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GLOBALIZATION AND THE

RURAL ENVIRONMENT

Edited by
Otto T. Solbrig,

Robert Paarlberg,

and Francesco di Castri

Published by Harvard University

David Rockefeller Center for Latin American Studies

Distributed by Harvard University Press

Cambridge, Massachusetts

I 2
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Cycles of Globalization, Economic
Growth, and Human Welfare in
I Latin America
I
~ John H. Coatsworth
~~
Introduction
\ Latin America has experienced four cycles of globalization since the
if,

r~ Columbus voyages. The first cycle began with Columbus and lasted
~~.
for a century. The second commenced in the late 17th century and
ended with the Haitian Revolution (1791-1803) and its aftershocks.
~
The third began in the late 19th century and ended with the Great
:.J.,:
Depression. The most recent cycle has only just begun.
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T!
Understanding the dynamics of the past three cycles of globaliza­
tion can provide useful historical and analytical perspective on the
~~ contemporary era of accelerating global integration. Each of the
Wt past cycles of globalization produced large and measurable benefits
~ . as well as huge costs. Though in at least two cases the net long-term
.~:- effects on productivity and living standards may have been positive,
.~' they were not equally or even equitably distributed in time and across
societies. Short-term net benefits generally went to tiny minorities.
Longer-term benefits tended to be better distributed, but were reaped
only much later and not by the heroic generations that suffered
through the initial shocks of globalization.
~.
At the risk of belaboring the utterly self-evident, this chapter be­
gins with a historically grounded effort at definition. Then it sur­
veys the effects of each of the three past cycles of globalization on
the productivity and living standards of the affected societies. The
chapter concludes with lessons and questions.
 24 Glohalization and thc Uural Envir(JIll11cnt
Globalization Processes
Globalization can be defined as a significant, long-term increase in
the flow of information, commodities, or people between distant
regions of the earth. In this sense, globalization began with the mi­
gration of early Homo sapiens from East Africa to Asia, Europe, and
eventually the Americas. It intensified when ancient empires spread
new military formations, taxes, and religions over large territories.
Globalization occurred with the early development of trade and
communications networks in the Mediterranean and over land be­
tween the Middle East and China, sub-Saharan Africa, and the In­
dian Ocean. It also occurred with the colonization of the Pacific
Island archipelagos and the establishment of regular exchanges across
the Indian Ocean and between Mesoamerica and the Pacific coast
of South America.
Unlike later processes of globalization, however, these early move­
ments took place over extremely long periods of time, affected rela­
tively small populations and excluded large parts of the earth. The
globe consisted of vast land masses that took many months, even
r. of ocean transport soon made it possible to trade heavy European
years, to traverse. Nobody thought to send messages or mail over
such distances. Inter-regional trade was confined to luxury goods of
great value and little weight. Migratory movements only occurred
in response to great catastrophes, like climate changes or military
conquest.
The Portuguese and Spanish voyages altered the scale and scope
of globalization processes. Between 1492 and 1565, for the first time
in world history, regular trade and communication opened up be­
tween the Atlantic and Indian Oceans as well as across and between
the Atlantic and Pacific Oceans. Moreover, the opening of long dis­
tance contacts, commerce, and migration over water routes vastly
increased the magnitude and speeded up the timing of global inter­
actions.
The Iberian seafarers did not, of course, "discover" any places
others had not already found. They did, however, make two differ­
ent but historically far more important discoveries. First, they dis­
covered by trial and error the winds, currents, and navigational de­
vices that made return voyages routine. Many others over many mil­
lennia had managed to sail to distant places across great expanses of
ocean. The big leaps forward in globalization came when people
learned how to go back as well as forth. Second, the Iberian con­
querors and settlers discovered how to get rich, or at least how to
Cyclcs of Globalization, Economic Growth, and Human Welfarc in Latin Amcrica 25
make some people rich, by moving merchandise and people over
the oceans. Technological breakthroughs in production as well as
communications, linked to new ways of making money, have fueled
every globalization cycle.
In a matter of decades, regular trans-oceanic and inter-oceanic
trade and communication became commonplace. It took only a
month or so to cross the Atlantic and three months to navigate the
vast Pacific. Letters with detailed instructions regularly traveled from
one end of the earth to the other. People began to move from densely
populated, resource scarce, low-income regions of the earth (like
rural Spain and Portugal) to depopulated, resource rich territories
in the Americas. Trade exploded, but in totally unpredictable direc­
1 tions. The Portuguese and later the Dutch put great effort into cap­
f turing and monopolizing the traditionally lucrative trade in spices
i from the Indian Ocean, but this trade never amounted to more than
if a few tons of pepper, cloves, and nutmeg each year. The economics
~
i
manufactures for tons of American silver, but the huge cost advan­
~ tage of ocean transport in carrying bulky products was not fully
exploited until the massive trade in slaves and sugar reached its apo­
gee in the 18th century.]
After the Iberian voyages, globalization processes increased in
scale, speed, and intensity. A world trading economy developed, in
which, for example, New World silver financed European imports
of Asian silks and spices. Massive voluntary and forced migrations
took place in decades rather than millennia. Sea power supplanted
the huge land armies of the ancient empires and extended colonial
t! rule to territories not contiguous to the seat of imperial authority.
Purposeful as well as unpremeditated exchanges of people, patho­
gens, plants, and animals altered the human and physical ecology of
If immense regions throughout the globe.
Three aspects of these modern globalization processes stand out.
First, globalization processes are multi-dimensional both in causes
and in effects. Alter one aspect, even a single crucial detail, and the
entire process may change speed, direction, scale, and impact. Sec­
t
ond, perhaps because of this complex sensitivity, globalization has
.~ -'
occurred in cycles. Periods of relatively rapid, large-scale changes
i·,,'
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have alternated with eras of slower change and even reversals. This
is true both for globalization as a whole and for particular regions
,{~~,
of the globe. Local and regional processes of integration have some­
~~:
26 Globalization and thc Rural Environmcnt
times worked on a distinct timetable, as for example, when the rapid
growth in a region's export of a diminishing natural resource ends
even while world trade is growing because the local resource de­
pletes or rising world supplies push prices down below costs. While
this chapter focuses primarily on the macro-cycles, it is worth re­
calling at the outset that analyzing macrohistorical trends necessar­
ily does some violence to underlying variations. Third, though multi­
dimensional and many layered, the search for economic gain-in­
dividual as well as collective-has driven the globalization cycles of
the past five hundred years with relentless force.
