Neoliberalism in Latin America Essay

From the 1930s until the 1980s state intervention and valueion were tombst iodin components of most Latin the Statesn economies. In these years many Latin the Statesn countries were used an Import-substitution industrialization based economy trying to reduce dependence on foreign imports and replacing them with domestic production. delinquent to the use of an Import-substitution industrialization based economy Latin the Statesn countries were forced to keep high tariffs to protect the private companies of their countries.This combined with many Latin America countries providing numerous governing body subsidized programs eventually take to the 1982 debt crisis. This debt crisis created a vacuum affect in Latin America with many of the countries taking on a new liberal scotch mould, and by the early 1990s John Charles Chasteen claims that almost every Latin American country was led by a president that was pro neoliberalism. This neoliberal economic manikin called for the sla shing of tariffs as well as the lessening of removal of all nationalist-inspired subsides.Also fol woefuling the neoliberal model, Latin American countries stopped the printing of money to slow inflation effectively undermining the functionality of their topical anesthetic markets. all in all of this was done so that a completely free market could be created. It was believed that this free market would non only help improve the economies of Latin American countries, entirely also create more(prenominal) face-to-face freedoms for the flock of Latin America. In the article Neoliberalism, Neo ordericism and Economic Welfare, John T.Harvey claims the complete opposite, arguing although a neoliberal economic model was created to produce conditions conducive to social provisioning or democratic problem solving, the use up opposite has occurred. Harvery states in his article, Instead of growth, stability, and the narrowing of income ruptures, we have seen stagnation, volatility, and increased inequality. By researching neoliberalism a clear exhibit can be drawn.Neoliberalism created order stratification with the upper and middle course of study greatly attaining from the new policies sanction by neoliberalism, while the poor continued to function more impoverished and otiose to provide for themselves. some(prenominal) historians argue that the neoliberal economic model was most beneficial for the small wealthy propertied of Latin America as well as many quality business owners from other countries. The existence of a free market due to neoliberalism in Latin America created many opportunities for propertied citizens to continue to become considerably wealthier.The upper-class benefit from neoliberalism in many ways entirely the two largest benefits come from the privatization of regime subsidized programs and the lowering of tariffs. Not only did both of these policies line the pockets of the upper-class of Latin America but foreign drapeors a s well. In order to balance their federal budget many Latin American governings privatized their government subsidized programs as well as cut federal jobs. First, the privatization of federal jobs allowed many upper-class citizens to take over these businesses and use them in their benefit to create capital.Former government projects such(prenominal) as constructing roads and government buildings were now being completed by companies that were owned by the upper-class. Prior to neoliberalism these jobs were salaried out of the federal budget and were used as a way to lower unemployment by hiring more workers than were really needed. Now that private companies were doing the work efficiency was the most important thing leading to the leaving of many jobs for the poor class of Latin America.In the article, Neo-Liberalism in Latin America Limits and Alternatives Ian Roxborough argues that the immediate beneficiaries of the privatization of government subsidized programs and federal jobs, or what he calls real assets, were foreign investors and people with flight cash. This was because when these programs became privatized upper-class people from other countries as well as Latin America were able to come in and by penny cheap shares of these programs and soon to be private companies.This excrementally helped the upper-class because after they bought this stock at largely discounted hurts it quickly grew in value. Clearly, lower classes that did not have extra cash could not benefit from this because they were unable to purchase any of the shares of these newly privatized commodities. This created two problems, not only did real assets of Latin America get lost to upper-class foreign investors, it also created a significantly larger wealth gap between the poor and upper-class because of the large kernels of money the upper-class made from the raises of the stock that they bought at such cheap prices.Another benefit the upper-class of Latin America and other foreign countries gained from neoliberalism was the reduction of tariffs. The reduction of Tariffs allowed foreign companies to come into Latin America and build maquiladoras. This was beneficial for the foreign investors because they could now come into Latin America where working wages were much cheaper and produce their goods at lower prices, which entail created more profit. inflict tariffs were beneficial for Latin American upper-class citizens because as the foreign companies came into Latin America they were able to invest in these companies.The ability to invest in these companies that wouldnt have come to Latin America with the preceding tariffs was just one more way people who already had money in Latin America were able to benefit even more from a neoliberal economic model. Neoliberalism also benefitted the middle class of Latin America. Chasteen argues the middle class benefited from a neoliberal economic model because of the cheap products that were produced due to th e maquiladoras in Latin America as well as cheap products that were being imported