The global financial crisis that began in 2007 and its repercussions sparked an interest among economists to turn to history for an explanation. Economic historians throughout the world have been revisiting the causes and consequences of the famous global financial crisis of the twentieth century. The Latin American region has not been an exception. The present edited volume offers a revision of the Great Depression of the 1920s, 1930s, and in some cases the 1940s, based on the premises that the Latin America region is diverse and complex and that economic change came in tandem with political transformations of different nature that reflected such diversity and complexity. As it is often the case of compilations that encompass a large region, this book does not have chapters on all countries of Latin America. The essays do not all attempt to respond to the same question, but rather delve on each of the author's areas of thematic expertise whether economic, social, or labor history.
This edited volume does not contest the basic premises of extant knowledge on the Great Depression in Latin America it rather adds evidence that clarifies the diversity of outcomes across countries and within regions as well as what were the effects of the Great Depression. It studies the different economic policies each government adopted to face the economic downturn and assesses its effectiveness.
One recurrent point of the studies in the compilation is that they examine the responses of the laboring classes to the economic downturn as their wages diminish or their jobs vanished. Some of the works find the emergence of different laboring groups that gathered around racial identification whether indigenous, mixed race (mestizos), or afro-Latin American, to voice their demands to their government like Central America and Cuba. Other works find the political radicalization of the laboring classes to the left or the right as the case of Argentina.
In their chapter on Peru, Paulo Drinot and Carlos Contreras present the case of an outlier in the region. The economic depression in Peru was profound but short-lived. The government did not increase its spending to remedy the costs; instead, it created financial institutions like the Banco Agrícola Peruano to manage the economy in order to maintain its export oriented focus. It also launched social policies such as housing projects for workers and labor legislation to contain the popular discontent that resulted from the economic slump. There was a rise of the left that the government was able to control while leaving the interests of the economic elites unchallenged.
Another interesting outlier is Colombia. In this chapter Marcelo Bucheli and Luis Felipe Sáenz effectively shed light on a country where the economic contraction did not create a rise of the left and where the government developed a series of policies to protect exports from 1922 to 1934, unlike other Latin America countries. Regarding the three main export industries (coffee, oil, and bananas), government policy was determined by the degree of participation of the national bourgeoisie in a particular sector, which was also determined by the technological entry barriers existing in each one of these industries. Even though politics turned left in the 1930s with the triumph of “the working-class supported Liberal Party that had been the opposition for decades, the Great Depression showed a consolidation of the export protectionist system instituted before the crisis” (p. 151).
In the concluding chapter Alan Knight displays a prodigious knowledge and understanding of the historiography on the topic. He lays out how Latin America experienced the Great Depression in the global context. By examining the differences across countries and the different experiences of each national economy depending on their demographic profile, political system, and natural resource endowment Knight sheds light on how Latin America is not a singular region and should not be understood as such. From this chapter it becomes clear that the region albeit closely integrated to the global economy was experiencing changes that were not directly related to its connection with the world. The Great Depression altered the social, political, and economic transformations that were taking place in different ways in each nation but these processes were not initiated by the global financial crises. By putting social and political context into the different cases, it is clear that there is not one standard story on the effects of the Great Depression in Latin America. He does add that, compared to Europe and the United States in the 1930s, the Great Depression in Latin America was a more positive and creative episode.
The most recent edition of Larry Neal and Rondo Cameron's A Concise Economic History of the World (Oxford and New York: Oxford University Press, 2015) relabeled the Great Depression the Great Contraction and argue that while there is a lively debate on the causes and consequences of the great contraction the consensus is that there is no consensus. In this spirit of intellectual debate The Great Depression in Latin America is one solid contribution to the historiography on the subject. This book should be required reading for scholars who study the Great Depression in a global context and are not specialists in Latin America as well as for Latin Americanists who wish to understand this period for the region and comprehend the specific cases of some countries.
