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The Open Drains of Latin America

From Project Syndicate by Ricardo Hausmann:

Stories are most believable when they reaffirm our prior beliefs and assumptions. If not, we tend to find them implausible.

A case in point is Eduardo Galeano’s much-admired 1971 book The Open Veins of Latin America, which has sold more than one million copies in 12 languages and defined a generation’s view of the region’s tortured history. The late Hugo Chávez gave US President Barack Obama a copy when they met in 2009 in Trinidad.

The book is commendable for its ability to describe five centuries of Latin American history with great coherence, something that only a work of fiction can achieve. History, unfortunately, is a bit more complex. A few weeks ago, Galeano, to the astonishment of many, distanced himself from his own book. He said he could no longer bear reading it, and that when he wrote it, he “lacked sufficient knowledge of economics and politics.”

Why was the book so well received, and what accounts for its author’s second thoughts?

Galeano’s book interprets Latin America’s history as the consequence of foreign plunder. Over the centuries, bad guys change nationality – say, from Spanish to American – but their intentions remain the same. Current problems are the result of evil deeds committed by foreign powers that came only to exploit. The poor are poor because they are victims of the powerful.

Even the most distorted myths contain a kernel of truth. Throughout human history, those with superior technology have tended to displace or even annihilate their neighbors. That is why the Welsh and the Pygmies live in remote places, and why English, Spanish, and Portuguese are spoken in the Americas. In fact, recent scientific evidence indicates that the Neolithic Revolution – the transition from hunting and gathering to agriculture – spread mostly because farmers displaced hunters, not because hunters learned from them.

But, while technological superiority and confrontation can wipe out the weak side, technological diffusion across cultures can be mutually beneficial. It allows all to do more with less, thereby generating a surplus that can be distributed.

As in any such relationship, all parties want to get the lion’s share of the gain, but some get the short end of the stick. Yet, without the relationship, there would be no stick. The real challenge for a patriot is to obtain the largest amount of pie, not a large share of a small pie.

Alas, those inspired by Open Veins, like Chávez (and Fidel Castro before him), are bound to create very small pies. For example, while Chávez’s intention was to double Venezuela’s oil production to six million barrels per day by 2012 – a feasible goal, given that the country has the world’s largest oil reserves – his penchant for expropriation and for firing able dissenters caused output to fall by one-fifth. While Venezuela remains mired in economic malaise, its allies – China, Russia, Brazil, and OPEC – have raised output by 14 million barrels per day, laughing all the way to the bank.

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