[Dissertation] An Intellectual History of the ECLA Culture, 1948 to 1964

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An Intellectual H istory of the ECLA C ulture, 1948 to 1964

A thesis presented by

H ilary B urger To T he D epartm ent of History In partial fulfillm ent of the requirem ents for the degree of Doctor of Philosophy In the subject of H istory

H arv ard University C am bridge, M assachusetts Decem ber 1998

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© 1998 by Hilary Burger All rights reserved.

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Abstract An Intellectual History of the ECLA Culture, 1948 to 1964 Hilary Burger This dissertation concerns a period of enormous popularity o f the ideas and economists associated with the United Nations Economic Commission for Latin America, or ECLA, from 1948 to 1964. Following World War II, ECLA championed an autonomous development model for Latin America, based on state-led import substitution industrialization, regional integration, and planning. ECLA endorsed planned industrialization as a means of overcoming instability associated with dependence on primary exports. ECLA economists also advocated structural changes, such as land reform, in order to address problems o f inflation and inequality in Latin America. Overwhelmingly the historiography of ECLA has focused on the theoretical origins and analysis of its structuralist ideology. Contemporary economists have criticized the influence o f ECLA’s ideas on Latin American economic development. There has been far less consideration o f the reasons for the popularity o f ECLA throughout Latin America during the 1950s and early 1960s, and the widespread and enduring influence o f economists identified with the institution and its ideology. This dissertation addresses the formation of a mission among the original ECLA economists, shaped by common professional experiences and endeavors and their assertion o f a regional development agenda. ECLA economists led the first collective attempt to document the Latin American economies, and successfully disseminated ECLA’s development ideas through in-country missions and a regional training program

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in development planning. ECLA became the central authority on economic development issues in a period normally associated with U.S. hegemony in the region. I argue that in contrast to traditional histories of ECLA, which have focused on the role of Executive Secretary Raul Prebisch, there is another story in the cooperation among the ECLA economists and their formulation and projection o f ECLA’s development ideology. As an alternative to Prebisch-centered histories, I study the intellectual biography o f Jorge Ahumada, an ECLA economist whose conception of economic development differed in crucial ways from the traditional canon. In particular, Ahumada argued strongly in favor o f export promotion in an era exclusively identified with reliance on import substitution industrialization. My analysis is aimed at engaging the discussion o f Latin American economic development in a closer analysis o f the critical changes that took place in economies of the region during the 1950s, along with a deeper understanding o f the legacy o f ECLA and its economists in the larger realm of development ideologies in the region.

Advisor: John H. Coatsworth

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Acknowledgements This dissertation could not have been written without the support o f my Latin American friends and colleagues. They have provided the companionship, encouragement, and friendship that helped me through the most difficult parts of the entire experience and that ultimately inspired me to finish. They have also enriched my life. While here I can only mention those directly related to the dissertation, these friendships have been the most valuable and enduring part of my graduate experience. Friends I want to thank especially include Graciela Marquez, who read and criticized nearly all o f my drafts. Ivan Hinojosa, Michel Gobat, Laura Gotkowitz, Aurora Gomez, and Anadelia Romo all provided invaluable commentary during the later stages o f dissertation writing. Helen Bronk and June Erlick gave both friendship and excellent editorial advice. Faviola Rivera and Luciana de Oliveira shared their wisdom. I would like to express my special thanks to Saburo Horikawa for his unfailing support throughout my years in graduate school. And to Jose Antonio Flores I am thankful for his friendship and trilingual sense of humor. I will always be grateful for the warmth and support of staff members at LASPAU and more recently at the David Rockefeller Center for Latin American Studies. I thank Professor John Womack, Jr. for inspiring and encouraging me to study Latin America. I am thankful to Professor John Coatsworth for his generous collegiality, and for the example he has set in his professionalism, hard work, and dedication to our field. Alex and Selma Ganz kindly and generously shared the perspective from ECLA in the 1950s upon numerous occasions in Boston. Alex Ganz also provided me with

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many contacts in Latin America, enabling me to interview former cepalinos and contemporaries o f Jorge Ahumada, including Ahumada’s wife Georgina Licea. A number o f friends and colleagues also helped me with my research abroad. Marcella Bernardo Costa was my best friend and guide in Rio de Janeiro. Marcelo Henriquez and Andrea Repetto diligently helped me find information on economists in Chile; Marcelo and his family offered companionship, and Ana Maria Figueroa and her family shared their home. In Venezuela, Eduardo Zambrano and Elizabeth Rauseo facilitated my introduction to Venezuelan economists and research institutions, in addition to being excellent hosts. Oscar Munoz, Ricardo Bielschowsky, and Juan Gabriel Valdes all gave me useful ideas and commentary on the cepalino perspective and on the history and the dissemination of ideas. Jose Besa, former Director o f the ECLA library, shared the collection of publications of the major cepalino economists that he has painstakingly compiled. Isaac Cohen offered unbounded encouragement even before I started graduate school. On an institutional level, the ECLA office in Washington, then under his direction, graciously assisted me in arranging several visits to the ECLA headquarters in Santiago. Joseph Ramos provided office space during my visit to ECLA in 1995, in addition to access to the library. Dan Hazen, Latin American bibliographer at Widener Library, helped me to locate and acquire materials for my thesis, and Susan Brown, Registrar of the Kennedy School of Government, made available critical information on Jorge Ahumada. I carried out dissertation research with the generous support of the Committee on Latin American and Iberian Studies and the David Rockefeller Center for Latin American

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Studies, which administered grants from the Tinker and Mellon Foundations and the Fundacion Mexico en Harvard. Additional research grants came from the Organization o f American States, the Graduate Student Council, and the Harvard Institute for International Development. Funding from the Foreign Languages and Area Studies (FLAS) program o f the U.S. Department of Education was critical in allowing me to study Portuguese. Finally, I wish to thank to my parents, without whose help I would not have pursued this path. This dissertation is only a reflection o f my love for Latin America, and my wish to understand and communicate its many fascinations, to lessen its misunderstanding in the United States, and to remind us of a time of great enthusiasm about its potential.

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I dedicate this dissertation to Alexander Ganz, for his faith in the process of economic development, and for his generous human spirit.

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Contents Chapter 1.

Introduction: An Intellectual History o f the ECLA Culture, 1948-1964

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The ECLA Canon The ECLA Culture ECLA and the Literature of Celebration Latin American Economic Development and Its Controversies: 1945-1964 The Social Costs o f Industrialization Conclusion 2.

Envisioning Economists in Latin America: The 1930s and 1940s

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The Economic Perspective o f Latin America, 1914-1948 The Appearance o f Institutions for Economic Policymaking Economics in Latin America in the 1930s and 1940s Academic Training Applied Policy Experience Literature in Economics International and Regional Conferences and Exchanges Conclusion 3.

An Institutional History of ECLA, 1945-1964

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Introduction The Beginning Economic Research The Arrival o f Prebisch The Consolidation of ECLA Programming: The ECLA Missions The ECLA Training Program The Influence of ECLA’s Ideas in Brazil Inflation and Industrialization: The Outlook Dims ECLA From Within Conclusion 4.

ECLA and Inter-American Relations, 1948-1964

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Introduction: The United States and Latin America after World War II The Immediate Post-War Period: The Desencuentro ECLA and the United States, 1948 to 1953 The Dialogo de Surdos: ECLA and the Cold War ELCA and Anticommunism Conclusion

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5.

A Different Cepalino: Jorge Ahumada

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Introduction Origins Ahumada and the ECLA Training Program En vez de la miseria The State and Development Strategy in En vez de la miseria Inflation, Inequality and Agrarian Reform According to En vez de la miseria Cuba and the Transition to Venezuela Venezuela: The Setting Cendes: Philosophy and Organization Conclusion 6.

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Conclusion

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Bibliography

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List of Tables

3.1

Design o f the First ECLA Economic Survey: Staff (November 1948)

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3.2

ECLA Training Program and Intensive Courses: Chronology

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5.2

Teaching Staff o f Cendes, 1961

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5.1

Courses Offered in the Cendes Graduate Program

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A Note on Abbreviations For purposes o f brevity I have abbreviated the names o f the main archives that I consulted in the process o f research for the dissertation. They will appear as indicated below: Cendes HUA IMF NARA UNA

Archives o f the Centro de Estudios del Desarrollo, in Caracas, Venezuela Harvard University Archives Archives o f the International Monetary Fund, in Washington D.C. United States National Archives and Records Administration United Nations Archives, located in New York City

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Chapter 1 Introduction: An Intellectual History of the ECLA Culture, 1948-1964 Heman Santa Cruz, a former United Nations delegate from Chile, recalled the heady days o f the nascent United Nations in Lake Success, New York: [We] the delegates and.. .the two hundred or so civil servants who comprised the Secretariat felt a little like semi-gods... We thought that destiny had given us the privileged place o f responsibility for the construction o f a new world.. ..In.. .Lake Success.. ..we were impassioned by our aspiration to collaborate in the transformation o f.. .all countries....We were convinced that our goal was realistic. We thought that the stellar moment for humanity represented by the San Francisco Conference and the four years that followed...would last for at least a century.1 It was in this atmosphere in July 1947 that Latin American delegates to the Economic and Social Council o f the United Nations submitted a proposal to form a regional economic commission, along the lines o f the European Economic Commission.2 The United Nations Economic Commission for Latin America, or ECLA, was officially inaugurated in 1948, and Chile, having played a central role in initiating the proposal for the new commission, offered to serve as its headquarters. ECLA was to “initiate.. .measures for facilitating concerted action for dealing with urgent economic problems arising out of the war and for raising the level o f economic activity in Latin America and for maintaining and strengthening the economic relations o f the Latin-American countries both among themselves and with other countries of the world.” The agenda for the Commission included research and “studies of economic and technological problems and

1 Heman Santa Cruz, “Recuerdos de la creacion de la CEPAL, a guisa de introduccion,” in Antecedentes sobre la creacion de la CEPAL (Santiago de Chile: CEPAL, December 1987), p. ix. 2 Jose Cayuela, ECLAC: 40 Years (1948-1988) (Santiago: United Nations Economic Commission for Latin America and the Caribbean, 1988), p. 19; Enrique V. Iglesias, Reflexiones sobre el desarrollo economico. H acia un nuevo consenso latinoamericano (W ashington, D.C.: Banco Interamericano de Desarrollo, 1992), p. 3.

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developments within territories o f Latin America,” with the crucial task o f “collection, evaluation and dissemination of such economic, technological and statistical information” seen as essential to the region. In more general terms, the Commission sought to address problems in Latin America that resulted from world economic maladjustment,” as well as economic problems o f a more global nature, “with a view to the co-operation o f the Latin-American countries in the common effort to achieve world-wide recovery and economic stability.”3 ECLA embodied a moment of extraordinary optimism in Latin America following World War II, in association with a set o f ideas about economic development that formed a powerful ideological canon closely identified with the region. ECLA’s prescriptions, now known as “structuralism,” quickly gained recognition in the 1950s as an autonomous approach to Latin American economic development that championed the interests of the underdeveloped “Periphery” against the industrialized “Center.”4 The ECLA economists, or cepalinos,5 built a strong sense of intellectual solidarity within an institutional framework that fostered ECLA’s rise to influence and acceptance throughout the region.6 Discussions o f ECLA have yet to consider the implications of the influence the cepalinos attained through identification with the institution and its ideology. By addressing the

3 Report o f the ad hoc Committee on the proposal for an economic commission for Latin America, Resolution o f 25 February and 5 March 1958 (document E/712/Rev. 1), in “Resolutions adopted by the Economic and Social Council during its sixth session from 2 February to 11 March 1948” (Lake Success, New York: United Nations, 1948). 4 Others have called ECLA’s thinking “autochtonous.” (Cristobal Kay, Latin American Theories o f Development a nd Underdevelopment (London: Routledge, 1989), p. 25). 5 Cepalinos are the economists associated with the ideas and institution o f ECLA, whose acronym in Spanish is CEPAL (Comision Economica para America Latina). 6 Albert Fishlow, “El estado de la ciencia economica en America Latina,” Revista Latinoamericana de Historia Economica y Social 5, no. 5 (1985), p. 31; Victor L. Urquidi,

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creation and dissemination o f the ECLA agenda, this dissertation aims to explore the significance of economists who built their identity based on the institution, its regional mission, and common intellectual culture.

The ECLA Canon The ECLA canon is associated with the tenure o f Argentine economist Raul Prebisch as executive secretary and leading cepalino from 1950 to 1963. During this period, ECLA challenged prevailing liberal notions in economic theory by arguing that the prolongation o f Latin America’s status as an exporter o f primary products would be detrimental to its future economic development. ECLA’s first studies determined that the prices of primary products had declined historically relative to the prices o f imported manufactures.7 According to the Prebisch thesis, the rate o f technological innovation in the Center was inherently higher than in the Periphery; furthermore, organized labor kept wages high in the Center, translating into higher export prices.8 Latin American countries did not generate sufficient internal savings to guarantee sustained economic growth, nor did it appear that the market alone would support necessary expansion in the industrial sector. The ECLA canon featured advocacy of state-led policies of import substitution industrialization and planning. Later elements included structural reforms and measures for regional economic integration.

“Cuestiones fundam entals en la perspectiva del desarrollo latinoamericano,” E l Trimesire Economico L(2), no. 198 (April-June 1983), p. 1097. 7 ECLA, The Economic Development o f Latin America and Its Principal Problems (New York: United Nations, 1950, Spanish edition issued in May 1949). 8 Joseph Love, “The Origins o f Dependency Analysis,” Journal o f Latin American Studies 22, no. 1 (February 1990), pp. 145-146.

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The ideas that ECLA came to represent were not necessarily new. Rather, for the most part they constituted a formalization of regional experience since the 1930s.9 The Depression had permanently shaken the confidence of policymakers in the reliability o f market forces, and led to the conviction that primary product exports, the basis for Latin American economic growth, would always be subject to violent swings in demand, what ECLA would later term “external vulnerability.”10 To many, “by the late 1930s it was reasonably clear that laissez-faire was finished in international economic relations.” European and North American as well as Latin America’s own experience had demonstrated that it was no longer viable to rely exclusively on the private sector.11 In Latin America, the collapse o f international trade, the cessation o f foreign investment, and the steep deterioration in the terms of trade for many countries brought on a period of bold experimentation in the 1930s. Latin Americans found themselves essentially “practicing Keynesianism without knowing it,” as policymakers implemented

9 ECLA’s ideas, Enrique Iglesias argued, allowed the Latin American countries “to apply” policies dating from the 1930s and 1940s “in a more coherent form than in the past.” (Reflexiones, p. 10); Diaz Alejandro wrote that “One would search in vain among public statements by economic authorities o f those days for reasoned explanations for the switch from the old rules to the new discretion. Only by the late 1930s ex-post rationalization o f some intellectual weight began to appear” (Carlos F. Diaz Alejandro, “Latin America in the 1930s,” Center Discussion Paper No. 404, Yale University Economic Growth Center, May 1982, pp. 89). See also Felipe Pazos, “Cincuenta aiios de pensamiento economico en la America Latina,” El Trimestre Economico (October-December 1983), p. 552; and Victor L. Urquidi, “Cuestiones fundamentales,” p. 1103. 10 “Memories o f the 1930s have profoundly influenced the region’s attitude toward international trade and finance” (Diaz Alejandro, “Latin America in the 1930s,” p. 1). See also Joseph L. Love, “Economic Ideas and Ideologies in Latin America since the 1930s,” in Leslie Bethell, ed., The Cambridge History o f Latin America, vol. IV (Cambridge: Cambridge University Press, 1994), p. 430. 11 In Diaz A lejandro’s words, the private sector now seemed “obsolete.” (“The 1940s in Latin America,” in M oshe Syrquin, Lance Taylor, and Larry E. Westphal, eds., Economic Structure and Performance. Essays in Honor o f Hollis B. Chenery (New York: Academic Press, 1984), pp. 352, 345). 4

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improvised policies in response to crisis.12 During World War II, industries faced severe shortages o f capital inputs due to lack of access to imported goods, while continuing to operate at full capacity. Industrialization, both in the 1930s and in the 1940s, took place through import substitution more spontaneously than through planned economic policy.13 When ECLA appeared, deliberate industrialization policies represented a logical continuation o f recent experience, one that was naturally systematized into a more coherent body o f ideas.14 From the 1930s, positive growth o f industry gave rise to a new sense of confidence in the potential of state-led industrialization, particularly in the Southern Cone. Latin America experienced a steady expansion in the role of the state in economic policy, both in the realm of macroeconomy and in what is now seen as long-term development policy. Meanwhile, the New Deal, Italian, German and later Spanish fascism, and Soviet socialism all provided models of state-led economic management. In the 1940s, expansion o f the state in Britain and France reaffirmed the validity of public sector activism, with the participation o f state enterprises in industry and public finance.15 Starting in the 1940s, industrialization was held up as a panacea for many of Latin America’s economic problems.16 Industrialization would absorb Latin America’s excess

12 Lacking access to sources o f capital from abroad, Latin American financial institutions began to take shape after the Great Depression, partly to channel domestic savings. (Diaz Alejandro, “Latin America in the 1930s,” pp. 1-7, 45-46; Iglesias, Reflexiones, p. 13). 13 Enrique Iglesias stated that in this era,“during this period in the region there was a process o f industrialization without industrial policies.” (Reflexiones, p. 13). 14 Ibid, p. 14. 15 Diaz Alejandro, “The 1940s in Latin America,” pp. 346, 351. 16 “Emancipation from this condition” o f dependence on primary product exports “was supposed to be accomplished largely through industrialization, a task proposed as though it were universally manageable, requiring only capital, entrepreneurship, and promotion or protection by the state.” (Albert O. Hirschman, “The Political Economy o f Latin American Development,”

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population growth, while enhancing productivity, stimulating economic growth, and promoting improved income distribution.17 Later on, in the 1960s, ECLA came to be associated with other ideas, such as regional integration, but import substitution industrialization was the one most closely identified with the institution and its influence regionally.18 ECLA’s conceptualization of development involved a central role for the state in the promotion of industrialization and the management o f economic policy. As was argued increasingly in the 1940s, ECLA in the 1950s maintained that “development did not occur as a natural evolution, but rather as a result of policy.” 19 The state was critical to the growth o f industries and the provision o f public services that the market failed to guarantee. Planning eventually came to be seen as a logical complement to this view, in ensuring the appropriate allocation o f resources for development priorities.20 In the mid-1950s, the ECLA doctrine also addressed chronic problems of inflation. In Latin America, ECLA economists argued, inflation was not solely due to

Latin American Research Review 22, no. 3 (1987), pp. 13-14; Kay, Latin American Theories o f Development and Underdevelopment, p. 39). 17 Rosemary Thorp, “The Latin American Economies, 1939-c. 1950,” in The Cambridge History o f Latin America, ed. Leslie Bethell, vol. VI (Cambridge: Cambridge University Press, 1994), p. 134. 17 Love, “Economic Ideas and Ideologies in Latin America since 1930,” p. 424; Iglesias, Reflexiones, p. 11. Carlos Diaz Alejandro took this analysis further with his somewhat critical assessment: “The many ills o f Latin American society were rigidly associated with pre-1929 openness to international trade and finance. False hopes were therefore aroused that the relative closing o f the 1930s and 1940s would alleviate poverty, reduce unemployment, improve income distribution, promote democratization, eliminate dependence on foreigners, and make the state willing and able to improve social welfare. By the late 1950s many had switched their faith from import-substituting industrialization to revolution as they way to achieve those goals.” (“The 1940s in Latin America,” Center Discussion paper No. 394, Economic Growth Center, Yale University, (February 1982), p. 37. 18 Love, “Economic Ideas and Ideologies,” p. 424; Kay, Theories o f Development, p. 35; Urquidi, “Cuestiones fundamentales,” p. 1099. 19 Sunkel, “Desarrollo de la idea del desarrollo,” p. 38.

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excessive growth o f demand, but also resulted from supply bottlenecks, particularly those affecting agricultural goods and imports, originating in structural conditions such as the unequal distribution of land. This finding gave the ECLA canon the name of structuralism.21 According to the structuralist view, measures for overcoming inflation had to include fundamental changes such as land reform, so as to alter inflation’s underlying causes. Starting in the late 1950s and early 1960s, issues o f social equity such as land reform and income distribution became increasingly important, particularly in light o f the Cuban Revolution, and ECLA began to emphasize social as well as economic reform.22 In the late 1950s and early 1960s, ECLA promoted regional economic integration as a way to overcome problems o f size and efficiency in industries that were limited to small domestic markets, and that failed to achieve basic standards of competitiveness. From the mid-1950s, ECLA also advocated economic development planning.23 Bolstered by the success of European experience, ECLA officially promoted planning as the means toward the most efficient and stable path of growth for the Latin American economies. The late 1950s featured the ECLA “consensus,” a period of widespread acceptance o f the structuralist agenda.24 The ideas that ECLA articulated won broad

20 Ibid; Fishlow, “El estado de la ciencia economica,” p. 34. 21 The inward-oriented development strategy, emphasis on structural causes o f underdevelopment and on social and political aspects o f development distinguished ECLA thinking from mainstream economic policy which saw inflation as the primary obstacle to economic growth and prescribed strict monetary control to reduce inflation. (Kay, Theories o f Development, pp. 48-49). 22 Love, “Dependency,” pp. 146-147. 23 Urquidi, “Cuestiones fundamentales,” pp. 1094, 1100-1101. 24 Jorge Castaneda uses the term to describe Cuban economic policy in 1959 and 1960: “Then, as now, the principal progressive recipes for Latin American economic development were few in number and fairly diffuse. They consisted essentially o f industrialization through import

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support in Latin American government circles through the mid-1960s, and in some cases even later.25 Only in the mid-1960s, as mounting evidence of increasing inequality led ECLA economists to reconsider the social aspects o f development, did ECLA’s inherent optimism began to wane. 26

The ECLA Culture In writings about ECLA, the institution and its ideas have been treated extensively, but the widespread acceptance o f its ideas and figures in the 1950s and early 1960s has attracted far less consideration. This dissertation analyzes the formation of an intellectual culture o f economists associated with ECLA, that is, the ideas and associations that built an enduring sense of identity among the cepalinos, their followers and disciples. As an alternative to more theoretical analyses o f structuralism, which abound, here I explore how the cepalinos identified with particular ideas, and, through active dissemination and training, gave ECLA an enormously powerful presence across the region.27 I also study the international conditions that contributed to ECLA’s appeal.

substitution; the diversification o f export markets; a central role for the state in the economy and the need for significant land reform ....These all formed what might be called the consensus of the U.N. Economic Commission for Latin America (ECLA).” (Jorge G. Castaneda, Compahero. The Life and Dealth o f Che Guevara (London: Bloomsbury, 1997), p. 171). Albert Fishlow refers to the structuralist “consensus” that “spread throughout the region” in the 1950s. (Fishlow, “El estado de la ciencia econdmica,” p. 31). Victor Bulmer-Thomas concurs, in explaining how “CEPAL, its influence at a peak in the late 1950s, was listened to with respect.” (BulmerThomas, The Economic History o f Latin America Since Independence (Cambridge: Cambridge University Press, 1994), p. 296). The ECLA consensus was unequalled until the advent of neoliberalism, which “swept the region” in the 1980s. (Thomas Skidmore, “Studying the History of Latin America: A Case o f Hemispheric Convergence,” Latin American Research Review 33, no. 1 (1998), p. 119). 25 Iglesias, Reflexiones, p. 15. 26 Cristobal Kay writes that “by the early 1960s the initial optimistic outlook had turned to a more cautious and self-critical stance.” (Kay, Latin American Theories o f Development and Underdevelopment, p. 40). 27 The following are but a small sample o f the theoretical analyses o f ECLA: Love, “Economic Ideas and Ideologies in Latin America since the 1930s”; Joseph Hodara, P rebischy la CEPAL.

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The years o f intellectual ferment and originality at ECLA have no other regional equivalent in Latin America in the second half o f the twentieth century.28 My aim is to try to understand the extraordinary growth of the cepalinos’ professional status and influence through the course o f ECLA’s early and most active years. A number o f authors have made reference to ECLA’s “ideology,” and “doctrine,” but fail to examine why the ideas associated with the institution took on such powerful connotations.29 Juan Gabriel Valdes has addressed the active dissemination o f neoliberal economic ideas in the case of the Chicago Boys in Chile, and Alejandro Foxley and Jose Joaquin Brunner have described the transformation of these ideas into ideology in the Southern Cone, but there is little else written on the earlier spread o f economic ideas in Latin America.30 The ECLA canon, by being baptized as “doctrine,” and “ideology,”

Sustancia, trayectoria y contexto institucional (Mexico: El Colegio de Mexico, 1987); Kay, Latin American Theories o f Development and Underdevelopment', Octavio Rodriguez, La teorla del subdesarrollo de la CEPAL (Mexico: Siglo XXI, 1980); Fishlow, “El estado de la ciencia economica en America Latina”; Francisco Rodriguez Garza, “La CEPAL y el pensamiento economico latinoamericano,” Departamento de Economia, Reporte de Investigacion Serie II No. 236 (Mexico: Universidad Autonoma Metropolitana, Unidad Azcapotzalco, Division de Ciencias Sociales y Humanidades, 1995). 28 Jose Antonio Ocampo, “New Economic Thinking in Latin America,” Journal o f Latin American Studies 22, part 1 (February 1990), p. 172. 29 Albert Hirschman referred, in 1961, to the “ECLA Doctrine” (“Ideologies o f Economic Development in Latin America” in Latin American Issues: Essays a nd Comments, ed. Albert O. Hirschman (New York: Twentieth Century Fund, 1961), p. 14); similarly, Joseph Hodara, in his analysis o f ECLA and its ideas, refers to “ la doctrina,” the doctrine, o f ECLA (Prebisch y la Cepal. Sustancia, trayectoria y contexto institucional (Mexico: El Colegio de Mexico, 1987), chapter 3). See also Joseph Love, “Economic Ideas and Ideologies,” pp. 393-460; E.V.K. Fitzgerald, “ECLA and the Formation o f Latin American Economic Doctrine,” in Latin America in the 1940s. War and Postwar Transitions, ed. David Rock (Berkeley and Los Angeles: University o f California Press, 1994), pp. 89-108; Osvaldo Sunkel, “El desarrollo de la teoria del desarrollo,” Estudios Internacionales (Buenos Aires) 10, no. 40 (October-December 1977), p. 30. 30 Juan Gabriel Valdes, P inochet’s Economists. The Chicago School in Chile (Cambridge: Cambridge University Press, 1995); Alejandro Foxley, Experimentos neoliberales en America Latina (Mexico: Fondo de Cultura Economica, 1988); Jose Joaquin Brunner, Entrevistas, discursos, identidades (Santiago: FLACSO, n.d.), pp. 81-92. One exception, on an earlier period, is Albert O. Hirschman, “A Prototypical Economic Adviser: Jean Gustave Courcelle-Seneuil,” in

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acquired a distinctive intellectual permanence, and thus the case of ECLA’s popularity begs for examination. ECLA’s influence extended far beyond the institution itself to encompass Latin American government bureacracies and universities. Members of the ECLA culture actively engaged in government advising, and were rarely limited to the role of theoreticians. ECLA actively disseminated its ideas through publications and cooperation with governments, in missions and training.31 ECLA trained innumerable civil servants from Latin American countries, many o f whom became highly influential both in university settings and in economic policymaking. Only in studying these relationships can we understand the legacy o f the ideas associated with ECLA, even as they outlasted their own apparent connection to reality.32 The concept o f culture as applied to ECLA, I argue, is also key to explaining the creation o f uniquely powerful figures in Latin American economics in the second half of the twentieth century. Without the appeal of ideas such as industrialization, techniques such as planning, and the machinery for their dissemination, the cepalinos would not have gained such spectacular prominence in the region. In a number of notable cases, such as Brazil and Chile, interaction with government bureaucracies also granted ECLA a central place in national policymaking. One of the crucial elements of ECLA’s success was the creation of universally recognized figures in the realm o f economic development. I ask how this affected their

Rival Views o f M arket Society and Other Recent Essays (Cambridge, MA: Harvard University Press, 1992), pp. 183-186. 31 ECLA’s publications included the Annual Economic Surveys, the Economic Bulletin fo r Latin Am erica (starting in 1955), country studies, and training manuals for planners, notably Manual deproyectos de desarrollo economico (Mexico: Naciones Unidas, 1958).

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projection o f ideas, their longevity and the perception o f the cepalinos from the outside. Only thus can we explain the existence of an entire “literature of celebration” 33 concerning ECLA and its members, and the powerful nostalgia associated with Prebisch and the original cepalino generation.34 It seems imperative to ask what distinguishes ECLA from other schools of economic thought, particularly in relation to the institution in question - how did ECLA extend beyond a small group o f believers, to reach into every level of government and university instruction in Latin America by the 1970s? How did it give rise to an intellectual culture, encompassing a generation of economists and practitioners from different countries with similar educational and professional experiences, shared ideals about economic development and its social dimensions, and common forms of communication? Can this culture, in turn, serve to explain a conception of economic development that came to be widely held in the region, that was enduring, and that produced an entire generation, or generations, of believers in the ECLA idea?

32 Urquidi, “Cuestiones fundam entals,” p. 1125. 33 Ivan Jaksic used the term “literature o f celebration” in reference to the writer and intellectual Andres Bello; it seemed particularly appropriate to describe the history o f ECLA. (Ivan Jaksic, “Introduction,” in Andres Bello, Selected Writings o f Andres Bello, trans. by Frances M. LopezMorillas (Oxford: Oxford University Press, 1997), p. xxxiii. 34 Economist Albert Hirschman, revered him self for his ideas, spoke o f this “nostalgic glance backward,” in a retrospective on contemporary Latin American political economy: The despondency o f many contemporary observers seems to me to be rooted principally in the realm o f ideas. The present scene, it is often said, lacks the feeling, so strong in the thirties and forties, that all kinds o f daring new directions in economic and social policy invite exploration. (Hirschman, “Political Economy o f Latin American Development,” p. 13).

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Historians of the social sciences in Latin America have recognized the utopian qualities of ECLA as an institutional project.35 I would argue that it was not ECLA’s theories, in isolation, but also the way ECLA became so extraordinarily influential that is important to our understanding of the contemporary history of economic ideas and policies in the region. In the historical narrative that follows, I explore the conditions that endowed ECLA’s principal economists with such optimism, how the cepalinos projected their ideology, and how they gained such widespread, enduring influence, despite, or perhaps because of, the polemic they inspired. I question whether their legacy can explain the vehemence of the reaction to ECLA’s ideas in Latin America on the part of prominent successors, like the Chicago Boys. My research focuses on how ECLA and its economists influenced the way in which economic ideas were shaped and disseminated in the region. My approach is necessarily biased towards the Latin American countries most influential in the creation o f the ECLA agenda. Much of the work o f ECLA was based upon the experience of the more industrialized Latin American economies, particularly Argentina, Chile, and Brazil, although its missions and training program, as well as its policy recommendations, such as integration, reached virtually every country in the region. (See chapters 3 and 5) ECLA’s effort to formulate a Latin American agenda was obviously based on the rather illusory concept that the multiple economic problems of Latin American countries could be addressed with a common regional standard.36 At the risk o f over­

35 Waldo Ansaldi and Fernando Calderon, La busqueda de America Latina. Teonas e instituciones en la construccion de las ciencias sociales latinoamericanas (Buenos Aires: Universidad de Buenos Aires, Facultad de Ciencias Sociales, 1991). 36 ECLA’s recommendations were largely based on the experience o f the more industrialized economies, including Chile, Brazil, and Argentina. As I explain in chapter 3, this bias led to

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generalization, I will maintain this regional perspective so as to capture and focus on ECLA’s intellectual culture and the deliberate attempt on the part o f the cepalinos to project their main ideas throughout the region. This story is not complete without accounting for ECLA’s unique position as a United Nations organization. ECLA had a stable financial base, paid high salaries, and maintained relative independence from individual government decisions, factors that allowed the institution to achieve a regional level of influence equalled only by the United States at the time.37 Without discounting the centrality o f ECLA’s mission, the “literature of celebration” suggests that ECLA was an entirely cohesive intellectual unit, a vision belied by the individuality of its principal economists. In treating ECLA and its economists as an institutional culture, I hope to transcend mere histories - memorias - o f the institution and those of its economists, which tend to address only the believers. In particular, in studying the biography of cepalino Jorge Ahumada, I document some o f the differences in the way individual ECLA economists perceived the path o f development that have been overlooked in traditional, Prebisch-centered histories of ECLA. In doing so, I ask why ECLA’s more outspoken cepalinos managed to attract such a following, while others who presented a different and sometimes more pragmatic message remained relatively unnoticed in the 1950s and early 1960s. This dissertation is organized as follows. In the next section, I elaborate on the imagery surrounding the cepalinos and their historical legacy. The remainder o f the

difficulties in countries such as Mexico, where local ECLA staff members felt that Prebisch failed to recognize domestic problems such as population growth, given differences from the Southern Cone.

