Latin America After the Cold War

Mark Falcoff

June 16, 2014

My task is to discuss three issues which are related, and yet each deserving of consideration on its own.

            The first is the end of the Cold War as it affects one of the major “peripheral” areas of international relations.

            The second is the death of what might be called the myth of the left in Latin America.  By that I mean not merely the terminal crisis of Communism as practiced in certain Latin American countries, but of something more powerful still—the expiration of revolutionary fantasy, the dream of an event which has not yet taken place.

            And the third is to speculate on where this will leave Latin America in the emerging world order, and how it will alter U.S.-Latin American relations.



            Because the Cold War is almost history now, some people are trying to make us forget why it existed in the first place.  So perhaps it might be best to begin our discussion with a brief recapitulation of the events of the last forty years.  What we call the Cold War was a strategic, political, military and ideological rivalry between the United States and the Soviet Union with quite literally global implications.  In this respect it was different from earlier struggles for power and influence between large states, or what we call major powers or “superpowers.”  In the eighteenth and nineteenth century—indeed, up to 1914—conflict was managed by an elaborate set of rules, the theater of contention was relatively small, and boundaries could be changed from time to time without seriously disrupting the international system as a whole.

            The creation of the Soviet state after 1917 introduced a new and literally revolutionary element into the game—a great power which did not accept the conventional norms of intercourse between nation-states—indeed which openly proclaimed its intention of subverting them.  This situation became even more dangerous after 1945, when the Soviet Union emerged from World War II as one of two surviving superpowers, whose political reach was enhanced by the acquisition of the Baltic republics (1940), by the subjugation of Eastern Europe (1945-48), by the victory of forces friendly to it in the Chinese civil war (1949), and by the eventual development of atomic weaponry in the early 1950’s—which put it on a basis of psychological and political I(if not full strategic) equality with the only other superpower, the United States of America.

            For the first time in world history, it was conceivable for one power to extend its reach literally everywhere, and this transformed international relations from a science concerned with a few major actors on a small stage, to a complicated chess game with dozens of pieces scattered all over a huge board.  In no other way can we understand such events as Soviet, Chinese and American involvement in Korea, American involvement in Vietnam, Soviet commitments to Cuba, Cuban military action in the Horn of Africa and Angola, Soviet (and later American) involvement in Egypt, and so forth.

            Certainly the intromission of the two superpowers in much of what we used to call the “Third World” had nothing to do with conventional notions of imperialism—the acquisition of territories and influence in a race for raw materials, cheap labor, or protected markets.  Quite the contrary:  the Cold War was an exercise in competition between the superpowers to see who could do more for formerly colonial, or semi-colonial areas, or rather, for their fortunate governing elites.  The other important difference between the Cold War and earlier races for global influence was the notion of a zero-sum game:  what one side acquired was understood to automatically detract from the welfare and security of the other.  And perhaps even more important, Soviet expansion appeared irreversible, since its territorial or political gains were typically consolidated by important transformations of society.  In some cases, entire social classes or cultural groups quite literally disappeared.  Wherever “socialism” prevailed, all the means to challenge it, to change it, to repeal it, were systematically uprooted.

            This brings me to the other crucial difference between the Cold War and great power rivalries of times past.  The organizing principle of conflict was not nation al interest, racial missions, “living space,” imperial preference, Manifest Destiny, or any of the banners which had driven countries to seek territories, markets or influence abroad in the past.  This time the issues was ideology, expressed not only in doctrinal terms, but also as a guide to social organization Put another way, the Soviet ideology not only expressed a system of values, but offered a blueprint for a particular kind of society and economy—what for lack of a better term we will call a totalitarian state.  Because of this unique transnational quality, Marxist-Leninism had the power to attract the loyalties of people outside the bloc, loyalties which surmounted and exceeded any which they might otherwise owe to their country of birth and residence.

            While treason, or service to a foreign power to the disadvantage of one’s own country, had existed in times past, it was usually inspired either by venality or by legitimate religious or ethnic grievances—one thinks, for example, of the English Catholics who conspired on behalf of Spain during the early years of the Reformation, or more recently, Irish Republican operatives in Great Britain during World War II.  But in the case of Soviet Marxism, the appeal was an entire world view—a vision of the society and the future—capable not only of driving individuals to commit acts of espionage against their own government, but of inspiring the formation of large political parties, as well as front groups, publications, cultural associations, and so forth.  The Cold War, then, was both a conventional and non-conventional struggle, with world-wide implications, from which no country, even no very unimportant county, could be wholly exempt.