Conquest and Globalization, 1492-1630
have proved deadly to large numbers of people.
The land migrations from Asia to the Americas probably ended when
the ice bridge between Siberia and Alaska ceased sometime between
12,000 and 9,000 BCE. The first major cycle of globalization in Latin
America after the migrations occurred as a result of Spanish and
later Portuguese conquest and colonization. Between 1492 and 1537,
Spanish expeditions, many with indigenous allies recruited along
the way, managed to defeat, overthrow and replace all the major
iards merely sailed away, leaving their diseases behind. In a single
Native American governments in the Caribbean, Mesoamerica, and
the Andes. The Portuguese achieved similar successes along the coast
of Brazil after Cabral's accidental "discovery" in 1500.
The Iberian conquests brought a substantial portion of the in­
digenous population of the Americas into contact with lethal Old
World pathogens such as smallpox, pneumonia, influenza, and
measles to which they had never before been exposed. Before the
arrival of the Europeans, Native Americans lived in a somewhat more
benign disease environment than the peoples of Africa, Asia, and
Europe in part because Native Americans had few domesticated ani­
mals to carry and spread disease. 2 The abrupt epidemiological glo­
balization of the Americas had catastrophic effects, which were mag­
nified as a result of Spanish and Portuguese treatment of their in­
digenous subjects. The pre-contact population of the Americas prob­
ably stood at 50 to 70 million, though estimates have ranged from
less than 20 to more than 100 million and continue to be debated.
By the early seventeenth century, the Native American population
had fallen to less than five million, though one estimate runs as
high as ten. 3
Globalization shattered the precarious equilibrium that permit­
ted Native Americans in the densely populated highlands to survive
Cycles of Globalization, Economic Growth. and Human Welfare in Latin America 27
on less food than Europeans. Nutrition levels, especially in Central
Mexico, tended to be low by European standards and particularly
deficient in the proteins required to fight disease or sustain pro­
longed physicallabor. 4 In the core areas of European conquest, the
Native American population found itself subject not only to Euro­
pean diseases but to Spanish and Portuguese work routines as well.
Just as they needed to conserve energy to ward off and overcome
infection, more and more Native Americans faced demands to la­
bor from dawn to near dusk. s Even without new diseases, the impo­
sition of Spanish and Portuguese work routines would probably
!
On Hispaniola, Columbus and the other major investors in the
r
; colony sent thousands of Native Americans back to Spain as slaves
and subjected everyone else they encountered to a harsh regime of
I
I:
forced labor. In such circumstances, "virgin soil" epidemics prob­
ably took a greater toll than they would have taken had the Span­
I
generation, most of Hispaniola's indigenous population disappeared,
forcing the Spaniards to send slave-hunting expeditions to other
islands. A generation later, Native Americans had virtually disap­
peared from Cuba, Jamaica, and Puerto Rico. 6 On the mainland,
especially in the temperate zones of Central Mexico and compa­
rable regions in the Andean highlands, successive epidemics drasti­
cally reduced but did not entirely destroy indigenous populations.
The virgin soil epidemics ended in the early to mid 17th century,
though occasional but less devastating outbreaks of epidemic dis­
ease continued. By this time, the indigenous population had fallen
by more than 90 percent
Globalization also took a toll on the environment in th e century
after the conquest. Deforestation occurred wherever the Spaniards
i> and Portuguese elected to establish a town or open a mine. 7 Ungu­
~.
;."
late irruptions, especially massive increases in sheep and cattle popu­
t··, lations, occurred throughout the hemisphere, with long lasting ef­
fects. In one well-studied case, an irruption of sheep irreversibly
transformed the Mesquital region of Mexico from a green area of
intensive agriculture into a dry region of hardy grasses and scrub
r;~
brush suitable only for extensive grazing. R Mercury poisoning oc­
curred at Spanish mining centers throughout the colonies. The con­
tamination of people and soil afflicted not only the workers at the
~.
': huge new mercury mine at Huancavelica in Peru but at every silver
2R G/obnlizotio/1 n/1d thc 1~1/1'Il1 E/1l'irnn111cnl
mine where the mercury amalgamation process was used to extract
silver from lower grades of ore. 9 The Spanish decision to drain the
five lakes that surrounded Mexico City destroyed pre-conquest ag­
ricultural systems based on raised fields (chinampas) and perma­
nently altered the ecology of the Valley of Mexico. 10
The Iberian conquests and subsequent depopulation led to the
abandonment and loss of pre-conquest agricultural techniques. The
greatest destruction occurred in areas of dense pre-conquest popu­
lation, like the Valley of Mexico, where the Spaniards did not under­
stand or chose to ignore the raised field techniques that had sup­
plied the Aztec capital of Tenochtitlan (renamed Mexico City by the
Spaniards) with much of its food. In many regions, technical knowl­
edge, irrigation systems, terraces, and the like fell into disuse. Such
losses, however, had occurred many times over the in the pre-con­
quest history of the Americas. The irrigation systems of Teotihuacan
and most of the lowland Maya city-states, for example, had been
forgotten long before the arrival of the Spaniards These systems
collapsed at least in part as a result of man-made ecological disas­
ters associated with overpopulation. I I The raised fields that sup­
plied the great city of Tiwanaku on the shores of Lake Titicaca had
fallen into disuse long before the Incas conquered the region and a
century before the Pizarro brothers arrived. 12 Decades of dry weather
had lowered the water level in the lake and made the Tiwanaku
canals useless. In the post-conquest era, the demographic collapse
caused the abandonment of indigenous infrastructure created to
accommodate much larger populations than those that survived the
epidemics. Given the population losses of the 16th century and the
consequent fall in demand for food, the immediate impact of aban­
doning indigenous agricultural systems may have been small. For
example, the arrogance of the Mexico City authorities, who cared
little for the effects of draining the lakes on the chinampas, is indis­
putable, but the negative impact on the food supply would have
been far more noticeable if the city's population had not fallen from
perhaps as many as 200,000 to under 30,000 during the 16th cen­
tury.13
Globalization also yielded substantial, long term benefits, though
the human catastrophe of the post-conquest century makes it im­
possible to weigh them against the millions who perished. As the
indigenous population collapsed over the 16th century and into the
17th century, agricultural productivity, nutrition levels, and per
Cycles of Clobalizntion, Economic Growth. a/1d HlIlI1an Welfare i/1 Latin America 29
capita income rose in many areas. The fragmentary evidence for
these trends is stronger in Mesoamerica than in the Andes, but it is
persuasive. Evidence for other regions is mixed and often difficult
to evaluate. In Central Mexico and some of the more densely popu­
lated highland regions in the Andes, the people who survived the
epidemics tended to abandon more marginal lands and resettle on
the most fertile and best-watered terrain. 14 This occurred sponta­
neously in some villages. In many cases, however, colonial authori­
ties forced Native American survivors to resettle in new towns and
villages with people from other places,ls Frequently, Spaniards and
other outsiders grabbed the best of the lands left vacant after epi­
demics and resettled indigenous villagers as peones on thei r hacien­
das. 16 Whatever the process, the results were impressive. Total agri­
cultural production fell as the death toll mounted, but per capita
output rose as survivors resettled on the best lands.