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introduction provides a brief overview of Latin American economic history during ECLA’s most influential period, along with an examination o f the intellectual debate over the development strategy followed in the region from 1948 to 1964. In chapter 2 , 1 trace the intellectual and professional origins of the cepalinos as representative o f the first generation o f modem economists in Latin America, highlighting the features that distinguished them from their predecessors, and from more recent generations o f economists. The first professional economists in Latin America emerged out o f the period of the Great Depression, to take the place of lawyers and other intellectuals who had traditionally occupied positions in national economic policymaking. Available sources from several countries provide the material for a rich story of their transformation from “literary” to “professional” economists, and their close connection to the public sector. In this chapter, I am interested in highlighting what I have found to be important parallel developments in the history of economists as the basis for the study of their intellectual culture. I tell this story for its central role in the rise of the most significant cepalinos to new heights o f fame, bolstered by ECLA’s institutional prestige. Chapter 3 traces the institutional history o f ECLA from 1948 to 1964, based on the collective memory of the cepalinos,38 It is designed to examine the recruitment of ECLA’s original professional staff and to depict the atmosphere in which they worked. The chapter also describes the nature o f the cepalinos' intellectual exchange, along with the formation and projection of their collective mission, through collection of data, 37 The only other Latin American institution in the field o f economics with a regional focus was the Fondo de Cultura Economica, the Mexican publishing house that, through the publication o f E l Trimestre Economico, helped to regionalize the dissemination o f economics literature.

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planning missions to individual countries, publications, and a regional training program. Here I propose an interpretation o f the cepalinos ’ conception o f their purpose and their engagement with the institution as the foundation for the origin o f ECLA’s intellectual culture. The chronology of ECLA’s institutional evolution from 1948 to 1964 ends with the theoretical as well as the political events that led to the institution’s loss o f prestige, followed by the rise o f local, parallel organizations for social science research, starting in the 1970s. The course of ECLA’s own development and the evolution o f its main economic ideas are inseparable from the context o f international relations. The looming presence of the Cold War created an atmosphere of tension in which ECLA’s main ideas were bom, presented, and projected as a common front against an increasingly doctrinaire position on the part o f the United States. Among the cepalinos there was a larger, overriding sense o f the need to form a common defense against the so-called Center, which in their case was the United States. The widespread popularity o f the cepalinos, with their assertion of a regional Latin American agenda, was exceptional in an era of U.S. hegemony in the West. In the 1950s, the United States Department of State and its spokesmen vociferously promoted the doctrine o f free trade and anticommunism to counter ECLA’s emphasis on state-led industrialization and development.39 The reaction that U.S. antagonism inspired in the cepalinos would seem to justify a regional approach to inter-American relations for the

38 I am interested in the sociological dimensions o f ECLA’s own staff, borrowing from cepalino Osvaldo Sunkel, who wrote what he called a “sociology o f development thinking.” (“El desarrollo de la teoria del desarrollo,” p. 34). 39 Notably, for some cepalino participants and observers, the ECLA model represented a middle ground between socialism and capitalism. (Interview, Felipe Pazos, Caracas, 18 June 1994).

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period o f the 1950s and early 1960s, culminating with the Cuban Revolution. Chapter 4 examines the circumstances surrounding ECLA’s contentious relationship with the United States, and judges its effect on the cepalinos’’ character, particularly their assertive rhetoric and projection of ideas. Chapter 5 is intended to project a sense of the complexities o f the interaction among the cepalinos, which are often lost in the aura that surrounds ECLA’s most prominent members. This chapter presents the intellectual biography o f cepalino Jorge Ahumada, asking why Ahumada took an approach different from that o f some o f his more militant colleagues at ECLA. I show how he used “a different language,” much more understated than that of cepalinos such as Raul Prebisch, Anibal Pinto, or Juan Noyola.40 I describe how Ahumada, in emphasizing an export-based development policy, presented what would now be seen as a more realistic message, but one that had significantly less appeal at the height of import substitution industrialization. Given that Ahumada was arguing in favor o f policies that have since been overwhelmingly vindicated, this chapter seeks to explain what made his approach relatively unpopular in Latin America in the 1950s and early 1960s. Ahumada was certainly more palatable to the United States than some o f his colleagues because he avoided explicit theoretical criticism of the “Center.” Still, he embraced most of ECLA’s ideas and played a central role in the dissemination of development planning. After a brief period with the ECLA mission in Havana, Ahumada left his post as director o f the ECLA Training Program in 1960 to lead a development studies center in Venezuela. His intellectual and professional biography is useful in

40 Interview, Sergio Molina, Santiago, 2 November 1997.

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illustrating the fundamental importance o f the Cuban Revolution as a turning point in the history of ECLA in Latin America, in dividing staff loyalties, and effectively signaling the end o f the ECLA consensus by the mid-1960s. In his extensive essay on “Economic Ideas and Ideologies in Latin America Since 1930,” Joseph Love ends his discussion with dependency theory, preferring to focus on ideas that were most “authentically” Latin American.41 I would argue, on the other hand, that even though neoliberalism was essentially a transplanted idea, its dissemination took on a particularly Latin American character.42 The conclusion to the dissertation serves to draw comparisons between the ECLA doctrine and other economic ideologies in Latin America, particularly neoliberalism. My aim is to ask how the nature o f interaction among economists affected the evolution of economic ideas and intellectuals, and why it gave rise to fashions in economic ideologies that distinguish Latin America from other regions.

ECLA and the Literature of Celebration The existence o f multiple interpretations of Latin American economic development in the 1950s is perhaps the best reflection of the intensity of feelings, both positive and negative, surrounding the policies that ECLA advocated while in its prime. Much of the literature on ECLA was written by and for the cepalinos and their disciples, who retain a sense of nostalgia for the early years of the institution, when it was most influential. The celebratory aspect of the history of ECLA, together with the enduring

41 Love, “Economic Ideas and Ideologies,” pp. 393-460. 42 Valdes, Pinochet's Economists-, M att Moffett, “Seeds o f Reform: Key Finance Ministers in Latin America are Old Harvard-MIT Pals. Spreading the Market Gospel,” Wall Street Journal, August 1, 1994; Jorge I. Dominguez, ed., Technopols: Freeing Politics and M arkets in Latin Am erica in the 1990s (University Park: Pennsylvania State University Press, 1997).

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mythology o f its most prominent members, comes as fundamental background to this dissertation. The period of “euphoria” that Celso Furtado recalls, what those at ECLA remember as the height of their creativity, is closely associated with the powerful leadership o f Raul Prebisch as executive secretary o f ECLA from 1950 to 1963.43 The “cohesive personality” o f the institution and its members created a legacy which lasts until this day.44 ECLA also inspired a generation o f equally ardent opponents intent on countering their influence in the region.45 The prestige o f ECLA was the result o f a particular constellation o f forces, regional, international, and intellectual, in addition to the very economic conditions that the cepalinos sought to address. Four central themes in the history of ECLA’s institutional and intellectual culture have shaped this dissertation: the euphoric moment of ECLA’s peak, which came to form an essential part o f the historical legacy of the institution; the rhetorical militancy o f its more vocal members; the international environment that conditioned their rise to fame; and the adamant character of the majority of the cepalinos in defense o f their ideology. Obviously, all o f these factors are interrelated. Joseph Hodara refers to the early years at ECLA as “the charismatic beginning” {el inicio carismatico), in which Prebisch was present in all major institutional

43 Celso Furtado wrote o f the “climate o f euphoria” at ECLA in Santiago towards the end o f 1951, when its main economists possessed enormous creative freedom. [See chapter 9, “A Alegria Limpida de Criar,” in A Fantasia Organizada (Rio de Janeiro: Paz e Terra, 1985)]. 44 Hirschman, “Ideologies o f Economic Development, “ p. 13. 45 See Valdes, Pinochet's Economists', Foxley, Experimentos neoliberales en America Latina', Ocampo, “New Economic Thinking in Latin America.”

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initiatives.46 At its height, ECLA is said to have taken on an “ecclesiastic” tone, a reflection of the sense o f mission fostered among the original generation o f cepalinos. These economists engaged in “ la construction del edificio cepalino,” that is, the construction of ECLA as the intellectual centerpiece of Latin American economic development from 1948 to 1964.47 Many of the cepalinos displayed an outwardly militant personality in the language of their writings and declarations. Students and scholars o f ECLA universally refer to the first essay that Prebisch wrote as a consultant to ECLA, in 1949, as the “veritable ECLA manifesto.” 48 Celso Furtado called Prebisch “the great heretic” (o grande heresiarca).49 To outsiders, the political inclinations o f selected cepalinos colored the image of the entire institution. Some o f the cepalinos, including Juan Noyola, were Marxist in their theoretical approach, or, as in the case of Anibal Pinto, had even been members o f a Communist party.50 A number supported the Cuban Revolution by serving in the ECLA mission to Havana in 1959-60, and remaining in Cuba as economic advisors (prominent cases include Juan Noyola and Regino Boti, the latter a Cuban citizen). Along with such real and imagined leftist-leaning political convictions, the overriding quality was the

46 Joseph Hodara, Prebisch y la Cepal. Sustancia, trayectoria y contexto institucional (Mexico: El Colegio de Mexico, 1987), p. 28. 47 “CEPAL: Recodo ‘eclesiastico’,” in Hodara, P rebischy la Cepal, pp. 183-185; “Intervention del Ministro de Educacion de Chile, Ricardo Lagos, en el acto de Homenaje a la memoria del Senor Fernando Fajnzylber,” CEPAL, Santiago, 13 April 1992. 48 Hirschman, “Ideologies o f Economic Development,” p. 19. 49 “O Grande Heresiarca” is the title o f Chapter 7 in Furtado, A Fantasia Organizada, pp. 99110.

50 Celso Furtado recalled that “Noyola thought o f him self as Marxist in political terms, but he was the first to call upon conventional instruments o f economic analysis when problems specifically related to economics were being addressed.” Furtado added that Noyola was “fully trained as an economist and the two years he had spent working at the International Monetary Fund had vaccinated him against monetarism.” (A Fantasia Organizada, pp. 126-127).

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forceful rhetoric of the cepalinos, one that colored the image o f ECLA even after many had departed from the organization. The language o f the most vocal cepalinos defined what Albert Hirschman called ECLA’s “distinct and militant personality.”51 The more visible cepalinos cultivated this personality o f militancy, in their articles, and in their work outside o f ECLA. Examples are Anibal Pinto’s assertive contributions to Panorama Economico, a Chilean journal o f commentary on economic affairs, and Juan Noyola’s open defense o f the Cuban Revolution.52 They formed an intellectual environment that embraced those who questioned the existing international economic order, one that continued in the era of dependency theory in the 1960s.53 The aura o f defiance historically associated with ECLA has overshadowed the other important activities that ECLA undertook in its initial years. This dissertation is intended to distinguish the rhetorical and ideological aspects o f the ECLA legacy from its technical and theoretical contribution to development policy.

Regarding Pinto’s intellectual biography, see “Anibal Pinto Santa Cruz,” in Historias Personates. Politicos Publicas, ed. Munoz, pp. 87-88. 51 Albert O. Hirschman, “Ideologies o f Economic Development in Latin America,” p. 17. Joseph Love described the core o f the ECLA approach in more theoretical terms, but still noted the same sense o f deliberateness, and confrontation: “the terms-of-trade argument was a point o f departure for a structuralist school which would seek to restrict the applicability o f neo-classical economics to Latin America, and by extension to all underdeveloped countries.” (Love, “Economic Ideas and Ideologies,” p. 423). 52 Examples include editorials written, by Pinto as editor, such as “Canto claro en Caracas,” Panorama Economico, 7, no. 96 (26 March 1954), pp. 108, 116; “Viraje de EE.UU. respecto a America Latina,” Panorama Economico 12, no. 196 (October 31, 1958), pp. 449-450; and Anibal Pinto and Osvaldo Sunkel, “Economistas latinoamericanos en los paises desarrollados,” Revista de Economia Latinoamericana (Banco Central de Venezuela) 7 (July-September 1962): 31-45. See also Juan F. Noyola, L a economia cubana en los prim eros anos de la revolucion y otros ensayos (Mexico: Siglo XXI, 1978). 53 Besides Prebisch, the “great heretic,” Paul Rosenstein-Rodan, him self a heretic o f sorts, who pioneered the idea o f industrialization among the less developed countries, came to ECLA as a consultant after being demoted at the World Bank. (Interview, Alexander Ganz, Cambridge, MA, 30 September 1997).

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Latin American Economic Development and its Controversies: 1945-1964 After 1945, the world experienced a myriad o f phenomena and processes of unprecedented magnitude and speed, both in politics and in macroeconomics, as well as in technology and in its applications.54 Recent economic histories of the post-World War II period in Latin America overlook the 1950s, as if to indicate that it is sufficient to address this decade in passing. Economic interpretations o f this period tend to analyze the past from the point of view of policy, as a prelude to recent reforms.55 I would argue that the enormous structural changes that took place in this decade merit greater attention. The optimism o f the era was also unprecedented. Furthermore, the long-term perspective of the ECLA economists was entirely lost in the atmosphere of crisis that arose in the aftermath o f the debt crisis o f the 1980s.56 In addition to the experience of extraordinary economic growth, the 1950s represented an exceptional era of theoretical ferment among Latin American economists, perhaps tinged with an exaggerated optimism, but also displaying a unique dynamism.57 This was a period in which Latin America “found itself’ economically, when economic development became a new reality, one to be articulated, described and projected.38 It is

54 Ansaldi and Calderon, La busqueda de America Latina, p. 16. 55 Ricardo Ffrench-Davis, Oscar Munoz and Jose Gabriel Palma, “The Latin American Economies, 1950-1990,” in Leslie Bethell, ed., The Cambridge History o f Latin America, vol. VI (Cambridge: Cambridge University Press, 1994), pp. 159-252, and Vittorio Corbo, Development Strategies and Policies in Latin America, Occasional Paper no. 23, International Center for Economic Growth (San Francisco: ICS Press, 1992). 55 Urquidi, “Cuestiones fundamentales,” p. 1097; Ocampo, “N ew Economic Thinking in Latin America,” p. 176. 57 Dlaz-Alejandro, “The 1940s in Latin America,” (1982) pp. 36-37. 58 H.W. Arndt, “ Economic Development: A Semantic History,” Economic Development and Cultural Change 29, no. 3 (April 1981), pp. 457-466; Urquidi, “Cuestiones fundamentales,” p. 1098.

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unlikely that this particular constellation will reappear in a regional context, given that Latin American centers o f economic thought have now shifted to national spheres.59 The period 1945 to 1960 has suffered from relative neglect among economic historians of Latin America. At the same time, the postwar era is subject to conflicting interpretations. It cannot be denied that rapid and dramatic change was taking place both economically and socially. Albert Hirschman compared the postwar years to “les trente glorieuses,” the era o f sustained economic growth in Europe following World War II.60 Many economic historians of the region, however, interpret the achievements o f the 1950s as a mere interlude between World War II and the 1960s, and instead dwell on Latin A merica’s so-called “missed opportunity,” when, in a period of expanding world markets, the region should have been actively promoting exports rather than encouraging import substitution.61 Moreover, it remains puzzling why critics of the period and contemporaries o f ECLA remain deaf to voices of figures such as ECLA economist Jorge Ahumada, who was preaching the export doctrine when it was supposedly being overlooked. The cepalinos themselves and many of their contemporaries have argued that the 1950s were a fundamental period of structural change that irrevocably altered the nature

59 Ocampo, “N ew Economic Thinking in Latin America,” pp. 172-173. 60 Hirschman, “ The Political Economy o f Latin American Development,” p. 7. Ricardo FfrenchDavis and O scar Munoz reflect, similarly, on the financial crisis o f the 1980s as “the end o f a long period o f expansion which - with some fluctuations - began in the postwar period and lasted until the beginning o f the 1980s.” (“El desarrollo economico de America Latina y el marco intemacional: 1950-86,” Coleccion Estudios CIEPLAN 23 (March 1988), p. 13). 61 Bulmer-Thomas, Economic History o f Latin America-, Corbo, “Development Strategies and Policies in Latin America,” p. 7.

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o f the Latin American economies after World War II.62 State-led enterprises in basic industries such as iron and steel, energy and communications brought about a major transformation in the Latin American economies.63 Furthermore, this period was the culmination o f remarkable institutional development dating from the 1930s, with the formation o f central banks and national development planning institutions (corporaciones de fomento). National and regional “technocracies” were formed to staff growing ministries, and there was a heightened level o f discussion of economic issues.64 Increasing exposure to ideas from the developed countries also took place through enhanced professional connections starting in the 1940s.65 Rather than debate the efficacy o f ECLA-influenced policies (given the extensive literature on the subject), it is perhaps more interesting to try to understand the vision of the economists of the postwar ECLA generation and the particular conditions that shaped their interpretation of development.66 The historical experience of the Great Depression and World War II profoundly marked the outlook of the generation of economists who

62 As Alexander Ganz, one o f the original cepalinos, explained, “there are those who claim that Latin America’s industrialization was premature, but I disagree” ; obviously, his colleagues would not have disputed this argument. (Personal correspondence, Alexander Ganz to author, 11 August 1992). 63 Sergio M olina argued that the Chilean development corporation, Corfo, founded in 1939, “has had an enormously positive effect on the development o f the country.” (See “ Sergio Molina Silva,” and also “Flavian Levine Bowden: La economia como suefio,” in Historiaspersonates. Politicospublicas, ed. Oscar Munoz (Santiago: CIEPLAN/Editorial Los Andes, 1993). 64 An illustration is the journal E l Trimestre Economico, published by the Fondo de Cultura Economica, which attained wide circulation throughout Latin America in the 1940s; another is the first conference o f Latin American central bankers, held in Mexico City in 1944. 65 An example was Harvard’s Littauer School o f Public Administration (now the John F. Kennedy School o f Government), which during the 1940s admitted two Argentine students each year, sponsored by the Central Bank o f Argentina (John F. Kennedy School o f Government, The John F. Kennedy School o f Government. The First Fifty Years (Cambridge, MA: Ballinger Publishing Company), p. 29.

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joined ECLA in the early 1950s. The first major theories that ECLA articulated focused entirely on avoiding another crisis of the magnitude o f the Depression by overcoming dependence on primary exports and imported manufactured goods. The prevailing feeling among ECLA economists was that continued dependence on the export o f primary products would condemn Latin American economies to instability and continued deterioration in the terms o f trade.67 Overall between 1950 and 1965, the Latin American countries experienced sustained annual economic growth rates above 5 percent, growing even faster than the industrialized Center.68 The dramatic transformation o f countries that focused on import substitution industrialization is evident in that by the late 1960s, in Argentina, Brazil, Chile, Colombia, Mexico and Uruguay, the share of manufacturing in GDP had reached levels common in developed countries. In some cases, most markedly in Brazil and Mexico, industrialization moved away from simple consumer goods to intermediate goods such as iron and steel and chemicals.69 Many o f the criticisms leveled at industrialization in Latin America during the 1950s relate not so much to policy prescriptions but to the way in which policies were carried out. Victor Bulmer-Thomas criticized the “inward-looking model” of the

66 See Victor Bulmer-Thomas, “W ar and the New International Order,” and “Inward-Looking Development in the Postwar Period,” in Economic History o f Latin America, pp. 238-275 and 276-322 respectively; Fitzgerald, “ECLA and Economic Doctrine,” p. 97. 67 Ffrench-Davis and Munoz, “El desarrollo economico de America Latina,” pp. 17-20. 68 Ffrench-Davis, Munoz and Palma, “The Latin American Economies,” pp. 188-189; Iglesias, Reflexiones, p. 29. One o f Latin America’s reference points during the 1950s was the performance o f the socialist economies. Jorge Ahumada, for example, writing in 1960, cited rapid growth rates in the Latin American economies between 1945 and 1960, but noted that they were surpassed by dramatic levels o f expansion in the socialist economies. (Jorge Ahumada, “El desarrollo economico y los problemas del cambio social en America Latina,” Naciones Unidas, Consejo Economico y Social, 20 November 1960 (ST/ECLA/CONF.6/L.A-1), p. 5).

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countries where industrialization had already begun during the First World War, or earlier.70 In the 1950s, protection extended to industries was “ad hoc, often inconsistent, and geared to the defense of the balance of payments rather than the needs o f industry.”71 Similarly, Ffrench-Davis and Munoz cite “the use of poorly refined and incoherent mechanisms to regulate imports,” including “a great proliferation o f non-tariff restrictions.” The more industrialized Latin American countries could not compete in world markets because their goods were not produced as cheaply as those o f other countries. Exchange rates were also often stubbornly overvalued, effectively discouraging the export of primary products and compounding disincentives for export diversification.72 One of the most troubling trends in Latin American industrialization in the postwar period was that, contrary to initial expectations, the import needs o f countries actually increased.73 Many countries, including the smaller economies, successfully substituted consumer goods through the development of manufacturing, but most countries still depended heavily on imports of intermediate and capital goods in the early 1960s. Technology still had to be imported from abroad. Continued reliance on imports, together with a stagnant export sector, produced serious disequilibria in the balance of payments. In hindsight, the overwhelming emphasis on import substitution industrialization now looks irrational, since Latin American countries pursued this policy

69 Bulmer-Thomas, Economic History o f Latin America, p. 283. 70 These countries are: Argentina, Brazil, Chile, Colombia, Mexico and Uruguay. 71 Bulmer-Thomas, Economic History o f Latin America, p. 278. 72 Ffrench-Davis and Munoz, “El desarrollo economico de America Latina,” p. 21; BulmerThomas, p. 284.

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during what turned out to be one of the longest continuous periods o f expansion in the world economy.74 Inflation also became a serious problem for Argentina, Brazil and Chile in the 1950s, generating extensive debate over its causes, with less successful actual policy responses. Each side on the ideological battlefield stood rigidly by its position on the issue. Structuralists had little confidence in the efficacy o f monetary, fiscal, and exchange rate policies to counter inflation; rather they argued that inflation was primarily the result o f “bottlenecks” on the supply side, for example, the inability o f domestic agricultural production to keep up with growing demand from an expanding urban population, and an insufficient supply o f foreign exchange from primary exports to pay for needed imports o f machinery and intermediate goods for industrialization.75 Monetarists, in turn, insisted that the fundamental cause o f inflation lay in excess money supply. In the 1950s, the International Monetary Fund directed some of the first postwar stabilization plans in Latin America, making external financing contingent upon their acceptance. These prescriptions generated violent debate over their appropriateness for the Latin American economies.76 On the one hand, structuralists were viewed as ideological due to their advocacy o f radical changes in the structure o f the domestic economy (such as land reform), and for that matter, in the world economy (as in

73 Ffrench-Davis and Munoz, p. 18. 74 Victor Bulmer-Thomas rules out any favorable aspects o f the Latin American development model as it was applied in the 1950s and early 1960s: “The distortions associated with the model have become legendary, and its achievements have been dismissed.” {Economic History o f Latin America, pp. 285, 288, 298). 75 The fundamental analyses o f inflation that gave structuralism its name are Juan Noyola, “El desarrollo economico y la inflacion en Mexico y en otros paises latinoamericanos,” Investigacion Economica 4th trim ester (1956): 602-48, and Osvaldo Sunkel, “La inflacion chilena - un enfoque heterodoxo,” E l Trimestre Economico, October-December 1958.

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commodity price agreements). On the other hand, monetarists were criticized as extremely narrow in their perception o f inflation as an exclusively monetary phenomenon, and for the recessionary effects of the policies they advocated.77 Overall, the share o f agriculture in total GDP in Latin America dropped steadily starting in the 1950s, particularly in the larger, more advanced economies such as Brazil and Mexico. This largely reflected the expansion of the relative weight o f the industrial sector, but also the failure of agricultural productivity to show significant gains. One of the major problems associated with the intensive application o f import substitution industrialization policies was the bias against agriculture that resulted from prevailing exchange rates and terms of trade. The cepalinos later argued that the policies they advocated were not deliberately designed to overlook agriculture. Contemporary observers, however, argue that import substitution was pursued too quickly, to the detriment o f the agricultural sector.

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The less industrialized Latin American countries continued to rely primarily on exports o f primary products, displaying “the classic features o f export-led growth economies, in which output, income, employment and public revenue were highly correlated with the fortunes o f a handful of primary-product exports.”79 The

76 Ffrench-Davis and Munoz, “El desarrollo economico de America Latina,” p. 20. 77 Albert O. Hirschman, “The Social and Political Matrix o f Inflation: Elaborations on the Latin American Experience,” in Essays in Trespassing. Economics to Politics and Beyond (Cambridge: Cambridge University Press, 1981), pp. 177-207. 78 Ffrench-Davis, Munoz and Palma argue that “from the point o f view o f comparative advantage, the rapid reduction in the relative size o f the agricultural sector in countries such as Argentina and U ruguay... is difficult to justify.” (“The Latin American Economies, 1950-1990,” in The Cambridge H istory o f Latin America, ed. Leslie Bethell (Cambridge University Press, 1994), pp. 193-195. A cepalino, Victor Urquidi argues more defensively that “ it is erroneous to assume that ECLA neglected the agricultural sector” (“Cuestiones fundamentales,” p. 1106). 79 Bulmer-Thomas, p. 289.

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industrialization that did occur supplied mainly consumer goods. Scattered industrialization attempts were weak and short-lived. Wholesale import substitution for these economies meant risking sharp deterioration in the balance of payments, the exhaustion o f foreign exchange reserves, and acute inflation.80 Still, the influence of ECLA during the 1950s was pervasive. As Bulmer-Thomas pointed out, the “high-cost, inefficient industries” that appeared with selected import substitution measures were frequently profitable, and even brought support from U.S. multinationals with investments in Latin American industries that benefited from favorable tariff conditions.81 Most policymakers were still convinced that export-led growth failed to promise a stable flow of earnings: by 1959 and 1960, it was clear that the post-war export boom in certain Latin American economies had come to an end; and growth rates in Venezuela, Mexico, Nicaragua, El Salvador and Ecuador were the lowest recorded since the end of World War II.82 The Korean War gave the illusion o f buoyant export prices, but in its aftermath, export earnings deteriorated, and countries depending on foreign exchange to pay for import substitution industrialization saw their balance of payments problems further aggravated.83 One o f the main problems confronting both more industrialized and externally oriented countries involved high production costs, a result of limited production capacity associated with small local markets, together with the appearance of monopolies and oligopolies in the industrial sector. In order to address these problems, towards the late

80 Ibid, p. 290. 81 Ibid, pp. 296-297. See also Sylvia Maxfield and James H. Nolt, “Protectionism and the Internationalization o f Capital: U.S. Sponsorship o f Import Substitution Industrialization in the Philippines, Turkey and Argentina,” International Studies Quarterly 34 (1990): 49-81. 82 Jorge Ahumada, “El desarrollo economico y problemas del cambio social,” p. 29.

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1950s, ECLA explicitly endorsed the idea of integration both in Central America and among the South American economies.84 However the logistical and political difficulties of implementing such a plan proved difficult, under the dual pressures of U.S. opposition and contending national political agendas. In 1958 the Central American countries ratified the treaty for the Central American Common Market, and the Latin American Trade Association (ALALC) was formally established in 1960. The United States moved to counter plans for the Central American Common Market on the grounds that it would restrict free enterprise.85 In the case of Latin America, binding agreements proved extremely difficult to attain because of the lack of consensus.86 Selective tariff reform for export promotion, in Brazil, Colombia and Chile, did not begin to take place until the mid to late 1960s, and even then, regional integration failed to fulfill its initial expectations.

The Social Costs of Industrialization The protests experienced during Vice President Nixon’s tour of South America in May and June 1958, followed by the radicalization o f the Cuban Revolution and its regional implications, reflected growing social tensions directly associated with economic transformation in the region. As a result o f a rapid fall in death rates along with a slower decline in fertility, Latin American population growth rates increased over the postwar period, and in the 1950s were among the highest in the world.87 Furthermore, an

83 Fishlow, “La ciencia economica,” p. 35. 84 Ffrench-Davis and Munoz, “El desarrollo economico de America Latina,” p. 22. 85 Victor L. Urquidi, “Incidentes de integracion en Centroamerica y Panama, 1952-58,” June 1998 (draft, for publication in Revista de la Cepal, 50th anniversary issue, December 1998). 86 Urquidi, “Cuestiones fundamentales,” pp. 1104-1105. 87 “The republics o f Latin America were in the midst o f a demographic explosion.” By the 1950s annual average population growth rates had surpassed 2.5 percent in 13 Latin American countries (Bulmer-Thomas, Economic History o f Latin America, p. 308). See also Ahumada, “El desarrollo economico y cambio social de America Latina,” p. 6.

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enormous shift took place in population between rural and urban areas: while in 1940, less than 40 percent o f the Latin American population lived in concentrations o f over 1,000 to 3,000, by the late 1960s, this figure had risen to 60 percent.88 In the 1950s, almost half o f the increase in the rural population emigrated to urban areas, effectively “a massive transfer o f the rural population to the cities.”89 Underemployment and unemployment were no longer limited to rural areas, and now became much more visible in urban settings. As early as 1960 there was already concern over increasing income inequality.90 ECLA economists noted as early as 1955 that the question of inequality and mounting social tensions were coming to the fore, and asserted that “psychological and social factors of decisive importance to Latin America have made it imperative to accelerate the rate of growth.”91 Over the course of the 1950s, urbanization and the spread o f education and greater facility o f communications led to “an awakening in the popular conscience,” heightened by awareness of economic growth in the socialist economies and, in selected cases, the cultivation o f democratic rhetoric.92 The social transformation that had accompanied economic growth was taking place much more

88 Bulmer-Thomas, pp. 310-311. 89 Ffrench-Davis and Munoz, “El desarrollo economico de America Latina,” p. 15. 90 Ahumada, “El desarrollo economico y cambio social de America Latina,” p. 43; BulmerThomas, pp. 308-322. 91 United Nations, A n Introduction to the Technique o f Programming. A study prepared by the Economic Commission for Latin America (New York: United Nations, Department o f Economic and Social Affairs, 1955), p. 11. 92 Jorge Ahumada expressed the growth o f social tensions as follows: “While on the one hand the social and political dynamic is leading to an ever more effective participation o f the majority in the political process, economic development is not opening up equivalent access to economic power.” (“El desarrollo economico y cambio social de America Latina,” p. 43).

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rapidly than had been the case in Europe and North America, a result of the immediate transfer of technologies and the dissemination of education and mass communication. In 1963, Prebisch published a treatise advocating measures to improve income distribution, including an explicit endorsement of agrarian reform.93 The recognition of problems with the import substitution model and evidence of social inequities against the backdrop o f the Cuban Revolution signaled the end of ECLA’s optimism. Structuralism’s more radical critique, in the form o f dependency theory, suggested that countries such as those in Latin America could not guarantee their own development by following the capitalist path o f the industrialized Center.94 Rather, relations between rich and poor countries were likely to perpetuate the so-called development o f underdevelopment.95 The turn towards military and authoritarian regimes, starting in the mid 1960s in Brazil (1964) and Argentina (1966), the U.S. invasion of the Dominican Republic in 1965, and the overthrow of Allende in Chile in 1973, ended Latin American reformist experiments, and further discredited the ECLA model, to be followed by a radically new market-based rhetoric by the 1970s.96

Conclusion Victor Urquidi, a former cepalino, wrote in 1983 that after a forty-year career dedicated to problems o f Latin American development, he was disappointed that so many questions still remained to be solved.97 In the 1960s and early 1970s, the optimism that had reigned at ECLA was overshadowed by a more “ambivalent” perspective towards the 93 Raul Prebisch, H acia una dinamica del desarrollo latinoamericano (Montevideo, 1967; first published in 1963), cited in Love, “Origins o f Dependency Analysis,” p. 146. 94 Sunkel, “Desarrollo de la teoria del desarrollo,” p. 42. 95 Love, “Origins o f Dependency Analysis,” p. 158. 96 Ibid, pp. 156-157.

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prospects o f development, far less hopeful than that of two decades before.98 Despite rapid growth rates, what would become gross social inadequacies were already apparent in the 1970s. Income distribution was no better, and in some cases, appeared to have deteriorated since the 1930s and 1940s.99 Without necessarily exalting the cepalinos as they have done so well themselves, I propose that we examine their moment o f optimism, one that now looks so unique.

97 Urquidi, “Cuestiones fundamentales,” p. 1097. 98 Sunkel, “Desarrollo de la teoria del desarrollo” , p. 40. 99 Comprehensive data on income distribution in Latin America did not appear until the 1960s; thus all evidence prior to this time remains more anecdotal than scientific. (Urquidi, op. cit., p. 1109).

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Chapter 2 Envisioning Economists in Latin America: the 1930s and 1940s Following the Great Crash of 1929, Latin American intellectual leaders predicted the region’s potential for modernization. They were passionate about the promise of industrialization in Latin America and convinced o f the need to improve the training o f professionals for national development goals. Support for national economic development and the optimism prevailing during World War II and immediately afterward created a new and unprecedented demand for professional economists, a demand closely connected to industrialization and the simultaneous institutionalization of economics programs at universities in Mexico, Argentina, Brazil, and Chile. The ways in which Latin America’s first professional economists became literate in their discipline were often unconventional but nevertheless successful, against sometimes difficult odds. Between 1930 and 1948 economists progressively defined their role by demanding more formalized training, finding opportunities for study abroad, disseminating economics literature in Spanish and Portuguese, and increasing regional exchanges and communication. It is highly significant that in addition to their particular national experiences, they shared common regional experience in training, professional trajectories, and international exposure. While histories of individual faculties of economics and biographies of economists have been documented, the simultaneous development in Latin America o f the first generation of professional economists has not been studied collectively.1 These parallel histories reflect a growing regional sense of

1The literature on the history o f the economics profession is most extensive in the case o f Brazil. Recent examples are the illustrative Ciro Biderman, Luis Felipe L. Cozac and Jose Marcio Rego, eds., Conversas com Economistas Brasileiros (Sao Paulo: Editora 34, 1996), and Marly Silva da Motta, “Economistas: Intelectuais, Burocratas e Magicos,” in Engenheiros e Economistas: Novas 33

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professional identity and provide clues to the convergence that took place at ECLA in 1948.

