Latin America's Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers.

• Author: Llosa, Alvaro Vargas
• Position: Book review

Latin America's Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers Javier Santiso Cambridge, Mass.: MIT Press, 2006, 250 pp.

The subtitle of this book caused this reviewer concern. A book that equates free markets with populism, blames both for Latin America's failure, and eulogizes pragmatism is something that needs to be challenged. (I refer to the Latin American brand of populism, not the Jeffersonian kind, of course.) However, a classical liberal such as the author of this review can live with much of the book's content--provided there is some clarification about the terms employed to describe what works and doesn't work. It is thought-provoking, well-argued, and intelligently constructed.

Two different definitions of pragmatism can be applied to Santiso's argument. An analogy lies in a dilemma posed a century ago by American philosopher William James. He imagined a squirrel going around a tree, and a man on the opposite side of the tree trying to catch a glimpse of it. Every time the man moves around the tree, the squirrel moves around quicker so that the tree trunk is always between the man and the squirrel. Is the man actually moving around the squirrel? By some definitions, says James, he is; by others, he is not. It depends on the practical meaning of the words "going around the tree."

If by "going around the tree" we mean that at some point the man is to the north of the squirrel, and then to the east of the squirrel, and then to the south of the squirrel, and then to the west of the squirrel, then, yes. But if we mean that at some point the man is in front of the squirrel, and then to the left of the squirrel, and then to the back of the squirrel, then, no, the man is at no point in those positions. So the answer to the question depends on the practical meaning of the words "going around."

One could say something similar about the word liberalismo (classical liberalism), which the author criticizes, equating it at some stages with populism, and calling both of them failed utopias. He makes the case that in the 1990s the market replaced the state as a paradigm and failed to trigger development, just as populism had failed in the past, and that this failure opened the doors to the current, more successful, era dominated by pragmatism. By some definitions, however, liberalismo means something similar to what Javier Santiso means by pragmatism, and, therefore, does not mean what he means by utopia.

This can be clearly seen if we look at the second, more traditional definition of pragmatism--the idea that beliefs do not represent reality, that they are simply dispositions that prove either true or false according to how much they help accomplish the desired goals. By that definition, liberalismo is compatible to some extent with Santiso's definition of pragmatism because, when tested against reality, its precepts--limited government, individual responsibility, equality before the law have proved much better at achieving the goal of development and prosperity than all the alternatives.

Santiso posits that Latin America has grown weary of utopias and has come to "'a pragmatic political economy that combines neoclassical orthodoxies with progressive social policies" (p. 4). Latin America was discovered at a time of...