The "Columbian exchange" of plant and animal species also con­
tributed to rising productivity. Biodiversity rose in both the Old
World and the new, but the increase was greater in the Americas.
The Old World held 12 of the world's 14 species of domesticated
animals and some 500 of the 640 plant species cultivated by hu­
mans. 17 Conquest and colonization brought the diversity and crop
mix of New World agriculture closer to that of the old. The Ameri­
cas gave the Old World maize, potatoes, hot peppers, beans, pea­
nuts, tomatoes, tropical fruits, and cacao, to mention the most ex­
portable of its cultivated plants. European transplants to the new
world included wheat and other grains, wine grapes, onions, sugar
cane, fruit trees, and rice. Greater diversity increased the options
available to farmers, and thus agricultural productivity, on both sides
of the Atiantic. 18
The introduction of domesticated animals also produced ben­
efits. Though the explosive multiplication of hoofed animals dam­
t aged crops and even entire ecosystems, the long-term impact of in­
troducing domesticated animals was positive. The new animals trans­
formed both agricultural practices and dietary standards, especially
in Mesoamerica. The Europeans brought horses, oxen, donkeys,
cattle, sheep, goats, pigs, chickens and a variety of other animals,
including silk worms and pets of all kinds. In the context of rapid
~,; ':
depopulation, the fact that animals required more land but less la­
bor to produce equivalent nutritional benefits may even have helped
, to improve resistance by raising nutrition levels. Eventually, indig­
,:"
 30 Globalization and the Rural Environment
enous populations learned how to control and make use of the new
animal populations. Smaller domesticates, especially chickens and
pigs, became common in Native American communities through­
out the Americas. Even in regions outside European control, the
spread of wild horses and cattle transformed the living standards of
indigenous nomads from the Argentine pampas to the Great Plains
of the United States and Canada. In the both regions, Native Ameri­
cans adopted the horse to extend hunting ranges. In Mesoamerica
and the Great Plains, and probably throughout the rest of the Ameri­
cas as well, the amount of meat proteins in Native American diets
increased substantially, with positive effects on stature, stamina, and
longevity. 19
The European conquest and colonization had other productivity
enhancing effects. The Spaniards and the Portuguese introduced
new tools and technologies as well as new institutions and methods
of organizing economic activity. The Americas imported sailing
ships, wheeled vehicles, iron and steel making, deep shaft mining,
and the chemistry of tanning leather and making soap, along with
money and commercial credit. The opening of long distance trade
also contributed to productivity advance. Unfortunately, many of
these net benefits did not reach the indigenous population, either
because as in most cases death occurred too swiftly or because the
conquerors and their descendants imposed rules that concentrated
the private gains in the hands of European and Creole minorities.
In short, the European conquest and colonization of the new world
produced large long term net benefits that most of the indigenous
population failed to appreciate or experience-because the small
number of Native Americans who managed to survive were legally
excluded from reaping them.
Globalization, Sugar, and Slavery, 1680-1791
A second cycle of globalization occurred in the American tropics
with the spread of sugar cultivation and plantation slavery from
Brazil to the Caribbean. While the first cycle arose from the com­
plex encounter between Europeans and Native Americans and thus
involved the entire hemisphere to one degree or another, the second
cycle affected mainly the tropical zones of the New World. Though
more limited geographically within the Americas, the effects of this
second cycle of globalization extended to Africa as well as Europe. 2o
Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 31
The Portuguese and the Spaniards brought Asian sugar cane and
African slaves to the Americas. At first only the Portuguese exported
substantial quantities of sugar, up to 9,000 tons by the early 1600s.
Slave-worked sugar plantations did not become dominant in the
American tropics until late in the 17th century. The transition be­
gan in the 1640s, when the Dutch facilitated the transfer to the Car­
ibbean of slaves, plants, technology, and equipment from the terri­
tories in northeast Brazil, which they had seized temporarily (1630­
54) from Portugal. By the 1740s, both British Jamaica (exports of
36,000 tons per year) and French St. Domingue (61,000 tons) pro­
duced more than Brazil (27,000 tons) The other British, Dutch,
French, and Danish islands were not far behind. 21
Sugar production could not have developed in the Americas with­
out the migration of a working population from outside the hemi­
sphere. By the early 16th century, the first cycle of globalization had
eliminated the Native American population of the Caribbean and
greatly reduced that of Brazil and the other mainland colonies. Only
slaves could have solved the New World's tropical labor shortage,
because only slaves could have been forced to labor for subsistence
wages in labor-scarce regions where land was abundant. Brazilian
planters enslaved the Native Americans initially, but they died or
escaped at such high rates that slave-hunting expeditions far into
.