            In this context, it is not surprising that the East-West conflict became the principal motor of U.S.-Latin American relations, as it did indeed in most other areas of what some people used to call the Third World.  Of course, Latin America had been of special interest to the United States long before the creation of the Soviet Union, but in a very different way.  From the time of the Monroe Doctrine (1826), it was a pillar of American policy to oppose European colonization, or re-colonization (in the case of Spain) of American territories, almost all of whom had attained independence by 1824.  this meant opposition not only to imperial expeditions by Spain or (in the case of Mexico) France, but to the seizure of territory by European naval expeditions under the pretext of debt collection or claims owed to injured national.  Under the so-called Roosevelt corollary to the Monroe Doctrine, the United States sought to preempt European annexation of certain countries—notably, the Dominican Republic, Haiti, Cuba, an din a certain way, Nicaragua—through costly and difficult preemptive interventions on its own.  (The last of these was completed with the U.S. withdrawal from Haiti in 1934, to the relief more of Washington than the Haitians, some of whom would have preferred that the Marines remain in perpetuity.)

            The United States has also been concerned with certain geostrategic aspects of the region, particularly Central America, whose narrow isthmus provides the most logical venue for a transoceanic canal.  Much of the diplomatic activity of the United States in the nineteenth century was organized around this project, which was finally completed in 1914.  In a certain sense, the existence of the isthmus, and then of the Canal (operated until recently by an American company chartered by Congress) provided the United States with a ready-made interest in the circum-Caribbean, at least to the extent of being concerned that the surrounding countries—but particularly the Republic of Panama itself—remain under the control of benevolent governments.  (This concern was most recently ratified by our intervention in Panama this last December.)

            There has always been a certain commercial interest in the region, but in no way different from other areas except for geographical propinquity.  Investment is another matter.  Before 1914 American overseas exposure was greater in Mexico, Cuba and the five Central American republics than anywhere else in the world.  Perhaps that is not saying very much, because in those the American economy was expanding so vigorously at home that profits from overseas operations amounted to a very small portion of our gross nation al product.  Although Latins often believed—some still may—that American investment in their countries was the essential cause of military intervention, this was never the case; most of the expeditions in the Caribbean and Central America under the Roosevelt corollary were provoked by geopolitics, or in the case of Mexico during its Great Revolution (1910-23), fear of local violence spilling over the border.

            As early as the 1930’s, the focus of American foreign policy was beginning to broaden and shift away from Latin America.  Evidently, this process was intensified enormously by World War II.  The post-war settlement left the United States for the first time with what appeared to be a permanent military presence in both Germany and Japan, and shortly thereafter, with a crucial association with most of the Western European countries in a defensive treaty against the Soviet union.  Investment followed the flag:  the reconstruction of Europe under the Marshall Plan also paved the way for a new American economic presence there which soon overshadowed anything like it in Mexico, Brazil, Chile or Central America—or indeed, all of them combined.

            During the first decade of the Cold War, Latin America was not regarded as an area of particularly high priority for the United States.  Certain comfortable assumptions nourished the American complacency of the day:  that these societies were predominantly Catholic, and therefore immune to the blandishments of Marxist ideology; that the military establishment in each republic was more than a match for small, weak, and disorganized Communist parties; or that the Soviets themselves were not interested in a territory so far from their immediate borders.

            All of those illusions were shattered by the Cuban revolution of 1959.  This event was not merely a change of regimes for an island which had known little political stability in any event.  Rather, it was a geopolitical and cultural shock of the first order; under Fidel Castro the Latin American country regarded as most firmly within the U.S. sphere of influence voluntarily entered the Soviet alliance.  Three decades later, it is easy to pick out the unique, not to say non-replicable, aspects of this affair; at the time, however, stunned by Castro’s own audacity and the element of surprise—including the unexpected Soviet acceptance of the island as a client state—American policymakers and the public alike assumed that the revolutionary conflagration would become general throughout the hemisphere, a fear nourished by Ché Guevara’s macabre promise to “turn the Andes into a Sierra Maestra.”  In any event, fear of  “another Cuba”—that is, another defeat in the Cold War in the geographic region closest to us—has been until almost yesterday the organizing principle of American foreign policy there.