The Economic Perspective of Latin America, 1914-1948 A modem economic consciousness first appeared in Latin America as a result of World War I and the Great Depression, to be fully defined during the Second World War. The isolation o f Latin America during the war caused a burst of industrialization in several of the larger Latin American countries, “improvised and spontaneous,” and marked a significant transformation in the public conscience. While monetary policy, income from exports, and foreign investment had stimulated a limited degree o f industrialization earlier, local supplies o f manufactures to domestic markets in wartime brought a “psychological change of immeasurable value, that of introducing, in the minds of many, the possibility of industrial development in Latin America.”2 The collapse of the international trading and financial system during the Great Depression thoroughly discredited Latin America’s traditional export-led model of

Elites Burocratas, ed. Angela de Castro Gomes (Rio de Janeiro: Funda^ao Getulio Vargas, 1994), pp. 82-115. Victor Diaz A rciniegas’ Historia de la Casa. Fondo de Cultura Economica, 19341994 (Mexico: Fondo de Cultura Economica, 1994) covers the early history o f economics in Mexico as background to the birth o f the Fondo de Cultura Economica; for a slightly later period see Francisco Rodriguez Garza, “La ensenanza de la economia en el periodo de entreguerras,” Reporte de Investigacion Serie II no. 197, Departamento de Economia, Universidad Autonoma Metropolitana, Unidad Azcapotzalco, Mexico, February 1994. In the case o f Chile, Oscar Munoz Goma, ed., Historias Personates. Politicos Publicas (Santiago: Editorial Los Andes & CIEPLAN, 1993), includes interviews with economists and other professionals who participated in the foundation o f the first department o f economics at the University o f Chile and who were also pivotal in the country’s major state-led industrialization efforts. 2 Adolfo Dorfman, El desarrollo industrial de America Latina (Santa Fe: Imprenta de la Universidad Nacional del Litoral, 1942), pp. 23-25. Mexican economist Javier Marquez characterized this general sentiment as la deseada industrializacion, in essence, industrialization “as our common goal.” (Javier Marquez, review o f Eduardo Villasenor, Ensayos interamericanos: Rejlexiones de un economista (Mexico: Ediciones Cuadernos Americanos, no. 8, 1944), in E l Trimestre Econdmico 11, no. 4 (January-March 1945), p. 737).

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growth.3 It also led to the continuation o f policies that stimulated further industrialization.4 The Depression was perhaps the single most important influence on this generation o f economists. It was, for example, the experience that led Pedro Aguirre Cerda to found the Faculty o f Economics at the University o f Chile in 1935, with the conviction that industrialization was essential for “Chile to abandon its isolation and despondency as a nation exclusively dependent on the export of primary materials.”5 Latin America in the 1940s enjoyed unprecedented industrial expansion, and restrictions on capital imports during the war indicated that the region needed to produce these as well as consumer goods. The United States intensified economic collaboration with Latin America during the war, in some cases fostering the development o f strategic industries.6 Latin American governments continued to expand their part in the domestic economy, with an even more deliberate approach to industrialization, broader provision of public services, and greater investment in defense.7 By the late 1940s, however, Latin American economic problems had attained a new degree o f urgency. Adolfo Dorfman, an Argentine economist at the United Nations 3 Carlos Diaz-Alejandro, “The 1940s in Latin America,” in Economic Structure and Performance. Essays in Honor o f Hollis B. Chenery, ed. Moshe Syrquin, Lance Taylor, and Larry E. Westphal (New York: Academic Press, 1984), p. 345. 4 The Depression in Latin America resulted in what Carlos Diaz-Alejandro called an “exhilirated creativity” in economic policy (“Latin America in the 1930s,” Center Discussion Paper No. 404, Economic Growth Center, Yale University, May 1982, p. 46). Also see Victor Bulmer-Thomas, The Economic History o f Latin America Since Independence (Cambridge: Cambridge University Press, 1994), p. 225; Dorfman, E l desarrollo industrial de America Latina, pp. 23-24. 5 “Homenaje a Pedro Aguirre Cerda. Discurso pronunciado por don Rafael Fuenzalida, Decano de la Facultad de Ciencias Economicas,” Economia, Revista de la Facultad de Ciencias Economicas de la Universidad de Chile 14, nos. 46-47 (M ay 1954), p. 2. 6 An example is Volta Redonda, Brazil’s first government-sponsored steel plant, built with U.S. support, which went into production in 1946. (Biderman, et al., eds., Conversas com Economistas Brasileiros, p. 16; Maria da Conceifao Tavares, “The Growth and Decline o f Import Substitution in Brazil,” Economic Bulletin fo r Latin Am erica 9, no. 1 (March 1964), p. 16).

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who later joined ECLA, published an article in the Quito newspaper Ultimas Noticias in 1948 summarizing the region’s most serious problems. He noted the pressing need to “combat inflation, ensure the fulfillment o f plans for economic development and industrialization, improve transportation systems, modernize agriculture, [and] raise living standards.”8 By the end of World War II Latin Americans were describing the region’s problems with exceptional authority. Furthermore, the industrialization that had taken place over the past two decades led to a new self assurance among economic policymakers. Cuban economist Felipe Pazos recalled that Latin American economic ideas following World War II reflected a “strong element o f confidence in.. .the destiny of our region, in our future. It was an optimistic outlook.”9 In 1948, Mexican economist Eduardo Villasenor openly declared that “Latin American economic development is an historical inevitability.” 10 State support for industrialization was already accepted practice in the larger Latin American economies, and for some leaders industrialization had become the solution to the social, economic and political problems of nations of the region, “the appropriate means to increase the average wealth of the population of the

7 Rosemary Thorp, “The Latin American Economies in the 1940s,” in Latin America in the 1940s. War and Postwar Transitions, ed. David Rock (Berkeley: University o f California Press, 1994), pp. 125-127; Diaz-Alejandro, “The 1940s in Latin America,” pp. 342, 346, 351. 8 Adolfo Dorfman, “La Comision Economica para America Latina y los urgentes problemas de la economia continental,” Ultimas Noticias, June 10, 1948, in “Transmitting o f Quito Newspaper Articles Concerning ECLA Meeting in Santiago, Chile,” July 15, 1948 (NARA 501 BD/ARA/71548). 9 Felipe Pazos, “Cincuenta anos de pensamiento economico en la America Latina,” in Politica de desarrollo economico. Coleccion de articulos, ponencias e informes, 1949-1984 (Caracas: Banco Central de Venezuela, 1985), p. 522. 10 Eduardo Villasenor, “El Banco Interamericano,” El Trimestre Economico XV, no. 2 (JulySeptember 1948), p. 191.

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country, and to give to the individual, liberated from material needs...the means to fully develop personal freedom as well as a means to national greatness.” 11 By the end o f World War II, visions of economic development carried powerful political significance. In speaking to the School of Economics at the National University of Mexico in 1947, engineer and economist Gonzalo Robles declared “a New Era for Latin America.” Industrialization in the 1940s, he said, was the most important means of “affirming or defining a national character.” 12 Industrialization would solve multiple problems, and served to promote “economic growth to improve the fate of the great mass of the deprived and the backward who represent a large proportion o f the population of...our countries...to eliminate the problems inherited from Colonial times.” 13

The Appearance of Institutions for Economic Policymaking One o f the most concrete expressions of the drive for development in Latin America was the creation of state-sponsored institutions for the promotion of industry. A Latin American survey published in 1947 noted that over half of the countries studied had established industrial development banks.14 While the larger countries had seen more substantial organization of such institutions, each of them showed some evidence of deliberately organized development policy.13 Notable efforts included the Chilean

11 Gustavo Polit, review o f Torcuato di Telia, Problemas de lapostguerra (Buenos Aires: Libreria Hachette, 1943) in El Trimestre Economico 13, no. 3 (October-December 1946), p. 560. 12 Gonzalo Robles, “Sudamerica y el fomento industrial,” Conferencia pronunciada en la Escuela Nacional de Economia (Mexico), El Trimestre Economico 14, no. 1 (April-June 1947), p. 4. 13 Ibid, pp. 1-2. 14 Ibid, pp. 1, 7. 15 An ECLA report listed public agencies for industrial promotion and the year they originated for the following countries: Argentina (Banco Industrial, 1944); Brazil (Banco Nacional do Desenvolvimento Economico, 1952); Chile (CORFO, 1939); Colombia (Instituto de Fomento Industrial, 1940); Mexico (Nacional Financiera, 1934); Peru (Banco Industrial, 1936); Venezuela (Banco Industrial de Venezuela, 1937; Corporacion Venezolana de Fomento, 1946). See Economic Commission for Latin America, The Process o f Industrial Development in Latin America (New York: United Nations, 1966), p. 173.

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Development Corporation (Corporation de Fomento de la Production - Corfo), established in 1939 in order to secure financing necessary for industrial development and agricultural mechanization.16 Already by 1947, the governments of all “medium sized and large Latin American countries,” including Chile, Peru, Colombia, Argentina, Brazil, Mexico, and Venezuela, had deliberately sought to foster the development of a basic iron and steel industry.17 State institutions were critical in stimulating the first large-scale industrial development in Latin America by providing the private sector with credit and capital contributions on favorable terms. Because industrial policy involved a significant planning component, these institutions also became involved in the training of a new cadre of professionals dedicated to the management of industrial development. Their aim was not “rigid intervention,” but “to teach, advise and guide” so as to “to accelerate the rate o f development” led by private initiative, particularly in the industrial sector.18 These institutions functioned in the “style o f private firms, to act as intermediaries between national and foreign governments, and between national governments and private interests” capable o f carrying out the research and planning necessary for industrialization. Their growth created a demand for professionals who were literate in economics and capable of assuming responsibilities of leadership in public management. Related institutions also contributed to the demand for economists, including central

16 Interview with Alvaro Marfan, in Munoz, ed., Historias Personates. Politicos Publicas, p. 43. The inspiration for Corfo came from both circumstantial causes and long-term development goals: the earthquake that destroyed Concepcion; government initiative to overcome “the chronic state o f depression which has befallen the country, full o f aspirations for development, due to the loss o f its markets for its main exports” ; and the fact that, according to Robles, Chilean geography lent itself easily to planning. (Robles, “Sudamerica y el fomento industrial,” p. 3). 17 Robles op. cit., pp. 3-4, 16. 18 Dorfman, El desarrrollo industrial, pp. 98-99. 38

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banks, several of which were organized in the 1920s, and ministries devoted to specific economic sectors, such as agriculture and finance. Along with this growing economic bureaucracy came support for the training of economists as well as the first regional discussions of economic policy.19

Economics in Latin America in the 1930s and 1940s The teaching o f economics has a very peculiar history. In the beginning it was limited to politicians and philosophers, then lawyers, and most recently accountants.20 In the words o f those who first practiced the profession, economics was originally more “literary” than theoretical.21 In Chile, as in most other Latin American countries, economics was originally the domain o f engineers and lawyers, and before the Faculty of Economics was founded in 1935, public officials substituted their “personal talent” for lack of adequate theoretical preparation.22

19 In the 1940s, the sponsorship of training included the Banco de Mexico, which financed graduate training abroad for nearly 50 students, and the Chilean Fundacion Pedro Aguirre Cerda, which provided scholarships for domestic and foreign training for over 100 Chileans. (Robles, “Sudamerica y el fomento industrial,” pp. 2-3, 6). In Brazil, however, it was not until the mid1960s that economists established formal institutional ties with the international economic community. (Raul Ekerman, “A Comunidade de Economistas do Brasil: Dos anos 50 aos dias de hoje,” Revista Brasileira de Economia 43, no. 2 (April-June 1989), p. 116). 20 Daniel Cosio Villegas, “Errores y soluciones en la ensenanza de las Ciencias Economicas,” Revista del Banco Central de Venezuela (January-February 1948), reprinted in Revista de la Facultad de Ciencias Economicas (Universidad de Buenos Aires), 1, no. 6 (August 1948), p. 840. 21 “Until then,...personal experience of businessmen and public officials was used to solve economic problem s....W hile experience has proven that public officials are excellent administrators, they have substituted personal talent for their lack o f theoretical grounding.” (“ Informaciones de la Asociacion de Ingenieros Comerciales. Discurso pronunciado por el sefior Ceppi M. de L. en la manifestacion efectuada con motivo de celebrarse el ‘Dia del Ingeniero Comercial’, el martes 10 de julio, con asistencia del sefior Pedro E. Alfonso, Ministro de Economia; don Guillermo del Pedregal, Decano de la Facultad; don Enrique Marshal, Secretario General de la Universidad de Chile; don Rudecindo Ortega, Senador de la Republicay numerosos profesores, senoras, miembros de la Asociacion, alumnos, etc.” Economia (Santiago) 6, nos. 1516 (August 1945), pp. 112-113). See also Felipe Pazos, “Influencia de la Escuela de Ciencias Economicas en el desarrollo economico del pais,” Discurso de apertura del afio academico 19551956 [Santiago de Cuba: Universidad de Oriente, (1955?)], p. 7. " As further evidence o f this situation, Octavio Gouvea de Bulhoes, one o f Brazil’s first economists, recalled that “[t]he general rule at this time was that everyone was self-taught.”

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Economics remained the province o f amateurs until the early 1940s.23 Moreover, overwhelmingly, the first economists were self-taught or drawn from other fields. Modem economics was pioneered in Argentina as early as the 1920s, but suffered from serious deficiencies. Writing in 1927, Raul Prebish, professor at the University o f Buenos Aires, dismissed an article by an author he called an “experimental economist” who did not meet the minimum standards o f rigor necessary for basic research.24 In Brazil until the mid 1940s, the study of economics was possible only in law schools or engineering departments.25 Political economy was offered from a legalistic approach in law schools, while in colleges o f engineering, economics was taught as a technical field. In the only recognizable Faculty of Economics, at the Universidade Federal Candido Mendes in Rio de Janeiro, economics was an out-dated mixture of accounting and law.26 With the advent of industrialization in Latin America there was a growing consciousness of the need for economic theory and for the systematic study of economic (Octavio Gouvea de Bulhoes, Depoimento (Rio de Janeiro: Memoria do Banco Central, Programa de Historia Oral do CPDOC/FGV, 1990), p. 64). 23 Before 1929, acording to Mexican economist Juan Noyola, economics did not even exist as a formal discipline in Latin America. (Juan F. Noyola Vazquez, “La evolucion del pensamiento economico en el ultimo cuarto del siglo y su influencia en la America Latina,” El Trimestre Economico 23, no. 3 (July-September 1956), p. 269). In Mexico, “[a]fter the Mexican revolution, the subsitution o f the Porfirian bureacracy required professionals trained in economic matters. Economists as such, were practically nonexistent. Thus, many were self-educated individuals, and social thinkers were appointed in economic posts. Only after the foundation o f the School o f Economics at the National University in 1929 did young economists participate in the discussion o f economic problems.” (Graciela Marquez, “Mexican Economists and the Great Depression,” Term Paper, Ph.D. program in History, Harvard University, 1993, p. 13). 2A Raul Prebisch, “Introduccion al Curso de Dinamica Politica,” Revista de la Facultad de Ciencias Economicas (Universidad de Buenos Aires) 1, no. 4 (July 1948), pp. 493-94. 25 Eugenio Gudin, Depoimento 1979 (Rio de Janeiro: FGV/CPDOC Historia Oral, 1980), p. 165. Denio Nogueira, recalling the early days o f economics in Brazil, explained that the “professors were the best at the time, but they were all self-taught. Even Professor Gudin was an engineer, [and] Professor Bulhoes studied law. But none o f them had formally studied economics.” (Denio Nogueira, Depoimento (Rio de Janeiro: Banco Central do Brasil e Programa de Historia Oral do CPDOC/FGV, 1993) p. 35).

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phenom ena. P olicym akers th ro u g h o u t th e region frequently co m plained o f the professional d eficiencies o f th e discipline during the 1930s and 1940s. Econom ics w as poorly organized, little recognized, and em battled by com peting fields. E conom ists were ill prepared, still often self-taught, and com m only confused w ith law yers and accountants. B razilian eco n o m ist O ctavio G ouvea de B ulhoes rem em bered that before the institution o f th e m o d em F aculty o f E conom ics and A d m inistration at the Federal U niversity o f R io de Janeiro in 1945, w hat existed “could not be called a proper D epartm ent,” but rath er an “incipient...rudim entary” organization.27 In R io, the first courses in econom ics w ere v ery poor in quality, and because they w ere only offered at night, they did not attract full tim e students. It w as w ell know n that the entrance exam ination fo r econom ics w as one o f the easiest am ong all the disciplines, and that students often chose th is field after being rejected from other p ro g ram s.28 Even through the 1950s, there w ere no fu ll-tim e econom ics professors at the U n iversity o f Brasil in Rio, although th o se w ho did teach had significant experience in go v ern m en t m inistries. A t the U niversity o f Sao Paulo, professors rem ained so far rem oved from reality that “ their bookish learning” ev entually becam e a form o f “surrealistic free-thinking.”29 From the 1920s in M ex ico there began a sm all, collective m ovem ent to study the national econom y, follow ed by the fo rm alization o f the discipline w ith the founding o f the School o f E conom ics at th e N ational A utonom ous U niversity o f M exico in 1929.

26 Interview, Anm'bal Villela, 21 August 1995, Rio de Janeiro; Denio Nogueira, Depoimento, p. 35. 27 Octavio Gouvea de Bulhoes, Depoimento, p. 63. Eugenio Gudin, Brazil’s earliest “neoliberal” economist, recalled that “myself, as well as my other Brazilian colleagues, were perfectly conscious o f our being self-taught, as there was still no organized form o f studying economics.” (Gudin, “A Formacjao do Economista,” Revista Brasileira de Economia 10 (March 1956), p. 54). 28 Octavio Gouvea de Bulhoes, Depoimento, p. 73. 29 Raul Ekerman, “A Comunidade de Economistas do Brasil,” p. 119.

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During this period, professionals from other fields migrated into economics, sometimes by accident.30 At the National University, “the first two years of the new school were very difficult; the textbooks were in foreign languages, and the study plan was disorganized and incomplete.” Moreover, the School of Administration and the School of Law firmly opposed the new profession, since they feared that the School of Economics would “duplicate...activities o f accountants and lawyers and economists would not find employment.” Competing professionals demanded angrily, “Is it worth asking, besides the government, who is going to employ these new specialists?”31 Economists still felt that they were “little understood by society.”32 Flavian Levine entered the Faculty o f Economics at the University o f Chile in 1935, and encountered professors of social and political history and good professors of mathematics, but no one who knew economic theory, much less the theories of political

30 “In economics, since there was no specialized school, the economists o f the new generation, including lawyers...dedicated in part to law and partly to economics, or else agronomists, such as Gonzalo Robles and several o f those who studied had law, abandoned their studies in order to dedicate themselves to economics and travel to foreign universities, especially those in the United States, to specialize in economics. This is the case o f Daniel Cosio Villegas. Others are selftaught intellectuals, such as Miguel Sanchez del Tagle, Eduardo Villasenor, Francisco Zamora, and Jesus Silva Herzog. From 1925 to 1930, these intellectuals began to teach classes and give seminars.” (Manuel Pallares Ramirez, La Escuela Nacional de Economia. Esbozo Historico: 1929-1952 (Mexico: Universidad Nacional Autonoma de Mexico, 1952, p. 44). 31 “The National School o f Economics survived those difficult years, the study plan was changed and. ..new professors taught new courses. Still there were problems, most o f the students worked and devoted only part time to their studies, there were few textbooks available in Spanish. To ameliorate the scarcity o f textbooks in Spanish, Francisco Zamora, professor o f economic theory, wrote down his notes and gave them to his students....[Starting] in the late 1930s, the Fondo de Cultura Economica provided fundamental material at low cost.” (Graciela Marquez, “Mexican Economists,” pp. 17-18. Marquez cites Norberto Dominguez, “Facultad de Ciencias Economicas,” from El Economista 2, no. 17, 5 May 1929, p. 9). Vehement opposition nearly defeated plans at the School o f Economics to offer an undergraduate degree program in 1932, and it took two years and the forceful leadership o f Jesus Silva Herzog to obtain final approval. (Victor Diaz Arciniega, Historia de la Casa. Fondo de Cultura Econdmica, 1934-1994 (Mexico: Fondo de Cultura Economica, 1994), pp. 38-39). 32 Interview with Ricardo Torres Gaitan, graduate o f the 1942 class o f the School o f Economics, Universidad Nacional Autonoma de Mexico. (Rodriguez Garza, “La ensenanza de la economia en el perlodo de entreguerras,” p. 1). 42

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economy current in Europe. Initially, engineers and lawyers taught courses for economists, and several of the earliest students decided that the program had to be improved. They began to investigate programs at universities in the United States and Britain, but it was not until the students had “led a revolution” that they felt that a “real” School o f Economics began to take shape.33

Academic Training Planning a career in economics was rare in Latin America until the late 1940s. Brazilian economist Denio Nogueira remarked in retrospect, “My generation was selftaught...those who managed to advance professionally did so by studying abroad.”34 In the 1930s and 1940s, opportunities for study abroad in economics were limited, informal, and inconsistent.35 Latin Americans did not complete foreign degree programs on a regular basis until the 1950s, and the handful o f Latin Americans who studied economics in Europe and the United States did so in a highly eclectic manner.36 Under these circumstances, the training of the ECLA economists and that of their contemporaries consisted of a combination of self-education, initiative, and good fortune. In many cases, the study of economics came about more coincidentally than as a result of any systematic plan. Still, even if intermittently, and with little institutional support, the first economists built a decided sense of professional identity and sought to fill intensely public roles. 33 “Until then, the Faculty had served above all to provide political contacts for important people.” (Interview with Alvaro Marfan, in Munoz, ed., Historias Personates. Politicos Publicas, p. 42, and Introduction by Munoz in same volume, pp. 15, 17). 4 Denio Nogueira, Depoimento (Rio de Janeiro: Fundafao Getulio Vargas, 1993), p. 36. 35 Felipe Pazos noted that in the late 1930s, a large number o f Latin Americans came to the United States to study medicine and engineering, but virtually no one traveled abroad to study economics. (Interview, Felipe Pazos, Banco Central de Venezuela, Caracas, 18 June 1994).

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The majority o f those belonging to the first generation of modem economists were at least partially self-educated. As a young lawyer discouraged with his profession, Daniel Cosio Villegas saw the need for economists and resolved to pursue the “agricultural question” facing rural Mexico. He studied economics at Harvard in 1926, and went on to study agricultural economics at the University of Wisconsin in Madison and at Cornell; later, while assigned as a diplomat in London, he attended a course on international trade at the London School of Economics.37 Raul Prebisch was a student at the Faculty o f Economic Sciences of the University o f Buenos Aires between 1918 and 1922, but while he “formally graduated as an accountant, he was instead a self-taught economist.”38 After his first year o f studies, rather than taking courses, Prebisch focused primarily on reading economics literature and published articles in the Revista de Ciencias Economicas. Disappointed in the quality o f university instruction, and lacking a formal advisor, Prebisch read Smith, Ricardo, Mill, Marshall, Pareto, and Taussig, as well as Marx, in addition to keeping abreast of international economics literature in such periodicals as the Quarterly Journal o f Economics. He read widely, not only current and classical texts on economic theory, but works by European social scientists such as Weber, Mannheim, and Pareto, and translated a number of texts in economics from the United States and Europe into Spanish.39

36 In the case o f Brazil, direct support for large scale training o f economists abroad began only in the 1960s. (Interview, Annibal Villela, Rio de Janeiro, 21 August 1995). 37 Daniel Cosio Villegas, Memorias (Mexico: Editorial Joaquin Mortiz, 1976), pp. 100-117, 122. 38 Edgar J. Dosman and David H. Pollock, “Raul Prebisch, 1901-1971: The Continuing Quest,” paper prepared for the conference “Latin American Economic Thought: Past, Present and Future,” Inter-American Development Bank, Washington, DC, November 14-15, 1991, p. 15. 39 Norberto Gonzalez and David Pollock, “Del ortodoxo al conservador ilustrado: Raul Prebisch en la Argentina, 1923-1943,” Desarrollo Economico (Buenos Aires) 30, no. 120 (January-March 1991), p. 458.

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The education of the earliest professional economists was at best imperfect, and thus required considerable initiative. With a scholarship awarded by the University of Havana for the best graduate of his class, in 1938 and 1939 Felipe Pazos studied business cycles with Wesley Clair Mitchell at Columbia University, in order to discover ways to overcome Cuba’s vulnerability to external economic fluctuations. He regretted not having chosen Harvard, where he would have been a classmate of Paul Samuelson, but this did not keep Pazos from assuming important roles in Cuban and Latin American economic policy in subsequent decades.40 Celso Furtado was bom in 1920 in the Northeast o f Brazil, a precarious land of poverty and violence, where education was accessible only to a small fraction of the population. Much o f his early education consisted o f reading in his father’s personal library.41 As in the case o f Cosio Villegas, Furtado began by studying law as a student at the University o f Brazil in Rio de Janeiro 42 When he arrived at the University, Furtado recalled that “the social sciences were only beginning to be taught,” and economics was not yet offered as a formally established discipline. After his third year as a law student, Furtado changed to administration. Only during his final two years did he study economics, and this was on his own account.43

40 Pazos was also instrumental in founding the School o f Economic Science at the University of Oriente, in Cuba, in the mid 1950s. (Interview, Felipe Pazos, Banco Central de Venezuela, Caracas, 18 June 1994; and Pazos, “Influencia de la Escueia de Ciencias Economicas,” op. cit.). 41 Celso Furtado, “Adventures o f a Brazilian Economist,” International Social Science Journal 25, no. 1/2 (1973), pp. 29-30. 42 Now the Federal University o f Rio de Janeiro. 42 Furtado, “Adventures o f a Brazilian Economist,” p. 32.

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Victor Urquidi spent his youth abroad, since his father was a Mexican diplomat, and grew up in Colombia, the United States, El Salvador, Uruguay, Spain, and England.44 In 1937, while his father was posted in Spain, Urquidi entered the London School of Economics, where he obtained his undergraduate degree in economics in 1940. Lacking a scholarship to pursue graduate studies, Urquidi recalls the period 1940 to 1947 as one of “self education” (autodidacta) in economics, during the years he spent as an economist and later assistant director in the Department of Economic Research at the Banco de Mexico, the Central Bank o f Mexico.45 In the 1940s, international cooperation fostered by World War II facilitated training in the United States, and later in Europe, even though many of those who studied abroad prior to the 1950s would still find their situation extremely precarious. As an economist with the Ministry of Agriculture in Chile, Jorge Ahumada obtained a U.S. government scholarship to study economics at Harvard from 1942 to 1944. At Harvard Ahumada became familiar with the North American system of higher education, and studied with economists active in the spread o f Keynesianism in the United States.46 Brazilian Denio Nogueira enrolled as a graduate student at the University of Michigan in Ann Arbor in 1949, which he remembers as his first opportunity to study economics in earnest, despite his lack of English training, insufficient funds, and the refusal o f the Brazilian government to grant him sufficient leave to complete a degree program.47 During World War II, Roberto Campos was posted at the Brazilian Embassy in

44 “Palabras del Profesor Victor L. Urquidi en la Ceremonia de Entrega del Premio Iberoamericano de Economia ‘Raul Prebisch,’” Pensamiento Iberoamericano 18 (1990), p. 267. 45 Curriculum vitae, Victor L. Urquidi, provided to author. 46 Harvard University transcript o f Jorge Ahumada (HUA); Interview with Georgina Licea, Caracas, September 23, 1996. 47 Denio N ogueira, Depoimento, pp. 38-41.

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Washington, D.C., where he was able to study with leading economists such as Wassily Leontief and Gottfried Haberler, who had been recruited for the war effort and taught evening classes at George Washington University.48 Celso Furtado obtained a scholarship from the Brazilian government for his participation in the Brazilian European Expeditionary Force in World War II, with which he completed his doctoral degree in economics at the University o f Paris in 1948.49

Applied Policy Experience The education o f this generation of Latin American economists consisted of a combination o f exposure to theory and extensive policymaking.50 Raul Prebisch is an early example, having accumulated vast experience in economic research and policymaking between 1922 and 1944. After graduating from the University of Buenos Aires, Prebisch was hired by the Sociedad Rural and the Ministry o f Finance, and later became deputy director of the National Statistical Bureau. Prebisch traveled to Australia and New Zealand for the Ministry of Finance, where he studied income tax legislation, and traveled with the president o f the Sociedad Rural to the United States and Canada. In 1927, he was appointed director o f the Division of Economic Research at the Banco de la Nacion Argentina. At the Bank Prebisch founded the Revista Economica, which attained

48 “Roberto de Oliveira Campos,” in Biderman, et al., Conversas com Economistas Brasileiros, pp. 33-36. From a slightly later cohort, Osvaldo Sunkel was awarded a scholarship by the United Nations to study at the London School o f Economics, where he was enrolled as a post-graduate research student from August 1953 until December 1954. Sunkel wanted to study development, but Lionel Robbins, Chair o f the Economics Department, pressured him to study demography instead. Therefore, on his own account he studied growth models recently pioneered by Rosenstein-Rodan, Nurkse, Singer and Rostow, joining a group o f Latin American students who shared an interest in economic development. (Interview, Osvaldo Sunkel, Santiago, September 26 and 27, 1995). 50 Carlos F. Diaz-Alejandro, “Latin America in the 1930s,” p. 45; Gonzalez and Pollock, “Raul Prebisch en la Argentina,” p. 455.

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recognition for its outstanding economic analysis. Prebisch’s extensive experience made him the most well-known economist in Latin America by World War II.51 Prebisch was also exceptional in Latin America for his early accomplishments in building institutions and developing qualified technical staff, particularly in a period of economic crisis. Following the September 1930 military coup in Argentina, Prebisch, at 29, was awarded the position of undersecretary of finance, where he gained recognition for experimenting with heterodox policies to counter the effects of the Great Depression.52 In 1932 he was asked to serve on the Argentine delegation at the League of Nations in Geneva, in anticipation of the World Economic and Monetary Conference in London in 1933. Prebisch stayed for almost a year in Geneva and London, visiting Germany and Paris, and led Argentine negotiations for the 1933 Roca-Runciman Treaty with Britain.53 Both o f these experiences left him with a much firmer grasp of the realities of international relations, and a sense of the inequality among nations in the world economy.54 Besides being crucial in the management of macroeconomic policy and in early industrialization efforts o f the larger Latin American economies, central banks and state development institutions also provided vital training ground for economists. Cooperation and professional exchange between these institutions improved opportunities for young

51 Victor L. Urquidi, “ In memoriam: Raul Prebisch,” El Trimestre Economico 53 (3), no. 211 (July-September 1986), p. 442. 52 Pollock and Dosman, pp. 7-14; Gonzalez and Pollock, p. 460; Joseph L. Love, “Economic Ideas and Ideologies in Latin America Since 1930,” in The Cambridge History o f Latin America ed. Leslie Bethell, vol. VI (Cambridge: Cambridge University Press, 1994), pp. 403-411. 53 In London, Prebisch’s stay coincided with the publication o f a series o f articles by Keynes on expansionary policies. 54 Pollock and Dosman, pp. 15-16. The World Economic Conference “represented a cold bath o f realism for this young economist.” In particular, Prebisch noted the relative powerlessness of Argentina in the world economy. (Gonzalez and Pollock, p. 465).