L
I:
.­
~
the interior could no longer replace them. 22 Sugar could have been
produced (and was later on) by free wage laborers, but the wage
f"
r~
levels required to attract and transport free immigrants from Eu­
"
f~
rope to the labor scarce and disease-ridden tropical regions of the
[
Americas exceeded the cost of importing slaves from Africa by a
[. wide margin. In the British West Indies, English colonists first popu­
~.'. lated Barbados, Nevis, and St. Kitts but were dislodged by slave plan­
!~ tations whose owners could afford to bid up land prices because
sugar production with African slaves proved to be more profitable
't-
than tobacco and indigo grown by free farmers. 23
Between 1500 and 1888, in the nearly four cen turies of the trans­
Atlantic slave trade, as many as nine million Africans were shipped
r:~~ to the new world. Of that number, 1.3 million arrived between 1500
'''-~.
and 1700, an average of some 7,000 per year. In the 18th cen tu ry,
the peak era of African slavery in the Americas, more than four
million slaves were forcibly transported to the Americas. By the 1770s,
over 50,000 slaves a year were arriving, the majority of them in
British ships. The vast majority of all slaves brought to the Americas
 32 Globalization and the Rural Environment
were sold in the sugar growing regions of Brazil and the British,
Danish, Dutch, French, and Spanish West Indies. 24
African slaves thus repopulated the Americas after the collapse of
the Native American population. More Africans migrated to the New
World between 1492 and 1800 than Europeans. 25 The Africans wert'
not taken to the areas where the largest number of Native Ameri­
cans died, such as the densely populated highlands of Mexico and
Peru. Nor were many Africans taken to the regions of heaviest Eu­
ropean immigration to supplement free working populations in cit­
ies, mining centers, and agricultural estates producing for local and
regional markets. The trans-Atlantic slave trade brought most of its
human cargo to tiny patches of tropical coast scattered along a nar­
row strip of northeast Brazil, the north coast of South America, and
a small number of the Caribbean islands.
Sugar plantations in all the Americas covered no more than a few
thousand square miles, all located on the seacoast or within a rela­
tively short distance, usually less than 15 miles or so, of a seacoast.
Except in a few places where navigable rivers made interior lands
accessible to the sea, sugar was so costly to ship overland, even after
reducing the cane to processed cakes or molasses, that it had to be
grown near the ocean. This constraint also affected the production
of the other, much less important, agricultural products produced
by slave labor such as cacao, cotton, rice, and tobacco, until the rail­
road era began in the 1830s. 26
The location constraint also limited the environmental impact of
sugar production. Deforestation, however, was extensive both in Bra­
zil and the islands. Forests were cleared to plant cane and to supply
fuel for sugar mills as well as for urban construction and other pur­
poses. The coastal forests of northeast Brazil, Rio de Janeiro, Sao
Paulo, Minas Gerais and other settlement zones largely disappeared
during the colonial era, permanently altering the landscape of vast
territories. 27
Sugar plantation agriculture produced enormous short-term eco­
nomic gains. The profits from this famously profitable industry, es­
pecially in the Caribbean, went to fuel the luxury consumption, po­
litical careers, and investment portfolios of absentee and resident
owners alike. Much less appreciated is the extraordinarily high pro­
ductivity, given 18th-century sugar prices, of the West Indian plan­
tation economies. The per capita GDP of the sugar islands exceeded
that of the 13 British North American colonies right through the
Cycles of Globalization, Economic Growth, and Humall Welfare in Latin America 33
eighteenth century.28 Even Spanish Cuba, which produced more to­
bacco than sugar until the end of the 18th century, had a higher
GDP per capita than the United States until at least the 1830s. 29
This economic success occurred despite the disruptive effects of fre­
quent wars and related slave and maroon revolts. Not until Haiti
exploded in 1791 could anyone begin to glimpse the abolitions to
come.
After 1791, slavery in Latin America ceased to be associated with
economic growth and commercial success. Only its revival after 1800
in the southern United States made it seem feasible as a modern
institution in a modernizing society. In Latin America, slave planta­
tions gained ground for a time only in Brazil and Cuba, but eco­
nomic stagnation rather than economic growth was the result. 50
Like the first cycle of globalization in Latin America, the second
produced huge short-term costs. While the first cycle killed millions
of Native Americans, the second inflicted vast suffering on millions
of Africans kidnapped from their homes and forcibly transplanted
to disease-ridden tropical coasts across the Atlantic. As in the first
cycle, short-term private gain both motivated and rewarded the Eu­
ropeans who made slavery and sugar their business. In contrast to
the first cycle, however, it is not so clear that anyone reaped great
gains in the long run.
Historians and economists have debated for decades about the
'i·;"
" links, if any, between slave plantation agriculture and long term eco­
nomic retardation. Whatever the nature of those linkages may be, it
is clear enough that neither slavery nor sugar cane cultivation con­
tributed to economic growth or development in Brazil or the Car­
ibbean in the long run. The much debated issue of how much, if at
all, slavery contributed to the industrial revolution in Britain or the
United States, on the other hand, has now shifted back towards ear­
'i'~: lier views that assigned slavery and slave profits a significant and
positive role. If this is true then the separation between winners and
losers in the second cycle of globalization is both temporal and geo­
graphic. The industrial revolution has never reached most of the
former slave plantation zones of the Americas. 31
Globalization and Export-Led Growth, 1880-1929
The third cycle of globalization occurred with the onset of export­
led economic growth in the closing decades of the 19th century.
The timing differed from place to place, but the process quickly
 34 Globalization and the Rural Environment
assumed similar characteristics throughout Latin America. West
European and U.S. demand for food and raw materials rose during
the industrial revolution. Capital and technology from the devel­
oped countries enabled Latin America to build the railroads that
made land and mineral wealth accessible to profitable exploitation.
