Byron Hist 258 Book Review April 11th

The Developmental Challenges of Mining and Oil and Open Veins of Latin America, despite both discussing the same subject, economic development or rather the lack of it in many cases the two works reviewed, reach near diametric conclusions. Despite looking at similar data and time periods, the differences between the conclusions seems to stem from the authors focus and professional lens. The first book is co-written by a group of Oxford and Brown affiliates who discuss the subject with an Ivory Tower air., In contrast, Eduardo Galeano is a journalist and author from Uruguay who lived through what he writes about and indeed was imprisoned for it. The first book embarks with the task of testing or reexamining the resource curse hypothesis. The resource curse hypothesis asserts that the possession of huge mineral wealth appears to lead to poor quality growth, inequality, and conflict (p 1)The authors are coming from what they acknowledge as the traditions of historical institutionalism in the social sciences (p 3) That is, they largely look at the problem in terms of institutions broadly defined (government agencies, organizations all the way down to customs) Their focus upon institutions fundamentally frames their work and directs it toward certain conclusions. The authors approach their analysis based on six case studies. Two of which they deem successes, Chile and Botswana and four failures, Peru, Bolivia, Niger, and Nigeria. To create these case studies the authors draw upon a very extensive set of secondary academic works largely from the realms of political science and economics. Based on these constructed case studies the authors come to a number of broad conclusions. In addition to maintaining the stress on economics, they also claim that both timing and sequencing have been crucial intervening elements, and so sometimes has leadership, in creating space or building consensus. (p213) That
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Byron Hist 258 Book Review April 11th

is, they conclude that a kind of institutional layering over time or lack thereof was a prominent factor in a countrys development, along with resource abundance, historical timing of larger events, and leadership in an amorphous non-individualistic sense. To clarify, they conclude by reaffirming the old hypothesis of resource curse but with fairly obvious and intuitive nuances. The authors case study of Bolivia is indicative of the works stance and approach. The study focuses on the creation of state capacity. State capacity is the states bureaucratic ability to act and make things happen. The authors claim that High dependency and skewed distributional effects across sectors undercut possibilities for the modernization of the state by their effects on the structure of upper classes and their politics towards improving state capacities in the early 20th century. (p102) They make a clear causal argument for the capacity of the state being contingent upon the social elites. As evidence they discuss the Bolivian railway system. Private enterprise, the mining industries in particular, built the first railroads. These first railroads were built with resource extraction in mind. The state wanting to aid agricultural production embarked on the creation of a national railway that would connect agricultural production to markets. However, agrarian Elites did not have the economic or political strength to become institutionally involved in the enterprise. (p94) As a consequence the state capacity did not expand and instead it was confronted with a number of floundering mistakes. This analysis creates a troubling narrative. Even after a working and middle class revolution, the authors continue to attribute state capacity creation to economic elites. Capacity growth stops with the revolution in 1952. This narrative is troubling because it suggests that state capacity cannot, or rather will not, come about through popular government. It is all too reminiscent of our

Byron Hist 258 Book Review April 11th

contemporary job creator rhetoric that praises our economic elites for growing the economy and blames socially interested policy for national decline. The authors methods have a significant hole. In their analysis of institutions they remain largely confined and focused on domestic institutions. The hole is most revealed in their discussion of Chile under the democratic government of Allende and dictatorship of Pinochet. In 1972 Nixon said Make the economy scream when he purportedly gave the CIA permission to interfere in the economy of Chile in order to undermine the socialist government. Despite the authors focus on state-society relations and institutions it seems a severe lapse in judgment to neglect the death squads of Pinochet, the stadium, the sense of fear, and the CIA backing of the coup dtat. As Professor Smaldone asserted in class, roughly paraphrased, economics has little prescriptive value without an understanding of power relations. Similarly, a discussion of development in resource abundant nations will find itself lacking if it does not discuss the international power relations of trade. The discussion of domestic institutions makes little sense without the larger context. The United States is a very large institution; one that looms over much of the developing world leaching wealth. In point of fact the United States simply does not appear in their index. By focusing on domestic institutions the explanation for underdevelopment is no longer that resources are vampirically sucked out of the country. Instead we are left with an explanation that holds the domestic institutions responsible, that it is the people or the governments fault. In contrast, the role of the United States and its firms form a central foundation of Eduardo Galeanos argument. Additionally, his argument is not about how institutions and policies domestically have misused resources, instead he writes about the pillage of Latin
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Byron Hist 258 Book Review April 11th