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Latin American economists to acquire knowledge of economics and gain international experience. Policymakers actively solicited advice from their counterparts in the United States, such as the Federal Reserve, and in Europe, as in the case o f the Bank of England. While in England in 1933, Raul Prebisch met with Sir Otto Niemeyer of the Bank of England as well as other government officials, an opportunity that allowed him to study British financial institutions in detail. Upon his return to Argentina, Prebisch helped draft plans for a Central Bank and in 1935 became its general manager.55 At the bank Prebisch developed a corps o f professional economists, and also promoted the professionalization of technical personnel at the Ministries of Finance and Agriculture. He created a Research Division, and established a graduate exchange program for individuals chosen from the staff of the bank to study at Harvard and acquire experience at the U.S. Federal Reserve Banks in Washington and New York.56 In Chile, under the intellectual leadership of Flavian Levine and Max Nolff, a fruitful relationship developed in the 1940s among professors at the School o f Economics at the University of Chile and economists who joined Corfo (Corporation de Fomento de la Produccion). In Brazil, at the initiative of economists Octavio Bulhoes and Eugenio Gudin, the Funda^ao Getulio Vargas (FGV) was founded in 1944 in an effort to improve the quality of economic information in Brazil and to contribute to the formulation of

55 Pollock and Dosman, pp. 20-21. 56 “Prebisch was inflexible with respect to the intellectual autonomy o f the Bank. This represented institutional independence in the realm o f finance. This situation created friction between Prebisch and individuals in the military government that took power in 1943, resulting in the dismissal o f Prebisch from the Central Bank” in the same year. By 1946, the Central Bank was nationalized. (Ibid, pp. 22-24; Gonzalez and Pollock, “Raul Prebisch en la Argentina,” p. 477). 49

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sound economic policy.57 The Fundafao was the first institution to systematically gather statistical information on the Brazilian economy. A close relationship developed between the Fundafao and the National Faculty o f Economic Science o f the University o f Brasil; many of the graduates o f the Faculty o f Economics found employment at the FGV, in addition to other state institutions dedicated to development. The Fundafao also invited a series of well-known economists from abroad to lecture in Rio de Janeiro, among them Gottfried Haberler and Jacob Viner.58

Literature in Economics The dissemination of economics literature in Latin America was also critical in the formation o f a generation o f economists actively involved in policy discussions for development. This nascent industry of economic information included both journals published by universities and their affiliated institutions, which provided ground for debate over local economic issues, and the appearance o f the first regional economics journal, El Trimestre Economico.59 These publications, together with translations o f literature from abroad, provided means for the documentation o f economic conditions and events, for the introduction of new economic ideas on policy, and for the communication and discussion of ideas from abroad. Modeled on the Quarterly Journal o f Economics, El Trimestre Economico (founded in 1934) and its parent organization the Fondo de Cultura Economica were a

57 With typically Brazilian uniqueness, the FGV received funding from the state as well as major private interests. (Fundafao Getulio Vargas, Instituto de Documentafao, Fundagao Getulio Vargas: 30 Anos a Servigo do Brasil 1944-1974 (Rio de Janeiro: Editora da FGV, 1974), p. 47). 58 da Motta, “Economistas: Intelectuais, Burocratas e Magicos,” pp. 101-102; Biderman et al., Conversas com Economistas, pp. 18-19. 59 Oscar Soberon M., “El volumen cincuenta de El Trimestre Economico,” E l Trimestre Economico 50, no. 197 (January-March 1983), pp. 3-19; Diaz Arciniega, Historia de la Casa', Cosio Villegas, Memorias, pp. 138-151. 50

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forum for articulating visions o f the region’s future and its relations with the United States and Europe. The Fondo de Cultura Economica and El Trimestre Economico were inspired by the need to prepare young professionals who could address modem economic problems.60 During the early years, contributors to El Trimestre provided basic information essential to the study of the Latin American economies and Spanish translations o f contemporary economics literature. In the words o f former director Oscar Soberon, El Trimestre during its first half-century was “witness to great events.” The journal published documents from the Bretton Woods Conference in 1944, including the stabilization plans proposed by White and Keynes, as well as plans for the International Bank for Reconstruction and Development and the International Monetary Fund.61 A retrospective characterized the Fondo de Cultura Economica, which, in addition to El Trimestre Economico, endeavored to publish major economics texts in Spanish, as “the university press o f all the Spanish speaking world.”62 E l Trimestre made economics literature and information accessible to a Spanish­ speaking audience, and was also read in Brazil. The journal began with contributions by “economist-lawyers” -the generation of lawyers who turned to economics- as well as agricultural economists. Because of the limited number of Latin American contributors, the editors originally relied on Spanish translations o f works by economists from abroad.63 El Trimestre included regular reviews o f current economics literature from

60 Soberon, “ El volumen cincuenta,” pp. 8-9. 61 E l Trimestre Economico also documented every major ECLA meeting from the time o f its inauguration in 1948. (Ibid, pp. 5-6). 62 Ronald Hilton, “El Fondo de Cutura Economica,” Hispanic American Report 5, no. 4 (April 1952), pp. 3-4. 63 Oscar Soberon argues that it took twenty-five years before there was sufficient intellectual output to allow E l Trimestre Economico to devote a significant amount o f attention to Latin American economic thought. (“El volumen cincuenta,” p. 10).

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Europe and the United States. The journal also offered a forum for Latin American economists to publish and articulate newly assertive interpretations o f Latin American economic affairs and international economic relations.64 Brazilian economics journals also flourished, and suggested a parallel, yet independent style, with the participation of industrial and commercial associations in addition to public and academic institutions. The Revista de Ciencias Economicas, founded by the Order of Economists of Sao Paulo in 1939, was initially directed by accountants, and began to include contributions from economists at the University o f Sao Paulo only in the 1950s. The Digesto Economico, sponsored by the Commercial Association o f Sao Paulo, included brief articles on various topics written by journalists, lawyers, sociologists, and historians, as well as economists.65 In 1946 and 1947, respectively, the Funda9ao Getulio Vargas, in conjunction with the Instituto Brasileiro de Estatistica, founded the journals Revista Brasileira de Economia and Conjuntura Economica, which published theoretical articles in economics by Brazilian and foreign contributors and basic economic statistics produced by the FGV.66 El Trimestre above all provided a Latin American forum for the critical evaluation of international economic relations, and thus embodied aspects o f an independent 64 The role o f E l Trimestre Economico in providing an independent voice for economists is apparent in Juan Noyola’s especially curt review o f a book published in 1950 by American Wendell C. Gordon, entitled The Economy o f Latin America. Noyola criticized G ordon’s superficial analysis o f the region. In contrast, Gonzalo Robles reviewed Industry in Latin America highly favorably because o f American author George Wythe’s apparent comprehension o f the Latin American problem: “We believe it important to insist on our point o f view, and we remain favorable towards this author, since, having come from the other side, he sees our dilemma with great comprehension and sympathy.” (Juan Noyola, review o f Wendell C. Gordon. The Economy o f Latin America (New York: Columbia University Press, 1950), in E l Trimestre Economico 19(73), no. 192, p. 152; Robles, “ Sudamerica y el fomento industrial,” p. 33). 65 See Maria Rita Loureiro, “ Economistas e Elites Dirigentes no Brasil,” Revista Brasileira de Ciencias Sociais 20, no. 7 (October 1992), Table II, “Principals Revistas de Estudos Economicos no Periodo 1930-1964 (RJ e SP), p. 58.

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approach that came to distinguish ECLA. Besides building a reputation for the quality of its coverage o f literature in economics, it began to foster the sense o f shared interests among economists that eventually flourished at ECLA. Local journals on economic issues provided similar venues for providing information and expounding independent ideas and opinions. In Chile in 1947, for example, Anibal Pinto along with Roberto Wacholtz and Flavian Levine founded the polemical journal Panorama Economico, which attracted contributions from economists at Corfo and the School of Economics at the University o f Chile, and featured continuous critical commentary on international economic relations.67 During the 1950s, these journals, with the regional leadership o f El Trimestre Economico, were decisive in the spread o f the ECLA gospel.

International and Regional Conferences and Exchanges In the 1930s and more so during the 1940s, a growing regional awareness resulted from professional contacts among economists from Latin America, the United States, and Europe. Latin American economists participated actively in international meetings and in international organizations that provided opportunities for contact with well-known economists from the United States and Europe, and fostered relationships among young and more experienced economists from the region. These encounters were essential in shaping the outlook o f those who taught the ECLA generation, and in a number of important cases, for the cepalinos themselves. Raul Prebisch initially turned down the offer o f the position of executive secretary at ECLA because, having served as Argentine representative at the International Economic Conference of the League o f Nations in 1933, he did not want to work in an

66 Ibid. 67 Munoz, ed., Historias Personates. Politicos Publicas, p. 89.

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international organization “under the sway of Anglosaxon orthodoxy.”68 Prebisch recalled the 1933 Conference as follows: “In fact only the Superpowers negotiated. We were invited to all o f the sessions but quickly I realized that I would have no influence....At that time the entire developing world was colonial terrain.”69 Similarly, Felipe Pazos recalled that the developing nations had little or no say in postwar economic negotiations, although through his participation as Cuban commercial attache at Bretton Woods, Pazos met Lord Keynes for the first time.70 Representatives from Brazil, Chile, Cuba, and Mexico, including Eugenio Gudin and Felipe Pazos, participated in the preliminary meeting at Atlantic City prior to Bretton Woods in 1944. A number o f those who would become Latin America’s leading economists, intellectuals, and political leaders were present at the Bretton Woods negotiations from July 1 to 22, 1944. They included Eugenio Gudin, Octavio Bulhoes, and Roberto Campos (Brazil); Luis Aguirre (Chile); Carlos Lleras Restrepo (Colombia); Felipe Pazos (Cuba); and Daniel Cosio Villegas and Victor Urquidi (Mexico).71 This was a formative experience for these economists, all o f whom were developing professional portfolios in national and regional economic affairs.

68 Raul Prebisch, Presentation upon the 25th Anniversity o f ECLAC, Quito, Ecuador, March 1973, cited in Jose Cayuela, ECLAC: 40 Years (1948-1988) (Santiago: United Nations ECLAC, 1988), p. 15. 69 Gonzalez and Pollock, “Raul Prebisch en la Argentina,” p. 464. 70 Felipe Pazos, “La Conferencia de Bretton Woods. Recuerdos de un participante” (Unpublished paper, Caracas, 1994); and interview, Felipe Pazos, Banco Central de Veneuzela, Caracas, 18 June 1994. Brazilian economist Eugenio Gudin, when asked about the position o f the developing countries at Bretton Woods, claimed that “in those days, such a division [between rich and poor countries] did not exist.” (Eugenio Gudin, Depoimento (Rio de Janeiro: Fundafao Getulio Vargas/CPDOC, 1980), p. 141). 71 U.S. Department o f State, Proceedings and Documents o f the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1-22, 1944, Vol. I (Washington, D.C.: U.S. Government Printing Office, 1948), pp. 294-305.

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Latin American economists also participated in the early years o f the International Monetary Fund and International Bank for Reconstruction and Development, opportunities that provided personal acquaintance with well known international economists. Many o f these professionals had training abroad, and their experience put them at the forefront o f regional and national development efforts in Latin America during the 1950s and early 1960s. In 1941 Felipe Pazos met U.S. economists Harry White, Edward Bernstein, and Walter Gardner on a mission from the U.S. Treasury invited to advise the Cuban government on the organization o f a Central Bank. Having just returned from his studies at Columbia University, Pazos was selected as assistant to the mission because of his English ability and training in economics. Through these contacts, Pazos was hired at the International Monetary Fund in 1947, where he remained for two years, eventually in the post of chief o f the Latin American Division.72 Other Latin Americans who worked at the Fund during this period included Jorge Ahumada (1947-49), Juan Noyola (1946-48), and Javier Marquez (1946-50).73 Victor L. Urquidi, of Mexico, served as an economist at the International Bank for Reconstruction and Development between 1947 and 1949. Juan Noyola lectured on his experience at the IMF to students at the National School o f Economics in Mexico in 1949. He mentioned the presence of noted international economists in the Department o f Economic Research, including Robert Triffin, Edward Bernstein, “one o f the architects o f Bretton Woods,” in addition to fellow Latin American economists. Even more important, the presence o f qualified economists and the availability o f information made the IMF a unique institution that offered “young 72 Interview, Felipe Pazos, Banco Central de Venezuela, Caracas, 18 June 1994.

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economists from many countries and especially from Asia and Latin America the opportunity to meet one another, and to leam about problems shared by their countries, and to leam under the guidance of leading figures in international economics.”74 For some economists, like Juan Noyola and Jorge Ahumada, these experiences also sharply defined their perspective on international economic affairs. The sharing of knowledge and professional contact among Latin American and other international economists also took place in the first regional conferences on economic issues organized in Latin America. The First Technical Meeting on Problems of Central Banking in the Americas was hosted by the Banco de Mexico in Mexico City from August 15 to 30, 1946.75 Participants at the conference described the meeting enthusiastically as an “unforgettable” two weeks of intellectual exchange.76 Not only did the conference provide an opportunity to renew professional acquaintances, it also fostered new contacts among Latin Americans and their counterparts from the United States. The regional nature o f the conference also allowed Latin American economists to voice their real concerns. Raul Prebisch, invited from Argentina, pointed out the problems inherent in the economics profession in Latin America: “I am very concerned by the fact that the best of us...focus on practical problems and on the search for immediate and urgent solutions,” failing to seek “a scientific understanding o f economic conditions.” He recommended that senior economists who served as advisors should be

73 Personal communication, James Boughton, Office o f the Historian, International Monetary Fund, to author, November 30, 1995. 74 Juan F. Noyola Vazquez, “El Fondo Monetario Internacional,” Revista de Economia (Mexico), 12, no.4 (15 April 1949), pp. 145-46. 75 Memoria. Primera Reunion de Tecnicos sobre Problemas de Banca Central del Continente Americano, Celebrada en la Ciudad de Mexico del 15 al 30 de agosto de 1946, a invitacion y bajo los auspicios del Banco de Mexico, S.A. (Mexico: Banco de Mexico, 1946). 76 Ibid, p. 527. 56

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granted periodic leave from their public responsibilities, in order to spend more time on theoretical research.77 The conference provided for the discussion of other measures for increased professionalization, including “Cooperation Among Departments o f Economic Research,” “The Exchange of Information and Personnel,” and the need for more continuity in programs for training abroad.78 The period immediately prior to the founding o f ECLA thus offered increasing opportunities to Latin Americans for the exchange o f information, professional development, and exposure to economic ideas from the United States and Europe. Victor Urquidi recalled that in the 1940s the Fondo de Cultura Economica, the National Autonomous University of Mexico (UNAM), the Banco de Mexico, and El Colegio de Mexico “were all one world for many of us: the world that was to us our own graduate program, [where] we learned, researched, translated, published in El Trimestre Economico and other journals. El Colegio de Mexico opened the world o f the social sciences and Latin America to us. The Banco de Mexico made us aware of the international prospects for the postwar era, and between the Bank, El Colegio, and the visits of Raul Prebisch in Mexico in 1943, 1944 and 1946, we learned about the reality of Latin America and its potential in the post-War era.”79 This comment is reflective of the richness of activities becoming available to economists at the time. There was an

77 Problemas de Banca Central, p. 30; Joseph L. Love, “Raul Prebisch (1901-86): His Life and Ideas,” in Latin America and Caribbean Contemporary Record, ed. Abraham F. Lowenthal (New York and London: Holmes & Meier), p. A 144. 78 Problemas de Banca Central, p. 512. 79 Victor L. Urquidi, “Cuatro economistas singulares: Javier Marquez, Fernando Rosenzweig, Jorge Sol Castellanos, Miguel S. Wionczek.” E l Trimestre Economico LVI (1), no. 221 (JanuaryMarch 1989), pp. 4-5. Victor Diaz Arciniega describes, similarly, the richness o f professional and intellectual exchange in Mexico, immediately preceding the founding o f the Fondo de Cultura Economica. (Historia de la Casa, pp. 28-29).

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excitement o f discovery in this generation of economists that would soon became tangible at ECLA. Conclusion By the late 1940s, more Latin Americans were preparing themselves as economists, even if not always in a systematic or consistent manner. There was a growing need for understanding of economics and economic policy. Economists were essential for answering the demand for basic documentation of economic conditions. They were “builders or administrators of fundamental public institutions, more pragmatic than theoretical, intuitive, and in many cases self-educated.”80 They were intellectuals who also played a vital role in the public sphere. Many had come to advocate a national definition o f development, and would share a suspicious if not critical view of U.S. aims in the region. For the majority o f economists, the need to address policy issues lent an urgency that precluded extensive theoretical abstraction. In the best o f conditions, most faced multiple, competing demands, acting simultaneously as civil or international servant, professor, and advisor. A distinctively Latin American pattern was appearing whereby economists fulfilled both technical as well as political roles. The appearance o f academic programs in economics throughout Latin America following the Depression lent recognition to the profession and encouraged new standards in training. Opportunities for professional exchange among universities, ministries, and corporaciones de fomento, training abroad, and the availability of economic literature fostered an entirely new level of professionalization. These new economists were no longer literary, like their predecessors prior to the Great Depression.

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They shared current ideas about development, though not yet necessarily formalized or comprehensively theorized. Economists were also more knowledgeable about developments in other countries within the region, and shared a common conviction that expertise in economic policy was desirable for the promotion of economic growth and industrialization. Through participation in international organizations and conferences, economists now developed a much more sophisticated perspective on Latin America’s place in the world economy. All of them had witnessed, first hand, the effects of the Great Depression and the Second World War on the Latin American economies, events that required new answers and approaches. They were assertive in their opinions on economic affairs. These new forms of professionalization and communication created not only a more “modem ” economist, but also began to suggest the outlines of what would become an economic culture, under the guise o f ECLA, in which Latin American economists developed a distinctive style of learning, a new cohesiveness, a political presence, and eventually, a common mission.

80 Rodriguez Garza, “La ensenanza de la economia en el periodo de entreguerras,” p. 2. 59

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Chapter 3 An Institutional History of ECLA, 1948-1964 These ideas do not appear in the minds o f economists and men o f government spontaneously, rather they are more often the result of concerted efforts to carefully study the passage o f events.1

Introduction When ECLA arrived on the scene in 1948, there were few professional precedents for the tight intellectual brotherhood that was to form among the cepalinos. Under President Porfirio Diaz (1876-1910), the generation of Mexican intellectual politicians known as the cientificos occupied positions o f importance in government ministries and conducted policies o f economic development. Until the neoliberal revolution starting in the 1970s and 1980s, however, there was nothing approaching the scale or intensity of interaction among Latin American economists that took place at ECLA from 1950 to 1964. ECLA was a direct precursor to the institutionalization of economics research, and the intense collaboration among economists sharing similar ideological perspectives derived from common intellectual backgrounds, in the case o f the neoliberal economists, the neokeynesian advisors trained at Cambridge University who reigned under Lopez Portillo in Mexico (1976-1982), and groups such as the Cieplan “monks,” economists who constructed a response to neoliberalism in Chile.2 This chapter is intended to present a new perspective on ECLA through the previously unexplored history of its institutional mission, as an explanation for its

1Naciones Unidas, Consejo Economico y Social, Comision Economica para America Latina, Problemas teoricosypracticos del crecimiento economico (E/CN. 12/221) 28 May 1951, p. 2. 2 Albert O. Hirschman, “The Political Economy o f Latin American Development: Seven Exercises in Retrospection,” Latin American Research Review 22, no. 3 (1987), p. 18; Patricio Silva, “Technocrats and Politics in Chile: From the Chicago Boys to the CIEPLAN Monks,” Journal o f Latin American Studies 23, no. 2 (May 1991): 385-410.

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trajectory to the height o f influence in the field of Latin American development in the mid-1950s. Here I delineate three aspects o f ECLA’s institutional history that contributed to form what I am calling the cepalino culture. First, the coordinated search for accurate and comprehensive economic data for the entire region. Second, the active dissemination of the central tenets o f ECLA’s interpretation of development, as described in chapter 1, through a vigorous regional training program. Third, institutional and theoretical support for planning, or “programming,” o f economic development through individual country missions. The perception o f the cepalinos as sharing a common allegiance to structuralism and the reputation of ECLA as an organization that aggressively pursued an independent development agenda have completely overshadowed the internal development of the institution. If we look more closely, we see the cepalinos ’ articulation of the well known ideas o f structuralism, but also, and perhaps equally important for the longevity of a Latin American development discussion, the beginnings of the first comprehensive economic information database for the region. In its heyday, ECLA was unequalled in Latin America as an institution for economic research and training. ECLA’s stature, financial stability, and respectability as a United Nations institution greatly facilitated the task of granting ECLA and its ideas both permanence and scope. Less well known are the collective stories of the cepalinos who collaborated in this task, their relationships, and the organization of their mission. In examining the generation of ECLA’s intellectual culture, I emphasize the origins of the enormously influential role of the cepalinos and their disciples in the development debate in contemporary Latin America, in order to stimulate new ways of

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thinking about the nature o f their power and its historical transcendance. This chapter might be called “ECLA beyond Prebisch,” in that, without denying the paramount importance of Prebisch in consolidating ECLA as an institution, I will argue that there are additional aspects of the organization’s history that should be brought to light, such as the collaboration o f its principal economists and their export o f ideas and techniques. ECLA’s distinctive vigor, the unique assemblage o f its staff, and the optimism shared by its first generation of economists were all closely related to the historical setting in which it evolved. The success of ECLA was part of a surge in internationalist sentiment that followed World War II. In a number of important cases, the arrival of Latin American economists at ECLA was also related to specific events in individual countries. The ousting o f Prebisch from his post at the Central Bank of Argentina, and later from his teaching position at the University of Buenos Aires, launched him on the international trajectory that led eventually to the position o f executive secretary of ECLA. Likewise, the departure o f a number of cepalinos from ECLA was tied to political events, as in the case o f the overthrow of Perez Jimenez in Venezuela in 1958 and of Batista in Cuba in 1959, both o f which drew economists back to their countries to serve in new administrations. In the latter instance, a number of prominent cepalinos went to Cuba, among them the Mexican Juan Noyola and the Cuban Regino Boti, permanently altering the character o f the ECLA staff. Thus, the evolution of ECLA as an institution, as we shall see here and further in the following chapter, is inseparable from the surrounding context of international relations and political events in the region. I will add one caveat. This chapter is not intended as a theoretical treatment of ECLA, but as an institutional history, to help us begin to understand the evolution of the

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professional roles o f the cepalinos. Given the absence of institutional archives at ECLA, this chapter is tentative at best. However, it may serve as testimony to the construction of an institution that defined, in many ways, patterns of relationships among Latin American economists in the second half of the twentieth century. By characterizing the interaction among the cepalinos, this chapter is intended to portray the centrality o f individuals in the creation of an international network of allies, participants, students, and disciples that secured ECLA’s presence in the region through the 1970s, and in some cases until today.

The Beginning The founding o f the Economic Commission for Europe and of the Commission for Asia and the Far East in March 1947 preceded the formation o f a parallel commission devoted exclusively to Latin America. In August 1947 the Chilean delegation to the United Nations proposed an Economic Commission for Latin America, based on the argument that the region shared a “common historical heritage” of colonialism. While Latin America was a region o f enormous diversity, spanning everything from so-called “tribal cultures” to “highly modern urban areas, with every gradation between these extremes,” representatives to the United Nations Economic and Social Council stressed the common problems, as well as the “common aspirations” o f the Latin American countries.3 Already, delegates maintained that ECLA should function with a considerable degree of independence: the Commission should be situated “in the midst of the Latin American countries” and be “concerned solely with their problems,” while poised to contribute to world economic stability.4 Appealing to the postwar focus on

3 Preface by Mr. Eugenio Castillo, Acting Executive Secretary, “The Economic Commission for Latin America,” Draft, 3 November 1948 (UNA RG 17 A/94 RR, Box 33, File 6). 4 “Regional Steps toward Recovery,” in “The Economic Commission for Latin America,” op cit., p. 4.

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reconstruction, they argued that ECLA was needed to promote measures that would bring about higher standards of living in the region and facilitate “the necessary contribution of this region to the rehabilitation of the economies of other continents.”5 Latin Americans on the United Nations Economic and Social Council argued that while the region had not suffered physical damage, its needs were as urgent as those of Europe.6 After its inauguration in February, ECLA held its first session on June 7, 1948. Dr. Alberto Baltra Cortes, the Chilean Minister of the Economy and Trade, was elected chairman of the new Commission. Baltra articulated the vision from Latin America: “Two wars and one depression...have taught us that we cannot continue to be tied to a structure which suffocates our desires and which, from time to time, launches us into depressions with the loss of a substantial part o f the progress made with so many efforts and sacrifices.” The Latin American economies urgently required diversification through industrialization and improved agricultural production.7 Furthermore, World War II had transformed the balance o f international relations. While Europe had historically been Latin America’s main trading partner, the United States was now the primary source of imported goods and principal market for exports from the region, besides being the world’s most preeminent military and industrial power.8 New policies would have to take account of this fundamental change in Latin America’s economic outlook.

5 “Technical Assistance - Resolution of25 June 1948” (UNA RG 17A/94, Box33 File 6). 6 “While Latin America has been spared the devastation wrought in Europe and the Far East by actual combat, the Committee nevertheless felt strongly that Latin America’s present handicaps are so great and have been so far aggravated by the events o f war that they too have need o f the services o f an economic commission” (“Regional Steps Towards Recovery,” Preface by Mr. Eugenio Castillo, Acting Executive Secretary, pp. 3-4 (RG 17 A/94, Box 33, File 6). 7 “The First Meeting o f the Economic Commission for Latin America,” Preface by Mr. Eugenio Castillo, Acting Executive Secretary, Draft, 3 November 1948 (UNA, RG 17 A/94, Box 33, File 6 ). 8 Ibid, p. 3 (also noted as p. 10). 64

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Delegates arguing on behalf of ECLA repeatedly insisted that the general inadequacy o f economic data for individual countries seriously hindered a complete understanding o f the Latin American economic situation; furthermore, no comparable economic information existed for the region as a whole.9 More specific reasons were offered in support of ECLA. Latin American countries had suffered a severe shortage of capital goods during World War II, complicated by the inconvertibility o f currencies earned from wartime exports, and in some cases, a scarcity o f U.S. dollars with the depletion of reserves immediately following the war. “Not only were Latin American countries unable to get equipment for new industrial development schemes, they were unable also to obtain equipment necessary to replace machinery prematurely worn out due to excessive use in meeting wartime needs.” Inflation also plagued the Latin American economies, as a result of “increased wartime and post-war demands for agricultural and mineral products” and accumulated demand for consumer goods.10 The Commission was “open to members o f the United Nations in North, Central, and South America and in the Caribbean,” in addition to France, the Netherlands, and the United Kingdom.11 The Soviet Union requested membership, but was refused, on the grounds that France, the Netherlands, and the U.K. had more valid claims to membership on the basis o f their territorial possessions, along with a long tradition of trade with Latin America.12

9 “The general level o f economic information currently published or readily available is out o f date, lacking comparability, or insufficient to provide a satisfactory basis for recommending concrete action.” (Ibid, p. 9). 10 Preface by Mr. Eugenio Castillo, “The Economic Commission for Latin America,” Draft, 3 Novem ber 1948, pp. 9, 13 (UNA, RG 17 A/94, Box 33, File 6). 11 Ibid, p. 3 (also noted as p. 10). 12 Eugenio Castillo, “The Commission’s Field o f Operation,” in “The Economic Commission for Latin America,” Draft, 3 November 1948, pp. 1,9, 13 (UNA, RG 17 A/94, Box 33, File 6).

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ECLA’s original mission was initially presented in fairly general terms: to “initiate measures for facilitating concerted action for dealing with urgent economic problems arising out o f the war, and for raising the level of economic activity in Latin America and.. .maintaining and strengthening the economic relations of the Latin American countries.” ECLA was especially to emphasize research: to “make or sponsor such investigations and studies of economic and technological problems and development within territories o f Latin America,” and to “sponsor the collection, evaluation and dissemination of...econom ic, technological and statistical information.” Perhaps most important, ECLA was given authority to make recommendations directly to governments, and thus bestowed on its economists an entirely new level of influence in regional policymaking.13

Economic Research In the beginning, one of ECLA’s main priorities was drawing together information on the Latin American economies, launching a “general and systematic effort to interpret the dynamics o f the Latin American economy.” 14 In comments delivered to the United Nations Economic and Social Council in 1951, Executive Secretary Raul Prebisch stressed, in retrospect, the consideration of the long over the short term in ECLA’s initial agenda. He recounted that at the first meeting o f ECLA held in Santiago in June 1948, members decided to focus on documenting the Latin American economies and “on making analyses of their problems as preparation for practical action.” ECLA decided against “a programme of immediate practical action at the inter-governmental level,” despite its political appeal, “especially as a means to quick results.” Whereas in 13 Ibid, pp. 6.

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Europe and North America, economic analysis of long-term trends in economic growth and development was already far more advanced, in Latin America “comprehensive studies of economic activities” were grossly inadequate. The original mandate o f ECLA was to “concentrate.. .on securing detailed knowledge of the characteristics of the Latin American economies.” 15 From the beginning, there were plans to offer “technical assistance” to member countries, however narrowly defined.16 The ECLA Secretariat “originally got off to a slow start because of difficulties in staffing its offices with competent economists.” In November 1948, Acting Executive Secretary Eugenio Castillo wrote to the United Nations headquarters that “our professional staff situation is still tight.” 17 He was looking for “two or three senior economists,” and while pursuing the search for “the right candidates,” he continued to rely on consultants, among them George Kalmanoff, hired for six months from the U.S. Department o f Commerce to work on studies o f foreign investment, starting in October 1949.18

14 “The Role o f ECLA in the Structure o f the United Nations,” (no author, typed ms), p. 1 (UNA, RG-20 A/316, RR-62/1232, Box 34 File 8). 15 United Nations Economic and Social Council, Ad Hoc Committee on the Organization and Operation o f the Council and Its Commissions, “ Statement prepared by the Executive Secretary,” 15 March 1951, p. 6 (UNA, RG-20 A/309 RR 62/1179, Box 35, File 3). 16 An ECLA survey o f member governments regarding the need for technical assistance explicitly stated that “projects relating to extensive economic development plans, desirable but unlikely to be undertaken soon, should not be included.” Given ECLA’s scarce technical capacity in the first year, assistance was limited to experts needed to “prepare a survey” or a specific project already underway. [Progress Report, submitted by Eugenio Castillo, Acting Executive Secretary, ECLA, to H.E. Caustin, Acting Assistant Secretary General in Charge o f Economic Affairs, United Nations, Lake Success, New York, 17 November 1948 (UNA RG 17 A/94, Box 33, File 6)]. 17 Ibid. 18 The sources o f ECLA’s talent reveal a fascinating story about the distribution o f economists knowledgeable about Latin America at the time. Some o f the most interesting details arise in the collaboration between ECLA and other international organizations, in the effort to secure the necessary information and expertise. Castillo noted that he was negotiating with the IMF to “send an economist to Santiago” by January 1949, a matter he would discuss with IMF Director Camille Gutt during a visit to Chile at the end o f November, 1998. (Ibid, pp. 1-2)

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In December 1948, U.N. Secretary General Trygve Lie appointed Gustavo Martinez Cabanas of Mexico executive secretary o f ECLA.19 At the time, the total staff of approximately 35 people included “six or eight” working as “economists proper.”20 Eugenio Castillo became deputy executive secretary; he was a Cuban who aroused an uncomfortable feeling among the other cepalinos due to his political beliefs.21 Others included Louis Swenson, a U.S. citizen, formerly of the United Nations Refugee Resettlement Agency; Milos Kybal, on loan to ECLA as a consultant from the Foreign Research Department of the Federal Reserve Bank o f New York; and Alizondo Garcia, former director of research at the Central Bank of Argentina, hired as a consultant for six months. Already the U.S. Embassy in Santiago was aware that ECLA was “negotiating the services of Raoul Pribic [sic], former head of the Argentine Central Bank,” but it was rumored that he was already on “contract to the International Monetary Fund.”22 The Embassy noted that “nearly all of the Latin Americans were trained in the United States,”23 and observed, with apprehension, that “with the exception of Mr. Castillo, Mr. Carlson and Mr. Swenson, the ECLA staff is young and in many cases inexperienced.”24 In the beginning, ECLA’s puipose was largely technical, although there were indications that ECLA might also adopt a more assertive role in articulating the region’s economic concerns. From 1948 to 1951, “ECLA had a small budget and a small and 19 Martinez Cabanas served at the Ministerio del Patrimonio Nacional o f Mexico prior to his appointment as Executive Secretary o f ECLA. 20 Progress o f Economic Survey Undertaken by the United Nations Economic Commission for Latin America, Despatch no. 765 from Claude G. Bowers, U.S. Embassy Santiago, to Secretary o f State (NARA, 50 l.BD-ARA/12-748, December 7, 1948). 21 Castillo later left ECLA in 1952, to join Batista in Havana. 22 Progress o f Economic Survey, op. cit. 23 Both Alexander Ganz and Richard Mallon, two U.S. citizens who joined the ECLA staff early on, also remarked in interviews that most economists at ECLA had received some training abroad. (Interview, Alexander Ganz, 10 February 1995 and Richard Mallon, 26 August 1993). 24 Progress o f Economic Survey, op. cit.

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relatively inexperienced staff.” Governments in the region still had little knowledge o f the organization or its purpose.25 Eugenio Castillo, who seems to have been held in confidence by the U.S. Embassy, expressed the Commission’s desire to “write a report that will have a standing and an impact comparable to the Myrdal Report on Europe,” a reference to Gunnar Myrdal, Executive Secretary of the United Nations Economic Commission for Europe, who was already internationally recognized for his analysis of problems o f economic and social development.26 By December 1948, the ECLA staff was preparing “a series of country studies on the basis of information gathered by regional team s.. .or otherwise readily available.” ECLA aimed to accompany these studies with a general overview o f Latin American economic conditions and international economic relations (Table 3.1). In a suggestive remark, the U.S. Embassy reported that for this task, “Sr. Castillo is seeking a first class man.”27

25 ECLA, “Survey o f the Work o f the Economic Commission for Latin America for the SecretaryG eneral’s Review o f Work Programmes,” Santiago, 3 October 1953 (UNA RG-20 A/316 RRG2/1232, Box 36, File 6). 26 Myrdal was Executive Secretary o f the Economic Commission for Europe from 1947 to 1957. 27 Progress o f Economic Survey, p. 2.

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Table 3.1 Design of the First ECLA Economic Survey: Staff (November 1948)

Name o f S ta ff Member Francisco Aquino (El Salvador)

15 September to 6 October collection o f data for El Salvador, Honduras, Nicaragua, Costa Rica.

Jorge Alcazar (Bolivia)

Arrived Santiago 13 October.

Javier Olea

Consultant; farm machinery and irrigation.

Oscar Tenhamm

Consultant: transportation.

Milic Kybal (United States)

16 September to 16 O cto b ercollection o f data in Cuba, Mexico, Guatemala and Panama. 15 August to 22 October Research on industry for Argentina and Uruguay. Arrived 8 November.

