| Economic development in Latin America has been a | | | | such as inflation, poor quality goods at exorbitant |
| matter of great debate since they became | | | | prices, and agricultural societies suffering due to the |
| independent. In the nineteenth century, Europe and the | | | | government subsidizing industries and not them. The |
| United States thought the reason why there was a | | | | Cuban revolution caused many Latin American |
| lack of development among Latin American countries | | | | countries to consider their own communist revolution, |
| was because they were racially inferior and Catholic. In | | | | which instigated President John Kennedy to put phase |
| the twentieth century, the reasons advanced was that | | | | three into motion. |
| they are backwards and uneducated. Latin American | | | | Modernization theorists persuaded Kennedy to help |
| countries assert their lack of development is not | | | | modernize Latin America in the belief that if they did |
| because of the theories that first world countries put | | | | so, the Latin American countries would commit them to |
| forth, but rather due to the fact that those same | | | | capitalism and democracy, and not become |
| countries have stolen much of their mineral wealth and | | | | communistic. Promoting health care and education was |
| agricultural products during the colonial period. Since | | | | most important to President Kennedy because Castro |
| their independence, Latin American countries have | | | | was very successful in implementing these two |
| went through four phases of economic development. | | | | reforms in Cuba. The plan implemented in Latin |
| Between 1821 and 1880, the first phase consisted of | | | | America was very similar to the Marshall Plan, which |
| classic liberalism. This type of economy consisted of | | | | had been used for European countries after World |
| free trade, and opening the country to foreign | | | | War II. The downfall to this phase was that in Latin |
| investment. Many of the Latin American countries | | | | America they were not re-creating democracy, but |
| produced a mono-crop economy, which made them | | | | rather creating it which was much more difficult. |
| very vulnerable to fluctuations in foreign markets. | | | | By 1968 this phase was failing and revolutions broke |
| Classic liberalism did create some economic growth in | | | | out again. From 1982 to the present, there has been a |
| the form of railroads, telegraphs, port works, and | | | | return to nineteenth century liberalism, called |
| financial institutions. However this type of growth | | | | neo-liberalism. This economic policy includes open |
| benefited the wealthy only; it did nothing for the lower | | | | markets, foreign investors, and globalism, such as |
| classes. As a result of this economic instability, revolts | | | | NAFTA. This is similar in many respects to the policies |
| occurred among Latin American countries. | | | | existing in the creation of the European Union, but does |
| The second phase of economic development was | | | | not include open borders between the United States |
| import substitution industrialization (ISI). Foreign capitalists | | | | and Mexico. The probable reason for keeping the |
| were driven out of the countries. For example, Mexico | | | | borders closed is that illegal immigrants will work for |
| nationalized oil and railroads, thereby forcing out | | | | substantially less than they would if the borders were |
| Standard Oil and Andrew Carnegie. Latin American | | | | open. Foreign investment in Latin American countries |
| countries closed their borders and instituted laws that | | | | also benefit the capitalists much more than the people |
| foreigners could not own the majority interest in | | | | of the countries themselves because the capitalists do |
| businesses. The government began subsidizing Latin | | | | not have the same requirements to provide job |
| American businesses, but this plan did not lead to | | | | benefits to those workers that they would have in the |
| economic prosperity. By 1959, the countries had | | | | United States, such as workman's compensation, |
| minimal development and bad economic problems, | | | | health insurance, and minimum wage standards. |