America; the mass extraction of resources from the continent for the benefit of industrialized and wealthy nations. Galeano creates an image of mid twentieth century Latin America wherein it is exploited by trade inequalities; constantly at a loss in its balance of trade. Not only do foreign nations benefit from the trade, they also dominate the continents manufacturing and investment. Aid and loans from developed nations go to benefit the industries of those industrialized nations in Latin America. In other words, Latin America loses when it trades, when it receives loans, and the lions share of profits leave the country to foreign firms. The picture that he paints is bleak. It is abundantly clear that Galeano is coming from a decidedly leftist perspective rather than trying to maintain an unbiased faade. He begins his chapter on contemporary plunder writing Of all the direct private investment in Latin America coming from abroad, less than one-fifth was from the United States when Lenin wrote Imperialism in the spring of 1916. Today, nearly three-quarters is from the United States (p205) He does not approach his subject material from the standpoint of objective political scientific inquiry. To be clear this is not a weakness. Rather, along with his writing style, it adds substance to his work. Unlike the first work that concludes with nearly vacuous statements like The nature, degree of domination and location of the commodity has run through all our learning. All our cases ex hypothesi shared the characteristic of dependence on extractives and therefore vulnerability to the macro and micro dimensions of such dependence. (p213) Galeanos approach allows him to state the situation clearly. In contrast he definitively states Underdevelopment isnt a stage of development, but its consequence. Latin Americas underdevelopment arises from external development, and continues to feed it. (p285)

Byron Hist 258 Book Review April 11th

Like the other text, Open Veins of Latin America also draws primarily upon secondary sources. Galeano differs in that his sources are not overwhelmingly from Anglophone scholarship. Instead, he utilizes secondary works from Latin America and the Soviet Union to balance out western scholarship. Additionally Galeanos usage of sources is different from the other authors. The authors of The Developmental Challenges of Mining and Oil use their sources to place themselves in the larger political economy discourse. The following example is indicative of their work This approach shares the stress on initial conditions common to much recent political economy writing (Engerman and Sokoloff, 1994; Acemoglu, Johnson, and Robinson, 2001). (p4) From a non-scholarly vantage point this contributes nothing to lay understanding. Galeano does not share this academic vanity. His sources instead are wholly directed at furthering his argument. It seems certain that Galeanos goal in writing was not participation in academia but rather creating a coherent narrative to explain the state of Latin America. The two works, The Developmental Challenges of Mining and Oil and Open Veins of Latin America demonstrate the diverging analysis regarding Latin American economic development. The former articulating an abstract institution focused argument and the latter formulating a strong narrative of imperialism. The first lends itself to continuing the status quo as it neglects outside institutions and focuses on the role of domestic institutions. The second paints a bleak picture of wanton theft and exploitation.

Byron Hist 258 Book Review April 11th

Bibliography Galeano, Eduardo, and Cedric Belfrage. Open Veins of Latin America: Five Centuries of the Pillage of a Continent. New York: Monthly Review, 1997. Print. Thorp, Rosemary, Stefania Battistelli, Yvan Guichaoua, Maritza Paredes, and Jose Carlos. Orihuela. The Developmental Challenges of Mining and Oil: Lessons from Africa and Latin America. Basingstoke: Palgrave Macmillan, 2012. Print.