            By no means has this development necessarily been a bad one for the Latin Americans.  For one thing, it made the region a somewhat more central area of U.S. foreign policy concern than would otherwise have been the case.  It forced the United States to expend resources which it otherwise would have diverted elsewhere; under the Alliance for Progress in the 1960’s, for example, the region received $20 billion in U.S. aid, which by today’s dollar values would amount to nearly ten times that.  Less happily, perhaps, it also led the United States to deeply involve itself in the internal political lives of Latin American countries, since after the Cuban revolution it was assumed that these matters could no longer be left merely to sort themselves out as they might.

            The heyday of Cold War policy in the region was the 1960’s, when the United States possessed both the resources and the heedless self-confidence to take on the problems of an entire continent.  Both “soft” and “hard” instruments were used:  the former included the Agency for International Development (created specifically to implement Alliance projects in the region), the Peace Corps, intensified cultural exchanges, low-interest loans for housing, education, and other projects, and outright grants-in-aid where the recipient country was simply too poor to be expected to pay the money back.  It also involved embrace of political forces particularly the populist left, as the preferred instrument of preemptive social change.  (The assumption—actually, quite inaccurate—was that Castro had come to power because of poverty and injustice, rather than the vagaries of Cuban politics, and that the spread of similar regimes could be prevented by eliminating what was believed to be their cause.)  The more forceful aspects of the policy consisted of enhanced military aid and counterinsurgency training, and where appropriate, covert action (Guatemala 1954, Chile, 1964-73), outright military intervention (the Dominican Republic, 1965), and most recently, proxy forces (Nicaragua, 1981-present).

            The common characteristic of American policy, whether it deployed “hard” or “soft” instruments—actually, all administrations used both—was the conviction that local political outcomes were of central relevance to the U.S. national interest.  In some ways old themes of inter-American relations were simply resurrected to serve new purposes.  Thus the Monroe Doctrine, originally enunciated to forestall the replication of European monarchical institutions and neo-colonial regimes in the Western hemisphere, now became an ideological shield against Soviet expansionism.  What was different, however, was the application of sociology (or less kindly, social work) to the business of foreign policy.  In the old days our interests in the Americas were protected through the conventional tools of diplomacy, or where need be, military action.  Now, however, we undertook to reshape Latin American political institutions, or even Latin American society itself—as a sophisticated means of protecting our southern flank.

            All of this seems remarkably naive in the light of what we know today, but there certainly was noting imaginary about the threat at the time.  The Cuban case had demonstrated that some aspiring Latin American politicians, in their search for glory and self-importance, or merely out of a twisted sense of ideological resentment, were capable of pushing confrontation with the United States to the ultimate extreme—that is, once in power, moving their countries over to the other side.  Castro’s coup provided the Soviet Union with a windfall bonanza of military and intelligence facilities, diplomatic support, and political contacts throughout the region.

            More important still, it provoked a drastic shift in Soviet strategic thinking about Latin America, a region formerly consigned to the U.S. sphere of influence under the doctrine of “geographical fatalism.”  The same eventuality might have occurred somewhat earlier if President Jacobo Arbenz had consolidated his regime in Guatemala in 1954 (instead of being overthrown by the military with the support of the Central Intelligence Agency).  Certainly it was the demonstration effect of Cuba combined with the shift in Soviet thinking (and willingness to expend resources in the region) which inspired the profound American concern with (and according to some, its covert activities against) the regime of President João Goulart in Brazil (deposed by the armed forces there in 1964) as well as the decision of President Lyndon B. Johnson to land American troops in the Dominican Republic in 1965.

            Even today it is difficult to know to what degree U.S. involvement in the Brazilian coup or military intervention in the Dominican Republic was justified by the facts on the ground.  No doubt there was a certain ideological confusion during these years between the commitment of some Latins to Marxism and the Soviet Union on the one hand, and, on the other, a resentful nationalism directed against the United States.  Successive American administration were often accused of not being able to distinguish between the two ideologies, but Castro (and later the Sandinistas in Nicaragua) demonstrated that for small nations at least, there really was no difference in practice.  That is, for tiny republics so close to United States, the only concrete way to establish one’s independence was to join the other superpower.  Even in the best of cases, the United States could not be expected to nourish, much less identify with, a nationalism whose content was purely negative, and directed wholly against it.

