What is wrong with Latin America?

[Dr. Zaus]

Latin America is lagging behind for a number of reasons. One reason, found by Beatty (2009) in a historical review of a Mexican entrepreneur, is that entrepreneurs often must not only burdened with finding the land labor and capital to perform a job but also burdened with collecting the social-capital of governmental officials and powerful families.

Berton (2009) finds that there is a lack of rational venture-capital in Latin America because of institutions that do not protect shareholders, centralize political power and economic influence being in few hands. Kharra (2007) looks at groupos (consortia of powerful families) as sometimes taking advantage of their embedded-ness within institutions to gain unfair advantages, something that stifles innovation.

The rise of China has not helped the mequila industry (Sargent Mattehws 2006, Allison 2009, Gallagher 2009). According to some (Kalinsky 1993) a focus on basic exports can lead to ever-diminishing terms of trade, despite economic growth

The institution of the nation may be best reduced in power and the vacuum replaced with a super-national body similar to that of the EU, within LA. This should be an economic and technological sharing, allowing the countries of LA together to do what they cannot do on their own (Niosi 2008).

Further, change should be made to help support the creative entrepreneurs within LA society. By unleashing the power at the bottom of the pyramid (Prahalad 1999) and lending to those who need it the most (Yunis 2005). By letting those in the informal sector move into the mainstream of society (De Soto 1989), a country can become more innovative and get out of the cycle of extreme inequality and wide-spread poverty.

Which is why it is essential that we stop fighting the entrepreneurial nature of man and regulate instead of fight the flow of persons across boarders.

(full citations available upon request)

 

[Alex@Nosound]

What is wrong with Latin America?

Its poor?

 

[Dr. Zaus]

Its poor?

But it has the resources not to be... so why doesn't it utilize them? The answer is because it has done for many years what Arizona is doing today: Stifling those who want to work with burdensome government interventions.

 

[StageLeft]

I'm sure it's also HEAVILY corrupt.

 

[Dr. Zaus]

I'm sure it's also HEAVILY corrupt.

Yes, but if the corruption were leading to investment in small business and reduced barriers to market entry then it wouldn't be nearly the problem it is.

Does it matter if Arizona is corrupt or not if the behavior, and thus outcome, is the same as we see in Latin-American countries?

 

[EagleKeeper]

Please identify how you are comparing AZ with South America.

 

[Infohawk]

I started a similar thread a couple years ago here. I was surprised that most people pointed to corruption and poverty as some sort of cause. These are not causes, these are symptoms.

I think the answer is clear: it's the culture. (And for you numbnuts out there, this is not racial!) They stress different things than protestant-based culture does. They have a southern European culture mixed in with travesties of colonialism which leads to poverty and corruption. Even though countries like Brazil are on the rise, I see them only getting to the level of Greece or Spain (not doing so hot right now). But in other news international polls have said that latin americans are some of the happiest people on Earth! (Asians among the least.)

What does this mean for the US? We need to think about massive migration from central and south america. It's not necessarily impacting our society for the best if they bring their culture with them.

 

[Linflas]

I started a similar thread a couple years ago here. I was surprised that most people pointed to corruption and poverty as some sort of cause. These are not causes, these are symptoms.

I think the answer is clear: it's the culture. (And for you numbnuts out there, this is not racial!) They stress different things than protestant-based culture does. They have a southern European culture mixed in with travesties of colonialism which leads to poverty and corruption. Even though countries like Brazil are on the rise, I see them only getting to the level of Greece or Spain (not doing so hot right now). But in other news international polls have said that latin americans are some of the happiest people on Earth! (Asians among the least.)

What does this mean for the US? We need to think about massive migration from central and south america. It's not necessarily impacting our society for the best if they bring their culture with them.

This. It is really largely the result of the differences between the Spanish/Portuguese and the English methods of colonization.

