Al Gore was quoted as saying that NAFTA was the best deal since the Louisiana Purchase. Hardly a diplomatic quote but in this lesson’s reading you will begin to see what he meant . The best way to understand the economic processes taking place throughout Latin America is to consider them from the perspective of a Rural-Urban continuum with immigration taking place along a line of development – from least developed areas all the way to the US border and beyond. 50 percent of the rural population is landless. Part of the problem here is that, in developing, these countries increasingly rely on cash crops for export – things like coffee, bananas, beef, sugar etc. These crops lend themselves to large scale industrial agricultural production and they take the best lands to do it. The crops do not feed the local people, they do not create a lot of work, and they do not leave much in the way of added value in the countryside. On the other side of the coin what developing countries buy is expensive capital goods – machinery, computers, airplanes etc. So they sell low -and are forced to buy high. On top of this as more countries grow cash crops prices fall. It is a buyers market for us – a sellers market for them in terms of what they buy from us. So poverty, hunger and debt is manufactured and built into the relationship between the two areas. On top of this traditional economies are based on creating as much work for as many people as possible – however “inefficient” this may seem to us. Capitalist economies on the other hand are based on creating profit – even at the expense of community or social capital. You create profit by downsizing the workforce and increasing the productivity of those left employed. In other words the global needs of people – for work – are sacrificed for the “artificial” needs of a particular economic system. So you find at least 25-50 percent underemployment and unemployment in “developing” societies.

With Nafta also the small farmer is being squeezed off the land by heavily subsidized corn, pork, poultry and eggs from the United States. They cannot compete with these subsidies.

What is to be done?

Pay particular attention to the section on migration to the United States and to Box 10.5. Recent figures suggest that over 50 percent of immigration to the US is from Latin America and that Latino populations in most States are increasing by 50 percent every decade. This is a marriage with no possibility of divorce. Yet there is a lot we could do – at marginal cost – to significantly improve the lives of the new immigrants. We just need the will to do it.

Reading:
The Legacy of Mesoamerica

Pages 353-378

Global Studies :

Pages 205-216

1. Reaction Paper: Is Capitalist penetration of the peasant class good or bad for local economies and cultures?