THE DILEMMA IN LATIN AMERICA

...If the amount of repatriated profits should increase, while new investment is stationary or falls, this too would seriously offset the benefits of the $500 million Alliance aid...

...In most countries publicly owned lands are in remote and unsettled areas and programs of colonization are slow and costly...

...President Kennedy's idealistic program is only one factor of the equation...

...five years later it was 230 to the dollar...

...The strongest argument against the State Department policy is that it would leave untouched all the existing social and political problems which the great disparity in land ownership has created...

...But the signs are far from encouraging...

...Only 35,000 families have received any acreage thus far— a rate which does not even keep pace with the natural increase in population and would require as much as five decades to affect all of today's landless peasants even in the most modest terms...

...No American political leader threatened him with economic or other reprisals, of the kind we have imposed on Castro, for his undemocratic behavior...

...In all but three or four of the republics the landlord is judge, jury, police force, and master...

...Presumably, Latin America's masses, burdened with poverty and stagnation, eager for social change, should be greatly pleased with the fresh approach of the United States...

...munist—disparages the Alliance as a fraud designed to prevent genuine social revolution...

...But when Castillo Armas, aided by our CIA, overthrew Arbenz in 1954, the 85,000 parcels were all taken back and returned to the large landowners...

...The Alliance will increase the total investment by an amount estimated by economists at only between $200 million and $500 million of new money each year...

...The result is that the revolution is being planned from the top down...

...Why, then, has the Alliance failed to achieve a more hopeful response...

...The political reality is that a large number of members of the ruling government coalition are themselves big landowners...

...There can be no progress until they are subdued and placed under firm civil control...

...Yet in the minds of our Spanish-speaking friends there is little difference between not holding an election and stealing one...

...The latifundista in Guatemala have been buying marginal land as a hedge against the United States' demand for "land reform...

...Many of our diplomats, however well-meaning and committed to reform, are reluctant to align themselves even with anti-Communist Leftists for fear of incurring the wrath of the powerful aristocracy or provoking an uproar among American business interests—or, as in some cases, because they genuinely believe the countries to which they are accredited are not yet ready to absorb the shock of revolutionary reform...

...The Alliance speaks of increasing per capita income by 2.5 per cent a year—which would amount to little more than a dollar a year for the many millions with a per capita income of $50—but fails to emphasize the need for a genuine redistribution of income...

...So long as the landlord continues to control vast acreages, he retains political as well as economic power, and can easily hold the peasant in virtual bondage...

...it leaves the barriers within these closed societies virtually intact...

...If land reform should ever become effective, it will greatly increase agricultural efficiency, creating a surplus of village labor...

...Many businessmen and landowners south of our border consider the Alliance for Progress "pure Communism...

...What is wrong...

...But land reform, after two and a half years, falls far short of urgent demand...

...Colombia, he said, had lost two or three times as much money because of falling coffee prices as it had received in Alliance for Progress aid...

...In the eyes of sincere Latin Americans it has no clear purpose, no coherent approach, no basic integrity...

...sugar, eighty-two per cent of Cuba's...

...Latins resent U.S...

...The Latin American doubts that we will now work to overhaul the power structure...

...In Brazil five per cent of the rural population owns ninety-five per cent of the land...

...Another loophole aggravating the lack of capital is the shipment by the wealthy of large sums—the cumulative figure is estimated at $6$ 11 billion—to Geneva, New York, and elsewhere for safekeeping...

...Assuming that outside private capital is the best means of developing the southern nations—an assumption many economists seriously question—there is no way to assure that United Fruit or Anaconda or Sears or General Electric will invest any specified amount of capital in new projects...

...In proposing this measure, Minister of the Economy Luis Escobar said that Chile must consider the "political reality...

...For all our magnificent phrases and brilliant paper work, we have yet to identify ourselves clearly and convincingly with the forces of revolution...

...Furthermore, Latin American nations, if they are to be truly viable, must be freed from dependence on a single product such as sugar or oil...

...Such land as has been distributed was not taken from the rich owner, but was reclaimed from" areas owned by the government...

...If land tenure and taxation measures now being contemplated do little to disturb the power relationships within Latin America, still another weakness of the Alliance relates to American investors...

...These impressions were deeply reinforced during a recent trip to Mexico during which I lectured at several universities and talked with many students, writers, government leaders, economists, and journalists...

...The United States could reward a friendly nation by increasing the price for its main commodity, or punish a less friendly one by cutting prices...