External public indebtedness financed the necessary infrastructure,
including railroad subsidies. Foreign direct investment poured into
mines and plantations. In a number of countries, most notably the
southern cone (Argentina, Brazil, Chile, and Uruguay) European
laborers emigrated in huge numbers as demand for labor and real
wages increased. In the Caribbean, contract laborers from India also
came in large numbers. For the first time since the 16th century (for
the mainland) or 18th century (for the Caribbean), the Latin Ameri­
can economies grew faster than population. J2
Globalization in the late 19th and early 20th centuries transformed
entire economies in relatively short periods of time. The speed and
extent of the process far exceeded the pace and depth of globaliza­
tion in more recent times. Foreign trade represented a much higher
proportion of total GDP in the 1910s in most Latin American coun­
tries than today.JJ Foreign investment measured either as an annual
flow of new resources or as the value of existing foreign-owned as­
sets weighed much more heavily in the economies of Latin America
34
a century ago. This suggests how great the potential may be for
achieving a far higher degree of integration into the global market­
place than Latin America has managed to achieve since the most
recent cycle of globalization began in the early 1980s.
The benefits associated with this third cycle of globalization
proved to be enormous, both in the short term and in the longer
run. On average, GDP per capita as well as living standards grew
more rapidly in the major Latin American countries than in the
developed countries of the north Atlantic between the late 19th cen­
tury and the Great Depression. Productivity as well as wages con­
verged toward, but did not reach, the levels of the advanced indus­
trial economies. The trend toward convergence ended and even ex­
perienced some reverses in the half century after 1930, but the econo­
mies of the region did not cease to grow. Several major economies,
including Mexico and Brazil, achieved relatively high rates of growth
from the 1950s into the 1970s. 35
Though the Latin American economies did not manage to main­
tain the high growth rates of the pre-1930 era, the overall twenti­
Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 35
eth-century performance of the major economies roughly matched
the growth rate of GDP per capita of the United States (about 1.6
percent per annum for the century as a whole).36 This rate trans­
lates into an impressive and unprecedented quadrupling of GDP
per capita in the past one hundred years. To put it differently, the
major economies of the region had a purchasing power parity (PPP)
adjusted GDP per capita equivalent to roughly one fourth the U.S.
level in 1900 and in the late 1990s. 37 The 20th century thus ended
with the Latin American economies facing exactly the same relative
gap between their performance and that of the United States as they
had faced at the beginning.
The costs of globalization between 1880 and 1930, as in earlier
periods, were not negligible. These included a long list of human
and environmental problems, ranging from the massive, unplanned
t and unhealthy proliferation of urban settlements to massive air and
water pollution, extensive deforestation, and the unregulated deple­
tion of non-renewable natural resources-all problems faced by the
f
r United States, Western Europe, and other late industrializing coun­
1­ tries in Eastern Europe and Asia.
In Latin America, the onset of export-led economic growth also
f
produced a kind of inequality shock, from which the region has yet
r~' to recover. The first and most visible disaster occurred wherever
economic growth, strong governments and railroad construction
came together in prolonged assaults on the traditional, sometimes
t' undocumented property rights of indigenous villagers and poor
r peasants from Mexico in the north to Bolivia in the south. Rail­
roads opened vast tracts of land to profitable commercial exploita­
tion. 38 As formerly isolated but productive land became accessible,
waves of usurpation by powerful outsiders, usually with local col­
laborators, hit region after region. The ownership of land, and thus
of income from agriculture, became far more concentrated than
'if
ever before. In a number of countries, most notably Mexico, this
,,.
~/..~
.~\
abrupt redistribution of assets provoked political and social unrest,39
-1"
Outside of agriculture, industrial and mining development required
ever larger or "lumpier" investments. Productivity and wages rose,
":."
r,s but returns to scarce, often foreign capital rose faster.
."
:i: A second dimension of this inequality shock affected labor scarce
regions where export producers imposed and governments enforced
~~';'
coercive systems of forced labor, indenture, and even slavery to fa­
,~~ cilitate export production. These included the imposition of rural
Yi Globalization and thc Rural EnvironmCllt
passbooks and vagrancy statutes that permitted local authorities, in
Cuba, Guatemala, and parts of the Andes, to force unwilling work­
ers to labor on export plantations. 40 In the henequen growing areas
of Mexico, new forms of slavery were introduced, abetted by the
Diaz regime when it captured Yaqui Indian rebels in Sonora on the
u.s. border and shipped them to Yucatan for sale on the docks to
local planters. 4 \ "Coolie" laborers in the Peruvian highlands rebelled
repeatedly against slave-like conditions at the turn of the century.'12
Coercive forms of enganche or indenture also developed in south­
ern Mexico, Central America, and parts of the Andes. Migration,
population growth, and reforming governments helped to end such
practices, but only after decades of abuse in many cases.
Third, the wage gap between unskilled and skilled workers tended
to grow, as demand for the latter outpaced supply in the early de­
cades of economic growth. This is a common feature of early growth
spurts in many regions of the globe. In Latin America, the migra­
tion of rural unskilled workers to the cities kept unskilled wages
low. In some countries, notably Argentina, Brazil, Chile, and Uru­
guay, immigration from Europe tended to further dampen unskilled
wage rates relative to skilled wages, though real wages levels in ab­
solute terms increased.
Finally, the failure of many Latin American governments to in­
vest adequately in the development of human resources also tended
to exacerbate initially and then to prolong the income inequalities
that make this region the most unequal in the world. Sustained eco­
nomic growth did contribute to incremental improvements in all
the conventional indicators of human development -longevity,
health, education, and the like. Life expectancy in Latin American
increased from less than 40 years on average to over 65 in the late
20th century. Infant mortality rates dropped from 300 to 400 per
1000 live births in 1900 to less than 50. Illiteracy fell from over 80 to
near ten percentY These achievements required substantial invest­
ments in human capital, made all the more diffi~ult by rates of popu­
lation growth that accelerated to peaks in the 1950s and 1960s in
many countries. Nonetheless, progress in most countries of Latin
America, and particularly in nations historically divided by ethnicity
and race, has lagged behind the region's economic capacities and
the minimum requirements for modern economic progress. Part of
the explanation for this historic failure probably lies in the relatively
low cost of the skills and technology Latin America began import-
Cycle" ofGlo!Jalization. Economic Growth, and Human Welfare in Latin America 37
ing at the end of the 19th century. Many liberal policy makers, whose
ideological forebears had insisted on education as crucial for na­
tional development a few decades before, now looked to foreign
investment and European immigration as the keys to economic
modernization.
