Almost nine years after reading Fernando Henrique Cardoso and Enzo Faletto’s Dependencia y Desarrollo en America Latina, the Past & Present Reading Group has come back to visit the history of Latin American political economy. In this journey, I have the pleasure of being the Latin American spatial political economist in residence, writing up a review of Amy C. Offner’s Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas.
In Dependencia y Desarrollo, we saw a broad-brush effort to relate the condition of uneven development and relations of dependency to the process of combined development in Latin America by bringing different cases (countries) into the discussion. In Sorting out the Mixed Economy, we see an attempt to disentangle some threads that could allow us to hear Latin America speak back to and influence U.S. economic policy. To so do, Offner subtly suggests an analysis across “the Americas” by bringing Colombia and the U.S. to the table.
The book makes many outstanding contributions. I will name a few of them. First, from a spatial political economy approach, it proposes an interesting historical analysis moving across different spatial configurations and scales, which somehow breaks away from methodological nationalism. Offner challenges the idea that broader economic historical analysis at the national scale is the best way to understand how the mixed economy (neoliberalism?) was sorted out. Second, in its first stop in Latin America and across the entire book, Sorting Out the Mixed Economy does a great job presenting with “lujo de detalles” (extensive details) the intricacies of the Colombian institutional landscape. Following this landscape, the book aims to shed light on how economic ideas travel, expand, and could have had some influence on U.S. economic policy. Furthermore, the book—masterfully written—follows the institutional landscape “through the eyes” of its agents. Offner thus reveals a constellation of agents with outstanding clarity. This clarity is precious because the author unravels and presents a Latin American story to an Anglo-speaking public—not an easy task.
Another significant contribution of this book is the detailed archival research that traces the emergence of the provision of public services by the ‘private sector’ (the mixed economy?) by following the ‘invisible’, ‘second’ or even ‘third’ tier of Milton Freidman(s), Chicago Boys(s), or Jeffry Sachs(s). Let’s be honest, we all would agree that those faces—plus Thatcher and Reagan—would be sculpted in the ‘neoliberal Mount Rushmore’, suspiciously leaving aside dictators and authoritarian leaders crucial for neoliberal deployment. So, it is a significant contribution to take the risk of analysing the multiple sparks from where neoliberalism (the mixed economy?) was ignited. In this sense, using those alternative characters, Offner presents one of the book’s central arguments, namely that:
U.S. and Latin American societies were thus entwined in ways far more pervasive than stories about the southward projection of power suggests.
Indeed, the author starts the discussion by stating that the book unearths the “unseen possibilities” that lie within the postwar world by means of analysing Colombia and the U.S. In so doing, the book winks a relational geographical eye towards the U.S. welfare state and Latin American developmental states that cannot be understood in isolation from one another.
Sorting out the Mixed Economy works in the invisible light spectrum of the emergence of neoliberalism (a relation between public and private spheres?), in which U.S. and Latin American political economies:
did not simply substitute one set of ideas for another . . . Instead, they sorted out the elements of midcentury mixed economies, destroying some practices, redeploying others, and retrospectively redefining them all as emblems of two different eras.
Hence, the author changes tracks from “where neoliberalism came from” to “how midcentury states came into being and how they came undone”. These are crucial questions to understand the continuities and changes in the state-building-crafting process. For instance, Raewyn Connell and Nour Dados made a pathbreaking contribution by asking where neoliberalism came from, arguing against the Global North triumphalist idea of the emergence of neoliberalism by demonstrating that the Global South was already engaging in neoliberal policies as tests for its massive implementation in Global North societies. However, we encounter some difficulties in following the delivery of the argument in Sorting Out the Mixed Economy because the book does not engage with available theories of the state. It would have been interesting to understand the standpoint from which the author develops the argument and invite the reader to follow the debate about how the midcentury state came into being. In this sense, the reader may ask for an operational definition to understand the approaching perspective of ‘the thing’ to analyse and how it was undone. Whatever state theory is at play—a condensation of social forces or an institution outside/over society—it would be crucial to have a confrontation with it and how the economy was sorted out. For instance, as the book’s thesis is that states did not replace one set of ideas for another but organised different components of economic and social policies, it would have been appreciated if an engagement with Bob Jessop’s strategic relational approach to state theory was evident to advance scholarship about the state.
An alternative view would be to let the reader make their own conclusions about what the state is, its role, and how it relates to the economy. In this sense, Sorting Out the Mixed Economy does not offer an operational definition of neoliberalism or—even more critically—what is the ground from where the mixed economy is presented as an economic alternative. This is crucial because the argument could have different inflexion points as we encounter the analysis from a particular standpoint. For instance, do we understand neoliberalism as an accumulation strategy, a collection of economic ideas detached from class interests, or as a school of economic thought? The argument could be even more persuasive if the reader could clearly see the scholarly dialogue the author is engaging with. Even though there are some snapshots throughout the book about what the mixed economy is, it also needs to be clarified if the triumphalist myth of a few notable characters is dismantled. We might need to put this book into dialogue with another set of current literature to build the research agenda. An excellent example of this is the integrative analysis presented by Quinn Slobodian. However, if the aim is to change the attention from the academic economist to the capitalist, then Offner focuses the attention on the business sector. It is therefore even more crucial to collaborate with the reader by indicating the direction that the argument comes from or by giving some theoretical grounding because the book in itself does not deliver such integrative arguments.
