Theme 4: Creation, Expansion, and Interaction of Economic Systems

As Latin American entered the 21th century, it continues to search for economic growth, social justice, and political stability. In many ways Latin American societies remained "unrevolutionary", being unable to bring about needed changes because of deeply entrenched class interests international conditions, or power politics. However the struggle for change had produced some important results. For example, the Mexican and Cuban revolutions brought profound changes in those countries and had a broad impact on the rest of the hemisphere, either as models to copy or as dangers to be avoided. Nations such as Peru, Bolivia, and Nicaragua attempted their own versions of change with greater or lesser success. 

New forms of politics were tried. New political and social ideas such as those of liberation theology grew out of struggle to find an effective formula for change. Although numerous problems continued to face the region, Latin America remained the most advanced part of the developing world. Levels of literacy quickly and easily surpassed those of Asia and Africa. 

New world economy created opportunities for expansion, and in the 1990s Latin American economies grew considerably but this growth has made the problems of the distribution of wealth in Lain America. 


PRI (Party of the Industrialized Revolution): A one-party system revolutionary leaders formed in order to institutionalize the new regime; developed slowly during the 1920s and 30s into a dominant force in Mexican politics. The party represented the institutionalization of the new power structure that had emerged as a result of the Mexican Revolution (1910–20), a coalition of regional and local political-military bosses and labor and peasant leaders. By the late 20th century, the stability of the PRI was undercut by corruption and a lack of social improvement. Virtually all important figures in Mexican national and local politics belonged to the party, because the nomination of its candidate to a public office was almost always tantamount to election. It was originally called the National Revolutionary Party (Partido Revolucionario Nacional), the party was renamed the Mexican Revolutionary Party (Partido de la Revolución Mexicana) in 1938 then took its current name in 1946.

  In the 1990's the Mexican government joined the non-tariff policy between the U.S. and Canada, known as NAFTA (North America Free Trade Agreement), wishing to spur the Mexican industry. Trade with U.S. increased and Mexico became the second largest U.S. trade partner. NAFTA also drew Mexico closer into political and economic ties the U.S. 

United Fruit Company: U.S. corporation that controlled the banana trade in much of Latin America. It was the largest foreign-based corporation in that region that had great influences on political and social concerns. It was the largest and most important foreign concern in Guatemala. 

Fidel Castro was a young lawyer experienced in leftist university politics and a strongly opposed critic of Batista's government. 1953 Castro was captured and put to trial for gathering a few followers to launch an attack on some military barrack. After being released from prison Castro and slowly but surely gained strength until he became a communist leader of Cuba in 1959, backed up by Soviet regime. Castro initiated reforms to establish socialism. 

 Salvador Allende: Socialist leader of Chile; overthrown by military junta in 1973. The soldiers in power imposed a new type of bureaucratic authoritarian regime. Their governments were supposed to stand above the competing demands of various sectors and establish economic stability. But now, the soldiers would place the national interest above self interests by imposing dictatorships. Government was essentially a presidency, controlled by the military.

Augusto Sandino: Led resistance against U.S. influence in

Nicaragua in the 1930s, until his assassination by the U.S.-trained Nicaraguan National Guard in 1934. His struggle against U.S. intervention made him a hero and later the figurehead of the Sandinista party, which carried out a socialist revolution in Nicaragua in the 1980s. 

Good Neighbor Policy: U.S. policy toward Latin America, begun in the 1930s, that promised less intervention.In 1937, President Franklin D. Roosevelt introduced the Good Neighbor Policy, which promised to deal more fairly with Latin America and to stop direct interventions. After World War II, however, the U.S. preoccupation with containment of the Soviet Union and communism as an ideology led to new strategies in Latin America. They included participation in regional organizations, the support of governments that at least expressed democratic or anticommunist principles, the covert undermining of governments considered unfriendly to the U.S. interests, and when necessary, direct intervention. 

 Favelas: Brazilian term for shantytowns. Often migrants lived in marginal neighborhoods or in shantytowns, which have become characteristic of the rapidly growing cities of Latin America. These favelas, to use the Brazilian terns, have created awful living conditions, but over time some have become poorer neighborhoods within the cities, and community cooperation and action within them have secured basic urban services. 

 Third World: The developing nations and regions, including Latin America. This term was used in the cold war era to distinguish them from capitalist industrialized nations, which were known as the first world, and the communist industrialized nations, which are known as the second world. The third world showed great diversity in their cultural and political traditions. For example, the presence or absence of revolutionary experience. However in their 20th century history they all faced hardship of economic development and challenge of what relationship to have with militarily and economically more powerful nations. 

In 1994 an armed guerrilla movement burst forth in the Indian southern stat of Chiapas, calling themselves Zapatistas, in honor of the peasant leader, Emiliano Zapata, in the 1910 revolution. this movement showed how social issues remained unresolved. The Mexican government's response was a repression and negotiation. 


 In 1944 a middle- class and labor coalition elected reformer Juan José Arevalo as president of Guatemala. He began series of programs that included land reform and improvement in the rights and conditions of rural and industrial workers. these programs brought the government into conflict with the United Fruit Company.

 In 1934- 1944 Fulgencio Batista was a strongly determined authoritarian ruler of Cuba who rose through the lower ranks of the army until he was overthrown by Castro. His reforms included a democratic constitution of 1940,which promised major changes, full employment, nationalization of natural resources, and land reform. But his programs were marred by corruption. In 1952 Batista returned to presidency as dictator rather than reformer. Then Batista was put to an end by Fidel Castro. 

Ernesto “Che” Guevara: Militant Argentine revolutionary who assisted Castro in Cuba and was killed attempting a similar revolt in Bolivia.

 Liberation Theology: A combination of Catholic theology and socialism, promoted (but not employed) in Latin America by some clergy and fewer politicians. By the 1970s, iberation theology combined Catholic theology and socialist principles or used Marxist categories for understanding soceity in an effort to improve conditions for the poor. Liberation theologists stressed social equality as a form of personal salvation. 

 Sandinista party: Leftist political group in Nicaragua backed by the U.S.S.R. Ousted in elections in 1990. In Nicaragua, the elections of 1990, held under thereat of a U.S. embargo, removed the Sandinista party from control of Nicaragua. In Subsequent elections the party of the Sandinistas could still muster much support, but it could not win back the presidency. 

Banana republics: Term used to describe Latin American nations with corrupt governments. The direct inderventions usually were followed by the creation or support of conservative governments, often dictatorships that would be friendly to the United States. These became known as the banana republics, a reference not only to their dependence on the export of tropical products but also to their often subservient and corrupt governments. 

 Alliance for Progress: U.S. policy toward Latin America, begun in the 1960s, that promised economic aid. It aimed to develop the region as an alternative to those solutions. The alliance had limited success despite good intentions and more than $10 billion in aid, but many Latin Americans perceived that it benefited the elites rather than the poor. 

 Jorge Luis Borges and Gabriel García Marquez: writers rejection traditional form as unsuitable for representing reality; turned to “magical realism.” In the 1960s a wave of literature too place in which novels that mixed the political, the historical, the erotic, and the fantastic were produced by a generation of authors who used "magic realism" because they found the reality of LAtin America too absurd to be described by the traditional forms of logic. Writers such as the Argentine Jorge Luis Borges and Colombian Gabriel Garcia Marquez won acclaim throughout the world. 

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