When the high rates of economic growth that began in the late
19th century ended in the Great Depression, the major Latin Ameri­
can economies turned inward. The region's share of international
trade declined steadily after 1945. 44 In the post war era, part of the
decline in Latin America's share of world trade occurred because
various war ravaged exporters recuperated, but the decline contin­
ued into the 1970s. Most of the smaller economies in Latin America
did not turn inward as fully as the major economies because their
markets were too small to absorb the output of efficient large-scale
manufacturing plants. 45 The five Central American countries at­
tempted to overcome this constraint by creating a common market
in 1960, but the effort collapsed when economic tensions exploded
in a border war between EI Salvador and Honduras in 1969.41' The
import substituting policies vigorously pursued in Argentina, Bra­
zil, Chile, Colombia, Mexico, and Uruguay in the postwar era, even
when balanced against the more export oriented smaller economies,
reduced Latin America's share of international trade from 13.5 per­
cent in 1946 to 4.4 in 1975.
Concluding Remarks
Since the financial and economic collapse of the early 1980s, Latin
America has embarked on a new cycle of globalization. As in previ­
ous eras, globalization has reached some countries and regions, such
as Chile and Mexico, earlier than others. A number of the major
economies, such as Argentina and Brazil, have elected for the time
being not to rely on the external sector to dynamize their econo­
"]0-;
mies. The late 20th century globalization cycle is still at such an
early phase of its development that it could still be blocked by iner­
.
~~ tia or even reversed by a return to the inward looking pre-] 982
strategies. Market pressures and elite policy preferences, however,
push toward globalization. The economic logic is inescapable, but
the political viability of elected governments that embrace global­
ization in the 21 st century will depend critically on the magnitude
and distribution of the costs and benefits.One measure of an
economy's globalization is the ratio of exports to GOP. In Argentina

38 Globalization and the Rural Environment
and Brazil, that ratio in 1998 still hovered between five and ten per­
cent. In Chile and Mexico, the ratio stood at 25 and 24 percent
respectively.47
The three cycles of globalization analyzed in this chapter all shared
certain characteristics that appear to some degree to characterize
contemporary processes, as well. First, each cycle of globalization
raised the productivity of the affected economies. GDP per capita
rose substantially after the Spanish conquest in the late 15th and
16th centuries, increased to even higher levels in the Caribbean slave
economies of the 18th century, and took off again during the epoch
of export-led growth in the late 19th and early 20th centuries. Open­
ness to external trade, capital, technology, ideas, and immigrants
has usually promoted economic growth, while less integrated or
closed economies have tended to grow more slowly. This is true
whether the comparison is made across cases at a single moment in
time or by comparing growth rates within and between countries
passing through phases of greater and lesser integration to the glo­
bal economy.48
The second commonality is the alarming tendency for tiny mi­
norities to reap the lion's share of the short term benefits of global­
ization-Spanish conquerors, slavocracies, export oligarchies and
foreign investors. Europeans survived the new world epidemics they
unleashed and ended up with mineral riches, titles to lands for­
merly occupied by the Native Americans who died, and a monopoly
on high office and tax revenues. Slave owners compelled their chat­
tel to labor in exchange for subsistence rations, far below the wage
level a free market would have set. Oligarchies usurped land, prof­
ited from high returns to the scarce capital they deployed, and cre­
ated governments that systematically underinvested in their nations'
human resources.
Third, all three globalizations coincided with a sharp decline in
living standards for most people and a sharp rise in inequality. Na­
tive Americans, made more vulnerable by abuse, overwork, and dis­
location, died in their millions of Eurasian diseases. The rise of the
trans-Atlantic. slave trade reduced the legal status and physical wel­
fare of millions of hitherto free Africans and their descendants. Ex­
port-led growth produced widespread theft of peasant lands, wid­
ening wage gaps between skilled and unskilled, and the unhealthy
multiplication of urban slums and favelas. Extensive though region­
ally concentrated environmental damage also occurred in each cycle.
Cycles of Globalization, Economic Growth. and Human Welfare in Latin America 39
Finally, the first and third cycles produced long-term benefits that
eventually spread throughout society. The rise in per capita income
in the 16th century did not continue, but the 17th century resump­
tion of population growth, in Mesoamerica at least, certainly owed
something to improved productivity and living standards. The best
case for the proposition that globalization can promote welfare, how­
ever, comes from the third cycle. Relatively high rates of economic
growth achieved in the half century before 1930 eventually contrib­
uted to measurable improvements in living standards, both through
higher real wages and by increasing the tax base generating resources
for public spending and investment.
The profoundly contradictory history of past cycles of globaliza­
tion in Latin America makes it important that policy makers, pro­
ducers, and citizens undertake conscious efforts to better under­
stand and manage the distribution of costs and benefits in the fu­
ture. Pareto optimality-the condition that no one suffer, even if
some gain-would constitute a huge step forward. At the onset of a
fourth cycle of globalization, a crucial question remains to be an­
swered. Have the natural and policy sciences developed over the
past 500 years sufficiently to reduce the risks of globalization to
acceptable levels? Will it be possible to distribute the costs and the
benefits of the fourth cycle more equitably and with less damage to
the environment?
Notes
On the magnitude and shape of the Iberian trans-Atlantic economy, see
Carla Rahn Phillips, "The Iberian Atlantic," ltinerario: European Journal
of Overseas History 23 (1999): 84-106.
Jared Diamond, Guns, Germs and Steel: The Fates of Human Societies
(London: Jonatha~ Cape, 1997) chap. 17.
William M. Deneven, ed., The Native Population of the Americas in 1492,
2d ed. (Madison: University of Wisconsin Press, 1992); Linda A. Newson,
" Indian Population Patterns in Colonial Spanish America," Latin Ameri­
can Research Review 20 (1985): 41-74. See also Noble David Cook, Born
to Die: Disease and New World Conquest, 1492-1650 (Cambridge, UK:
;.;.
Cambridge University Press, 1998).