Sorting out the Mixed Economy stretches the argument based on not-so-convincing connections between the business sector and the Colombian influence of U.S. economic policy. Offner analyses the sorting out process of the economy following key characters as vectors of analysis. Using their stories, Offner unravels the economic discourse of the time and how it is linked to the rise of private provisions of public goods (the mixed economy?) by means of public-private partnerships (neoliberalism?). However, following the stories of those so-called key individuals, we encounter some ambiguity in their specific weight as ‘influencers’ because those agents are disconnected in the book’s narrative from broader social relations. In other words, those characters are not analysed in relation to their class belonging: they are treated as individual comets putting forward some “new” (but old) economic ideas. This becomes critical as the primary argument is linked to the possibility of Latin American elites influencing U.S. policies. So, Offner does not engage in a pivotal reading of the role of agents within class struggles. For instance, the book does not discuss Eduardo Wiesner as President of the Bankers Association of Colombia—or as type of “Monsieur le Capital”—as a key member of a fraction of capital in shaping the dominant class. One could say that this is extemporaneous to his involvement in local policy. However, it was critical to his return as a prophet of fiscal adjustment. Additionally, Offner points out that “in 1982, Wiesner owned no notable debts to intellectual communities often credited with dismantling the midcentury order—the Chicago School, public choice theorist, the Mont Pelerin Society, or the wider schools of Austrian and neoclassical economics”. However, if the analysis had not divorced agents and structure, we could have had a deeper understanding of Wiesner’s ‘network’ and intellectual belonging. Those alternative Chicago Schools out there would have been, then, indubitably and equally relevant because Wiesner graduated from Stanford. Then we can expand our understanding of different U.S. Ivy-league graduate networks of influence and their connections using, for instance, Ralph Miliband’s “bourgeoisification” of the state in capitalist societies or Maurice Zeitlin and Richard Ratcliff’s Landlords and Capitalists as starting points. However, this disconnection or isolation of subjects from social struggles springs forth across the book, reflecting Offner’s presentation of the subjects as a self-fulfilling prophecy. For instance, in concluding Miguel Urrutia’s (another economist from Harvard) understanding of the 1960s and 1970s protests and strikes in the U.S. and North Atlantic, Offner points out, “Urrutia’s judgement revealed more about the world that had formed him than the movements he was observing”.
A final point should be made by returning to the book’s opportunities for spatial political economy. The author points out that “foreign advisors never had the power to unilaterally remake societies, but they did have the power to tell stories as they wished back home”. Hence, a complementary approach would shed light on how those stories mobilise material interests in the national context and create the perfect hidden abode for the capitalist relations of production—the internalisation of external interests and vice versa. The book starts by disentangling the threads between the Valle del Cauca in Colombia, and the Tennessee Valley Authority, in the U.S. through the experience of David Lilienthal. Lilienthal, “a former New Dealer”, is presented as another comet in the Colombian constellation of economic agents. Offner again masterfully traces his steps through the Valle del Cauca as he becomes an international consultant in development. The analysis integrates spatial conditions and economic processes and tries to go beyond the geographical similitudes by diving into the possibilities of reverse tutelage from a particular scale or vantage point within the global economy. Here, spatial political economy opens up possibilities by drawing on class interests, the political economy of scale, and what Milton Santos would call “rugosidade” (or roughness or “rugosidad”). Agents, in this sense, would act as vectors of class interests, and we can trace their movements across scales, wherever these are in geographical terms (internalisation or externalisation of interests). For instance, it is now openly known that the role of Agustin Edwards in linking the Chilean dominant class interests with U.S. interests was to “make the Chilean economy scream”. Nixon’s and Kissinger’s plan to overthrow Allende’s government would not have been possible without the internalisation of U.S. interests into the Chilean dominant class by means of a valid interlocutor—at the time, Edwards was one of the most influential businessmen and his family historically have controlled a fraction of capital within the dominant class. In other words, by taking a relational approach through grounded geographies of economic development, we can understand the material dimension of economic ideas. Notwithstanding this quibble, the spatial twist of Sorting Out the Mixed Economy is an excellent contribution of the book that wonderfully presents a collection of cases, from the valley’s scale to housing projects to industrial complexes. In incorporating this spatial twist, it is critical also to incorporate the internalisation of external interests or vice-versa.
Finally, some readers will see the note on language as an interesting detail in looking for the nuances in the historical process of U.S. influence over Latin American countries. Offner offers an interesting explanation about “America” as a contested concept, which is a powerful statement coming from a U.S.-based scholar. Certainly, it could be an overlooked detail for many. Still, it opens many possibilities for analysis and discussion, including an attempt to stop seeing Latin America as “El pueblo al sur de Estados Unidos”. However, four lines after, Offner points out, “this book uses the term Latin America and Latin Americans in ways that all of us do”, which becomes an uncertain terrain all over the book, conceptually and analytically. Notwithstanding these points, I applaud the intervention and welcome the effort in taking back America to where it belongs, to the Americas.
