The individualist legacy in Latin America.

• Author: Llosa, Alvaro Vargas
• Position: Reflections

It is often said that the root of Latin America's underdevelopment lies in its statist tradition. (1) That tradition goes as far back as the pre-Columbian states, under which masses of laborers toiled for the benefit of the ruling classes; it includes three centuries of corporatist and mercantilist Ibero-Catholic rule; and it has been compounded in modern times by the elitist independent republics. Through a combination of institutional arrangements set in place at various times by the governing cliques and cultural values transmitted from generation to generation, Latin America's tradition weighs so heavily against ideas of limited government, the rule of law, and personal responsibility that it would seem that an almost determinist view is justified in regarding liberty as beyond the region's reach.

Yet from the days when Indians in parts of Central America and Mexico used cacao seeds as money to the present-day informal economy, the instinct of the Latin American people is no different from that of the rest of the human species. Nothing suggests that the native cultures, either in their precolonial or in their mestizo forms, could not have responded creatively and successfully to the incentives of liberty had they been allowed to operate under less-oppressive conditions.

An individualist spirit has sought to manifest itself in Latin America in all historical periods. This legacy goes as far back as the family units that worked their own land and exchanged goods in ancient times, moving from them to the Jesuits of the School of Salamanca who discovered the monetary causes of inflation and the subjective nature of value at the very time when Spain colonized Latin America in the sixteenth century, and from them to the informal (black-market) economy that represents a contemporary and inventive response by the people to the state's illegitimacy. Inbetween these episodes stand landmarks such as the mid-sixteenth-century rebellion of Gonzalo Pizarro, the 1812 liberal Constitution of Cadiz, Spain, the ideas that inspired the Latin American independence struggle, the brilliant Argentinean three-quarter century that flowed from Juan Bautista Alberdi's vision, and a few post-World War II intellectuals who went against the current.

Trade and Property in Ancient Times

Despite the limits on communication imposed by the absence of pack animals and by the fact that the wheel had not yet been discovered in the area, trade occurred in all three of the great pre-Columbian civilizations--the Incas, the Aztecs, and the Mayas (who used the wheel only in toys). The powerful bureaucracies established in ancient Latin America used the tradition of commerce for their own purposes and to a large extent curtailed mercantile private initiative precisely because they appreciated its significance.

Trade played an important part in making possible the loose confederate organization of the Maya culture that flourished in the Yucatan Peninsula and the surrounding areas, with no permanent political center, but rather a system of city-states, Tikal being the best known, among which hegemonic influence shifted. In fact, long before the classic period of Maya civilization, taken to have started in the third century A.D., trade was a mainstay at locations such as Chiapa de Corzo, Abaj Takalik, El Baul, and Chalchuapa (James 2001). Thanks to commerce, the communities of the coast were later fed not by the agricultural lands in their immediate vicinity, but by the interior hinterlands, where they obtained food as well as textiles and other goods. When the Europeans arrived, the Maya city-states had long waned, but the descendants of that civilization were well acquainted with the notion of exchange.

A commercial tradition was strong also in Mexico. Before Tenochtitlan established itself as the undisputed capital of what is known as the Aztec Empire, that city-state coexisted with Tlatelolco, an entirely mercantile center. Through trade, Tlatelolco developed a class of merchants and entrepreneurs (Garraty and Gay 1972). Tenochtitlan was naturally jealous of those merchants, who traded in valuable commodities (James 2001). Despite political centralization, trade continued to be a feature of daily life once Tenochtitlan had become the imperial nerve center. (2) The pochtecas specialized in long-distance commerce and supervised markets in the Valley of Mexico. The Mexicas of the capital traded with the surrounding areas, exchanging water-intensive products (the city stood on a huge lagoon) for wood and stone. Although the empire was divided between the ruling class and a great mass of laborers, the merchants numbered as many as ten thousand (Wolf 1999). They even had special law courts. Their activities were not spared many of the controls suffered by other types of activities, but they still constituted a culture of exchange in which mutual benefit, not simple predation, was the guiding principle. From that exchange flowed elementary concepts of money, with the use of gold, zinc, and other media.

Trade also occurred at the other end of the region, in the Andes. The Incas went a long way toward eliminating it, precisely because it was a tradition. Important cultures had surfaced in what is known today as Peru long before the Incas. The people of the Tiahuanaco culture, born around A.D. 500 in the mountains of southern Peru, traded intensely with the coast and even with Central America. Before the Inca Empire came into being, when the Inca kingdom was but one among many others, trade continued to be a part of life in the Andes. It was an activity that engaged many women, whose presence in the market was particularly visible. One Inca, Tupac Yupanqui, is remembered for having ordered free passage across the land to those who chose to take part in commerce. Many of the Inca's decisions were announced in the marketplace (Cabello de Balboa 1951).

Because the people had no written language, scant evidence exists of just how intense trade was before the Inca Empire and how much of it survived until Spain conquered South America, but notarial records of early colonial times attest to the Indians' acquaintance with contract and commerce despite the stifling controls put in place by the Inca Empire. Testimonies given by Indians in local Peruvian communities to Spanish inspectors in the sixteenth century clearly speak of trade. The records also show kurakas (local chiefs) providing labor to the Spaniards in exchange for a lee, using traditional social customs (Spalding 1973). The kuraka received raw cotton from the Spaniards and distributed it to the Indians under his jurisdiction. He then sold the finished cloth to the Spaniards for cash payment. By the mid-sixteenth century, the Indians were already diverting part of their labor for the production of goods for the Spanish market. By the eighteenth century, not only kurakas but also the wealthier members of Indian society in general traded their possessions in the Spanish markets for goods they then sold to fellow Indians. An entire class of merchants called principales stocked the shops that they set up in their communities with European commodities bought from Spanish merchants. (3) Although the incorporation of Indians into the Spanish market owes much to the dislocation of...