), sprang longer be dictated by the Un ited States. Over the next decade, the region up south of the border. By 1992, there were more than 200 of these zones turned into a worldwide center for mass participation in democracy, for in Mexico and the Caribbean Basin. They housed more than 3,000 assem new economic alliances between neighboring nations, and for new social bly plants, employed 735,000workers, and produced $14 billion in annual initiatives by governments at home. Having rejected the Washington ex ports to the United States.3 Consensus, several countries in the region promptly showed remarkable These free trade zones were allowed to operate as virtual sovereign progress in reducing their domestic income gap and reducing poverty. enclaves within the host countries, routinely ignoring the few local labor 151 HARVEST OF EMPIRE HARVEST (LA COSECHA) 153 and environmental laws that ex isted. Inside the zones, child labor was pro sperity? Unfortunately, the history of most major industrialized na reborn and the most basic rights of workers trampled. As agricultural tions is just the opposite. None of them practiced free trade during their production in many Latin American countries fell under the sway of for early period of economic growth. Instead, they used high tariffs to pro eign agribusiness, millions of Latin America's young people abandoned tect their domestic industries from foreign competition, often engaging the countryside to find work in or near the zones. But the cities to which in tariff wars against rivals. the migrants flowed lacked sufficient infrastructure of roads, sewage "In the early days, when British industry was still at a disadvantage, an systems, housing, and schools to sustain the sudden surge in population. Englishman caught ex porting raw wool was sentenced to lose his right Giant shantytowns sprang up almost overnight. The makeshift slums hand, and if he repeated the sin he was hanged," Uruguayan journalist and the new factories around which they developed led to a public Eduardo Galeano reminds us. 5 health nightmare of industrial pollution, untreated human waste, and Only when England gained a decided advantage over all other coun disease.