4 Woodrow Borah and Sherburne F. Cook, Essays in Population History, 3
f vols. (Berkeley: University of California Press, 1971-79), vol. 3: Mexico
and California, chap. 2.
40 Gloho/izllticl/1 ol1li the r~lIml Envimllrrll'lIt
5 Charles Gibson, The Aztecs Under Spanish Rille: A History o(l1le Indio liS
of the Valley of Mexico, ]519-18 tn (Stanford: Stanford University Press,
1964), pp. 224-25. On the Andes, see Steve J. Stem, Peru's lndion Peoples
and the Challenge of Spanish Conquest: Huamanga ta 1640 (Madison:
University of Wisconsin Press, J 982), chap. 6.
6 William D. Phillips, Jr., and Carla Rahn Phillips, The Warlds af Christo­
pher Columbus (Cambridge, UK: Cambridge University Press, J 992) chap.
5. And see Felipe Fernandez-Armesto, Columblls (Oxford: Oxford Uni­
versity Press, 1991).
7 Elinor G. K. Melville, A plague of sheep: environmental conseqllences of
the conquest of Mexico (Cambridge, UK: Cambridge University, J 994),
pp.55-9.
8 Ibid., chap. 4.
9 Rafael Dobado, "Salarios y condiciones de trabajo en la Minas de
Almaden, 1750-1839," in La e[Onomia espanola al final del Alltiguo
Regimen, ed. Pedro Tedde (Madrid: Alianza, 1982); Guillermo Lohmann
Villena, Las minas de Huancavelica en los siglo.~ XVI y XVI!. (Lima:
Pontificia Universidad Cat61ica del Peru, 1999).
10 Gibson, The Aztecs Under Spanish Rule, chap. 1I.
I I William L. Fash, Scribes. Warriors, and Kings: The City of Coplin and the
Ancient Maya (New York: Thames and Hudson, 1991), chap. 9. And see
Rebecca Storey, Life and death in the ancient city of Teotihllawn: a 11I0d­
ern paleodemographic synthesis (Tuscaloosa: University of Alabama Press,
1992).
12 Alan L. Kolata, The Tiwanaku: portrait of an Andean civilization (Cam­
bridge, MA: Blackwell, 1993).
13 Gibson, The Aztecs Under Spanish Rule, chap. 9.
14 Borah and Cook, Essays in Population History vol. 3, pp. J 72-76. See also
Gibson, The Aztecs Under Spanish Rule, pp. 282-86.
15 The "reducci6n" or "congregaci6n" of indigenous villagers into Spanish­
style towns occurred in Peru with the reforms of Viceroy Francisco de
Toledo in the 1570s; similar forced resettlements occurred throughout
Mesoamerica. See Stern, Peru's Indian Peoples. chap. 3.
16 Francois Chevalier, Land and Society in Colonial Mexico: The Great Ha­
cienda (Berkeley: University of California Press, 1970), chap. 5.
17 Alfred W. Crosby, Jr., The Columbian Exchange: Biological and Cultllral
Consequences of 1492 (Westport, CT: Greenwood Press, 1972), p. 170. Also
Diamond, Guns, Germs and Steel, p. J 62.
18 Crosby, Columbian Exchange., chaps. 3 and 5. The dietary effects also
appear to have been positive, though over-dependence on corn in Italy
Cycles o(Glol'o/izotioll, Econol1/ic G1'Owth. and HlIIlIan Welfarc in Latin A nlcrica 41
and potatoes in Ireland caused severe problems well into the 19th cen­
tury. See i/7id., pp. 183-5 and Arturo Warman, La historia de UII bastardo:
maiz y capitalismo (Mexico: 1nstituto de Investigaciones Sociales, UN AM
and Fondo de Cultura Economica, 1988).
J 9 Crosby, Columbian Exchange, chaps. 3 and 5. Also Joseph M. Prince and
Richard H. Steckel, "Tallest in the World: Native Americans of the Great
Plains in the Nineteenth Century," in NBER Workillg Paper Series. His­
torical Paper 112 (Cambridge, MA: National Bureau of Economic Re­
search, 1998). To the purposeful transfer of plants and animals should
be added the incalculable number of"stowaways"-especially grasses and
ot her "weeds," as well as rodents and insects-which made t he trans­
Atlantic journey, hidden from view like the bacteria and viruses that killed
so many. Some of these species undermined productivity by reducing
harvests, but their net effect over time seems not to have detracted much
from the gains made possible by the new crops and farm animals.
,, 20 The recovery of silver production in New Spain (Mexico) and the
; Viceroyalty of Peru (Bolivia and Peru) in the 18th century along with
i
I the resulting growth in external trade could also be treated as a kind of
l
~
reglobalization process after the 17th "century of depression." In the
Mexican case, however, silver production in 1800 was only marginally
higher, if not actually lower, in per capita terms than in 1700, while Peru's
f
t silver production never came close to repeating, even in absolute terms,
the output achieved before 1630. On Mexico, see John H. Coatsworth,
"The Mexican Mining Industry in the Eighteenth Century," in The Econo­
mics of Mexico and Peru During the Late Colonial Period: I76()-18I(), ed.
Nils Jacobsen and Hans Jiirgen Puhle (Berlin: Colloquium Verlag, 1986),
26-45. On Peru, see Enrique Tandeter, Coercion and Market: Silver Min­
ing in Colonial Potosi. 1692-1826 (Albuquerque: University of New
Mexico Press, 1993).
Herbert Klein, African Slavery in Latin America and the Caribbean (Ox­
ford: Oxford University Press, 1986), p. 59.
Stuart Schwartz, "Indian Labor and New World Plantations: European
Demand and Indian Responses in Northeastern Brazil," American His­
torical Review 83 (June 1978): 43-79.
Klein, African Slavery, p. 50.
David Eltis, The Rise ofAfrican Slavery in the Americas (Cambridge: Cam­
bridge University Press, 2000), chap. 1.
Ibid., Table 1-1, pp. 9-11.