            Over the years the Latin American political class (supported, increasingly, by certain opinion groups within the United States) complained about the subordination of their own agendas to the East-West struggle—as if the outcome of that had no relevance to them whatsoever.  But at the same time, they benefited enormously from the very existence of the Cold War.  It gave them enhanced leverage in extracting resources from the United States—by threatening to draw closer to the Soviet Union if certain demands were not met; by pointing to the very real existence of forces in their countries allied to, or manipulated by, Cuba, the Soviet Union, or the Eastern bloc; or merely by citing the vague prospect of “chaos” or “instability,” as if those things alone were somehow capable of ushering in a credible Communist threat, or even, in the worst of cases, a second Communist government in the hemisphere.

            The United States was not always capable of sorting out these individual claims, but in a certain sense it did not even want to try—the threat was so massive, the stakes so high, that it was better to err on the side of security.  This sometimes meant throwing good money after bad on “development’ projects of dubious economic logic; supporting politicians who were both corrupt and inefficient; getting involved with military men whose commitment to professionalism was something less than total; investing enormous political capital on causes and movements whose staying power proved slight; offering too hasty diplomatic recognition and support to de facto governments.  But by the 1970’s it also meant tolerating and sometimes even subsidizing the outright hostility of some Latin American governments, notably Mexico, Costa Rica and Panama.  The end of the Cold War means, of course, that these irrationalities—which in a particular context, made sense—can be eliminated.  The relationship between the United States and Latin America can be put exclusively on its own terms.  For the United States this is certainly good news; for the Latins, possibly less so.



            As the Cold War has been winding down for reasons wholly unrelated to Latin America itself, another development has been occurring within that region of far-reaching importance.  I call this the end of the myth of the left.

            This is the notion, first of all, that most Latin Americans are somehow more “revolutionary” than most Americans or Europeans.  This idea probably tells us more about those in wealthier societies who hold it than it does about anything else.  For while Latins are, on the whole, poorer than Americans, Swedes, West Germans or Canadians, there is no evidence whatever that they are more revolutionary, and in fact, what data we do posses points precisely in the opposite direction.  I suppose it is generally known that most Latin American revolutionaries come from the upper and upper-middle class; less so, that most poor Latin Americans are deeply conservative, both religiously and politically.  This explains why genuine left-wing parties so rarely win elections in Latin America, and those few who manage to do so quickly find themselves unable to govern.

            The myth of the left also holds that poverty in the region is due to the unequal distribution of property, and that in expropriating the rich one will automatically enrich the poor.  While riches and poverty do exist side-by-side in Latin America, often in shameful proportions, merely eliminating large private fortunes does not generate abundance.  This much has been proven in many countries around the world, including Cuba and (most recently) Nicaragua, Chile (under Allende, 1970-73) and Peru (under a “leftist” military junta, 1968-75).  In fact, attacks on wealth as such have simply aggravated the problems of poverty and rendered them more general.

            Perhaps the most important article of leftist faith in Latin America is the concept that the primary cause of the region’s backwardness is due to its economic dependence upon the United States (or sometimes stated more clinically, dependence upon the industrial countries, or global capitalism).  This dependence, we have been told, purposely perpetrates unjust social structures, since there is an automatic and necessary relationship between the wealth of one society and the poverty of the other.  As put in one particularly virulent slogan, “If American workers are to have cars, Bolivian workers must go without shoes.”

            This belief has strong roots in Marxist and particularly Leninist theories of imperialism, but is not restricted to people who think of themselves as being “of the left.”  One could just as easily call such people “nationalists” of a certain type—people who are confused in their own ideological goals, or people in whom left and right-wing ideas are commingled in no particular order.  (Small wonder that the United States, which as a society is not very attuned to ideological nuances generally, has often failed to see the distinction between anti-Americanism and leftism!).