...its words do not match its deeds...

...President Kennedy's program seems trapped in contradictions which rob it of dynamism...

...and Chester Bowles, are pointed toward reform programs that must necessarily include a considerable measure of democratic socialism...

...in Venezuela two per cent owns seventy-four per cent of the land while 300,000 families—at least one of every four—are landless...

...But such a plan has a major drawback: It makes the southern countries even more dependent on the United States than at present...

...This in turn has been reflected in a pyramiding increase in the cost of living...

...his authority cannot be successfully challenged...

...corporations, or by continued shrinkage of raw material prices...

...THE DILEMMA IN LATIN AMERICA by SIDNEY LENS "fT^he struggle in Latin America," A a staff member of the American embassy in Mexico said recently, "is not between Communism and capitalism, but between Communism and democratic socialism...

...It is significant that American military aid to Brazil in 1961 totaled $33 million, more than three times the annual average for the preceding decade, and almost half the military aid given to all of Latin America in that year...

...Industrialization is therefore vital for successful development...

...By all odds the greatest need of the southern republics is land reform...

...Are we prepared to withdraw our heavy financial support from those military machines which are far more active and effective in corrupting political democracy and preventing social reform than in "combating Communism...

...dominance over their economic life now...

...In Brazil, Latin America's most populous country, Janio Quadros resigned the Presidency last year rather than see his program for social reform squeezed dry by military pressure...

...On many estates the daily wage is only a few cents a day, plus a handful of coca leaves which allay but do not satisfy hunger...

...Except for Mexico and perhaps one or two others, each of the republics depends on a single commodity for most of its foreign exchange...

...copper, sixty-seven per cent of Chile's...

...in Chile 9.7 per cent owns eighty-six per cent of the acreage...

...One of the causes of economic sickness south of our border is the monoproduct character of the economies...

...In places like Alta Verapaz, wages for farm workers are as low as ten cents a day...

...Discussion of these aspects of the Alliance for Progress may seem unfairly negative...

...Genuine reform can succeed only as new countervailing forces are developed—radical non-Communist political parties, organizations of peasants, strengthened trade unions, student groups, professional associations, village governments, credit unions, cooperatives...

...Does your State Department really know," a Mexican asked me, "what your Pentagon is doing...

...They include all the monies that are now flowing into Latin America from traditional sources— U.S...

...His articles have appeared in many publications, including the Yale Review, Harper's, the Harvard Business Review, Fellowship, and, frequently, in The Progressive...

...they will certainly resent it more if prices for their commodities are fixed by Washington...

...Not only is this economically unhealthy, but it is bound to make enemies for the United States...

...The great stumbling block is the problem of power...

...Except for tiny Salvador, which recently raised income taxes to a new maximum of 76.5 per cent, income taxes in Latin American nations seldom exceed a maximum of thirty per cent, and account for only a small part of their budgets...

...If it is the latter, it will be truly a great new beginning...

...Admittedly the Alliance has not yet been adequately tested...

...Elsewhere the situation is even more bleak...

...a Peruvian institution...

...We cut off diplomatic relations with Cuba and refused to buy its sugar after its government incurred our wrath...

...The tendency is to evade the essence of reform, while paying obeisance to the form...

...There are many good, even excellent, features of the program...

...and coffee represents sixty-seven per cent of Brazil's exports...

...Every non-Communist intellectual with whom I spoke expressed a similar reaction...

...They have long heard friendly phrases promoting "good neighbors" or "progress...

...Ydigoras greeted the demonstrators with a murderous hail of bullets...

...The peasant who gets a farm is obviously better off, but the nation as a whole gains little...

...the average elsewhere is still less than sixty cents...

...Most of the countries still have no land reform law...

...In Argentina the situation was even more bizarre...

...Experts meeting in Buenos Aires recently estimated that an honest collection of taxes—even at the present low rates—would add fully $3 billion in revenue to Latin American coffers each year, fifty per cent more than the projected total to be provided by the Alliance for Progress...

...While I was in Mexico in mid-March, there were two major crises in Latin America, each of which placed the United States in a dilemma...

...Many Latin American nationalists interpret our de-emphasis of industrialization as a protection against competition for American industry—another sign to them that we are less than completely sincere in our expressions of desire to aid their development...

...As a result of these unfavorable "terms of trade" Latin America has had an unfavorable balance of payments...