Jean Richardot

Bruno Leuschner (Chile) Regino Boti (Cuba) Reynold E. Carlson

Julio Alizdn Garcia (Argentina) Professor Carlos Hoerning

Working under supervision o f Mr. Carlson. Consultant: Banking and credit, and general aspects o f Economic Survey. Arrived 10 August. Consultant: Argentina, Uruguay and Paraguay. Arrived 15 November. Consultant: technical assistance. Reports for duty 17 November; assignment terminates 31 December.

Present Assignment 19 O ctober - ECLA/FAO W orking Party. Also responsible for collection o f information needed for agricultural sections o f Economic Survey, especially on crop insurance and price fixing, agricultural and processing industries and marketing. 19 October - ECLA/FAO Working Party. Also responsible for collection o f information needed for agricultural sections o f Economic Survey. 15 October - ECLA/FAO Working Party. Also responsible for securing additional information on methods o f agricultural production required for Economic Survey. 15 October - Chairman ECLA/FAO Working Party. Also responsible for securing complete data on Inland Transportation, especially freight rates, required fo r Economic Survey. Research and first draft on industrial developm ent for sections o f Economic Survey. Research and first drafts on industrial developm ent for sections o f Economic Survey. Research and reports on mining and fuel for Economic Survey. 15 July - Research and first draft on foreign trade sections o f Economic Survey. Research and first draft on banking and credit sections o f Economic Survey. Research and ch ief responsibilities for writing all aspects o f Economic Survey dealing with Argentina, Paraguay and Uruguay. Construction o f questionnaire to be used to secure information re needs and facilities for technical personnel in Latin American countries.

Source: Progress Report, from Eugenio Castillo to H.E. Caustin, Acting Assistant Secretary General in Charge o f Economic Affairs, United Nations, New York, 17 November 1948, pp. 2-3 (UNA, RG 17 A/94 RR, Box 33, File 6).

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Castillo reported to the United Nations that the 1948 Economic Survey would trace trends in industrialization for the previous ten years in almost all o f the Latin American countries. Staff also worked on the “construction of detailed variables for each country showing [the] origin and destination of imports and exports” annually for the period 1936 to 1946, with the intention of analyzing commercial trends by country since the 1930s.28 Castillo noted “the difficulty of procuring basic economic data.” This task was all the more challenging, since regional trade statistics followed no uniform standard. Weak national statistical sources were compounded by political events in Argentina, where, Castillo reported, “no statistical reports have been issued since August 1948” due to a “statistical blackout.” Still, ECLA’s reliance on consultants often drew economists with significant experience. In the case o f Argentina, for example, Julio Alizon Garcia became the principal source o f information because he had good contacts and an “ intimate knowledge of the Argentine economy.”29 ECLA quickly developed close relations with the International Monetary Fund, thanks to the Fund’s already having hired a number of Latin American economists.30 In addition to collaborating in matters of recruitment, the Fund also shared information with ECLA, although not always entirely willingly.31 On behalf of ECLA, staff at the

28 Progress Report submitted by Eugenio Castillo, Acting Executive Secretary, ECLA, to H.E. Caustin, Acting Assistant Secretary General in Charge o f Economic Affairs, United Nations, Lake Success, New York, 17 November 1948, pp. 5-6 (UNA RG 17 A/94, Box 33, File 6). 29 Argentina was considered crucial, “ inasmuch as recent economic developments are important for an understanding o f such problems as inflation, industrial development and changes in foreign trade.” (Ibid, pp. 3,4). 30 At the time, the Fund employed Felipe Pazos (Cuba), as assistant to Edward Bernstein; Jorge Del Canto (Chile) directed the Southern Cone Division o f the Latin American Division, and Javier Marquez (Mexico) was responsible for the Northern Latin American countries. 31 See Eugenio Castillo to Jorge Del Canto, Chief, Latin American Division, Department o f Economic Research, IMF, 27 January 1949 (IMF 1 124 “Economic Commission for Latin America,” 1949). Castillo expressed his disappointment that the Fund had not provided personnel to help ECLA in the preparation o f the sections o f the Economic Survey on financial issues.

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International Monetary Fund prepared a study of the terms of trade that included Cuba, Mexico, Guatemala, Argentina, Chile, Colombia, Peru, Brazil and Uruguay, as well as another on problems of inflation, and a third on balance of payments issues. Castillo was also negotiating with Gunnar Myrdal to hire a European economist to write a section o f the Survey “dealing with the effect of the economic rehabilitation program of Europe and the Far East on Latin America.”32 The first ECLA Annual Economic Survey has been relatively neglected due to the overwhelming focus on Prebisch’s contribution to the Survey o f the following year; it was in fact the beginning o f a series o f fundamental contributions to the study of the Latin American economies. In Prebisch’s own words, the “Economic Survey of Latin America of 1948 brought together a significant body o f information on the region as a whole in some cases for the first time,” in addition to tracing the principal developments in agriculture, industry, mining, transportation, immigration and foreign trade for the period 1937-47.33 The second section of the 1948 Survey, “Economic Development of Selected Latin American Countries,” included extensive data on industrialization in the larger economies. The chapter entitled “Growth, Disequilibrium, and Disparities: An Interpretation o f the Process of Economic Development” indicated that much of ECLA’s rationale for industrialization, as in the need to increase the productivity of labor, and in

Another internal memorandum, dated 27 April 1951 indicated that “the Fund can undertake studies o f special interest to ECLA only if they also serve the interests o f the Fund,” although already the Fund had in fact prepared studies for ECLA on trade and payments agreements, and monetary systems in individual countries. (Frank Coe to Roman L. Florne, “Fund’s Attitude at ECLA Conference in Mexico City,” 27 April 1951 (IMF I 124 “Economic Commission for Latin America,” 1951-1952). 32 Progress Report, Castillo to Caustin, 17 November 1948, pp. 6-8. 33 “ Progress Report by the Executive Secretary to the Fourth Session o f ECLA,” 15 March 1951, p. 8 (UNA, RG-20 A/309 RR 62/1179, Box 35, File 3).

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its agenda for industrialization, including planning, was already taken seriously in the region.34

The Arrival of Prebisch The basic institutional structure of ECLA was already present when Raul Prebisch arrived in 1949, but as many colleagues and other observers have commented, it was Prebisch who gave ECLA its trademark, and who contributed significantly to the creation o f a cepalino identity with the development o f ECLA as a recognized intellectual entity.35 At the end of February 1949, Prebisch, having been dismissed from the Central Bank (1943) and from his university teaching post (1948) in Argentina, accepted an invitation to prepare a study on the Latin American economic situation for the first annual ECLA Conference, to be held in Havana in May.36 His essay was called “The Economic Development o f Latin America and Its Principal Problems,” and represented an outspoken indictment of the existing balance of international economic relations. Prebisch issued “a war cry,” and a direct “attack on the existing international order and its ideologues” in calling for a theoretical interpretation that originated in the developing countries, rather than the industrialized countries, the so-called “Center.”37 Prebisch criticized the idea that the underdeveloped countries would indefinitely remain exporters o f primary products, and his language was uncompromising: “Industrialization is not an end to itself, but the principal means at the disposal of those countries of obtaining a 34 E.V.K. Fitzgerald, “ECLA and the Formation o f Latin American Economic Doctrine,” in Latin America in the 1940s. War and Postwar Transitions, ed. David Rock (Berkeley and Los Angeles: University o f California Press, 1994), p. 97. 35 “Intervencion del Ministro de Educacion de Chile, Ricardo Lagos, en el acto de Homenaje a la memoria del Senor Fernando Fajnzylber,” CEPAL, Santiago, 13 April 1992. 36 Love, “Economic Ideas and Ideologies,” p. 414; Furtado, A Fantasia Organizada, pp. 54, 56, 58; Kathryn Sikkink, “The Influence o f Raul Prebisch on Economic Policymaking in Argentina, 1950-1962,” Latin American Research Review 23, no. 2 (Spring 1988), p. 93.

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share of the benefits of technical progress and of progressively raising the standard of living of the masses.”38 The admiration for Prebisch began almost immediately, and quickly became a key aspect o f identification with ECLA. Celso Furtado later called Prebisch’s work a “manifesto which called upon the Latin American countries to undertake industrialization. His qualities o f polemicist shone, as well as his well crafted language.”39 This manifesto forged the rhetoric that came to define ECLA, and that soon overshadowed the rest o f the work that was taking place at the Commission. Not only Furtado noted the powerful nature of the essay; its impact was also immediate on a broader level. Memoranda from the United Nations headquarters, in discussing whether to break strict United Nations precedent and attribute the text to Prebisch’s authorship, suggested his already well established reputation in Latin America, and the potential significance of his work.40

37 Furtado, A Fantasia Organizada, p. 60. 38 Ibid, p. 62; Raul Prebisch, “The Economic Development o f Latin America and Its Principal Problems,” Economic Bulletin fo r Latin America, 7, no. 1 (February 1962), p. 1. 39 Albert O. Hirschman was the first to call Prebisch’s essay a “veritable ECLA manifesto,” in an article published in 1961 (“Ideologies o f Economic Development in Latin America,” in Latin American Issues. Essays and Comments, ed. Albert O. Hirschman (New York: Twentieth Century Fund, 1961), p. 13). E.V.K. Fitzgerald called Prebisch’s tone in the essay “somewhat rhetorical,” a description that would mark ECLA’s image over the next two decades, if not longer. (Fitzgerald, “ECLA and Latin American Economic Doctrine,” p. 98). 40 A flurry o f memos reflects the seriousness of the question o f whether to openly attribute the work to Prebisch, thus breaking United Nations protocol. Arguments against citing Prebisch as the author relied on his already well established reputation: “Prebisch’s personality is so well known in Latin America and among economists that it seems to us that it is not necessary to mention” his authorship in the preface o f the report. [See H.E. Caustin, Deputy Director, Division o f Economic Stability and Development, Department o f Economic Affairs, United Nations, to Gustavo Martinez Cabanas, Executive Secretary, ECLA, Santiago, 31 October, 1949. Also memorandum, S.B. Shields, Department o f Economic Affairs, to Andrew Cordier, Chairman, Publications Board, United Nations, 17 October 1949 (UNA, RG 17 A/94, Box 33, File 7)].

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The essay was unveiled at the second session of ECLA, in Havana (May-June 1949), and its success led Prebisch to stay on at ECLA. Following the conference, Prebisch drafted the introduction to the 1949 Economic Survey, where he was formally to lay out the terms of trade argument for the first time. Prebisch used statistical analysis to demonstrate that the terms of trade for Latin American exports to the United States and Great Britain had declined between 1929 and 1949. The Introduction represented a direct critique of the theory of laissez faire in international economic relations, countering the idea that the benefits of free trade would be distributed equitably through economic growth.41 Prebisch documented a deterioration in the terms of trade for countries in the so-called Periphery, to be distinguished from the more industrialized Center. According to the study, gains in productivity from technological improvements in the Center and the deterioration of relative prices o f primary exports placed the Periphery at a disadvantage, one that only deliberate economic policies o f industrialization could overcome. The views that Prebisch presented in the Survey “implied not only a radical analysis o f the economic problems o f the Periphery but also an outspoken criticism o f the behavior o f the Center in setting high prices, wages, and profits for itself on the one hand and retarding the spread of technology and industry on the other.” Most significantly, the 1949 Survey implied that import substitution industrialization was the only solution for Latin America given that the alternative, the export o f manufactures, would not succeed without adequate access to markets in the Center.42 Industrialization was considered the

41 Furtado, A Fantasia Organizada, pp. 78-79. 42 Fitzgerald, “ECLA and Latin American Economic Doctrine,” p. 99.

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“centerpiece” o f economic development policy, and would remain at the core o f the ECLA agenda for the next fifteen years.43 The 1949 Economic Survey o f Latin America is widely known, particularly for its part in inaugurating Prebisch’s monumental contribution to Latin American economic development. Rather than devoting extensive discussion to its content, which has been covered elsewhere, I will focus on the creation of the Survey and the collaboration of ECLA economists under the direction of Prebisch. Joseph Love argued that “without Prebisch’s leadership, ECLA was not yet ECLA. His personality, theses, and program mes.. .dominated the agency in its formative phase.”44 Besides the influence of Prebisch, however, what interests us here is the passionate commitment o f the entire staff to economic development in the region, and their common missionary purpose. After the Havana meeting, Executive Secretary Martinez Cabanas authorized the creation of a Research Division, designating Prebisch as Director, and allowing him extraordinary freedom both in the direction of research and the selection of personnel. When Celso Furtado arrived at ECLA in 1949, he recalled that the “technical staff consisted o f no more than ten people,” many of them trained abroad.45 Cepalino Alexander Ganz, hired in 1952, recalled that in the beginning, “there was no sense of what the Latin American economy was.”46 The production of the second Annual

43 Love, “Economic Ideas and Ideologies,” p. 416; Urquidi, “Cuestiones fundamentales en la perspectiva del desarrollo latinoamericano,” El Trimestre Economico L(2), no. 198 (April-June 1983), pp. 1099-1100. 44 Love, p. 413. 45 Two agricultural economists, Jorge Alcazar, o f Bolivia, and Francisco Aquino, from El Salvador, had studied in the United States. Jorge Rose, from Peru, had studied in the United States and had worked at the U.S. Bureau of Statistics. Raul Rey Alvarez and Julio Alizon Garcia (also noted as Alizondo) were both economists from Argentina. (Furtado, A Fantasia Organizada, p.72). 46 Interview, Alexander Ganz, Cambridge, MA, 22 July 1993.

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Economic Survey reveals extensive collaboration among United Nations agencies, and growing professional contacts among economists specializing on Latin American affairs. A depiction o f how it took shape also provides insight on the internal evolution o f ECLA. Prebisch reported that chapter 1, entitled “Recent developments in the economic situation of Latin America,” would consist o f information gathered at the ECLA headquarters. He hired consultants on trade, mentioning in particular Gustavo Polit, a Mexican economist, who had experience in Washington and knowledge of useful sources of data. Chapter 2 was entitled “The Problem o f Economic Development.” Here, Prebisch made a clear distinction from his previous, more polemical essay, stating that the chapter would “differ greatly” in “tenor,” and that it would be devoted to theory, “without the advocacy of any practical solution,” in order to maintain standards o f objectivity. This, in essence, would define the language with which all of ECLA’s future pronouncements were made, a distinctive combination of objectivity and persuasion.47 Jorge Alcazar prepared the chapter on agriculture, and Milos Kybal traveled to Mexico, Brazil, Argentina and Chile in order to collect material for the chapter on industry; Bruno Lauschner prepared the chapter on mining, and Prebisch was to work with Javier Marquez at the IMF in preparing the chapter on the balance o f payments, drawing from information available at the International Monetary Fund.48 Prebisch charged the Research Division with writing analyses of the four largest economies (Argentina, Brazil, Mexico and Chile), along with a general section on the region as a whole. The Division prepared the regional economic overview, taking the 47 In spite o f the fact that he invited collaboration, the mark o f Prebisch is unmistakable, in his statement “Chapters I and II will be drafted by myself.” (“First draft o f the outline o f the Economic Survey o f Latin America 1949,” typed manuscript, 22 August 1949, p. 3 (UNA DAG RG-17 A/94 RR, Box 3 File 6).

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first steps to aggregate national data.49 Celso Furtado described this process in luminous terms: Prebisch’s experience in Argentina, and his exposure to other countries, “could now be tested against a new reality, whose image began to appear before ourselves, discoverers o f a new Latin America.”50 If not yet a literature o f celebration, at least the atmosphere of celebration, now began. Prebisch’s findings actually paralleled a report written simultaneously by Hans Singer, at the United Nations in New York, which argued that income in the developed countries continued to grow as a result o f technological progress, but that meanwhile prices in developing countries, producers o f food and raw materials, were deteriorating.51 The ideas that ECLA presented were not entirely novel; rather, ECLA was fundamental in formally articulating the experience of the Latin American economies. But what concerns us here, rather than the theoretical origins or implications of the argument, is the meaning o f the intellectual culture o f those who worked with Prebisch, received and translated ECLA’s ideas o f development; and the effect of ECLA’s discourse on the audience within and beyond ECLA.

The Consolidation of ECLA The third session o f ECLA in 1950, held in Montevideo, “consolidated the prestige o f Raul Prebisch.” Delegates expressed considerable interest in the studies of the four largest economies. The conference also provided a preview o f the resistance of the United States to particular positions of the Latin American side. The main message of Prebisch’s theoretical study was that “the Governments should take charge of the 48 Ibid, pp. 3-4. 49 Furtado called this overview one of the first “coherent views of Latin America as a whole” (A Fantasia Organizada, p. 75). 50 Ibid.

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direction o f the process of development,” a finding that aroused strong opposition from the United States delegation, whose representatives insisted that the role o f governments in Latin America should be limited to creating a favorable environment for private investment.52 Celso Furtado observed how Prebisch’s ideas were extremely “seductive” to many o f the Latin American delegates, even though ECLA reports still suffered from a dearth o f adequate statistics.53 The atmosphere at Montevideo was highly encouraging: “for the moment, we were on the right path (caminhavamos em estrada real). Everything seemed possible.” In June 1950, immediately following the Montevideo conference, Prebisch was named executive secretary o f ECLA, replacing Martinez Cabanas, and an American, Louis Swenson, assumed the position o f assistant formerly held by Eugenio Castillo. Swenson was an “authentic ‘New Dealer’,” and would prove essential in negotiating the tenuous relations between ECLA and the United States government in the years that followed.54 At the insistence of the United States, ECLA was originally granted a three year trial period from 1948 to 1951. At the fourth session in Mexico City in June 1951, delegates formally approved the permanent status o f ECLA, in spite o f heavy resistance from United States delegates. Furthermore, resolutions allowed for a considerable expansion in the scope of ECLA’s activities.55 The atmosphere o f triumph, ECLA’s accomplishments to date, and the feeling of excitement among its staff gave the cepalinos

51 Love, “Economic Ideas and Ideologies,” p. 417. 52 Furtado, A Fantasia Organizada, p. 84. 53 Ibid, pp. 84-85. 54 Ibid, pp. 86-87, 127.

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a sense o f “euphoria.”56 Furtado declared that “the challenge had been launched. ECLA was transformed into the symbol of a united effort of Latin America in its struggle to escape the vicissitudes o f underdevelopment.” In his lofty words, ECLA would “occupy a place of importance in the struggle for the direction o f economic policy in Latin America.”37 Prebisch presented a review of ECLA’s activities at the plenary meeting of the Commission held on May 29, 1951. He emphasized the collegiality among the Latin American economists working at ECLA, and referred to the absence o f “outside pressure and influence which so often upset the working o f similar” institutions, an obvious reference to the legacy o f U.S. interference at the Organization o f American States, precisely what ECLA had so consciously sought to avoid. His description of the cepalinos’ working style was characteristic of the passionate feelings that ECLA had aroused: “Mexican, Cuban, Central America, Brazilian, Argentine, Chilean, Bolivian, Paraguayan, Uruguayan, Peruvian and Colombian economists...collaborate enthusiastically in a joint task with a small group o f United States and European economists.” Prebisch pursued the imagery further, suggesting that ECLA’s working environment had fostered “harmony and coherence,” above all, a “fundamental unity of purpose. ?i58

55 ECLA, “Survey o f the Work o f the Economic Commission for Latin America for the SecretaryGeneral’s Review o f Work Programmes” (typewritten text) Santiago, 3 October 1953 (UNA Archives RG-20 A/316 RR-G2/1232, Box 36, File 6). 56 Furtado, A Fantasia Organizada, p. 125. 57 Ibid, pp. 119, 125. 58 Speech made by the Executive Secretary to the 36lh Plenary Meeting o f ECLA, 29 May 1951, Economic Commission for Latin America, Work Programme and Priorities, Progress Report by the Executive Secretary to the Fourth Session o f ECLA, 6 June, 1951 (E/CN. 12/220), p. 19.

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With an enlarged budget, the ECLA staff began to expand. The fourth session resulted in the establishment o f a regional office in Mexico City, responsible for Costa Rica, Nicaragua, the Dominican Republic, Guatemala, Cuba, Haiti, Honduras, Panama, El Salvador, and Mexico. By October 1951, the ECLA Secretariat had 28 economists, of whom 18 were based in Santiago, with others at the Mexico City office and more engaged in field work in different countries.59 The hiring of consultants continued to give ECLA access to talented economists with “an intimate knowledge o f their own national economies and... ready access to the best sources of information.”60 In Santiago, the Office o f the Executive Secretary now supervised multiple divisions: the Economic Survey Unit, Economic Development Division, Industry and Mining Division, Agricultural Division, Foreign Trade Division, and, after 1952, the ECLA Training Program, administered in conjunction with the Technical Assistance Administration of the United Nations in New York. In 1952 Furtado was appointed director o f the Economic Development Division, which oversaw a number o f working groups. Prebisch recruited Juan Noyola Vazquez, a young economist from Mexico, who had worked at the IMF, to join the Division.61 Prebisch also invited University o f Chicago economist Harvey Perloff, who was instrumental in Puerto Rico’s recent industrialization effort; but Perloff, unable to accept, recommended Alexander Ganz, who had worked on the Puerto Rican Planning Board; Ganz would become the only other North American on the ECLA staff besides Louis

59 Foreign Service Despatch No. 399 from Amemb Santiago to Department of State, October 1, 1951 (NARA 340.210/10-151), p. 2. 60 ECLA, “Survey o f the Work o f the Economic Commission for Latin America for the SecretaryGeneral’s Review o f Work Programmes,” 3 October 1953, p. 2 (UNA, RG-20 A/316 RRG2/1232, Box 36 File 5). 61 Furtado, A Fantasia Organizada, p. 126.

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Swenson. Regino Boti, o f Cuba, a graduate of Harvard, was also recruited to the Division at this time.62 Furtado described the excitement o f the cepalinos ’ work at ECLA during this intense period, what Joseph Love calls the “halcyon years,”63 when Prebisch seemed to be “the soul” of this common effort:64 Our group worked without time limitations and without concern for the specific division of work. We repeated the same tasks several times, as if we were entertaining ourselves with a marvelous toy... .We discussed everything, creating a continuity o f concentration, even if only at a subconscious level, in what we were accomplishing.65 In particular cases, their excitement was related to the development o f new information about the Latin American economies. Furtado’s description o f the work of colleague Alexander Ganz in the construction o f national accounts for the Economic Development Division suggests some o f the momentous feel o f their work. Ganz “knew how to extract water from a stone, assembling statistical tables on the basis of fragmentary data,” one of the most pivotal tasks of ECLA’s early years.66 The ECLA staff members recall a “total dedication” to their work.67 This excitement was fragile, in that staff did not know how long their jobs would last, but conditions were sufficiently favorable to draw together

62 Alexander Ganz to author, 11 August 1992. 63 Love, “Economic Ideas and Ideologies,” p. 423. 64 In referring to the work o f ECLA from 1952 to 1963, when Prebisch left ECLA for Geneva, Francisco Giner de los Rios recalled that “ Raul Prebisch was in reality - and it is almost obvious to mention it - the soul o f all o f this.” He further reminisced, “I never felt such enthusiasm and more complete dedication to the work o f the Commission than during those years.” (“Prologo Heterodoxo,” p. 7). 65 Furtado, A Fantasia Organizada, p. 137. 66 “Ganz belonged to the generation o f the sons o f immigrant workers, with social concerns, in the European tradition. He looked upon Latin American under-development as a continuation o f the experience o f his country in the bad times o f the 1930s.” (Furtado, A Fantasia Organizada, p. 136). 67 Francisco Giner de los Rios, “Prologo Heterodoxo,” in CEPAL: Bibliografia 1948-1988 (Santiago: Naciones Unidas, Comision Economica para America Latina y el Caribe, 1989), p. 7.

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economists from disparate countries in ECLA’s mission.68 ECLA was developing its regional agenda, and for a United Nations organization, enjoyed a considerable amount of autonomy. The task quickly evolved from research alone, to collaboration with governments in planning missions and training.

Programming: The ECLA Missions Instability represents one of the two main justifications for a programme; the other is the need to accelerate economic growth.69 The fourth session of ECLA in Mexico City, held in May 1951, was the scene of the unveiling o f “Theoretical and Practical Problems o f Economic Growth,” ECLA’s first explicit endorsement of development planning. This study was only the “beginning o f a vast project, in which the very methodology was still being formulated.”70 By 1953, ECLA reported to the United Nations Headquarters that “it could be expected to enlarge further its scope o f activities - at least to the point where it could assist individual governments in analysing economic data and in formulating goals and programmes for their economic development.”71 Planning can be said to have institutionalized ECLA’s collaboration with governments in the region, even though its acceptance was mixed and its concrete results far from ideal. This was a period of rapid growth, and the New Deal, experience during World War II, impressive evidence o f economic development in the socialist economies, together with the adoption of planning in Northern Europe, presented a compelling model 68 Furtado,/f Fantasia Organizada, pp. 109, 127. 69 Economic Commission for Latin America, Analyses and Projections o f Economic Development I. An Introduction to the Technique o f Programming (New York: United Nations, Department of Economic and Social Affairs, 1955), p. 17. 70 Comision Economica para America Latina, “Problemas teoricos y practicos del crecimiento economico” (Mexico: Naciones Unidas, Consejo Economico y Social 28 May 1951) (E/CN. 12/221), pp. 8-9.

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for the cepalinos.72 European recovery from the Second World War called for new planning methodology, including input-output analysis and linear programming, attracting economists such as Jan Tinbergen and Wassily Leontief.73 In the 1950s, ECLA economists actively communicated with a number of prominent European and North American economists who were working on fundamental planning theory, fostered in particular by ongoing exchanges with the Economic Commission for Europe.74 The Economic Development Division undertook to develop and disseminate “the technique o f projecting economic development as an aid in the formulation of development strategy and programs for the region as a whole, and by governments.”77 The centrality of the state as a principal investor in Latin America made planning a rational method for prioritizing investment and charting growth.76 Experiences such as that o f postwar France, which had channeled resources into strategic sectors, showed how calculated investment could successfully promote key industries, such as iron and steel, while also supporting the expansion of infrastructure.77 The more definitive expression ofE C L A ’s approach to planning appeared in An Introduction to the Technique o f Programming, published in 1955, prepared by ECLA

71 “Survey o f the Work o f the Economic Commission for Latin America,” op. cit., p. 2. 72 Celso Furtado observed that existing “experience in economic planning seemed to me something that could not be overlooked. World War II had clearly demonstrated that proper management o f the economic system could guarantee full em ploym ent....The Soviet Union had demonstrated that this aspiration...could also be fulfilled in peacetime.” (A Fantasia Organizada, pp. 16, 129). 73 Hollis B. Chenery, “ From Engineering to Economics,” Development Discussion Paper No. 456, Harvard Institute for International Development (Cambridge, MA, June 1993), p. 9. 7J During tne 1950s, the relationship o f cooperation between ECLA and the Economic Commission for Europe brought, among others, economists Nicolas Kaldor and Jan Tinbergen to ECLA. (Interview, Jose Besa, ECLA, Santiago, 3 December 1997). 75 Alexander Ganz to author, August 11, 1992. 76 Interview, Oscar Munoz, Santiago, 26 November 1997. 77 Furtado, A Fantasia Organizada, p. 129.

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economists Celso Furtado, Regino Boti, Juan Noyola, and Alexander Ganz.78 The Technique o f Programming asserted that planning was necessary to accelerate growth rates, in addition to ensuring “a regular and ordered development with a minimum of fluctuation.” Programming was not to be confused with “rigid state control of the economy,” rather it was aimed at “increasing and judiciously regulating capital investment, so that a stronger impetus and greater order may be given to the growth of a country.” ECLA’s wording was chosen carefully, to avoid criticism from more conservative sectors, and perhaps also from the United States: “a development programme calls for the firm application of a development policy... without shackling private enterprise.”79 ECLA’s approach to programming incorporated specific techniques introduced by mainstream economists from North America and Europe. The Economic Development Division drew up investment and capital stock estimates, based on Simon K uznef s research on the measurement o f national income.80 Prebisch invited World Bank and MIT economist Paul Rosenstein-Rodan to ECLA, where he introduced methods for the analysis and projection of consumer demand as a function of income and product growth. Hollis Chenery of Harvard University introduced techniques for the preparation of inputoutput tables, drawing on his experience in postwar southern Italy. Based on the notion that changes in the structure of demand accompany growth in per capita income, inpuloutput analysis served as a means for projecting direct and indirect requirements for intermediate goods, such as steel and electricity, required for the production of consumer

78 Introduction to the Technique o f Programming, p. 2. 79 Ibid. 80 Richard A. Easterlin, “Kuznets, Simon,” in The New Palgrave Dictionary o f Economics, ed. John Eatwell, Murray Milgate, and Peter Newman, vol. Ill (London: Macmillan, 1987), p. 70.

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goods. Countries were expected to draw up national development strategies based on production and investment goals.81 ECLA organized a series of missions to individual Latin American countries for the preparation o f detailed economic surveys and recommendations for economic development planning. Two important missions, in particular, were central to the experiences o f the original generation of cepalinos. The ECLA mission to Colombia in 1954, under the direction o f Alexander Ganz, resulted in the publication The Analysis and Projection o f the Economic Development o f Colombia (1955).82 The overthrow o f Peron interrupted the Colombia mission at the time o f the ECLA meeting in Bogota in September 1955; Prebisch immediately ordered staff members Hugo Trivelli and Alex Ganz to meet him in Buenos Aires. The mission to Argentina that followed drew upon the national accounts staff from the Central Bank, recently dismissed by the new government, including Manuel Balboa, Alberto Fracchia, and Norberto Gonzalez, and resulted in the publication in 1957 o f the five volume study, The Analysis and Projection o f the Economic Development o f Argentina** For the cepalinos the ECLA missions meant exposure to broad economic questions and contexts outside of their own countries.84 Not all of the missions met with resounding success, however. From 1954 to 1956, the ECLA mission to Mexico, with the participation o f Juan Noyola, Oscar Soberon, Celso Furtado, and Osvaldo Sunkel,

81 Alexander Ganz to author, 11 August 1992. 82 ECLA staff who participated in the mission to Colombia included Hugo Trivelli (Chile), for agriculture; Pedro Vuskovic (Chile) for industry and the construction o f input-output tables; Richard Mallon (USA) for international trade; and Alexander Ganz (USA) for national accounts. (Alexander Ganz to author, 11 August 1992). 83 Later Balboa and Gonzalez would also serve terms as deputy director o f ECLA (ibid).

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prepared a report to be presented before the ECLA meeting in La Paz in 1957. However the report antagonized Mexican officials, who rejected it due to its critical assessment of economic policy. In the end, it was never published, and only distributed in mimeographed form.85 Albert Hirschman, present as economic consultant in Bogota at the time of the Colombia mission, called integrated development planning a “myth.” 86 Hirschman’s well known criticism, as well as the debate between supporters and opponents of planning in Brazil, suggest that planning was controversial, even in this era of apparent enthusiasm.87 Apart from post-revolutionary Cuba, neither is it clear that integral planning took hold, except for periods of official support, as in Brazil during the administration o f Juscelino Kubitschek. More importantly, perhaps, these missions served as opportunities for information-gathering and for exposure of the ECLA economists to a vast new panorama o f Latin American possibilities.

The ECLA Training Program In 1949, less than a year after ECLA was established, the executive secretary directed a questionnaire to member governments inquiring as to the “ [njeeds of countries for technical assistance and...technical training for economic development.”88 At the Mexico City meeting of ECLA in June 1951, delegates agreed on “the need for

84 Hugo Trivelli, from Chile, traveled to Colombia, Ecuador and Argentina on ECLA missions, and through his research on agriculture in each country became knowledgeable about three very different agricultural contexts. (Interview, Hugo Trivelli, Santiago, 1 December 1997). 85 Victor Urquidi to author, 8 July 1998; Furtado, A Fantasia Organizada, pp. 188-192. 86 Hirschman advocated the elaboration o f sector project plans as opposed to overall “integrated” development planning. (See “Economics and Investment Planning,” in A Bias fo r Hope. Essays on Development and Latin Am erica (New Haven: Yale University Press, 1971), pp. 44, 46). 87 Sikkink, pp. 66-67. 88 “Transmitting Copies of Questionnaire on Technical Assistance Circulated by the United Nations Economic Commission for Latin America,” Incoming Telegram No. 156, Bowers, Amembassy, Santiago, to Secretary o f State, May 10, 1949 (NARA 501.BD ARA/5-1049).

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governments to formulate well-defined, general programs of economic development, and underlined the lack of economists in the region with sufficient preparation to design and put them into practice.”89 In 1952, ECLA inaugurated the Training Program in Economic Development, organized with the cooperation o f the United Nations Technical Assistance Administration (TAA) in New York. Jorge Ahumada was named its director in the same year, and spent the months of March and April 1952 visiting universities and research institutions in the United States and Canada, seeking models and literature for the Program, in addition to meeting with the TAA in N ew York to discuss matters o f administrative organization. The Training Program was originally envisioned to provide intensive training to “a small number of economists in economic development problems.”90 It was assumed that ECLA economists would be available to give lectures, participate in discussions, and collaborate on research projects with Training Program participants in Santiago.91 The Program was the first of its kind, and contributed to the dramatic spread o f ECLA’s methodology of economic development throughout Latin American government circles in the 1950s.92 The courses instilled civil servants, engineers, and social scientists with

89Naciones Unidas, Consejo Economico y Social, lnforme acerca delprogram a conjunto CEPAL/AATsobre capacitacion de economistas en desarrollo economico, CEPAL, 7o periodo de sesiones, La Paz, Bolivia, 15 May 1957 (E/CN. 12/433), p. 3. 90 Naciones Unidas, Consejo Economico y Social, Informe sobre el programa CEPAL/AAT de capacitacion en materia de desarrollo economico, in CEPAL, Informe Annual, 15 February 1952-25 April 1953, 16o periodo de sesiones, suplemento no. 3 (E/CN. 12/303), p. 3. 91 In particular, participation was expected from those in ECLA’s Economic Development Research Unit. [Formal Proposal for the Establishment and Programme o f Economic Development Study Centre Santiago, Chile, 28 September 1951, in “Current Activities o f the Secretariat o f the United Nations Economic Commission for Latin America (ECLA),” Foreign Service Despatch No. 399 from Amemb Santiago to Department o f State, October I, 1951 (NARA 340.210/10-151)]. 92 Furtado, A Fantasia Organizada, p. 76; Kathryn Sikkink, Ideas and Institutions. Developmentalism in Brazil and Argentina (Ithaca: Cornell University Press, 1991), p. 131.