            For a long time the myth of the left was kept alive, paradoxically, by its very failure to be put into practice.  How could a system never actually tried be held accountable for its own logical contradictions?  The burden of proof thus rested upon capitalism, or rather, what leftists called the mercantilist, populist and statist economies which pass for capitalism in Latin America.  Even more politically useful—because of their extinction in martyrdom—were the mutilated examples of social experiments (notably Arbenz’ Guatemala, or by some accounts, Allende’s Chile); fortunately for their defenders, these regimes were truncated by military coups before the sterility of their economic vision could be fully revealed.  They could be judged on their promise alone, while other governments had to face a full accounting for their performance.

            Very conveniently, however, we now have a thirty-year record to examine in the case of Castro’s Cuba.  While on the face of it, a Caribbean island largely given over to agriculture might not normally be expected to offer much in the way of instruction to more sophisticated industrial societies, this never gave particular pause to Castro himself, who at the time of his seizure of power promised his people “a standard of living higher than Sweden’s.”  Today Cuba’s only consolation is ideological:  it has succeeded in snubbing its nose at the United States and lived to tell the tale (an outcome, by the way, that says as much for American restraint as it does for Cuban effrontery).  Meanwhile, at the somewhat less exciting level of daily life the cost to the Cuban people has been simply enormous.  Over three decades the island has slipped from the second or third ranking in development among Latin American nations to twentieth or twenty-first—and this, in spite of a massive Soviet subsidy which amounts to $10 million in aid every day since 1961! As one Cuban recently told his cousin, a visiting Cuban-American, “don’t worry, we’re fine here; the only thing we lack is food and freedom.”

            Even the regime’s apologists admit, of course, that not all is well in the first socialist state of the Americas.  For many years their excuse was the alleged “economic blockade” imposed upon the island by the United States in 1962.  But in fact such a blockade does not exist at all, and never has; what the United States did impose was a trade embargo of its own, in which it was joined by most of the other countries of Latin America.  Even so, Cuba was never wholly cut off from international commerce.  It continued to trade with Spain, Mexico, France, Canada, and Japan, as well as Eastern Europe and the Soviet Union.  Since 197a5 most Latin American countries have abandoned their support of the U.S. embargo and opened commercial and diplomatic relations with Castro.  Ironically, if dependency theory had any scientific value, Castro’s island would be the most advanced country in the region, since it has fulfilled the two mandates implicit in the Marxist analysis of Latin American backwardness and poverty—it has broken its economic relationship with the United States and reorganized its society along completely different (that is, non-capitalist) lines.

            Nicaragua, of course, has been an even greater disaster for the revolutionary left.  During the ten years that the Sandinistas have governed that country they have plunged it into a poverty it had never known.  Over the past five, the standard of living has dropped 95 percent, a misfortune which again is laid at the door of the united States.  (A trade embargo was imposed in 1984—this time, without the support of any other country.)  Oddly enough, however, the things that Nicaraguans now lack are not imports at all, but articles of basic consumption which the country always produced—cooking oil, beans, rice, soap, toilet paper.  Unlike Cuba, however, the case of Nicaragua has been decided not be economic statistics but a popular decision.  Through a special and somewhat unexpected conjunction of events, the Sandinista Front has been voted out of office—a defeat worse, far worse, than the extinction of Marxist experiments elsewhere by blood and iron, since this heralds not merely the end of a regime but an entire revolutionary mystique.  Small wonder that so many foreigners—including foreign journalists—wept openly on the night President Daniel Ortega conceded defeat to Mrs. Violeta Chamorro.



            There is another myth of the left which is also dying—what might be called the myth of the populist left—namely, the notion that the state can produce abundance.  In many ways, of course, economic populism is nothing but watered-down Marxism, without the intellectual rigor or the political ruthlessness normally associated with that doctrine.  In one fashion or another, it has been the informing philosophy of almost every Latin American government since the 1930’s, including some military governments which have advertised themselves as “conservative” or “anti-Communist.”  It has inspired the creation of huge public sectors, given ruling parties enormous patronage possibilities, and liberated parastatals (that is, government-owned railroads, airlines, oil companies, etc.) from any imperative to show a profit.  The deficits generated by this huge welfare state have been typically financed by inflationary emissions of the local currency, heavy foreign borrowing, or more likely, both.