...The Alliance for Progress program involves an overall investment of $20 billion in ten years, at the rate of $2 billion a year, of which the United States has committed itself to $1 billion a year...

...Even the advantage of this amount of additional capital can be nullified either by repatriation of too large a volume of American profits or by a drop in raw material prices...

...Obviously, unless Latin America receives more money for its raw materials, the $500 million in Alliance funds will compensate only for the continuing decline in raw materials prices, and will add little to development...

...Our southern friends are accustomed to loans, credits, and aid...

...Even more important, most members of the Administration concerned with Latin America are genuinely dedicated to reform, and this is especially true of some of President Kennedy's fine appointments in the field...

...Under President Jacobo Arbenz a decade ago, 85,000 parcels of land were distributed to the peasants of this Central American nation...

...This surplus can be absorbed only by industrialization, by making jobs for the unemployed in new factories...

...Representative Sidney Yates, Illinois Democrat, asked the State Department for clarification of its policy on land reform...

...The most disturbing feature of the Alliance to date is that it seems to have no plan to encourage change in the political relationships between the upper and lower classes...

...If, somehow, taxes could be raised, collections made foolproof, and the flight of capital stopped, the Latin American republics would have enough funds for a monumental push forward— enough to exceed greatly the 2.5 per cent growth in annual per capita income contemplated under the Alliance for Progress...

...Is it merely an enlarged program of relief...

...If it is the former, the Alliance will excite hopes only to dash them...

...And it is precisely here the Alliance for Progress policies are dangerously weak...

...From 1953 to 1958 the cost of living in Argentina and Brazil almost tripled, and in Chile it rose more than eight-fold...

...But no American voice of authority spoke out against Argentina's military forces when they abrogated an honest election...

...A new regime, imposed upon the nation by the armed forces, canceled the results of the December election...

...little if anything is being done at the grass-roots...

...According to Frank Tannen-baum, the Columbia University specialist in Latin American affairs, writing in Political Science Quarterly, "serfdom in which people are sold with the land is...

...What is the purpose behind our program for social reform...

...Chile's conservative government, for example, has a program to divide "abandoned" land...

...Yet the image of the Alliance is already out of focus...

...One of the tragedies of Latin America's economy is that except for the years of World War II and a few years thereafter, the prices of goods that Latin America sells have either gone down or risen only slightly...

...President Kennedy has promised that the United States will take measures to stabilize prices for Latin American commodities...

...The legacy of a semi-feudal power structure and the economic imperialism of a century is difficult to disown...

...Other factors include scores of pressure groups both in Latin America and at home—U.S...

...In Peru one-half of the Andean Indians work on estates where they labor three days a week for a large landowner in return for the right to occupy a small plot of land...

...There are a few plans for bringing industrial consultants to various countries, but little planning of new factories...

...many consider it political suicide...

...coffee, eighty-three per cent of Salvador's...

...Furthermore, there are certain features of the Alliance for Progress that our government cannot guarantee—for instance, how much money private American firms will invest in Latin America each year...

...and the generous aid we give these armies undoubtedly buys us considerable influence...

...If our friends to the south are not looking hopefully toward the Alliance for Progress—as they are not— it is because they see little hope as yet of reshaping the economic and political power structure that has exerted such a stifling grip for so long on the Latin American republics...

...Are we prepared to discipline our own corporations when they stand in the way of social reform in Latin America...

...In some countries, Guatemala, for example, there is no income tax at all, even though the regime promises to introduce one almost every year...

...Foreign investments have been declining lately, partially because of fear that Cuban-type nationalizations may occur elsewhere...

...Through high interest loans, control of marketing machinery, and similar devices, the rich landowner can eventually subdue the poor one, even take his land from him, unless the latter can achieve some political strength...

...A third, and similar, incident occurred early in April when the military in Ecuador forced President Carlos Arosemena to dismiss his cabinet and break off relations with Cuba...

...Reform seems to be checkmated in another pivotal area—taxation...

...All the worthwhile projects envisioned by the Alliance will avail little unless the political and economic power structures of Latin America are radically revised...

...If these are the limits of "land reform" not only will the timorously conceived program fail, but it will pull down the whole Alliance for Progress...

...Intensifying this situation is the fact that the rich successfully avoid paying a large proportion of even such taxes as are imposed...

...Are we, in short, genuinely interested in helping to harness the surging forces of Latin American revolution to a meaningful program of social democracy, or are we merely engaged in a holdi ng operation against the spread of Fidelista influence, as the Communists charge...