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the principles o f economic development and notions o f its management through basic planning techniques. The first program involved specific objectives: the “analysis and projections of economic statistical series” for the Latin American economies as the basis for a discussion o f economic development problems and planning, along with assigned readings on economic theory and its application to less developed countries, with weekly discussion sessions.93 More broadly, the ECLA Training Program sought to “create a common outlook among members o f different professions working on economic development within Governments, to give them an integrated view of the process of economic change” and familiarize participants “with the most modern projecting and programming methods.”94 Two levels of instruction would serve separate, but complementary, purposes: in Santiago, the year-long program prepared economists to “coordinate the recommendations o f diverse specialists with programs and policies of economic development hi practice,” while in-country courses were designed to “familiarize a large number o f civil servants with modern techniques of programming economic policy,” with a view towards “promoting a coordinated outlook on policy instead o f the fragmentary approach which is so commonly found in different branches of public administration.”95

93 Annual Report fo r ECLA/TAA Training Program (1957), cited in Foreign Service Despatch no. 46 from Amembassy Santiago to Department o f State, July 14, 1958 (NARA 340.2/7-1458 HBS).

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95 Informe acerca del program a conjunto CEPAL/AAT sobre capacitacion de economistas en desarrollo economico, 15 May 1957 (E/CN. 12/433), pp. 3-4.

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The program syllabus was designed to serve “Latin American economists who took active part in the search for practical solutions to problems of the region.”96 The Manual on Economic Development Projects, published in 1958, set out the guiding principles o f the program most explicitly: “In widening circles o f opinion in different less developed countries it has become the consensus that economic development should not be left to the free play o f economic forces, but, instead, that it requires a deliberate effort, focused specifically on attaining a more active rhythm of growth o f per capita income.”97 Furthermore, earlier, less formalized means o f analyzing economic problems were outmoded; problems must be studied in a “systematic manner, instead of leaving” them “to the abandon o f intuitive forms of perception.”98 The courses meant that the ECLA vision of development, along with new, scientific techniques of economic development planning, would be introduced throughout Latin America to a broad array of civil servants and other professionals involved in public administration. The organization of the courses was ambitious, though its limitations in terms of scale became quickly apparent. The first training course was given in Santiago from May 1952 to March 1953, to be offered annually to between ten and twenty Latin American students. Instruction consisted of “an intense program of selected readings, lectures, discussion, and elaboration o f applied research projects.”99 In this first course, which

96 Naciones Unidas, Consejo Economico y Social, Informe sobre el programa CEPAL/AAT de capacitacion en materia de desarrollo economico, 15 February 1952-25 April 1953, 16o periodo de sesiones, suplemento no. 3 (E/CN. 12/303), p. 4. 97 Manual de proyectos de desarrollo economico. Estudio preparado p o r el Programa CEPAL/AAT de capacitacion en materia de desarrollo economico (Mexico: Naciones Unidas, diciembre de 1958). Also published in English by the United Nations in New York in 1958. 98 Informe sobre el programa CEPAL/AAT de capacitacion en materia de desarrollo economico, in CEPAL, Informe Annual, 15 February 1952-25 April 1953 (E/CN. 12/303). 99 Osvaldo Sunkel, a graduate o f the first course, recalled a reading list o f “five thousand pages’'' selected by Jorge Ahumada. (Interview, ECLA, Santiago, 27 June 1995).

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Ahumada taught on his own, classes were held in the form of a seminar, and covered basic economic concepts, such as national accounts, project analysis, and economic history, as well as mathematics, statistics, and project evaluation.100 The Santiago program grew to include courses in basic statistical methods; development theory and programming techniques; location and regional development theory; sector analysis; project formulation and evaluation; economic policy; financing, administration, and after 1957, the latest techniques in linear programming. The teaching o f linear programming, location analysis and regional development were “part of a continuing effort to keep the Programme abreast o f the most efficient modem methods available in the science of economics.” 101 This was an endeavor previously nonexistent in Latin America, and it grew quickly. Starting in 1955, shorter, intensive courses were given in Bogota (1955, 1959, and 1960); in Rio de Janeiro (1957, 1958, and 1960); Caracas (1957); Buenos Aires (1959, 1960); Havana (1959); La Paz (1960); Mexico City (1960); and Montevideo (1960). The intensive courses, lasting approximately three months, drew a considerably larger participation of government officials, engineers, architects, and other social scientists, with attendance ranging from 30 to 130 (Table 3.2).102

100 Ibid. 101 Informe acerca del programa conjunto CEPAL/AAT sobre capacitacion de economistas en desarrollo economico, CEPAL, 15 May 1957 (E/CN. 12/433), pp. 4-5. 102 Naciones Unidas, Comision Economica para America Latina, Informe Anual, 1952-1961.

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T ab le 3.2

E C L A T ra in in g P ro g ra m a n d In te n siv e C o u rses - C hro n o lo g y

F irs t T ra in in g

S econd T ra in in g C o u rse

T h ir d T r a in in g C o u n e

F o u rth T ra in in g C o u n e

S antiago A pril-Decem bcr 1954 16 Students

S antiago A prii-December 1955

F if th T r a in in g C o u n e

S ixth T ra in in g C o u n e

S ev e n th T ra in in g C o u n e

E ig lb T ra in in g C o u n e

N in th T ra in in g C o u rse

C oune S an tiag o M ay 1952-M arch 1953 10 students

S antiago A pril-Decem bcr 1953 12 Students

San tiag o April-D ecem ber 1956

S antiago A pril-December 1957 P ro f H ollis C henery guest

S an tiag o June 1958-Feb. 1959 9 students H ollis C henery returns

B o g o ti First intensive course Sepi-D ec. 1955 M ore than 100 attendees

S antiago July 1959-Feb. 1960 18 students Prof. Jan T inbergen guest

S antiago 1960-61 suspension o f regular course for reform and expansion from l4 to 3 5 p a itic ip a u ts

B o g o li June-Septem ber 1959 33 students; 45 auditors

B o g o ti A ug-N ov. 1960 3 0 full tim e students and 4 7 part tim e participants

R io d e Ja n e iro

R io d e Ja n e iro

R io d e J a n e iro

Aug.-Nov. 1957 80 participants 56 full tim e

A ug -Nov. 1958 50 participants, alm ost all o f them full tim e

Sept -Dec. I960 O rganized w ith the C enter for Econom ic D evelopm ent, EC L A / B N D E w ith 52 participants; 46 full tim e and auditors

C a ra c a s Sept -Dec 1957 26 full tim e students 56 p a n tim e

B uenos A ires O ct.-D ec 1958 70 participants

B uenos A ires 24 students w ith scholar­ ships and 47 auditors, in conjunction w ith the Faculty o f Econom ics, U niversidad d e Duenos Aires

La Paz July-Sept. 1960 U niversidad M ayor de San A n d ris 130 participants

H avana S ep t-D e e 1959 30 students w ith scholar­ ships; 30 auditors O rganized w ith E C L A / D O A T advisory m ission M ontevideo C ourse at U niversidad d e la Republica O riental w ith 72 participants; 22 full tim e and 50 part tim e

Source; Econom ic Com m ission for Latin America, A nnual Report (New York: United N ations, Econom ic and Social Council, 1952-1962).

At the ECLA headquarters, the Division o f Economic Development worked with students on individual projects to apply planning methods to development problems in their respective countries.103 Moreover, each year, the two top graduates o f each course were sent abroad to study and acquire practical experience in planning in northern Europe. As one o f the first students selected, Osvaldo Sunkel, a graduate o f the original year-long training course, was a post-graduate research student at the London School of Economics from 1953 until the end o f 1955. Between semesters he visited the European Community in Geneva, where he met Gunnar Myrdal, Hans Singer, and Nicolas Kaldor, luminaries in the fields o f growth and development. Sunkel was witness to practitioners who saw planning as a fundamental element of economic policy. He also spent one month in the Netherlands with Jan Tinbergen, a leading Northern European planner, a month at the Planning Office of Norway, and another month in Stockholm.104 Through the initiative o f ECLA’s staff, the Training Program was able to attract internationally recognized experts in planning. In late 1957, Professor Hollis Chenery of Stanford University was invited to give lectures on the latest techniques o f linear programming, to cover “scientific procedures for designing economic policy.” 105 Chenery returned to Santiago to participate in the course as a Lecturer in 1958 and

103 As an example, in 1957, Chilean students collaborated in the design o f a development plan for the Chilean chemical industry; three Brazilian students carried out regional income studies for the states o f Minas Gerais, Sao Paulo and Bahia for the period 1939 to 1954; and two Bolivian students calculated export, import and investment projections for their country. [ECLA/TAA Economic Development Training Programme, Annual Report, 1957, p. 7, in Foreign Service Despatch no. 46 from Amemb Santiago to Department o f State, July 14, 1958 (NARA 340.2/71458 HBS)]. 104 Interview, Osvaldo Sunkel ECLA, Santiago, Chile, 20 and 27 June 1995. 105 ECLA/TAA Economic Development Training Programme, Annual Report, 1957, p. 2; Informe anual sobre el program a CEPAL/AAT de capacitacion en materia de desarrollo economico, April 1958-May 1959 and May 1959-March 1960. Chenery’s lectures were published in Spanish in an article entitled “Politica y programas de desarrollo,” in Boletin Economico de America Latina 3, no. 1 (March 1958): 51 -78 and also in the English edition o f the Economic Bulletin.

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1959.106 ECLA invited Jan Tinbergen to lecture on short-term economic policy during the course offered in 1959-60.107 Both of these economists were at the forefront of development planning, and together brought considerable experience in applied economics, as well as planning in Europe and in less developed economies.108 One of the primary achievements o f the course was the preparation o f teaching material, which was severely lacking at the start of the program.109 Until the mid 1950s, material was still “dispersed in various sources.” In 1951, preparations began for the Project Manual, which was eventually released in Spanish and English in 1958.110 The Manual came in response to the “almost complete absence of a bibliography on economic development in Spanish,” not only to improve the training courses themselves, but also to “achieve the much more ambitious goal of disseminating knowledge o f the problems of economic growth and the means and techniques available to solve them” throughout Latin America. This material was intended to serve both economists, as well as a broader range o f “technicians and civil servants” serving development planning functions in Latin American countries.111

106 Chenery, “From Engineering to Economics,” p. 21. 107 Having attained significant applied experience in the Netherlands Central Planning Bureau during the 1940s and early 1950s, Tinbergen would later turn to academic research and make significant contributions “to the theory of development..[and] the methodology o f national and international planning.” Tinbergen “contributed to nearly every aspect of...planning processes” sought by “the new states o f the 1950s and 1960s to direct their policies through a medium-term development plan.” (Henk C. Bos, “Jan Tinbergen: A Profile,” Journal o f Policy Modeling 6, no. 2(1984), pp. 151-158). 108 “Preface,” in Economic Structure and Performance. Essays in Honor o f Hollis B. Chenery, ed. Moshe Syrquin, Lance Taylor, and Larry E. Westphal (New York: Academic Press, Inc., 1984), pp. xv-xvi; Bos, “Jan Tinbergen,” pp. 152-155. In a typical case, following the intensive course given in Colombia in 1955, the text o f class lectures was distributed to universities and to “numerous government officials.” (CEPAL, Informe Anual, 1953-54, and May 1955-May 1956). "° Key contributors to the Manual included Julio Melnick, Carlos Oyarzun, and Jorge Ahumada. (Interview, Jose Besa, ECLA, Santiago, 3 December 1997). 111 CEPAL, Informe Annual, May 1956-April 1957. 94

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The Program forged an entirely new relationship among students and instructors by balancing lectures with discussion, whereas Latin American universities traditionally relied entirely on lectures.112 Many observed how the classes fostered intellectual and professional solidarity among participants; along with this came an identification with ECLA.113 Participants remember the courses as the only existing training opportunities in economic development available in Latin America, even if they were not fully equivalent to the doctoral programs that Latin American economists now pursue abroad. The Santiago course, however small, was formalized and o f high enough quality so as to be recommended “as a prerequisite for post-graduate studies in economics in Europe and the United States.” 114 Through their local, short-term editions, the courses reached into every level of government administration in the region, and significantly enhanced graduates’ professional recognition. In the case o f Venezuela, for example, in 1957 participants represented over “20 different public institutions and National Universities.” At the time, the course administrators noted that “[b]oth in Brazil and Venezuela practically every government agency connected with economic development has at present in its staff at least one economist or engineer who has been trained by us.” The Training Program could trace its influence in high level government posts: as of 1957, “Most o f the students trained in Santiago now occupy important positions. For instance, one is a Minister of Finance, another is the President o f a Central Bank, and still another is an Under­ secretary of Economy.” In the case of the intensive course given in Venezuela, attendees

112 Informe acerca del programa conjunto CEPAL/AAT sobre capacitacion de economistas, CEPAL, 15 May 1957 (E/CN. 12/433). 113 Interview, Daniel Bitran, Mexico City, 5 July 1994. 114 Annual Report, ECLA/TAA Economic Development Training Programme (1957), p. 2.

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included the Director of the Budget, the Customs Director, the General Manager of the Development Corporation and the Director o f Agricultural Planning.115 Through other means, such as academic positions, graduates became highly influential in economic training and policymaking. For example, Maria da Conceifao Tavares, a graduate o f the intensive course administered in Rio de Janeiro in 1960, wrote a seminal article on the problems o f import substitution industrialization in Brazil in 1964, and became a key player in the institutionalization of university training in economics.116 Whereas earlier it was law and engineering that had attracted the brightest students in Latin America, during the 1950s, ECLA’s Training Program in economic development began to draw some of those who might formerly have chosen other fields. Richard Mallon, formerly an economist at ECLA, and one of the small number o f North American professional staff members, recalled that ECLA “never gave rigorous economic training like Harvard, but it was a step forward, and it was influential.” 117 The incorporation o f discussion represented an entirely new method o f teaching at the graduate level, and created a strong identification o f participants with ECLA and its tenets, one that was to last for at least two decades, or more.118 The attachment of graduates to ECLA was enduring.

115 Ibid. 116 The paper was entitled “The Growth and Decline o f Import Substitution in Brazil,” and appeared in the Economic Bulletin fo r Latin America 9, no. 1 (March 1964). See “Maria da Conceifao Tavares,” in Conversas com Economistas Brasileiros, ed. Ciro Biderman, Luis Felipe L. Cozac and Jose Marcio Rego (Sao Paulo: Editora 34, 1996), p. 127. 117 Interview, Richard Mallon, Harvard Institute for International Development, Cambridge, MA, 26 July 1993. Hollis Chenery, a colleague and contemporary o f Mallon, noted the uniqueness o f the ECLA Training Program, where he was a lecturer: “there were few opportunities for students to study in this kind o f program.” (Hollis B. Chenery, “From Engineering to Economics,” Development Discussion Paper No. 456, Harvard Institute for International Development (Cambridge, MA, June 1933), p. 22). 118 Hollis Chenery remarked that the “planning course... in Santiago became known for the high quality o f its student participation,” and that a “real camaraderie developed among the students

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The Influence of ECLA’s Ideas in Brazil Although present in virtually every Latin American country, ECLA left its greatest legacy in specific countries, most notably in Brazil and Chile.119 In Brazil, ECLA attained an institutional and an ideological presence, coinciding with a period of economic growth, most dramatically evident in President Juscelino Kubitschek’s campaign for “fifty years of development in five,” the Programa de Metas, or Target Plan, from 1956 to 1960. While Prebisch’s “manifesto” was published in Spanish and English by the United Nations in New York (in 1950 and 1951, respectively), “with the slowness characteristic o f official documents,” its rapid dissemination in Portuguese was largely responsible for the early introduction o f ECLA’s ideas in Brazil. Newly hired at ECLA, Celso Furtado immediately undertook the translation of the “The Economic Development o f Latin America and its Principal Problems” into Portuguese, and arranged for its publication in the September 1949 issue of the Revista Brasileira de Economia.m Furtado also translated the first five theoretical chapters o f the 1949 Economic Survey o f Latin America into Portuguese and they appeared in the Revista Brasileira de Economia under Prebisch’s name in March 1951.121 By 1951 a vigorous debate had already

that led to enduring networks among this group o f Latin American economists during the decades that followed” (Chenery, “From Engineering to Economics,” pp. 21-22). See also the Introduction in Jayme Costa Santiago, Memoria Institucional da CEPAL/ILPES nos Seus 30 Aims de Contribuiqao Permanente no Brasil (Setembro de 1960 a Setembro de 1990) LC/BRS/R.34 (mimeo). 119 Interview, Fernando Calderon, ECLA, Santiago, 18 August, 1993. ECLA’s presence was less pronounced in Argentina, Mexico, Pern and Colombia, although its ideas were embraced in Central America and in the Caribbean (Sikkink, Ideas and Institutions, p. 253). 120 Furtado, A Fantasia Organizada, pp. 63-76. 121 Ibid, p. 138.

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appeared in Brazil between those who supported ECLA’s ideas, and adherents to what Furtado disparagingly called “a great festival o f orthodox doctrine.” 122 ECLA’s institutional presence was also felt in Brazil throughout the 1950s. The establishment of the Lf.S.-Brazilian Commission in December 1950 grew out o f earlier efforts by diplomat and economist Roberto Campos to foster U.S. investment in Brazil.123 The Commission served as a stimulus for the design of an industrialization policy under the Vargas regime. The second regime of Getulio Vargas, from 1951 to 1954, was in turn crucial in the growth of a “solid industrial base,” making Brazil a logical setting for ECLA’s ideas.124 The Banco Nacional de Desenvolvimento Economico (BNDE), established in June 1952, provided the basis for large-scale planned investment in projects such as transportation, infrastructure, and energy, and marked the introduction of planning along the lines o f ECLA in Brazil. ECLA and the BNDE initiated a joint collaboration beginning in 1953, aimed at disseminating techniques of programming. In May 1953, Celso Furtado arrived in Brazil to direct this effort, which was to involve a “diagnosis” of the Brazilian economy, in ECLA fashion, and a series of projections based on several potential state-directed development strategies.125 ECLA also exerted a significant influence among Brazilian industrialists. The National Center for Industry (CNI) published ECLA’s most important studies starting in the early 1950s, and Prebisch spoke before Brazilian industrialists’ associations, which

122 Furtado called the exchange between Gudin and Prebisch “a dialogue o f the deaf, which obscured the real confrontation in the realm o f ideas, in a field with clear practical implications.” (Furtado, op cit., p. 141). 123 Sikkink, Ideas and Institutions, p. 130. 124 Furtado, A Fantasia Organizada, p. 144. 125 Ibid, pp. 144-145, 153, 155, 170.

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had endorsed ECLA’s ideas. The 1953 meeting of ECLA at Quitandinha, outside of Rio de Janeiro, which served to unveil the Preliminary Study on the Technique o f Programming Economic Development, took place with financial support from the CNI.126 When two o f Brazil’s most prominent economists, Eugenio Gudin and Octavio Bulhoes, immediately launched a series o f attacks on planning in Brazilian newspapers, Prebisch responded in kind.127 Juscelino Kubitschek’s campaign for planned, accelerated development was the very embodiment of the ECLA vision. At the time, Brazil’s economy appeared “ready to be modeled.” 128 The BNDE assumed the direction of the Programa de Metas without apparent opposition; with it came the national glorification of planned development.129 The execution o f the Programa de Metas, despite its inflationary consequences, and those associated with the construction of Brasilia, represented a “dose of success” for the Brazilian development model.130 This euphoric period shared the “mystique of development” that also characterized ECLA in its prim e.131

126 Sikkink, p. 155. 127 Ibid, p. 159. The proponents and critics o f planning in Brazil occupied highly influential positions. On the one hand, Roberto Simonsen, leading figure at the National Council on Industrial and Commercial Policy, and on the other, Eugenio Gudin, at the Economic Planning Commission. (Clovis de Faro and Salomao L. Quadros da Silva, “A decada de 50 e o Programa de M etas,” in O Brasil de JK, ed. Angela de Castro Gomes (Rio de Janeiro: Fundagao Getulio Vargas/CPDOC, 1991), p. 55). 128 Faro and da Silva, “A decada de 50,” pp. 44-45. 129 Sikkink, Ideas and Institutions, p. 131; Rosemary Thorp, “The Latin American Economies, 1939-c. 1950,” in The Cambridge History o f Latin America, vol. VI, ed. Leslie Bethell (Cambridge: Cambridge University Press, 1994), p. 137. 130 Ibid, p. 62. 131 As if to symbolize the very ECLA ideal, “while associated with a certain extravagance of public spending, the Kubitschek years (1956-60) were, fundamentally, marked by high growth rates and tremendous optimism.” (Helena Bomeny, “Utopias de cidade: As capitais do modernismo,” in O Brasil d eJK , p. 145). 99

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Inflation and Industrialization: The Outlook Dims Even before the overthrow o f civilian government in Brazil in 1964, which marked the beginning o f the decline o f ECLA’s influence, the publication o f Juan Noyola’s seminal article in 1956, “Economic Development and Inflation in Mexico and Other Latin American Countries,” highlighted a problem increasingly apparent in the industrializing countries o f Latin A m erica.132 Noyola’s thesis, which was to give its name to the structuralist canon, held that bottlenecks, particularly those in the agricultural sector, produced an inelastic supply o f agricultural products at a time o f increasing demand originating in the spectacular expansion o f urban concentrations. Noyola argued that in Mexico, land reform had created a more elastic supply o f agricultural goods, while in Chile, the concentration o f land ownership worked to the contrary. Furthermore, stagnation in the export sector, most clearly apparent in Chile, caused repeated devaluations, which fueled inflation by raising the price o f imports.133 Together with Anibal Pinto, Noyola distinguished structural causes o f inflation from other motivating factors, including fiscal policies, credit, and the wage-price spiral.134 This interpretation opened a vocal debate with so-called monetarists, whose prescriptions for antiinflationary policy, the structuralists feared, would bring an end to economic growth. Over time the process o f industrialization also encountered serious problems. In some cases, industrialization was not as rapid as had been expected. By the late 1950s

132 Juan Noyola Vazquez, “El desarrollo economico y la inflacion en Mexico y otros paises latinoamericanos,” Investigation Economica 16, no. 4 (1956): 603-618. 133 Love, “Economic Ideas and Ideologies,” p. 425. 134 In the 1980s, the structuralist view of inflation was rejected because it had overlooked the monetary issues that became critical in the fight against hyperinflation. (Ibid, pp. 426-427).

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and early 1960s, ECLA economists noted a disturbing rise in inequality.135 Industrialization had also created a new kind o f “external vulnerability,” precisely the problem it was supposed to overcome.136 Towards the late 1950s, ECLA began to call for economic integration o f the region, in order to alleviate some of the limitations of scale due to small national markets, and stimulate the development o f industries to produce intermediate and capital goods, as opposed to consumer goods alone. But the implementation of plans for integration proved to be extremely disappointing.137 The “agonizing reappraisal o f ISI,” as described by Joseph Love, occurred in 1964.138 By the early 1960s, Prebisch had already become increasingly concerned over evidence of exaggerated protectionism.139 Studies indicated that 80 percent o f regional imports now consisted o f fuels, intermediate and capital goods.140 Two articles appeared simultaneously in the ECLA Economic Bulletin, criticizing the problems associated with Latin America’s import substitution industrialization.141 Maria da Concieqiao Tavares’ landmark study o f Brazilian industrialization in the period since World War II demonstrated the need for greater emphasis on manufactured exports, along with the problems associated with continued and increasing demand for capital and fuel imports to sustain the growth o f industry. Other structural problems, notably the unequal distribution o f income, Tavares argued, limited the growth of demand in the domestic

135 A landmark article in the discussion of inequality was Albert Fishlow, “Brazilian Size Distribution o f Income,” American Economic Review 62 (1972): 391-402. 136 Love, “Economic Ideas and Ideologies,” p. 430. 137 Bulmer-Thomas, Economic History o f Latin America, pp. 297-308. 138 Love, “Economic Ideas and Ideologies,” p. 430. 139 Interview, Victor Urquidi, Mexico City, 4 July 1994. 140 Love, p. 430. 141 Maria da Conceiqao Tavares, “The Growth and Decline o f Import Substitution in Brazil,” and Santiago Macario, “Protectionism and Industrialization in Latin America,” Economic Bulletin fo r Latin America, 9 (1964): 1-59 and 61-101.

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market, and capital-intensive industry failed to absorb the growing labor surplus. Santiago Macario, a cepalino himself, published an article on the largest industrial economies in Latin America, Argentina, Brazil, Chile and Mexico, demonstrating that import substitution policies had been applied indiscriminately, with no overall strategy to ensure efficiency. As a result Latin America was beset with highly skewed patterns of protectionism. Both o f these articles pointed out the absence o f concern for manufactured exports viable in international markets. To add to the growing tone of pessimism, there were internal and political events that affected the climate at ECLA.

ECLA From Within Despite an outward appearance o f cohesion, by this time ECLA was beset by disagreements over basic questions of theory and policy, as in the case of Juan Noyola and Jorge Ahumada, who held diametrically opposed views on foreign direct investment in Latin America, and who would part ways in Cuba.142 Victor L. Urquidi, who headed the Mexico City office from 1951 to 1958, felt that Prebisch, being from Argentina, did not understand some o f Mexico’s most pressing problems, such as rapid population growth. According to Urquidi, at ECLA, the vision that predominated was influenced most heavily by the experiences of Brazil and Argentina.143 The gap that separated headquarters from Mexico and Central America was not only geographical. Prebisch visited Central America infrequently as executive secretary. After his 1952 tour throughout Central America, and attendance at a preliminary meeting on Central American economic cooperation in the same year, Prebisch returned to Central America only once for the 1959 ECLA meeting in Panama. The Mexican and

142 Interview, Alexander Ganz, Cambridge, MA, 13 September 1996. 143 Interview, Victor L. Urquidi, El Colegio de Mexico, Mexico City, 4 July, 1994.

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Central American economies were much more closely linked to conditions in the United States than the Southern Cone countries, a factor that created distinct differences in conditions for development. In any case, M exico’s official relationship with ECLA was far from enthusiastic.144 At the ECLA conference of 1955 in Bogota, Urquidi argues that Prebisch “did not mention the subject o f integration,” already of interest to Mexico and Central America. Rather, Prebisch was entirely focused on unveiling the new technique o f programming. More specific disagreements arose, as in the case of the 1957 ECLA report on Mexico, where Furtado, as a principal author, was more strongly convinced than Prebisch o f its significance in the midst o f official reluctance to allow its release. In some countries, for political reasons, ECLA’s presence was undeniably weak.l4:> The first and central group o f cepalinos began to move on to other endeavors. Jorge Ahumada, as we will see in chapter 5, was prominent among the growing number o f economists who chose to leave ECLA, and resigned his position after a brief period with the ECLA mission in Cuba in 1960. Others, such as Celso Furtado, left ECLA to assume positions in national development institutions. In 1958 Furtado took on full time responsibilities at the Banco Nacional do Desenvolvimento Economico working on problems of the Brazilian Northeast.146 Alexander Ganz left ECLA in 1958, and from 1959 to 1961 served as consultant to the research division of the Central Bank of Venezuela. Victor Urquidi left in 1958 to assume responsibilities at the Mexican Ministry of Finance and the Banco de Mexico.

144 Ibid; Urquidi to author, 8 July 1998. 145 Urquidi to author, 8 July 1998; Sikkink, Ideas and Institutions, p.253. 146 “Celso Furtado,” in Israel Beloch and Alzira Alves de Abreu, Dicionario Historico-Biografico Brasileiro 1930-1983, 2 vol. (Rio de Janeiro: Fundafao Getulio Vargas/CPDOC), pp. 1414-1417.

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ECLA reached a new stage o f institutional and theoretical evolution with the Cuban revolution. In its aftermath, events quickly and completely changed the playing field for the cepalinos. In response to a request from the Cuban government, ECLA sent a mission to address the needs o f the new revolutionary administration in May 1959. Juan Noyola and Regino Boti, as well as Jorge Ahumada, participated in the ECLA/DOAT mission to Havana, but had dramatically different views o f the revolution. Thereafter, almost no one at ECLA could remain neutral. Other outside events, particularly in U.S. foreign policy, also affected ECLA’s standing in Latin America. The ECLA mission to Cuba was short-lived, and in November 1960 it was terminated upon orders of the United Nations Secretary General.147 With a view to garnering anticommunist support, after the Cuban revolution the United States allied itself with ECLA-like ideals. Following the failed Bay of Pigs invasion, on March 23, 1961, John F. Kennedy announced the Alliance for Progress, responding to the revolution with a well-publicized program o f financial support for economic and social reform in the region. In setting up the Alliance, Kennedy’s staff invited a working group, “The Committee of Nine,” drawing on prominent Latin American economists, many of whom had professional and ideological connections to ECLA. They included Felipe Pazos, formerly of the National Bank o f Cuba, Jorge Sol Castellanos (El Salvador), Paul Rosenstein-Rodan and Harvey Perloff, o f the United States, Raul Saez (Chile), Hernando Agudelo Villa (Colombia), Manuel Noriega Morales (Guatemala), and Emesto Maleccorto (Argentina). Teodoro Moscoso, formerly coordinator of Puerto Rico’s “Operation Bootstrap,” led the Alliance, which took many

147 Jesus Silva Herzog, “A manera de introduccion,” in Juan F. Noyola, La economia cubana en losprim eros afios de la revoluciony otros ensayos (Mexico: Siglo XXI, 1978), p. 10.

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o f its ideas and inspiration from ECLA’s basic doctrine; the Alliance also drew on the moderate, democratic leaders, Romulo Betancourt o f Venezuela and Carlos Lleras Restrepo of Colombia. A number of prominent cepalinos, including Raul Prebisch, participated in the planning and execution o f the Alliance, which made development plans a general requirement for U.S. foreign assistance.148 With the Alliance the U.S. adopted ideas that were already circulating in Latin America, and added a new “evangelical” tone to its new foreign policy endeavors.149 After the assassination of John F. Kennedy in November 1963, however, the Alliance rapidly disintegrated, almost as quickly as it appeared. ECLA’s twilight had come, at least in the realm of innovations in economic development theory.150 Following the tenth session of ECLA at Mar del Plata, in May 1963, an internal memorandum circulated at the International Monetary Fund suggested the end of ECLA’s reign in the region. The IMF representative reported to the acting managing director that many delegates, including himself, felt that “the influence of ECLA is declining.” The problem lay in ECLA’s failure to evolve theoretically. Not only did ECLA have “little real power o f action,” but its “doctrines and pronouncements by now tend to follow an established pattern and hence break little new ground.” 151

118 The Alliance for Progress had supporters and detractors within ECLA. Jorge Ahumada declined an offer to participate. Colleague Hugo Trivelli, in turn, served from 1962 to 1964 on the C o m ite In te ra m e ric a n o d e D e sa rro llo A g ric o la (CIDA), an Alliance-inspired effort based upon cooperation from inter-American organizations. 149 Arthur J. Schlesinger, Jr., “Myth and Reality,” in The A llia n c e f o r P ro g re ss: A R etro sp e c tiv e, ed. L. Ronald Scheman (New York: Praeger, 1988), p. 67. 150 Joseph Love calls this the crisis in structuralism. (“The Origins o f Dependency Analysis,” J o u r n a l o f L a tin A m e ric a n S tu d ie s 22, no. 1 (February 1990), p. 145). 151 Office Memorandum, Paul J. Brand, WHD, to Frank A. Southard, Jr., Acting Managing Director, International Monetary Fund, 22 May 1963 (IMF 1124).