to Latin America because of the newly reduced tariffs.This was very beneficial for the middle class for two reasons. First, under neoliberalism the middle class society who had money to spend, now had more choices because the large influx of items that were now being imported into Latin America. In his article, Magical Neoliberalism, Alberto Fuguet argues that neoliberalism was what led to amenities resembling large scale movies from Hollywood and other services, like fast food chains, to come to Latin America. Secondly, neoliberalism was beneficial to the middle class because with a larger cream of goods comes competition.With competition companies foreign and local now had to produce the best quality goods at the lowest price in order to continue to receive business from the middle class. Neoliberalism also benefited the middle class of Latin America because of the advancement in technology that o ccurred because of the privatization of water resource centers, electrical companies, and telecommunication companies. The privatization of these companies allowed them to modernize as well as make them more reliable.Some argue that neoliberalism was also beneficial for the women of Latin America. In her article Love in the Time of Neo-Liberalism Gender, Work, and Power in a Costa Rican Marriage, Susan E. Mannon argues neoliberalism allowed women to gain more reason and independence then they previously had. Mannon claims that neoliberalism, and the reduced tariffs that come with it, led to the creation of maquiladoras where women could desire employment. Latin American womens new ability to gain employment in maquiladoras allowed them to earn a wage creating dual-income households.Not only did this give them more power and independence in their individual households, but the ability to buy goods also allowed them to participate in the local economy giving them more power as well. Those who stood to gain the least under a neoliberal economic model were the poor people of Latin America. This is because the privatization of state-run corporations and public service programs made them unaffordable for the poor working class, leaving many homeless and hungry. In the article, From Democracy to Development The Political Economy of Post-Neoliberal Reform in Latin America, Alfred P.Montero states claims that neoliberalism leads to deepening levels of inequality, a growing percentage of people living below the poverty line, decaying infrastructure, poor access to even low-quality original education, rising criminality, and inefficient productivity. All of these problems can be linked to privatization of government subsidized programs and the loss of government jobs. With neoliberalism the loss of jobs and government programs made unemployment skyrocket and education too expensive for much of the poor class of Latin America to afford.This lack of education is what ma ny argue led to the problems that Montero claims such as a rise in criminal activity. Also, because neoliberalism privatizes companies that control commodities such as water, telecommunications, and electricity the poor class was unable to afford them, essentially leaving the poor of Latin America in the dark without water or electricity. Neoliberalism also led to the creation of Maquiladoras which initially created what poor Latin American believed to be preferred jobs.Quickly the poor found out that many of these jobs did not pay a wage that was copious for a person to survive. With the poor pay of maquiladoras also came very poor working conditions that were conducive to creating injury. Omar Gil a former maquiladora worker stated in an interview that his first maquiladora job paid him a disconsolate forty dollars a week in working conditions that were less than safe. Omar attested that maquiladora workers were injured often because of the acuate pressure of Formans to produc e as much product as possible. Also with neoliberalism came the lack of on tap(predicate) occupations.Due to the reduction of tariffs foreign companies were able to bring mass produced goods into Latin American countries at prices cheaper than local inhabitants were able to produce them. This created large scale unemployment and forced Latin American people into the unsafe and low paying maquiladoras. Chasteen argues that for the poor class the inability to produce goods far outweighed the benefits of being able to be a small-time consumer from the dismal wages that were earned in maquiladoras. It is clear that the neoliberal economic model is not beneficial for anyone but the wealthy elites and middle class of Latin American Countries.A neoliberal economic model became fashionably popular in Latin America because the people who were in charge were upper-class citizens and during a down turn in 1982 neoliberalism seemed like a solution due to its approach to give away balance the budget of Latin American countries. Unfortunately, either the leadership of these countries assumed wrong, or just didnt care about the wellbeing of its impoverished people, but clearly a neoliberal economic model does nothing but create a larger wealth gap, create more social stratification, and cancel out living conditions for the poor even more.In the article, Exploring the Impact of Neoliberal Economic Development on want in Costa Rica What Went Wrong? , Paul B Lubliner argues that in order for economic prosperity to equilibrise poverty reduction the state should have more control over the economy not less. I agree and argue by privatizing all state subsidized programs as well as depleting the amount of government jobs to almost zero Latin American countries actually went backwards in their pursuit to alter the wealth gap as well as social stratification.Abusing your population to closer balance budget is in no way the solution to guarantee countries prosperity in the forese eable future. Neoliberalism was clearly one sided only benefiting the rich and middle class, disfranchising each countries poor setting them back further then they were before.