 

[Dr. Zaus]

I started a similar thread a couple years ago here. I was surprised that most people pointed to corruption and poverty as some sort of cause. These are not causes, these are symptoms.

I think the answer is clear: it's the culture. (And for you numbnuts out there, this is not racial!) They stress different things than protestant-based culture does. They have a southern European culture mixed in with travesties of colonialism which leads to poverty and corruption. Even though countries like Brazil are on the rise, I see them only getting to the level of Greece or Spain (not doing so hot right now). But in other news international polls have said that latin americans are some of the happiest people on Earth! (Asians among the least.)

What does this mean for the US? We need to think about massive migration from central and south america. It's not necessarily impacting our society for the best if they bring their culture with them.

This is a good point;

I argue that Mexicans that come here want to be part of our protestant-work-ethic entrepreneurial spirit (ie the American dram).

 

[Infohawk]

This is a good point;

I argue that Mexicans that come here want to be part of our protestant-work-ethic entrepreneurial spirit (ie the American dram).

It's an interesting thought. I hope you're right but that is not my impression. It seems like there are too many and that they are able to insulate themselves from cultural assimilation.

 

[Linflas]

It's an interesting thought. I hope you're right but that is not my impression. It seems like there are too many and that they are able to insulate themselves from cultural assimilation.

That is aruguably more our fault than theirs. Earlier immigrants found very little official support when they arrived in the US so they pretty quickly learned that they would need to learn English and assimilate to make it here. Another factor is that it was not so easy for them to maintain their connections to the country and people they left behind when they came here. The last large group of immigrants we had that all this really applied to were the Vietnamese.

 

[StageLeft]

Does it matter if Arizona is corrupt or not if the behavior, and thus outcome, is the same as we see in Latin-American countries?

Sure it does. Bad public policy can hurt people but corruption ALWAYS does. Find me a single country heavily corrupt that is not punishing the majority of its citizens by its ways. Corruption is really very similar to a monopoly. Instead of money getting more money money gets more power, which gets more money.

 

[DucatiMonster696]

This is a good point;

I argue that Mexicans that come here want to be part of our protestant-work-ethic entrepreneurial spirit (ie the American dram).

Not if they come here illegally instead of following the laws like our protestant work-ethic would require.

 

[DucatiMonster696]

But it has the resources not to be... so why doesn't it utilize them? The answer is because it has done for many years what Arizona is doing today: Stifling those who want to work with burdensome government interventions.

That is the biggest logical (illogical) leap I've seen in a post here in the P&N.

 

[colonel]

I agree with DixyCrat, the protestant-work-ethic made America different than Latin America where the Spanish (from Spain) colonization fail to do it. I can give you a lot of resources how the founders fathers they got it right. By the way Brazil is doing a great job right now but according with the magazine The Economic they are spending a lot of money from profit in social programs , in years it going to back fire the growth.

 

[drebo]

Most Latin and South American countries are run by extremely corrupt governments (this is a CAUSE, not a symptom). Because of this, there is no trickle-down of wealth from potential exports (this is how a country gains wealth). So, you end up with plush palaces and compounds for the leaders and squalor for everyone else. There is no real way for the poor to advance in station because they do not hold any claim to any resources that the government might want for export.

Then there are the countries who have single-export economies, like Venezuela. They balanced their budget with something like 60% of the budget being derived from the export of oil at $150/bbl. When oil fell to $50/bbl later that year, they had instant poverty. Tourism-based economies (mostly in the Carribean, but some central and south America places as well) are being hit right now, as well.

There is also a severe lack of focus on education. With very, very few "white collar" jobs available, most families don't put any emphasis on education, wanting their kids to join the labor force as quickly as possible. This is also affecting the success of our first and second generation immigrants from Latin countries--their parents don't see the need for higher education and thus don't push their kids to scholastic success. Usually by the third generation of a family, they've learned that schooling is right, but it takes them seeing a juxtaposition between the "labor" force and "white collar" jobs (the maid cleaning the CEO's office, for instance) first hand, which is something that's not really possible in most of these places.