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Prebisch left ECLA to assume the position of secretary general of the United Nations Conference on Trade and Development (UNCTAD) in August 1963, to be replaced by Jose Antonio Mayobre o f Venezuela as ECLA Executive Secretary.152 The climate at ECLA had altered irreversibly. Out of the Cuban Revolution, followed by the 1964 military coup in Brazil, a new generation of social scientists arrived in Santiago, a number of them in political exile. Discussion in Santiago took on a radical, political orientation and turned to new issues in the formulation of dependency theory, which interpreted the causes of inequality and backwardness, the “development of underdevelopment,” from a Marxist and structuralist perspective.153 Meanwhile, ECLA now faced more vigorous competition. Since 1955, the University of Chicago, in collaboration with the U.S. Agency for International Development, had endeavored to arrange a formal program with the Universidad Catolica in Chile for the training of economists based on the Chicago model. This effort, designed to counter what was seen as excessive influence of ECLA’s ideas, proved to be extremely successful.154 In subsequent decades, military regimes in Latin America eventually became more receptive to market-oriented solutions, and, above all, the question of autonomy in economic ideology became considerably less important.155 The

152 Prior to assuming this position, Venezuelan economist Jose Antonio Mayobre acted as Chief of the Department o f Economic Research at the Banco Central de Venezuela (1946-48), Chief of the Division o f Economic Development at ECLA (1954-57), Director o f the Corporacion Venezolana de Fomento (1958), and Venezuelan Minister o f Finance (1958-60). In 1960, Mayobre coordinated the group o f Latin American economists who proposed the ideas that became the basis for the Alliance for Progress. (Felipe Pazos, “Introduccion,” in Jose Antonio Mayobre. Obras Escogidas, Coleccion de Estudios Economicos 9 (Caracas: Banco Central de Venezuela, 1982), pp. 7-9). 153 Love, “Origins o f Dependency,” pp. 143-168. 154 Juan Gabriel Valdes, Pinochet's Economists. The Chicago School in Chile (Cambridge: Cambridge University Press, 1995). 155 For example, Chile withdrew from the Andean Pact in 1976. (Interview, Jorge Cauas, Santiago, 1 December 1997).

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age o f structuralism and of ECLA’s premier place in Latin America was over, but its legacy was already rooted in its staff, disciples, and policymakers throughout the region.

Conclusion Until the overthrow of Allende in Chile in September 1973, ECLA was protected from the direct effects o f political ruptures, although the institution was continually affected indirectly through the arrival and departure of talent. The dismantling of Prebisch’s research “brain trust” in Argentina would not necessarily occur at ECLA, although professionals did come and go often according to the course o f political events. With widespread dissemination through missions, training, and participation of the region’s growing pool o f technocrats, the ECLA model appeared in many Latin American contexts. By the 1970s, however, a flourish o f other regional and local institutions for research in the social sciences had begun to take its place. The Facultad Latinoamericana de Ciencias Sociales (FLACSO), also established under United Nations auspices (in 1957), and the Consejo Latinoamericano de Ciencias Sociales (CLASCO) (established in 1967), were organized in an effort to institutionalize and facilitate regional social science research.136 In a number o f important cases, Latin American economic thinking now took on distinctive national characteristics often based upon particular institutions; as in the Fundagao Getulio Vargas in Brazil and Cieplan in Chile.157 Dependency, the dominant paradigm at ECLA during the late 1960s and 1970s, failed to 156 Ansaldi and Calderon describe how, at the end o f the 1960s, FLACSO in Chile contributed to the “LatinAmericanization” o f the social sciences, drawing together some o f the best social scientists from the region (Ansaldi and Calderon, L a b u sq u e d a d e A m e r ic a L atina. T eo ria s e in slitu c io n e s en la co n stru c c io n d e la s cie n c ia s so cia les la tin o a m e ric a n a s (Buenos Aires: Universidad de Buenos Aires, Facultad de Ciencias Sociales, 1991), pp. 41, 44). 157 Jose Antonio Ocampo, “New Economic Thinking in Latin America,” J o u r n a l o f L a tin A m e r ic a n S tu d ie s 22, part 1 (February 1990), pp. 172-73; Red de Centros de Investigacion

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attain the theoretical rank o f structuralism, at least from an economic perspective. And neoliberalism, an import from the Center, crept over the region, introducing a completely new dimension in dependency on ideas from abroad.

Economica Aplicada (ATN-SF3578-RE), Banco Interamericano de Desarrollo (Maria Elisa Bernal, Inter-American Development Bank, to author, 15 December 1993).

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Chapter 4 ECLA and Inter-American Relations, 1948-1964 Introduction: The United States and Latin America after World War II Albert O. Hirschman once described inter-American relations as a “permanent orgy o f misinterpretation and misunderstanding.” 1 Economist Carlos Diaz-Alejandro argued that from the “height o f intimacy” in the wartime era, by 1952 “Latin AmericanUnited States relations had returned to a state o f unrequited obsession” that would last until the end of the decade.2 In the particular case of Brazil, which collaborated closely with the United States during the Second World War, postwar relations have been characterized as a dialogo de surdos, a dialogue of the deaf.3 This constant misunderstanding, or desencuentro, also colored relations between the United States and ECLA.4 Personal accounts of the cepalinos, substantiated by detailed records from U.S. State Department files, show how ECLA was the target of persistent U.S. opposition from its origins in 1948. U.S. objections to ECLA originally stemmed from the threat that the institution represented to its postwar regional hegemony, as well as ideological differences over appropriate economic development strategy. After the outbreak o f the Korean War in 1950, and the widening of the Cold War, the institution came to be directly associated with a perceived danger of Communism in the region.

1 Albert O. Hirschman, “Out o f Phase,” Encounter, September 1965, 25(3), p. 21. " Carlos F. Diaz-Alejandro, “The 1940s in Latin America,” in Moshe Syrquin, Lance Taylor and Larry E. Westphal, eds., Economic Structure and Performance. Essays in Honor o f Hollis B. Chenery (New York: Academic Press, 1984), p. 358-59. 3 Pedro S. Malan, Regis Bonelli, Marcelo de Paiva Abreu, and Jose Eduardo de C. Pereira, Politico Economica Externa e Industrializagao no Brasil (1939/52) (Rio de Janeiro: 1PEA/INPES, 1977), p. 31.

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Histories of inter-American relations since World War II are few and commonly limited to recounting the evolution o f U.S. foreign policy.5 Only recently have scholars begun to address the Latin American perspective, usually focusing on an isolated event or issue.6 Obviously the Cold War colored U.S.-Latin American relations after 1945, and most significantly from 1950 onwards, yet there is another, especially intriguing story from the perspective o f Latin America. This chapter explores the evolution o f conflict between United States official channels and ECLA within the larger context of the Cold War and its Latin American manifestations. Between 1948 and 1964, the tension between the United States and ECLA contributed fundamentally to a sense o f intellectual solidarity among the cepalinos, from Executive Secretary Raul Prebisch and hand-picked economists in the Economic Development Division to individual staff members in other divisions. The conflict also added to the urgency with which the cepalinos created and projected their mission. Finally, the relationship between the cepalinos’ popularity and the international environment of the 1948-1964 period cannot be overlooked. Raul Prebisch, for example,

4 Albert O. Hirschman, “La economia politica del desarrollo latinoamericano. Siete ejercicios en retrospectiva,” E l Trimestre Economico, 216 (October-December 1987), p. 81. 5 Bethell and Roxborough argue in more detail that the literature on the immediate post-war period has been dominated by the Braden affair in Argentina, in virtual ignorance o f what was taking place in other countries. (Leslie Bethell and Ian Roxborough, “Latin America between the Second W orld War and the Cold War: Some Reflections on the 1945-8 Conjuncture,” Journal o f Latin American Studies 20 (1988), p. 167). See also Lars Schoultz, Beneath the United States: A History o f U.S. Policy Toward Latin America (Cambridge, MA: Harvard University Press, 1998); Stephen G. Rabe, Eisenhower and Latin America. The Foreign Policy o f Anticommunism (Chapel Hill: University o f North Carolina Press, 1988); Roger R. Trask, “The Impact o f the Cold War on United States-Latin American Relations, 1 9 4 5 -1 9 4 9 Diplomatic History 1, no. 3 (Summer 1977): 271-284; Bryce Wood, The Unmaking o f the G ood Neighbor Policy (Austin: University o f Texas Press, 1985). 6 Examples include the history o f labor in the context o f inter-American relations (Bethell and Roxborough, op cit., pp. 167-189), or the U.S.-backed invasion o f Guatemala in 1954 (Piero Gleijeses, Shattered Hope: the Guatemalan Revolution and the United States, 1944-1954 (Princeton: Princeton University Press, 1991).

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was extraordinarily popular because of his radical stand on international relations and his sophistication as a diplomat.7 The climate of U.S. opposition that prevailed in this era fostered the cepalinos' life-long identification with ECLA, along with their powerful image o f defiance that has endured until this day.

The Immediate Post-War Period: The Desencuentro At the Inter-American Conference on Problems o f War and Peace at Chapultepec in February 1945, Assistant Secretary o f State William Clayton urged Latin American countries to abandon protectionist measures, precisely the policies that had stimulated recent industrialization. Clayton gave little assurance o f the economic aid that Latin American representatives were expecting from the U.S. in return for their wartime cooperation.8 Latin American leaders were resentful o f being abandoned after the War, when the United States turned its attention to European reconstruction and discontinued all forms o f direct cooperation with the region, with disruptive consequences for its economies.9 They were particularly conscious o f the contributions made on behalf o f the Allied cause, and expressed a number of specific grievances when economic relations with the United States suddenly turned distant. Inflation eroded reserves accumulated

7 Ani'bal Pinto, “La contribucion de Cepal al pensamiento latinoamericano” (editorial), Panorama Economico 16, no. 236, April-M ary 1963, p. 37. 8 Arthur P. W hitaker, “Politics and Diplomacy,” in Inter-American Affairs 1945 (New York: Columbia University Press, 1946), pp. 2-18, cited in David Rock, “Latin America and the United States,” in Latin Am erica in the 1940s. War and Postwar Transitions (Berkeley and Los Angeles: University o f California Press, 1994), p. 29. 9 In the case o f Ecuador, U.S. demands in wartime prompted the following commentary: “We took our men and machines to the heart o f the tropical jungle, interrupting their permanent jobs and forcing them to confront severely adverse conditions. In spite o f this effort, at the end o f the conflict the demand for strategic goods disappeared and we were rewarded with nothing.” (“Comision para America Latina. Discurso del Presidente de la Delegacion del Ecuador Dr. Teodoro Alvarado Olea, Mtro. de Economia,” E l Comercio (Quito), July 4, 1948, in “Transmittal o f Quito Newspaper Articles Concerning ECLA Meeting in Santiago, Chile,” Unclassified Despatch No. 595 from Amembassy Quito to Secretary o f State, July 15, 1948, NARA 501.BD ARA/7-1548). Ill

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through wartime exports. The United States devoted the Marshall Plan to European reconstruction, and it appeared at first that international lending agencies would follow the same path. Furthermore, the United States repeatedly rejected attempts to obtain support for commodity price stabilization and ratification of an International Trade O rganization.10 At the end o f World War II Latin American economists expressed high expectations for progress in the region. The successful experience of economic growth in the 1940s prompted enthusiastic visions o f Latin America’s potential: “a prosperous population, engaged in highly productive stable and secure occupations, will be the...basis for an industrial, wealthy and powerful Ibero-America, a veritable haven of peace and great promise, which will look without hesitation towards the future.” 11 In this climate the inauguration o f ECLA in 1948 drew widespread expectations from Latin American participants: “it is our hope that the first meeting o f this important organization produces agreements that redirect in more prosperous ways the battered economies o f the nations of the hemisphere, which, while not devastated directly, were equally as affected economically by the war as many of the countries which participated in the conflict.” 12 In even more dramatic terms, ECLA would serve to redefine the destiny of the region, “to determine, with historical hindsight...the unmistakable and definite path which will...allow harmony to reign in America, strengthening...commercial linkages between

10 Di'az-Alejandro, “The 1940s in Latin America,” pp. 358-59. See also Rabe, who comments, “In effect, Latin America made a $3-billion non-interest-bearing loan to the United States and could not collect on the principal.” (Eisenhower and Latin America, pp. 16-17). 11 Adolfo Dorfman, E l desarrollo industrial de America Latina (Santa Fe: Imprenta de la Universidad Nacional del Litoral, 1942), p. 108. 12 La Razon, June 2, 1948 in “Newspaper Cuttings Regarding Bolivian Participation in the United Nations Economic Commission for Latin America,” Despatch from La Paz, Bolivia to Secretary o f State, June 3, 1948, NARA 501.BD-AR/6-348.

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our countries...uniting needs and demands, riches and misery, to make use of the natural wealth o f this part of the Continent, making...the economic prosperity o f the peoples o f Latin America more durable and stable.” 13 The institution of ECLA in 1948 prompted observers to declare the creation o f a “continental economic conscience,” one that would stimulate the “development o f Latin America’s economies, the diversification of exports, as well as industrialization.” 14 Furthermore, ECLA could provide a collective voice to the Latin American countries, whose demands were often ignored by more powerful nations: “the installation o f this organization in a South American capital, with the characteristics which surround it, leads us to think that these small and tossed aside countries have ceased to be the retinues which are taken to world meetings exclusively to ‘chorus’ the interests of the great powers, [but rather] to be changed into direct beneficiaries, to be incorporated as useful and even indispensable elements with the contribution of their wealth, disinterestedly stimulated and equitably interchanged.” 15 Latin American public figures thus focused unbounded optimism on the potential o f ECLA to solve the region’s economic problems. The expectations that Latin Americans invested in ECLA were not those o f the United States. Following the announcement of the Marshall Plan in 1947, Latin America “remained firmly at the periphery o f U.S. strategic concerns,” and the focus o f the United 13 “Comision para America Latina. Discurso del Presidente de la Delegacion del Ecuador Dr. Teodoro Alvarado Olea, Mtro. de Economia,” El Comercio (Quito), July 4, 1948 in “Transmittal o f Quito Newspaper Articles Concerning ECLA Meeting in Santiago, Chile,” NARA 501.BD ARA/7-1548. 14 “En Montevideo se ha revelado la aparicion de una conciencia economica continental dice el Subsecretario de Relaciones Senor Alvarado,” La Razon (La Paz), June 28, 1950, in “Comment by Under Secretary on Montevideo CEPAL Meeting,” from U.S. Embassy, La Paz to Secretary o f State, NARA 340.210/7-350. l5“Official and Press Comment on the First Session, Economic Commission for Latin America, Santiago, June 7-25, 1948,” Despatch No. 476 from Ambassador Claude G. Bowers, Amembassy, Santiago to Secretary o f State, July 19, 1948, NARA 501.BD-ARA/7-1948.

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States on the reconstruction o f Western Europe left economic and political spokesmen from Latin America angry and betrayed.16 Starting at the Chapultepec Conference in 1945, Latin American delegates struggled to convince the United States of the urgency of the economic needs o f the region.17 However, as long as Communism did not present a direct threat to the region, key U.S. foreign policy figures continued to display ignorance, “indifference,” “contempt,” and condescension toward the most pressing Latin American issues.18 Latin America would remain, for the time being, of “little interest” to the Washington foreign policy establishment.19 After World War II, other regions easily took precedence over Latin America in U.S. foreign policy. This became painfully clear as the State Department pursued a policy of intransigence, hesitating to participate in conferences to discuss measures for economic cooperation, and failing to offer any significant economic aid to the region.20 During the Truman administration (1945-53), U.S. Secretary of Commerce Averell Harriman introduced an “aggressive” campaign to promote private U.S. foreign

16 Bethel and Roxoborough, “Latin America Between the Second World W ar and the Cold War,” p. 182. See also Rosemary Thorp, “The Latin American Economies in the 1940s. War and Postwar Transitions,” in David Rock, ed., Latin America in the 1940s, p. 51. 17 Enrique V. Iglesias, Reflexiones sobre el desarrollo economico. Hacia un nuevo consenso latinoamericano (Washington, DC: Banco Interamericano de Desarrollo, 1992), p. 2. 18 Leslie Bethell and Ian Roxborough, “Latin America Between the Second World War and the Cold War,” p. 180; Stephen Rabe, “The Elusive Conference,” p. 294. Roger B. Trask commented on a report that George Kennan wrote after his first and only tour o f Latin America, which was “condescending and patronising in parts, perceptive in others, [and] could hardly have contributed to an improvement in the disturbed state o f relations between the United States and Latin America in March 1950 when it was written.” See Trask, “George F. Kennan’s Report on Latin America (1950),” Diplomatic History 2, no. 3 (Summer 1978), p. 307. 19 Bethell and Roxborough, “Latin America Between the Second World War and the Cold War,” p. 167. “W hatever President Truman and Secretary Marshall’s intentions at Rio, State and Treasury department officials never seriously considered a Marshall Plan for Latin America.” (Rabe, “The Elusive Conference,” pp. 279, 286).

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investment in Latin America.21 Instead o f economic aid, the United States insisted that Latin America should rely entirely on private capital and investment, and that “self-help, technical cooperation, [and] liberal trade practices” would guarantee development in the region. 22 Outward expressions o f frustration among Latin American leaders became widespread. Mexican intellectual Daniel Cosio Villegas, writing about the “Yankee” delegation to the Chapultepec Conference, spared no delicacy in describing it as “mediocre and unprepared.”23 In a spirit that would reappear at ECLA, one Mexican economist cried out, We want to know what, in reality, are the intentions of the Great Powers. We want to know whether they really seek a new and better world. For if the Great Powers are guided, once again, by narrow minded sordid self-interest, the Latin American countries will have much to demand and redress for themselves.24 Between 1945 and 1949, the intransigence of the United States on economic issues became acute. In 1946, economist Victor Urquidi published an article in the Mexican Revista de Economia Continental on a speech by Assistant Secretary of State Spruille Braden, commenting on the clash of positions between the United States and Latin America over development policy: It is disappointing that...the United States declares private initiative as good and public enterprise and state intervention as bad instead of facing our countries with a spirit o f true comprehension of our problems and sensitivity for the superhuman tasks which our governments must undertake. I repeat, it is not our intention here 21 Donald M. Dozer, Are We G ood Neighbors? Three Decades o f Inter-American Relations (Gainesville: University o f Florida Press, 1959), p. 244. " Rabe, Eisenhower and Latin America, p. 17. 23 The Inter-American Confrence on the Problems o f War and Peace took place in Mexico City, 21 February to 8 March, 1945. See Daniel Cosio Villegas, “La Conferencia de Chapultepec,” in Extremos de Am erica (Mexico: Tezontle, 1949), p. 189; also Trask, “Impact o f the Cold War,” p. 272. 24 Emilio Krieger V., review o f Antonio Carrillo Flores, “El nacionalismo de los paises latinoamericanos en la post-guerra,” Jornada 28 (Mexico: El Colegio de Mexico, Centro de Estudios Sociales, 1944) in E l Trimestre Economico, XII, no. 2 (July-September 1945), p. 338.

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to enter into conflicts with Mr. Braden, but only to draw attention to an attitude that appears to prevail in the U.S. Department o f State and that unfortunately is not very constructive. The North American private sector should realize that Latin America is o f a different opinion...because, in Mr. Braden’s own words, it could be good business for all sides.25 Even before the appearance o f ECLA, there was growing doubt among Latin Americans about the United States’ willingness to accept their vision of economic development for the region. From the end of World War II, Latin Americans at a succession o f interAmerican conferences called for commodity price agreements, an inter-American development fund, and public credits from the United States, only to face repeated rejection of their proposals. At the same time these policymakers had reached a new level of sophistication in the understanding o f the region’s economic reality. It appeared that only by means o f a united effort would the Latin American countries make apparent their need for foreign assistance, more favorable conditions for exports, and support for industrialization.

ECLA and the United States, 1948 to 1953 The relationship between the United States and ECLA has been documented in memoirs of the original cepalinos and their close colleagues. While limited in both number and scope, these works suggest the atmosphere of siege that initially shaped ECLA, and evoke the conditions in which the first cepalinos defined their mission. In particular, Celso Furtado, in his memoir, A Fantasia Organizada, described United States resistance to ECLA at its inception, efforts to discontinue ECLA as an independent

25 Victor L. Urquidi, “Iniciativa Privada y Desarrollo Economico, segun el Departamento de Estado Norteamericano,” Revista de Economia Continental I, no. 1 (August 1946): 376-382.

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organization in 1951 at the fourth session in Mexico City, and surveillance of ECLA personnel suspected o f leftist sympathies.26 Economists present at ECLA during its initial years were well aware of U.S. moves to “liquidate” the institution by merging it with the Inter-American Economic and Social Council (IA ECOSOC), where the United States already asserted a dominant influence. Furtado noted that during the 1950s, the United States saw the increasing influence o f ECLA in Latin America as threatening to its interests in the region. A Fantasia Organizada documents the mandate issued, at the initiative o f the United States, to allow ECLA to proceed for a trial period o f three years, from 1948 to 1951. Furtado also described the efforts o f Latin American diplomats to save ECLA in the face of opposition from the United States, recounting how Brazilian representative Miguel Osorio successfully argued in favor of ECLA at the fourth session in 1951, even though several Latin American delegations had already been persuaded to support the U.S. position.27 Furtado recalled open U.S. surveillance o f ECLA economist Juan Noyola, whom the U.S. suspected because o f his Communist affiliations; he also noted the key role that American Deputy Executive Secretary Louis Swenson later played in calming U.S. fears that ECLA was a front for Communist infiltration.28 State Department records clearly demonstrate that the United States reacted to ECLA with hostility, but in analyzing the period 1948 to 1958 there is also evidence to suggest a more complex relationship. State Department commentaries on ECLA abound with criticism o f ECLA’s theoretical viewpoint, but at times also question the narrowness o f U.S. foreign policy. A number o f State Department officials clearly recognized 26 Ceiso Furtado, A Fantasia Organizada (Rio de Janeiro: Paz e Terra, 1985), p. 125. 27 Ibid, pp. 106-115.

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ECLA’s contribution as an institution of economic research. While the State Department was careful not to embrace the theoretical and ideological positions o f ECLA during the 1950s, there were expressions o f respect for the professional reputation o f Executive Secretary Prebisch, and acknowledgement o f the growing support that ECLA enjoyed among Latin American governments. Later, some State Department observers even suggested ways in which interaction with ECLA would be useful as a method of convincing Latin Americans o f the validity of U.S. positions. The U.S. Embassy in Chile provided ongoing coverage o f the activities o f ECLA at its Santiago headquarters.29 An early Embassy report expressed the hope that “the Commission’s work promises at least to pierce the fog of oratory that beclouds the facts of so much o f the economic life in this area,” or alternatively, to “turn out a job that will cut through slogans and Latin American generalizations and wishful thinking to underlying realities, with the emphasis on what Latin America can do for itself.” There was also skepticism expressed about the quality o f ECLA’s work; in a more critical tone this report suggested that “it may be useful to have the Latin’s ‘own’ outfit come up with some hard facts” given that country studies prepared by ECLA were still “handicapped by relatively superficial knowledge o f several countries, and by an immature and academic approach.”30 The State Department saw ECLA as antithetical to United States interests in the region; the ideas that ECLA economists proposed were portrayed as

28 Ibid, p. 127. 29 “Progress Report on the Work o f the United Nations Economic Commission for Latin America,” Enclosure N o .l, Despatch No. 765, American Embassy, Santiago, December 7, 1948, NARA 501 .BD-ARA/12-748, p. 1. 30 Ibid, p. 3-5.

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“naive...heretical...and dangerous.”31 W ith the publication o f Prebisch’s essay on Latin American economic development as the introductory chapter o f the Annual Economic Survey o f Latin America in 1949, the State Department immediately predicted the potential for arousing nationalism alien to U.S. interests. It was observed that “while the tone o f the document is very friendly and objective, drafting has necessarily been hurried and some of the phraseology is susceptible to misuse for hostile propaganda purposes if removed from its context.”32 The State Department refrained from expressing support for the essay in order to avoid any suggestion o f official endorsement o f Prebisch’s views.33 They objected to “certain recurring themes which point to the conclusion that under nearly all conditions the economic fates work against the underdeveloped countries to the advantage of the developed countries.” There were reservations expressed that while the document might not necessarily provoke positions antagonistic to the United States, its content and wording could “at least place our delegation on the defensive.”34 From 1948 to 1951, ECLA faced a determined U.S. effort at the diplomatic level to merge the organization with the OAS Inter-American Economic and Social Council. By 1950, however, it became obvious that while individual Latin American governments

31 Pollock, “ Some Changes in U.S. Attitudes Toward CEPAL Over the Past 30 Years,” CEPAL Review 6 (Second Semester 1978), p. 63. See also Sikkink’s description o f critics who saw Prebisch “with suspicion as a leftist critic o f standard economic wisdom.” (Kathryn Sikkink, “The Influence o f Raul Prebisch on Economic Policy-making in Argentina, 1950-1962,” Latin American Research Review 23, no. 2 (April 1988), p. 91). 32 Incoming Telegram from American Embassy, Santiago, to Secretary o f State, May 10, 1949, NARA 501 .BD ARA/5-1049. 33 “Strategy Followed by the U.S. Delegation,” in Report on the Second Session o f the Economic Commission for Latin America, Havana, submitted by Albert F. Nufer, Acting United States Representative to the Economic Commission for Latin America to the Secretary o f State, Despatch No. 261 from American Embassy, San Salvador to Department o f State, June 20, 1949, NARA 501 .BD-ARA/6-2049, p. 4. 34 “Economic Survey o f Latin America, 1949,” Despatch 553 from H. Gerald Smith, First Secretary, American Embassy Santiago, to Department o f State, May 12, 1950, NARA 340.210/5-1250.

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might be persuaded to endorse the U.S. position, unanimous support was not forthcoming.35 Latin American countries wanted an institution independent from United States influence. Latin American officials strongly objected to the U.S. approach o f “passive antagonism” and outright “lobbying” against ECLA, since they saw the institution as “the only effective multilateral mechanism which existed to deal with Latin American economic problems.”36 Besides independence from U.S. influence, the Organization o f American States lacked the technical expertise that ECLA had successfully attracted, and possessed none o f the intellectual reputation already attained by the ECLA economists.37 The State Department was ultimately dissuaded from its efforts to force the merger by its own representatives’ growing recognition o f the quality of ECLA’s work under Prebisch’s leadership. When Prebisch was offered the position of executive secretary in 1950, American Ambassador C.M. Ravndal in Montevideo wrote to the Assistant Secretary of State for Economic Affairs that he had “known Dr. Prebisch well since 1935,” particularly through a previous assignment in Buenos Aires, and emphasized

35 “A member o f the Cuban delegation to ECLA session at Montevideo has informed Embassy officer that if proposal is made to abolish ECLA Cuba will be opposed. He stated that certain Latin American countries (implying that Cuba is one) feel that LA ECOSOC alone would not suffice as inter-American organizations are dominated by United States and for that reason such countries would not support any move to replace ECLA.” (“Consolidation o f ECLA and LA ECOSOC,” Despatch 1253 from Harold S. Tewell, Counselor, American Embassy, H abanato Department o f State, May 22 (?), 1950, NARA 340.210/6-350). 36 “Future o f ECLA,” Memorandum o f Meeting between Ambassador Hernan Santa Cruz and Mr. Dreier (AR), May 26, 1950, NARA 340.210/5-2650. Similarly the U.S. delegation to the third session o f ECLA in Montevideo commented that the Brazilians “greatly admired the work accomplished at ECLA,” especially the economic country surveys prepared by the ECLA Secretariat in conjunction with the UN Secretariat; furthermore “it was their feeling, on the other hand that IA-ECOSOC had served no useful purpose to date.” (Outgoing Telegram, from Amembassy Montevideo for Green, June 7, 1950, NARA 340.210/5? 750). 37 The Chilean journal Panorama Economico commented that to Latin Americans, the OAS was “ little more than a rubber stamp.” (“^Parto de los montes en Buenos Aires?” Panorama Economico 9, no. 173, 16 August 1957, p. 469).

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that “to my knowledge, Dr. Prebisch not only is a gentleman of excellent character but also one of the most competent and revered economists in Latin America.”38 By the third session o f ECLA in Montevideo, in May 1950, U.S. consultations with delegations from Argentina, Chile, Uruguay and Cuba revealed a firm conviction that ECLA must be located outside of Washington so that it would be independent o f “the general influence o f the Washington Scene.” In addition, the U.S. representative noted that “Dr. Prebisch is obviously held in the highest esteem by the Latin American governments....The research work produced under his direction is welcomed and endorsed by many who might be suspicious of facts and conclusions presented by economists in Washington.”39 Any suggestion that the United States would continue to try to merge the two bodies was interpreted as equivalent to a “campaign o f trying to sabotage ECLA.”40 Not only was there widespread support for ECLA among individual countries, and suspicion o f U.S. interference in the organization, but the U.S. Embassy in Santiago admitted conclusively in July 1950 that “there is apparently no doubt in Dr. Prebisch’s mind that...ECLA, including the Secretariat, will be continued beyond 1951.”41 At the fourth session of ECLA held in Mexico City in May 1951, United States representatives acknowledged the failure of their campaign. Prior to the meeting, State Department officials had planned to remain firm in their stance towards ECLA and, once

38 C.M. Ravndal, American Embassy, Montevideo, to Willard L. Thorp, Assistant Secretary of State for Economic Affairs, June 9, 1950, NARA 340.210/6-950. 39 “Confidential Report on the Third Session o f the Economic Commission for Latin America,” Despatch No. 164 from C.M. Ravndal, Acting United States Representative to the Third Session o f the ECLA, Montevideo, to Department o f State, September 7, 1950, NARA 340.210/750, pp. 2-3. 40 Ibid, p. 3. 41 “Activities o f Secretariat o f United Nations Economic Commission for Latin America,” Despatch 104 from Carlos Hall, Counselor, American Embassy, to Department of State, July 27, 1950, NARA 340.210/7-2750, p. 2.

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again, to avoid discussion o f any issues o f significance on the agenda.42 But the meeting displayed the difficulty o f the official U.S. position. The U.S. delegation could not deny the stature that ECLA had attained in the region over the past three years. It became clear that Latin American delegates unanimously supported ECLA, which indicated endorsement from the governments themselves and not “merely personal views [of the] delegates.” The U.S. delegation reflected that over the previous three years, “ECLA has issued some reports o f outstanding quality...and has performed valuable statistical and economic research in individual countries.” The scope o f ECLA’s field o f activities and the caliber o f its economists had allowed ECLA to produce work unequalled in quality and depth by the Inter-American Economic and Social Council. In contrast to earlier reluctance to allow for ECLA’s institutional autonomy, the delegation urged U.S. support because this would allow “Latin America [to] discover problems and difficulties for themselves, which no...amount [of] U.S. lecturing can accomplish.” The delegation acknowledged the seriousness of ECLA’s endeavor: “despite some over-emphasis, from the standpoint on industrialization...we feel ECLA has succeeded [in] combining aggressive action with fairly realistic balance and is effectively directing [the] attention [of] Latin Americans to real problems.”43 Discussion of the merits of ECLA’s continuation persisted through 1951. In August Paul C. Daniels of the American Embassy in Quito wrote to the Department of State that “personally, I think the money saved in abolishing ECLA as soon as possible would more than compensate for any contribution it may make to improved economic 42 “Instructions to the U.S. Delegation to the Fourth Session o f the Economic Commission for Latin America, Mexico City, May 28, 1951,” from UNE Mr. Green to UNA Mr. Hickerson, May 26, 1951, NARA 340.210/5-2651, p. 4.

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conditions in Latin America.”44 Internal State Department commentary, on the other hand, stressed that the idea o f eliminating ECLA was unworkable. The U.S. Embassy in Mexico reminded the Secretary of State that to Latin Americans, the “whole history of ECLA is one of U.S. noncooperation.”45 It would be difficult to oppose ECLA’s continuation, not only on the grounds that its budget was relatively minor compared to other regional United Nations organizations, but most significantly, “ECLA is doing a job that by and large is in the long-term interests o f the United States.”46 In November, the State Department issued a report to all of the U.S. Embassies in Latin America as well as London, The Hague and Paris, detailing final U.S. policy on ECLA and reversing its earlier position on merging ECLA and the OAS Economic and Social Council, arguing that “it was felt that Dr. Prebisch is in a position to bring home to Latin American officials economic truths which they would not accept on the basis o f any statement made by U.S. representatives.”47 Even if the U.S. could not exercise authority over ECLA, it was at least a potential tool for the projection o f United States interests in the region. An internal State Department memorandum in 1953 on the subject of United Nations Regional Economic Commissions presents a suggestive admission o f the narrow approach that the United States had taken in previous years and its implications for U.S. relations with ECLA and by extension with Latin America at large:

43 Outgoing Telegram (No. 1581) from O ’Dwyer, Amembassy, Mexico City, to Secretary of State, June 10, 1951, NARA 340.210/6-1051, pp. 2-3. 44 “Report o f U.S. Delegation to Fourth Session o f Economic Commission for Latin America,” from AmEmbassy Quito to Department o f State, August 7, 1951, NARA 340.210/8-751. 45 Outgoing Telegram from O ’Dwyer, Mexico City to Secretary of State, No. 1581, June 11, 1951, NARA 340.210/6-1051, pp. 2-3. 46 “Budgets o f Regional Commissions o f the United Nations,” Office Memorandum from ARA Amb. Bohan to A R M r. Monsma, October 24, 1951, NARA 340.210/10-2451. 47 “Continuation o f the United Nations Economic Commission for Latin America,” Outgoing Airgram from Department o f State to American Diplomatic Officers in Other American Republics, London, The Hague, and Paris, November 27, 1951, NARA 340.210/11-2751, pp. 2-4.

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After a brief period of enthusiasm, the U.S. has adopted a sort o f policeman’s attitude, seldom encouraging positive or constructive action, but charging in hard when anything threatens to get out of line; developing its position on each separate agenda item with insufficient attention to the overall impression that will be made by the U.S. delegation; protecting over-zealously the rights of other agencies in which our stake is no greater than our stake in the regional commissions; reserving our position with respect to the budgetary implications of actions whose budgetary implications are barely perceptible; seeming to have little confidence in the professional secretariats; and generally dragging our feet.48 The author concluded, “Somehow we ought to concentrate even more on constructive alternatives, be less concerned with minutiae, develop more feel for tone and timing, and greater sensitivity to the overall impression we are making.”49 However, events during the remainder of the decade resembled more o f a desencuentro between ECLA and the United States than a search for constructive alternatives. As the United States became more exclusively preoccupied with the dangers o f Communism, economists at ECLA became more adamant about the urgency of Latin American development, more strongly identified with the collective identity of the institution, and more engaged in a discourse that was alienating to the United States.