...Nor is Peru alone...

...Citizens of our neighboring Latin states find it hard to believe that we are not involved in the machinations of their generals...

...In the words of Gerry Robichaud of the Chicago Daily News, the Ecuador military is "ultra-conservative if not reactionary, and it is ordinarily allied with political groups of the same coloration...

...The Alliance," said a writer who reflects this position, "can either be the greatest boon for us or the greatest fiasco...

...This would strengthen the economies of the Latin American countries by freeing them from the worst effects of unfavorable terms of trade...

...The military forces of Latin America have always been the base of power for the conservative classes...

...By all reports the United States has been acting with dignity, patience, and foresight in meetings with Latin American governments...

...but the interplay between the viewpoints that represent yesterday and tomorrow results in a discouraging immobilization today...

...The program is not well defined and is especially unclear on the main problem of remodeling the power structure of Latin America...

...Land reform to be truly effective must not only redistribute land...

...Another unknown factor is the repatriation of profits...

...businessmen who earn twenty-five or thirty-five per cent profit each year, their allies south of the border who share in this largesse, importers who enjoy similarly high returns and therefore oppose native industry, and other Latin Americans who live well under the present system...

...Citing a reply received from Brooks Hays, Assistant Secretary of State, Yates reported: "It seems clear that if, as [Hays'] letter points out, the State Department's policy is to limit our cooperation in land reform measures to the utilization only of government or marginal lands, such programs cannot succeed except in a few countries...

...These are some of the reasons given me by Latin Americans who are neither Rightists nor Communists: flThe United States has a "double standard of values...

...We sent our Navy to the Dominican Republic a few months ago when a coup was in the making against those forces we hoped would replace its then-President Hector Trujillo...

...In many instances the same Latin Americans who are most bitterly opposed to Cuba and Communism are as bitterly opposed to the Alliance for Progress...

...The Alliance insists on land reform, but it tolerates reform that does not effectively redistribute land...

...intentions to help change power relationships...

...Are we prepared to stand fast to our avowed commitment that basic internal reform, in the form of improved standards of health, housing, education, and land tenure, must be a condition of our assistance...

...If there is little enthusiasm for the Alliance in Latin America it is because of a lack of conviction in U-S...

...The bulk of revenue comes from sales taxes and customs duties...

...Or does it imply a basic reconstruction of the power structure...

...It will do Uncle Sam no good to have the anti-Cuban cause furthered by such undemocratic maneuvers as have taken place in Ecuador and Argentina...

...It cannot be done by merely voicing laudable aims or dangling money before governments with doubtful credentials and timid plans...

...The United States is accused of being "unprincipled," even "hypocritical...

...The southern countries, when they find themselves short of funds, take to the printing presses...

...In Venezuela, despite President Betancourt's good intentions, the inordinately large army and the still powerful aristocracy have forced a moderate and cautious approach that can hardly be expected to infuse new hope among the long embittered peasantry...

...Formulated vaguely by President Eisenhower in 1960 and developed more fully by President Kennedy in March, 1961, it was ratified only last August...

...Yet this area of Alliance activity is far down the list...

...Here again the generals imposed an unconstitutional change in government, but the United States failed to raise its voice...

...Such programs as do exist—except in two or three instances—are carefully contrived so as not to disturb the power position of the latifundista...

...Sometimes "land reform" has been an outright sham, as in Guatemala...

...Thus, payments for coffee, tin, sugar, bananas, and other Latin products may be frozen at current levels or may even be raised slightly...

...and European private investment, loans from various international agencies, and the like...

...But when the followers of the deposed Juan Peron, former dictator of Argentina now in exile, won ten of nineteen governorships and forty-four of eighty-six seats at stake in the lower house, the incumbent regime of President Arturo Frondizi refused to permit the victors to take office...

...One-third of one per cent of Guatemala's farm population owns more than half of the land...

...But these are misleading figures...

...He is the author of a number of books, including "A World in Revolution," "The Counterfeit Revolution," and "The Crisis of American Labor...

...it must redistribute power...

...pressure for tax reform has been minimal, and there are few proposed changes that offer much hope...

...In the hinterlands of most countries, far removed from the eyes of tourists, conditions of peonage stagger belief...

...In 1956 the value of the Brazilian cruzeiro was eighty to the American dollar...