The potential is there for most countries, sure. However, many of them are run by dictators (elected or not) that don't really care about anything but themselves and their cronies. This strangles natural resources from being made available to private companies (and, like it or not, the US is heading down this path to cronyism right now). It would take incredible social upheaval to turn these countries into proper capitalist nations, though, and as long as the US offers an easy way out, it'll never happen.

 

[Infohawk]

Most Latin and South American countries are run by extremely corrupt governments (this is a CAUSE, not a symptom).

Wrong. Lame excuse. Corruption isn't something that magically appears. It is a reflection of a country's underlying shortcomings.

 

[drebo]

Wrong. Lame excuse. Corruption isn't something that magically appears. It is a reflection of a country's underlying shortcomings.

That may be partly true in that corrupt leadership can only enter power during a time of social or political upheaval, but it only goes so far. The corrupt party in power oppresses everyone else. That's a cause if ever there was one.

Additionally, there is a long-standing axiom that "power corrupts". It's true, it's been true, and it will always be true. You cannot argue against the fact that a large contributor to poverty throughout Africa and the Latin America is the corruption within the government. How that corruption got there is completely and totally irrelevant.

 

[Infohawk]

How that corruption got there is completely and totally irrelevant.

Not really. That is the whole point. How the hell are you even going to address the situation if you don't look for the cause of the corruption? Give me a break.

 

[ShawnD1]

I'll say corruption as well. Why is Africa so god damn shitty? The people I've met who are actually from Africa seem like good people with a good work ethic and strong family values. Africa is fucked because work ethic will not help you when the country is run by warlords.

Why are Central and South America so fucked? Warlords. There's no real system of government in place to protect anything. You have no rights. What happens in that movie Blow is pretty much every country south of the United States in a nutshell. You had several million in our bank? Sorry but our leader says it's now his money. We also took your factory and we're not going to honor those government bonds you purchased.

 

[Dr. Zaus]

It's an interesting thought. I hope you're right but that is not my impression. It seems like there are too many and that they are able to insulate themselves from cultural assimilation.

I'll tell you: as a white guy who's lived in post-Mexican-invasion land sense i was 8( The population here is 85% Hispanic and the white people haven't had the power sense the 60s):

1.) There are some dumb Mexicans who deserve little more than to be put in prison, a mental hospital or shot in the head: this percentage, though, is very small.
2.) The cultural differences in work-ethic are clear on this side of the boarder and the other. Now, we people here often show up 15 min late instead of 15 min early to a meeting and the general region has less money per-capital than just about any-ware, but the vast majority of people work, work hard and even want to own there own business.
3.) Of the kids I went to school with, the only shit-heads were the kids of 0th generation adults. Often kids who get bussed over every day across the boarder to go to school here or kids that live in little houses around here made of tin with no floor or plumbing.

My second+ generation friends are just as American, just as profit-motivated and even if they are catholic, just as Protestant-work-ethic driven as can be.

Bad public policy can hurt people but corruption ALWAYS does

the road to corruption is paved with the bricks of bad public policy. Please see the transition of Latin America to the present new world order.

 

[Jaskalas]

This is a good point;

I argue that Mexicans that come here want to be part of our protestant-work-ethic entrepreneurial spirit (ie the American dram).

Who is the one being assimilated? We're quickly falling to South American standards.

 

[spacejamz]

They are oppressed by their neighboring country to the North who rigorously enforces their immigration policies and sends back (or worse) all the Latin Americans who try to sneak into Mexico illegally.

Yet when another country tries to do the same thing, they are criticized for being RACIST.

 

[DucatiMonster696]

A strong work ethic means nothing if there is no strong belief in upholding laws in your nation. In fact one could argue that a strong work ethic in these nations by individuals has more to do with folks needing to work 2x as hard to over come the sheer corruption of the law and the government systems to accomplish the very basics in life or when running a business.