            This-not high interest rates or the U.S. fiscal deficit—is the first cause of what Latin American politicians like to call the “debt crisis.”  What they really mean by the “debt crisis” is the inability of their governments to continue to borrow new money to cover the accumulated compound interest on loans contracted in the past to support unproductive and unremunerative activities.   (Actually, these activities were not at all unproductive politically—they provided employment for many deserving supporters of different Latin American governments—but they were and are unremunerative economically, in many cases, spectacularly so.  For example, the Argentine state petroleum company YPF was the only oil company in the world to lose money during the 1970’s.)

            In the old days of the Cold War, the United States would have felt obligated to step in and help, not because we thought these economic policies were sound ( we knew they were not),j but because we sensed that if we did not prop up populist governments, they would be replaced by regimes far more radical, possibly even allied to the Soviet Union.  Today we need not worry:  if any government thinks t can get a better deal from the Soviet Union, we should encourage it to try.  It is not surprising, I think, that under these circumstances a whole new political class is emerging in Latin America which frankly embraces free market ideas.  Whether these reformers will succeed in imposing their agenda remains to be seen, but what is virtually certain is that the populists have lost all leverage with the United States and Western Europe.  Latin American economies must change or disappear altogether.



            By now you will perhaps gather where some of these reflections are heading under the concluding topic, which is the future of U.S.-Latin American relations.

            Let me first step back for a moment and suggest where I think the world is going generally after the Cold War.  In my view, there will be no more “Third World,” because there cannot be a third world if there is no second.  Instead, there will be two worlds—one of development, one of underdevelopment, an inner circle and an outer.  This division is not to be confused with the old “North-South” dichotomy, since some of the nations well with the first circle will not be Western at all—countries like Korea, Japan, Singapore, Taiwan, and Malaysia.  The criterion for entry into the inner circle will be capacity to create self-generating economic growth, and to use and adapt (if not produce) new technology.

            Some Latin American countries possess the capability of entering the inner circle of development and may well d so—particularly Chile, possibly Costa Rica, Venezuela and Mexico.  Others, like Argentina and Peru, may simply have gone too far down the road of statism and planned inefficiency to rectify their course.  With still others—Bolivia, Colombia, Ecuador, Uruguay, most of Central America—the jury is still out.  The important difference with the past is that, lacking an overarching strategic imperative, the United States will have considerably less interest in throwing good money after bad in Latin America; those countries which cannot make the right decisions for development will simply decline in relevance.  I expect no particular debate over these options; American policy will simply move on its own towards those areas where commercial logic dictates, and away from those where the only stock-in-trade is demand for limitless aid.  This will be true not only for Latin America, obviously, but also Africa, South Asia, and may parts of the Middle East.)

            The end of the Cold War presupposes a very sharp change in the political environment of U.S.-Latin American relations.  Certainly, for us it is an opportunity to redirect our priorities in a more ration al direction, and to revive the old-fashioned notion of national interest and performance-driven assistance policies.  It is, however, also an opportunity for the Latin Americans to join what used to be called the First World.  But the decisions are theirs, and theirs alone, to make.  The emerging world order after the Cold War is a challenge to which they—as we—must meet by changing to adapt to new, and hopefully better, international circumstances.

Mark Falcoff


Mark Falcoff is a Resident Fellow at the American Enterprise Institute in Washington, D.C., where his specialty is Latin American issues.  He is the author of Small Countries, Large Issues (1984), A Tale of Two Policies (1989), and Modern Chile:  A Critical History (1989).  He is the co-editor of four other books, and is a contributor to many volumes of Latin American issues and U.S. policy.  He has written for Foreign Affairs, Commentary, The New Republic, and The Washington Post, among others.

            Mr. Falcoff has been a national fellow at the Hoover Institution on War, Revolution and Peace at Stanford University, a staff member of the Senate Foreign Relations Committee, and a visiting fellow at the Council on Foreign Relations.  He received his B.A. from the University of Missouri and his Ph.D. from Princeton University.  He has taught at the Universities of Illinois, Oregon and California (Los Angeles) and at the U.S. Foreign Service Institute.

            This Ashbrook Essay was originally delivered as a lecture on March 15, 1990 as part of the Ashbrook Center’s “Major Issues Lecture Series” at Ashland University.  The opinions expressed in Ashbrook Essays do not necessarily reflect the views of the John M. Ashbrook Center or its Board of Advisors.