...Yet still sitting at key desks in some of the embassies, in the State Department, in the Central Intelligence Agency, and in the Pentagon, are men who have spent a lifetime in collaboration with the very Latin American forces arrayed against basic reform—the conservative business community, the landowners, the generals, and the dictators of the Latin American republics...

...To call for social reform, then, while encouraging and financing these armies, is a self-defeating contradiction of United States policy of which most thoughtful Latin Americans are painfully aware...

...In Argentina, by all accounts, there was an honest election...

...I'm betting it will be a fiasco...

...This and similar military pressures contribute greatly to the growing conviction south of our border that the military forces in these nations are only puppets of the Pentagon and Central Intelligence Agency...

...Why the apathy...

...For most Latin Americans the United States is the mortar which has held together their various reactionary forces and kept them in power— and it is this concept that has strengthened the appeal of the Communists...

...The true democratic socialists who should be the backbone of indigenous support for the Alliance talk as if the program will not even get off the ground...

...In the Latin view, it is small, and may be entirely offset either by enlarged profits of U.S...

...Unless this situation is corrected, he pointed out, "the help that is given us, however generous it may be, will not be blood to vitalize our economies, as was planned, but simply tranquilizers to avoid a total collapse...

...So far, however, U.S...

...Here elections for the lower house of the national legislature and for governors of the provinces were scrupulously honest...

...But true land reform is precisely what most of the Latin American governments want to avoid...

...army officers are "advisers" to Latin America's armed forces...

...This perceptive statement throws revealing light on the dilemma of President Kennedy's imaginative Alliance for Progress...

...So far almost nothing has been done by the Alliance about the industrialization of our southern neighbors...

...A second handicap facing the Alliance is its apparent lack of a clear-cut concept of the relationship of political and economic power to social reform...

...But in Guatemala, Argentina, Ecuador, and Brazil we did not even raise our voices against the offensive of the militarists...

...President Kennedy had told Khrushchev's son-in-law in an interview only a few months earlier that he would recognize even a Communist government in Latin America if it came to power through honest elections...

...Without genuine land reform neither the Alliance for Progress nor Latin America's economy can move ahead...

...There is nothing inherent in the Alliance for Progress program that would tend to narrow the gap between the very rich and the very poor...

...Frondizi was subsequently arrested and removed from office by the military...

...When and if land reform is accelerated, the land monopolists will sell these inferior holdings at a profit to the government they control, while their power and their wealth will remain untouched...

...In Guatemala, President Miguel Ydigoras faced the fury of students protesting the elections of last December in which the government rigged the rural vote so that its candidates could capture twenty-five of the thirty-three seats in the legislature...

...The Alliance today is recruiting new men and emphasizing new ideas...

...On the other hand the prices for finished goods it buys, mainly from the United States, have risen steeply...

...Eight nations have not yet drafted tax law revisions, six have such legislation pending, and only five have already taken action...

...Are we prepared to cut off aid to our old allies—Ydigor-as, Somoza, and other dictators...

...The President's challenging concepts of the new Latin America, shared by liberal White House advisers such as Arthur Schlesinger, Jr...

...In 1959 American investors returned $775 million of profits to the United States, while investing only $200 million in new capital in Latin America...

...Finance Minister Jorge Mejia Palacio of Colombia emphasized this point at the April, 1962, meeting of the governors of the Inter-American Development Bank in Buenos Aires...

...Since then a mere 4,000 parcels have been given to peasants, almost all of them reclaimed land rather than the fertile holdings of the landlords...

...It insists on social change, but it leaves intact and, in fact, increasingly finances the power of the military, which is the principal pillar against change in most of the Latin American countries...

...Our own business leaders often speak of it in the same strident tones...

...At the other extreme, the radical left—Fidclista and ComSIDNEY LENS, labor leader and author, has traveled and lectured extensively in Latin America...

...The United States is not liberating Latin America from its control, but merely forging new and more effective means of domination...

...Oil accounts for ninety-three per cent of Venezuela's exports...

...The publicized amount of money to be spent is inflated...

...But what they have experienced is a United States allied with their latifundista, their military, their dictators, their conservatives...

...The United States has finally decided to promote revolution rather than suppress it, to help channel social and economic change along a democratic course rather than support the feudal forces of dictatorship...

...No decisive change is possible in Latin America without a genuine revamping of the land tenure structure...

...In Venezuela the Betancourt government is far more sincere in its purposes...

...To the average Latin American this was clear proof that we are still tied to the four powerful forces of reaction—the large landowner, the Church, the military, and the foreign investor...