BOOKENDS: Diagnosing the Madness of Things Latin American

A year ago, I was working in Peru with a nonprofit in an attempt to rein in the country’s frenzy of illegal logging. Much of the work was productive and engaging; we motored down obscure Amazonian tributaries, held press conferences with indigenous leaders, and plead for support from American diplomats-cum-drug warriors.

But our most formidable task was navigating the sea of regulations governing Peruvian forestry, and somehow making use of thousands of pages harvested from the very trees they were intended to protect.

Natural resources are far from the only arena in which the Peruvian state has near-absolute jurisdiction. The state’s massive power, combined with the dearth of democratic institutions, has generated a crisis of political legitimacy in Peru and other Latin American countries, often manifesting itself in the form of violence or paralyzing demonstrations.

In “Liberty for Latin America: How to Undo Five Hundred Years of State Oppression,” journalist Álvaro Vargas Llosa argues that this crisis of political legitimacy originates in five “principles of oppression”: corporatism, state mercantilism, privilege, wealth transfer, and political law. He blames the region’s recurrent slide into instability and stagnation on persistent government meddling in private affairs.

Vargas Llosa’s politics will come as no surprise to anyone familiar with his father Mario, an internationally renowned novelist who voiced similar opinions during his unsuccessful bid for the presidency of Peru back in 1990, and yet again when father and son campaigned for current president Alejandro Toledo.

This slim volume recounts Latin America’s last half-millennium, evaluating watershed moments with Vargas Llosa’s trademark enthusiasm for the free market. Concentrating on such ostensible reforms as the Mexican Revolution, economic nationalism, and the liberalizing policies of the 1990s, the book establishes that Latin America’s statist culture has stifled economic growth by limiting individual rights. Far from liberation, these “reforms” meant that “ownership changed hands while property rights remained in the hands of the government.”

If this argument sounds familiar, it should: Peruvian economist Hernando de Soto expresses a similar view in “The Mystery of Capital,” which pinpoints a lack of formal property rights as a main culprit behind the developing world’s stagnation. Like his compatriot, Vargas Llosa heaps praise on the ingenuity of Latin America’s poorest, especially the shantytown residents who have organized to provide basic services to the disenfranchised. Still, he considers them incapable of generating the sort of structural change key to breaking the region’s cycle of misery.

The book’s vast scope makes the historical analysis largely superficial, but readers of any political leaning will enjoy the nuanced explanations of failed reforms.

Criticism of U.S. drug policy and the World Bank will serve mainly to elicit cheers from the left, just as free-market proponents will savor his broadsides against the welfare state.

Vargas Llosa’s expertise shines through most clearly in his section on the privatizations of the 1980s and 90s, in which he effectively highlights how the process served to enrich a new elite by transferring state monopolies while doing little to increase competition.

Too often, though, Vargas Llosa becomes bogged down in minutiae, rattling off figures of little interest to the ordinary reader. But just as frequently, he paints in overly broad strokes, providing analysis hardly trenchant enough to hold the interest of a serious academic.

As it is, it seems that Vargas Llosa—or his publisher—wanted to appeal to as large an audience as possible, and this ambition negatively impacted the work. Ironically, this book is one instance in which market forces conspired to produce an inferior product.

Vargas Llosa stumbles again when he tries to suggest reforms of his own. In a bland final chapter, he proposes a radical reduction in the size of government. But his plan assumes that change will originate at the top—from executive action—rather than through grassroots advocacy.

The conclusion is disappointing because Vargas Llosa—who carries a Spanish passport and resides in northern California—designs a utopian master plan from afar, instead of clearly delineating the practical steps toward progress that Latin America so desperately needs. The theoretical nature of his proposals implies a lack of urgency that contrasts sharply with the book’s bleak depiction of the continent’s health.

The difficulty in bringing the author’s ideals to life is illustrated in his description of the presidency of Peru’s Toledo, whom Vargas Llosa himself helped elect: “marred by corruption” and “the most unpopular in the nation’s history.” (At one point, Toledo’s approval rating was near 4 percent, with a 4 percent margin of error),

Just as Vargas Llosa’s proposals for reform seemed removed from everyday reality, his economic analysis largely considers macroeconomic indicators like GDP, despite his admission that internal inequalities make such statistics grossly misrepresentative.

In failing to consider differences at the local level, he ignores some bright spots that have recently cropped up in Latin America. Innovative municipal governance in places like Curitiba, Brazil and Bogotá, Colombia has dramatically improved quality of life, reducing crime while furnishing world-class civic services.

Though cumbersome and fraught with loopholes, even the environmental legislation that Vargas Llosa disdains as creating “diffuse responsibility” shows a shift away from the extractive mentality that has plagued Latin America since European contact.

Civil society organizations increasingly have a role in policy-making, such as the recent sweeping forestry reforms in Peru and Brazil that prioritized sustainability and protection of indigenous territory.

And though bureaucracy frustrated my own work in Peru, I saw grassroots movements of traditionally marginalized groups make unprecedented economic and social progress.

Unfortunately, it seems that in adopting the same sort of paternalistic attitudes he decries, Vargas Llosa cannot see the trees for the forest.