26 B.W. Higman, "Economic and Social Development of the Bri tish West
Indies from Settlement to ca. 1850," in The Cambridge Economic History
ofthe United States, ed. Stanley L. Engerman and Robert E.Gallm an (Cam­
bridge, UK: Cambridge University Press, 1996), pp. 297-336. Also Stuart
 42 Globalization and the Rural Environment Cycles of Globalization, Economic Growth, and Human Welfare in Latin America 43

B. Schwartz, Sugar Plantations in the Formation of Brazilian Society: Ba­36 Maddison, "Explaining the Economic Convergence of Nations, 1820­
hia, 1550-1835 (Cambridge, UK: Cambridge University Press, 1985). 1989," 20-61.
27 Schwartz, Sugar Plantation, p. 77. See also Preston E. James and C.W.
Minkel, Latin America, 5th ed. (New York: John Wiley & Sons, 1986), pp.
t
I 37 John H. Coatsworth, "Economic and Institutional Trajectories in Nine­
teenth-Century Latin America:' in Latin America and the World Economy
472ff. ! Since 1800, ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA:
David Rockefeller Center for Latin American Studies, Harvard Univer­
28 David Eltis, "The Total Product of Barbados, 1664-1701," Journal of Eco­
nomic History 55 (1995): 321-36. sity Press, 1998),23-54.
38 John H. Coatsworth, "Railroads, Landholding and Agrarian Protest in
29 Pedro Praile Balbin, Richard J. Salvucci, and Linda K. Salvucci, "E! caso
the Early Porfiriato," Hispanic American Historical Review 54 (February,
cubano: exportaci6n e independencia," in La independencia americana:
consecuencias econ6micas, ed. Leandro Prados de la Escosura and Samuel 1974): 48-71.
Amaral (Madrid: Alianza Universidad, 1993), part II, chap. 3. 39 The Mexican Revolution began in western Chihuahua where elite land
grabbing inspired by railroad construction provoked the victims to take
30 Cuban GDP per capita was only slightly higher in 1850 than in 1750,
up arms. See Friedrich Katz, The Life and Times ofPancho Villa (Stanford:
according to Ibid. On Brazil, see Angus Maddison, "Explaining the Eco­
Stanford University Press, 1998), p. 28. For a Brazilian example, see Todd
nomic Convergence of Nations, 1820-1989," in Convergence of Produc­
A. Diacon, Millenarian Vision, Capitalist Reality: Brazil's Contestado Re­
tivity: Cross National Studies and Historical Evidence, ed. WIlliam T­
bellion, 1912-16 (Durham: Duke University Press, 1991), chap. 4.
Baumol, Richard R. Nelson, and Edward N. Wolff (Oxford: Oxford Uni­
versity Press, 1994), pp. 20-61. 40 For a survey that is appropriately skeptical of poorly established claims,
see Arnold J. Bauer, "Rural Workers in Spanish America: Problems of
I 31 See the essays in Barbara L. Solow and Stanley M. Engerman, eds., Brit­
Peonage and Oppression," HispanicAmerican Historical Review 59 (1979):
ish Capitalism and Caribbean Slavery: The Legacy of Eric Williams (Cam­

!
bridge, UK: Cambridge University Press, 1987), especially the editors' in­ 34-63.
troduction. 41 See Allen Wells, Yucatan's Gilded Age: Haciendas, Henequen and Interna­
tional Harvester, 1860-1915 (Albuquerque: University of new Mexico
32 The best survey and analysis is Kevin H. O'Rourke and Jeffrey G.
Williamson, Globalization and History: Evolution of a Nineteenth-Cen­ Press, 1985).
tury Atlantic Economy (Cambridge, MA: MIT Press, 1999). 42 Wilfredo Kapsoli, "La crisis de la sociedad peruana en el contexto de la
Guerra," in Reflexiones en torno a la guerra de 1879, ed. Jorge Basadre, et
33 Victor Bulmer-Thomas, The Economic History of Latin America since In­
al. (Lima: Francisco Campodonico F. y Centro de Investigaci6n y
dependence (Cambridge, UK: Cambridge University Press, 1994), Appen­
dix 2, pp. 438-41. Capacitaci6n, 1979), 339ff.
43 The Mexican case is typical. See Instituto Nacional de Estadistica,
34 Michael J. Twomey, "Patterns of Foreign Investment in Latin America in
Geografia e Informatica, Estadisticas hist6ricas de Mexico, 2 vols. (Mexico:
the Twentieth Century," in Latin America and the World Economy Since
Instituto Nacional de Estadistica, Geografia e Informatica, 1985), vol. I,
1800, ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA: David
Rockefeller Center for Latin American Studies, Harvard University Press, chaps. 1 and 4.
1998), pp. 177-85. 44 Bulmer-Thomas, The Economic History of Latin America since Indepen­
35 Bulmer-Thomas, The Economic History of Latin America since Indepen­ dence, p. 271.
dence, Appendix 3, pp. 442-47. Also Andre A. Hoffman and Nanno 45 The six major import substituting economies saw their share of world
Mulder, "The Comparative Productivity Performance of Brazil and trade drop from 8.9 percent in 1946 to less than one fourth of that level
Mexico, 1950-1994," in Latin America and the World Economy Since 1800, (2.2 percent) in 1975; the smaller and more open economies dropped by
ed. John H. Coatsworth and Alan M. Taylor (Cambridge, MA: David ,U",
'['
a little over half, from 4.6 to 2.2 percent. Ibid., p. 271
~.
Rockefeller Center for Latin American Studies, Harvard University Press, r

46 Ibid., p. 271.
1998), pp. 88-90. Also Maddison, "Explaining the Economic Convergence
'irt.
~: 47 World Bank, Entering the 21st Century: World Development Report 1999/
of Nations, 1820-1989," pp. 20-61; O'Rourke and Williamson, Global­
ization and History, chap. 1. ~ii.:,2000 (Oxford: Oxford University Press, 2000) ,pp. 254-55.
I~
rl'.=..
 44 Globalization and the Rllral Environment
48 For a recent test of this proposition for Latin America, see Alan M. Tay­
lor, "On the Costs of Inward-Looking Development: Price Distortions,
Growth, and Divergence in Latin America," Journal of EcolliJrl1ic History
58 (March, 1998): 1-28.
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