The Dialogo de Surdos: ECLA and the Cold War Between 1947 and 1950, the heightening of Cold War tensions was focused primarily in Europe, but with the declaration of the People’s Republic of China in 1949 and the outbreak o f the Korean War in June 1950, the underdeveloped countries also became an area o f concern to the United States. In 1953, Secretary o f State John Foster Dulles and Allen Dulles, Director o f the CIA, incorporated Latin America into plans to forestall Communist incursions into the developing world. There followed a U.S.

48 “UN Regional Economic Comimssions,” from Robert E. Asher to John D. Hickerson (UNA), May 14, 1953, NARA 340.210/10-2853. 49 Ibid. 124

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National Security Council order to strengthen defense o f Latin America and eliminate subversive elements threatening to United States interests in the region.50 U.S. fears mounted as a result o f the suspected influence o f Communists in the administration of Jacobo Arbenz (1951-54) in Guatemala, and tension was acute by the time o f the Tenth Inter-American Conference in Caracas, in March 1954.51 A State Department report on the economic issues discussed at the conference openly recognized the discordance between the United States agenda o f anticommunism and the insistence of the Latin American countries on economic matters: “What was not fully anticipated...was the extent to which some o f the Latin American Delegations would go in pressing certain of their proposals to points which could not be accepted by the U.S.” The eloquent deliveries o f the Latin American representatives reflected a direct clash of priorities, and U.S. representatives admitted to the State Department that their positions were entirely “unconvincing to the Latin Americans.” Many delegates were angry at the United States’ complacent attitude towards Latin American dictators, continued indifference towards Latin American economic proposals, and Secretary of State Dulles’ single-minded effort to win support for the anticommunist declaration at the expense of all other issues.52

50 John H. Coatsworth, Central America an d the United States: The Clients and the Colossus (New York: Twayne Publishers, 1994), pp. 53-66. 51 See Piero Gleijeses, “The Caracas Conference,” in Shattered Hope: The Guatemalan Revolution and the United States, 1944-1954 (Princeton: Princeton University Press, 1991), pp. 267-278. 52 “The speeches reflected their view that our policies were all right for a country as rich and diversified as the U.S. but were o f little help in dealing with the problems they tried at great length to expose to U.S.” (“Report on Work o f Committee II - Economic Matters,” Post Conference 2 Delegation Report, Tenth Inter-American Conference, Caracas, Venezuela, March 28, 1954, Department o f State, NARA Box 126, pp. 1, 7).

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Starting in 1954, the State Department also anxiously noted the growing influence of ECLA’s ideology, a sign that the mission o f the institution had created a following among governments and intellectuals in the region in favor of state-led economic development. At the third session o f ECLA in 1950 the State Department delegation had already warned that ECLA “assumed the role o f apostle for the underdeveloped countries.”53 At the Caracas Conference, U.S. officials commented further on “ample evidence o f the widespread indoctrination o f the Latin Americans with the Prebisch notions o f the obsolete character o f the free trade philosophy as applied to a world consisting o f underdeveloped countries on the one hand and highly industrialized countries on the other.”54 The IV Special Meeting of the Inter-American Economic and Social Council came as compensation for Caracas and took place at Quitandinha, in Petropolis, Brazil, in November of 1954. In the immediate aftermath o f United States involvement in the overthrow o f Arbenz in Guatemala, ECLA faced a “strong North American offensive” against its theoretical position. Prebisch prepared a statement for the conference entitled “Inter-American Co-operation in a Latin American Policy,” explicitly calling for an increase in foreign public lending to Latin America, and endorsing development planning, state-led industrialization, agrarian reform, and technical cooperation.55 The support at ECLA for state intervention went entirely against the explicit stance o f the 53 “Confidential Report on the Third Session o f the Economic Commisson for Latin America,” Despatch 164 from Montevideo to Department o f State, September 7, 1950, NARA 340.210/9750. 54 “Report o f Work o f Committee II - Economic Matters,” Post Conference 2 Delegation Report, p. 7. 55 Raul Prebisch, “International Co-operation in a Latin American Development Policy,” reprinted in United Nations, Development Problems o f Latin America (Austin: University o f Texas Press,

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Eisenhower administration, especially its emphasis on the private sector. Treasury Secretary George Humphrey, leader o f the U.S. delegation to the Quitandinha Conference, once again insisted that the “principal job o f development was expected to be done by private capital, both domestic and foreign.” The U.S. delegation rejected outright the ECLA proposal for commodity agreements to maintain prices for exports of Latin American raw materials and its calls for an Inter-American Development Fund, arguing that private direct investment would more than suffice for development needs.56 Latin American delegates blamed the failure o f Quitandinha on U.S. objections to almost all o f the Committee’s recommendations. They felt that the United States was unfair in insisting that Latin America follow a policy o f free trade, while itself imposing protectionism on selected products. The U.S. also emphasized reliance on private investment, without acknowledging that foreign direct investment (then) tended to concentrate exclusively on primary products for export. Several State Department officials again recognized the United States’ increasingly untenable position. Assistant Secretary o f State for Inter-American Affairs John Moors Cabot and Ambassador Merwin Bohan viewed the conference as “a noteworthy failure.”57 Other critics of the “empty briefcase policy” included Representative James G. Fulton (R-PA), who went as a private observer, and Senator George A. Smathers (D-FLA), who traveled as advisor to the U.S. delegation.58 Latin Americans were incensed at the United States’ total lack of

1970). See also David H. Pollock, “ Some Changes in United States Attitudes Towards CEPAL Over the Past 30 Years,” CEPAL Review, Second half o f 1978, p. 66. 56 Hernan Santa Cruz, Cooperar operecer: el dilemci de la com unidadm undial 1941-1960, vol. I (Buenos Aires: Grupo Editor Latinoamericano, 1984), p. 466. 57 Rabe, Eisenhower and Latin America, pp. 69-78. 58 There were reports that officials cancelled Representative Fulton’s invitation to the American Embassy dinner after he gave an interview comparing the amount o f U.S. aid granted to Europe

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responsiveness on key economic issues, and its seeming hypocrisy in matters of economic policy.59 The powerful nature and ideological potential of ECLA’s pronouncements continued to draw alarm from the State Department, as did the cepalinos ’ growing authority on Latin American economic issues. A 1956 report to the Secretary o f State observed that “ECLA staff members., .believe that their constant study o f Latin American problems eminently qualified them as interpreters o f the ambitions and needs o f the region.”60 Commentary by the U.S. Embassy in Brazil in 1957 on the ECLA Training Program suggested a similar wariness of the spread o f ideas potentially threatening to U.S. interests. Officials recognized the effectiveness and scope o f the Training Program as “an instrument for disseminating ECLA’s viewpoints on economic theory and practice and for developing an extensive body o f disciples or supporters in responsible positions in the governments o f the Latin American members o f ECLA.” While the courses themselves were not objectionable as such, the Embassy alerted the State Department to the powerful implications of training, in spreading the ECLA ideology by providing “a built-in, self-perpetuating mechanism for the theoretical and practical philosophy of the ECLA Secretariat.”61

and Asia with aid to Latin America. {Hispanic American Report, 7, no. 11, November 1954, pp. 41-42). 59 Regino Boti and Felipe Pazos, “Algunos aspectos del desarrollo economico de Cuba,” Revista Bimestre Cubana LXXV (Second semester) 1958, p. 255; Arn'bal Pinto, “La industrializacion y el Profesor Rottenberg,” Panorama Economico 180, November 1957, p. 736. 60 “Classified Report o f the Work o f the Sub-Committee I and Working Group,” Enclosure 1 o f “Classified Report o f the United States Delegation to the Trade Committee Meeting o f the ECLA, Santiago, Chile, Novem ber 19-29, 1956,” from Harold M. Randall to Secretary o f State John Foster Dulles, NARA 340.210/1-2357, p. 3. 61 “ECLA Development Training Program, 1957,” Foreign Service Despatch No. 46 from Robert J. Dorr, First Secretary for the Ambassador, Amembassy, Santiago, to Department o f State, July 17, 1958, NARA 340.210/7-158.

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In the late 1950s, the official U.S. stance towards ECLA turned from hesitation back to opposition, in resistance to ECLA’s plan for regional economic integration and over fear o f Communist influence among its most outspoken members.62 Efforts by the Soviet Union to strengthen trade with Latin America, starting in 1956, made the United States especially apprehensive. In 1957 a State Department memorandum on ECLA’s proposals for regional integration argued critically that “ECLA’s tendency...is to urge types of agreements and operations on selective bases which we believe would be unwise and prejudicial to the United States.”63 In commenting on an article that Executive Secretary Prebisch was to publish in 1958, the American Embassy in Santiago urged that “the United States will wish to attempt to correct...the misimpressions and fallacies contained in the article both with respect to Dr. Prebisch and to other Latin Americans.” ECLA’s views, principally as articulated by Prebisch, presented a danger in allowing Latin American countries to remove “themselves from any responsibility for failure” if aid was “not received from the United States.” This evaluation suggested that a “serious omission...is the author’s failure to give any consideration whatsoever” to ways in which Latin American countries could promote economic development by their own efforts.64 The United States issued an official diplomatic protest at being excluded from a meeting of an informal working group o f Latin American representatives to discuss plans for a

62 Coatsworth, Central America and the United States, pp. 92-93. 63 Memorandum from ARA Amb. Randall to REA Mr. Conover, November 4, 1957, NARA 340.210/10-457, p. 2. 64 “ECLA Executive Secretary Proposes United States Adopt New Policy for Latin American Economic Development,” Foreign Service Despatch 740 from Amembassy Santiago to Department o f State, January 30, 1958, NARA 340.210/1-3058 OAA, pp. 2-3.

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Latin American common market.65 However, the Secretariat sought to guard its independence from U.S. influence over the issue o f integration, which by this time had come to represent a centerpiece of ECLA’s institutional mission.66

ECLA and Anticommunism The rift that appeared openly at the 1954 Caracas Conference and at Quitandinha continued to widen, fueled by U.S. anticommunism, overt support for dictators in the region, and, especially after 1957, an economic recession in the United States that depressed prices for a number of key Latin American export commodities.67 Beginning in 1954 the Department of State intensified its surveillance of ECLA’s activities and main staff members in order to target possible signs o f Communist influence.68 By 1958 this had escalated to deliberate U.S. efforts to influence the hiring of economists for the ECLA Secretariat in the hope of introducing personnel with a pro-U.S. perspective.69 At the same time, under the sway of Prebisch’s forceful leadership, it was clear that the

65 “ECLA Report on Latin American Regional Market,” Department o f State Instruction No CA8695 from Herter, Acting, to all ARA Diplomatic Posts, Amemb London, Brussels and Geneva, April 9, 1959, NARA 340.210/4-959, p. 5. 66 “Informal discussions with Dr. Raul Prebisch, Mr. Louis Swenson and Mr. Alfonso Santa Cruz, as well as more subordinate officials, reveals that none o f them agree with the United States position and, even if the United States claim is valid legally, believe that insistence on official participation, even by observers, in working group sessions would reduce greatly the practical value o f such groups.” (“Participation by M ember Governments in ECLA Activities,” Foreign Service Despatch No. 822, from Robert J. Dorr, First Secretary, Amembassy Santiago to Department o f State, February 17, 1958, NARA 340.210/2-1750 HBS). 67 Tad Szulc, “Nixon Tour Highlights a Continent’s Crisis,” New York Times, May 1 1, 1958. 68 In July 1954 the Department o f State alerted U.S. representatives to regional United Nations Commissions that invitations from the Soviet Union issued to members for official visits for observation o f development efforts should be officially protested, and advised that the Secretary General would be informed o f the United States position. (Outgoing Telegram from Department o f State to USUN (New York), AmConsul, Geneva; Amembassy, Bangkok; and Amembassy, Santiago, July 31, 1954, NARA 340.210/7-3154, pp. 1-3). 69 Department o f State Instruction 2824, no. A-57, from Herter, Acting to USUN, New York, August 29, 1958, NARA 340.210/8-2958.

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Executive Secretariat would resist accepting professionals who did not endorse ECLA’s theoretical viewpoint.70 Between April 27 and May 15, 1958, Vice President Nixon and an entourage o f State Department and White House officials toured eight South American countries on what was to be a mission of goodwill.71 In Buenos Aires, Montevideo, Lima and Caracas, Nixon m et angry and violent crowds, where protesters shouted insults and antiAmerican slogans.72 In Caracas, the reaction was most dramatic, and Nixon barely escaped being killed. President Eisenhower responded immediately by stationing Marines at Ramay Air Force base in Puerto Rico and Guantanamo Bay, Cuba, creating intense resentment of the United States for its overreaction and open affront to Venezuelan sovereignty.

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70 Regarding “Recommendation o f Herbert B. Woolley as Candidate for ECLA Position o f Chief o f the Current Economic Analysis Division,” the U.S. Delegation to the United Nations noted o f Prebisch that “ Letters from the latter appeared to give the impression that he might be very reluctant to accept any candidate for this job who came from the outside, preferring to hold it for someone he recruited himself.” (Foreign Service Despatch No. 1095 from USUN to Department o f State, May 22, 1958, NARA 340.210/5-2258). Furthermore, when it appeared that the position would be granted as a promotion to British economist Dudley Seers, the conclusion was that “Seers, personally, is not o f a type that would be likely to oppose vigorously or lengthily any o f the concepts held by Dr. Prebisch.” (“ECLA Position o f Chief, Current Economic Analysis Division,” Foreign Service Despatch No. 57, from Amembassy Santiago to Department o f State, July 17, 1958, NARA 340.210/7-1758). 71 The countries on N ixon’s itinerary included Uruguay, Argentina, Paraguay, Bolivia, Peru, Ecuador, Colombia, and Venezuela. (Marvin R. Zahniser and W. Michael Weis, “A Diplomatic Pearl Harbor? Richard N ixon’s Goodwill Mission to Latin America in 1958,” Diplomatic History 13, no. 2 (Spring 1989), p. 169). 72 “Communist-Inspired Booing Greets Nixon in Peru,” New York Times, May 8, 1958; “Nixon is Stoned By Peru Rioters Headed by Reds,” New York Times, May 9, 1958; “Slogans used by Demonstrators in Caracas,” Office Memorandum from OSA - Mr. Wardlaw to OSA Mr. Sanders, May 14, 1958 (Official Use Only), NARA RG 59, Records o f the Bureau o f InterAmerican Affairs, Lot File No. 61 D 332, Box 4 o f 4 (part), Office Files o f Maurice M. Bernbaum, 1954-1959, Box 24 o f 28, Folder “Vice President N ixon’s Trip - General.” 73 Interview, M anuel Caballero, Universidad Central de Venezuela, Caracas, 23 September 1996; “U.S. Flies Troops to Caribbean as Mobs Attack Nixon in Caracas; Eisenhower Demands His Safety,” New York Times, May 14, 1958; “Nixon Cuts Tour Short; Eisenhower Will Lead a Gala Welcome Today,” New York Times, May 15, 1958. 131

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Although a number o f U.S. observers had noted tensions in inter-American relations, there was less awareness that the Latin American reaction would be so strong. In 1953, in his capacity as Special Representative to the President, Milton Eisenhower drew up relatively sensitive assessments o f Latin America and the lack o f understanding in U.S.-Latin American relations.74 Starting in 1954, Assistant Secretary o f State Richard Rubottom warned that economic stagnation in much o f Latin America was endangering poverty stricken areas with the threat o f Communism.75 A background memorandum prepared for Representative Richard Simpson (R-Ill) just before the trip called attention to the overriding concern in Latin America for problems of economic development, and argued that “Latin America, and in particular the countries to be visited by the Vice President, are expecting more than just another goodwill mission.”76 In the aftermath o f the trip, State Department officials struggled to define the magnitude of the troubled relationship between the United States and Latin America.77

74 After a tour o f Latin America as Special Representative to the President, in July 1953, Milton Eisenhower observed that Latin Americans doubted the United States commitment to the region, and felt “dissatisfaction with the extent to which the United States is helping to improve the standard o f living o f their people.” (Current Economic Developments, 414 (3) 74, July 30, 1953). 75 Hispanic American Report, 7, no. 11, November 1954, pp. 41-42. 76 Memorandum from Ralph E. Becker to Honorable Richard Simpson, April 17, 1958 “Latin America”; NARA Record Group 59, Records o f the Bureau o f Inter-American Affairs, Lot File 61 D 332, Box 4 o f 4 (part), Office Files o f Maurice M. Bembaum, 1954-1959, Folder “Nixon Trip to South America: Itinerary, Schedules, Program, Policy.” The same briefing strongly suggested that “the Vice President be prepared to at least suggest something concrete and imaginative in the form o f forthcoming economic assistance;” in short, “If we do not meet the needs o f this young giant, the Soviets will.” 77 An internal State Department memorandum written on the day o f the most violent confrontation in Caracas suggests considerable surprise at the degree o f resentment displayed towards the United States: “I believe the anti-U.S. demonstrations which we have seen during the Nixon trip represent something new in our inter-American relations. While we have seen some of this general feeling building up in recent years (particularly the last year and a half), we have not in my memory had such acts o f violence.” (“Some Thoughts on the Evaluation o f the Nixon Trip,” Office Memorandum, May 14, 1958, from Mr. Hoyt (ARA) to Mr. Sanders (OSA), NARA RG 59, Records o f the Bureau o f Inter-American Affairs, Lot File 61D 332, Box 4 o f 4 (part),

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Not only was there an obvious divergence between Vice President Nixon’s insistence on anticommunism, on the one hand, and Latin America’s economic concerns, on the other, but, as one State Department commentary reflected openly, “It is our attitude that affects Latin attitudes even more than the financial aspects o f the problem.”78 In the ensuing months, Brazilian President Juscelino Kubitschek proposed “Operation Pan America,” a program o f U.S. assistance to Latin America, which brought an immediate visit from Secretary o f State Dulles to Brasilia to discuss measures for regional cooperation.79 The perception o f a steadily growing security threat in Latin America led to a quick succession o f changes in U.S. policy toward the region, and most notably a reversal of its position on the ECLA agenda. Undersecretary of State for Economic Affairs C. Douglas Dillon and State Department Economic Officer Thomas Mann organized discussions o f the issue o f falling commodity prices, reflecting a more flexible approach to Latin American economic problems.80 Now, the State Department interpreted declining prices for raw materials as a danger to social and economic stability, one that made Latin America more vulnerable to the dangers o f Communism. Responding to a long-standing

Office files o f M aurice M. Bembaum, 1954-1959, Folder “Vice President N ixon’s Trip General”). 78 “Office Memorandum, Official Use Only, From Amb. Deier (RPA) to Mr. Sanders (OSA), May 14, 1958, NARA Record Group 59, Records o f the Bureau o f Inter-American Affairs, Lot File No. 61 D 332, Box 4 o f 4 (part), Office Files o f Maurice M. Bembaum, 1954-1959, Folder “Vice President N ixon’s Trip - General.” 79 Pollock, “United States Attitudes,” p. 68; Schoultz, Beneath the United States, p. 356; Iglesias, Rejlexiones, pp. 5-6, 80 Secretary o f State John Foster Dulles appointed Dillon, an international investment banker, Undersecretary o f State for Economic Affairs in 1957; in 1959 Dillon became Undersecretary o f State for Christian Herter. Thomas Mann had experience in Latin American affairs dating from World War II, and became Deputy Assistant Secretary o f State for Inter-American Affairs in 1950-53, Assistant Secretary o f State for Economic Affairs in 1957-60, and Assistant Secretary o f State for Inter-American Affairs and Coordinator o f the Alliance for Progress in 1963. (Current Biography, 1953 and 1964).

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request on the part o f Latin American countries, Dillon also announced support for the Inter-American Development Bank, reversing previously steadfast U.S. opposition.81 U.S. foreign policy continued its overall trend toward an exclusive focus on anticommunism. The Cuban Revolution of January 1959 precipitated growing fears that ECLA had become a vehicle for Communist activities in Latin America.82 The twelvemember UN Advisory Group for Economic Development Programming, which was assigned to Havana from May through December 1959, inspired direct U.S. efforts to press for the exclusion o f any “undesirables,” participants whose background might suggest “communist leanings, affiliations or actions.”83 The State Department issued to its embassies an explicit statement that expressed a “strong interest in cooperating to avoid [the] UN becoming [a] cover for Communist penetration o f [the] hemisphere.”84 There followed an overwhelming concentration of U.S. attention on the Revolution and its regional implications.

81 Arthur M. Schlesinger, A Thousand Days. John F. Kennedy in the White House (Boston: Houghton Mifflin, 1965), p. 190. 82 In December 1958, the State Department sent letters to all U.S. Ambassadors in Latin America asking for their help in gathering information on United Nations activities in their particular countries, in an effort to determine “whether any o f the individuals concerned appear hostile or friendly to the United States...whether their theories and recommendations are contrary to or would tend to impede the execution o f United States policies.” As an example, see letter to the Honorable Robert Newbegin, American Ambassador, Tegucigalpa, from Roy R. Rubottom, Jr., Assistant Secretary, ARA, December 11, 1958, NARA 342.210/12-1158. 83 “Our Instruction to Chile and Cuba about UN Advisory Group in Cuba,” Memorandum from OES John Ordway to OES Mr. Kootschnig, November 17, 1959, NARA 340.210/11-759; “Members o f ECLA Advisory Group in Cuba,” Department o f State Instruction No. CA-4448, from Herter to Habana and Santiago (Chile), November 25, 1959. 84 Outgoing Telegram from Ball, Acting, Department o f State to Amembassy, San Salvador, June 28, 1962, NARA 342.10/6-1962. State Department files from this period demonstrate ongoing concern over Communist infiltration among United Nations staff in Cuba. See “Lie. Placido Garcia Reynoso,” Airgram from Robert W. Adams, Counselor, Amembassy, Mexico, DF to Department o f State, July 26, 1962, NARA 712.521/7-2662 XR 342.10; “Role o f Pro-Castro ECLA-FAO Officials on UN Aid to Cuban Agriculture,” from Joseph John Jova, Counselor, Amembassy Santiago to Department o f State Washington, Januay 23, 1963, NARA 342.10/12363 X R 398.03-FAO.

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In this climate, the political engagement of many ECLA economists fed the general paranoia, which now became publicly visible. An article in the Indianapolis Star, reprinted in the Congressional Record in 1959, described a sensational plot in which ECLA, with the leadership o f economist Adolfo Dorfman, “a leftwing, Russian-born Argentine,” had master-minded a “plan to gather secret industrial information from every power company in Latin America.” The Star warned of “a real danger that South American governments, many o f them Socialist oriented, will pressure private power companies into complying with this request from the Socialist-Communist-dominated Economic Commission for Latin America, not knowing the real dangers to their own economic and military security that are involved.”85 Far from dissipating since the early period o f ECLA’s existence, U.S. suspicions o f the organization were now easily channeled in the furor o f the Cold War. Spurred by the attack on Nixon in 1958 and the Cuban revolution, official U.S. foreign policy began to change, a result of concerns over expansion of revolutionary movements in the region. The presence of key State Department personnel who were more responsive to Latin American demands for economic assistance also contributed to reorient U.S. policy. The ECLA doctrine now, ironically, found acceptance in U.S. government circles.86 On March 8, 1960, Prebisch, Felipe Herrera of the Inter-American Development Bank, Jose A. Mora and Jorge Sol o f the Organization of American States, and Jose A. Mayobre, Venezuelan Ambassador to the United States, presented a memorandum at the invitation of the White House calling for attention to the critical state

85 “U.N. Plan Would Aid Saboteurs,” Extension o f Remarks o f Hon. Ross Adair o f Indiana in the House o f Representatives, Congressional Record, Appendix, September 10, 1959. 86 Pollock, “Prebisch Versus the United States Government: Changing Perceptions Over Time,” Canadian Journal o f Development Studies 9, no. 1 (1988), p. 125.

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of the Latin American economies and the need for Inter-American cooperation. One year later John F. Kennedy announced the Alliance for Progress, promising a massive program o f financial support for economic and social reform in the region. The Alliance drew upon the advice o f a working group, “The Committee o f Nine,” which included prominent Latin American economists, and a number of those who had participated in the initiation of ECLA. In a complete turnaround, the Alliance endorsed a large-scale plan for economic assistance under the direction of a newly strengthened Inter-American Economic and Social Council, in collaboration with ECLA and the Inter-American Development Bank. A number of cepalinos, including Prebisch, participated in the planning and execution of the Alliance, which took ideas and much o f its inspiration from ECLA’s basic doctrine. 87 Development plans became a general requirement for U.S. development assistance, for example, and planning “at the country level quickly achieved a degree of respectability.”88 With outright support for the role o f the state in economic development, large-scale public investment, and social reform, the Alliance confirmed ideas that ECLA had advocated throughout the 1950s.89

87 Prebisch acted briefly in an advisory position to the Alliance in 1962. In 1964, Prebisch declined a U.S. offer o f chairmanship o f the Inter-American Committee on the Alliance for Progress o f the Organization o f American States. Levinson and Onis suggest, from their own interviews with State Department officials, that the offer of the chairmanship o f the InterAmerican Committee on the Alliance for Progress represented a “major concession,” given that “Prebisch’s responsibility for the ECLA thesis, particularly with respect to the terms o f trade, the positive role o f the public sector, and the limitations o f private enterprise, had not endeared him to the State Department.” (Jerome Levinson and Juan de Onis, The Alliance that Lost Its Way (Chicago: Quadrangle Books, 1970), pp. 129-130; see also Schlesinger, A Thousand Days, p. 190). 88 Pollock, “Prebisch Versus the United States,” p. 125 and interview, Richard Mallon, Cambridge, MA, 30 September 1991. 89 The Alliance “gave more comprehensive, more evangelical, and no doubt more pretentious form to ideas that had been circulating for a long time in Latin America.” (Arthur J. Schlesinger,

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The Alliance for Progress, in Fernando Henrique Cardoso’s words, a “splendid moment of North American socio-political reformist zeal,” also proved to be extremely brief.90 Despite official statements to the contrary, following the assassination of Kennedy, the Johnson administration turned abruptly away from Latin America to focus on the Vietnam War. In 1964, Prebisch left ECLA to become Secretary General of UNCTAD in Geneva, leaving ECLA with a void in philosophical and charismatic leadership. ECLA quickly lost its approval in U.S. government circles once Thomas Mann became Assistant Secretary of State for Inter-American Affairs in 1964 and reiterated a policy of fierce anticommunism, protection of U.S. foreign investment, and an abandonment of social development goals in the region.91 The military overthrow of Joao Goulart in Brazil in 1964, with apparent U.S. endorsement, and the U.S. invasion of the Dominican Republic in 1965, with the explicit purpose of averting “another Cuba,” evidenced a further, seemingly unsurmountable divide between U.S. security objectives and Latin American economic concerns.

Jr., “Myth and Reality,” in The Alliance fo r Progress: A Retrospective, edited by L. Ronald Scheman (New York: Praeger, 1988), p. 67). 90 Fernando Henrique Cardoso, “The Originality o f the Copy: CEPAL and the Idea o f Development,” CEPAL Review (Second H alf o f 1977), p. 30. 91 Even the new Executive Secretary o f ECLA in 1962, Jose Antonio Mayobre, was “subject to attacks by conservative U.S. politicians for his supposed Communist sympathies.” (Levinson and Onis, The Alliance, p. 88. See also Hispanic American Report, XV (2), April 1962).

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Conclusion In the en d .. .the present tensions in inter-American relations depend.. .more on what Latin America does than what the United States could be doing, not because the United States can do little or because it is not the decisive factor in alleviating these conflicts, but simply because the policy o f th e .. .North is going to depend ultimately on the degree o f coherence and confrontation that Latin America demonstrates in defense o f its legitimate interests.92 The Chilean journal Panorama Economico, where cepalino Arn'bal Pinto served as an editor, published this statement immediately following Vice President Nixon’s ill-fated trip to South America in 1958. ECLA’s mission and its ambitious agenda were communicated in the provocative language o f the cepalinos. From the time o f ECLA’s inauguration, U.S. representatives perceived this discourse as threatening, as an affront to U.S. regional interests, contradictory to the U.S. doctrine o f private investment, and by the late 1950s, as indicative o f a broader Communist conspiracy in the region. There were, however, some important contradictions in U.S. foreign policy towards ECLA. Hard-line anticommunism appeared starting in 1954, and heightened after the Cuban Revolution. However, formal declarations o f U.S. foreign policy did not always correspond entirely to internal opinions within the U.S. State Department; in fact some diplomats gave credence to the role of ECLA, and believed it could serve as a conduit for U.S. interests. After the attacks on Vice President Nixon in South America in 1958, followed by the Cuban Revolution, the U.S. foreign policy establishment adopted ECLA’s agenda in the form o f the Alliance for Progress in an effort to forestall the spread o f revolutionary movements. But such wholehearted support for ECLA lasted only momentarily. With the assassination of John F. Kennedy, the U.S. abandoned its crusade

92 “Y despues de Mr. Nixon, ^que?,” Panorama Economico (Santiago, Chile), 11, no. 191, 20 June 1958, p. 262.

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for social and economic reform in the region and began to concentrate exclusively on preventing revolution by military means. In the midst o f this atmosphere of confrontation, the original generation of cepalinos gained a broad reputation for outspoken criticism o f international economic relations. In 1949, Prebisch set the standard with his critique of ideas from the industrialized world, in outspokenly challenging traditional interpretations o f economics, and in calling for a radical transformation o f the structure o f the Latin American economies.93 Likewise, Celso Furtado constantly exhorted his readers and students to “rethink” existing theories in Latin American terms.94 Many o f the cepalinos had professional engagements that reached beyond the confines o f ECLA. Cepalinos published and taught in separate venues, where they were often able to express more open criticism of U.S. foreign economic policy. In an article that appeared in 1966 in the journal Economic Development and Cultural Change, ECLA economists Anibal Pinto and Osvaldo Sunkel criticized Latin American dependence on theories from abroad: “we have continued to be prisoners of this ‘alienation,’ copying painfully and without critical adaptations whatever emanates from Harvard, Cambridge, and other prestigeful (sic) universities.” The training of economists abroad was, in their view, a complete “waste of resources and opportunities.”95 This polemical language added to the cepalinos'1aura of defiance. In addition to his early criticism of classical economic theory, Prebisch became notorious for his image

93 Raul Prebisch, “El desarrollo economico de America Latina y algunos de sus principales problemas,” E l Trimestre Economico, July-September 1949. 94 Celso Furtado, “Ideas en torno a la creacion de una escuela latinoamericana de economia,” Economia (Santiago) 19, nos. 72-73 (1961), p. 2. 95 Anibal Pinto and Osvaldo Sunkel, “Latin American Economists in the United States,” Economic Development and Cultural Change 15, no. 1 (October 1966), p. 80.

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as an “armed prophet” (profeta armado), and an “intellectual caudillo” (caudillo intelectual).96 Mexican economist Juan Noyola achieved the “status of hero,” “militant,” and “revolutionary intellectual.”97 In October 1960, Noyola wrote a letter to Prebisch announcing his resignation from ECLA as a result of the U.S. Secretary General’s termination of the United Nations mission to Cuba. Noyola declared his dedication to the ECLA mission, and more broadly, his commitment to the “economic liberation of Latin America.”98 He was obviously threatening to the United States because o f the marxist overtones o f his public declarations. It is more difficult to explain U.S. objections to other cepalinos, who filled purely technical roles.99 Although ECLA enjoyed a unique degree of independence within the interAmerican system, it was not immune to the ideological conflicts of the Cold W ar.100 ECLA’s discourse granted the cepalinos a sense o f intellectual coherence in opposition to the narrow view of international economic relations taken by U.S. foreign policy representatives. Besides the cepalinos ’ collective identity and widespread influence, a much larger question is the degree to which this prolonged conflict impinged on ECLA’s

96 Joseph Hodara, “Orfgenes de la CEPAL,” Comercio Exterior 37, no. 5 (May 1987), p. 383; Victor L. Urquidi, “/« Memoriam: Raul Prebisch (1901-1986),” El Trimestre Economico 53, no.3 (July-September 1986), p. 441. Celso Furtado described Prebisch as “the great heretic.” (Celso Furtado, “Raul Prebisch, el gran heresiarca,” Comercio Exterior 37, no. 5 (May 1987), p. 374). 97 “ Discurso del Lie. Fernando Carmona de la Pena,” in Noyola, La economia cubana en los prim eros anos de la revolucion (Mexico: Siglo XXI, 1978), p. 16; and Carlos Bazdresch, “Presentacion,” in Elpensamiento de Juan F. Noyola (Mexico: Fondo de Cultura Economica, 1984), p. 19. 98 Juan F. Noyola, La economia cubana, pp. 10-12. 99 A clear example is ECLA economist Alexander Ganz, a U.S. citizen, who constructed national accounts estimates as a member of the Economic Research Division. In 1958, the U.S. State Department issued an official statement indicating that it did “not believe that Mr. Ganz possesses the standard o f integrity required o f international civil servants.” (Department o f State Instruction 2824, to USUN, New York No. A-57, August 29, 1958 “Executive Order 10422, as amended Alexander Ganz,” NARA 340.218/8-2958). 100 Planning, for example, was called programming at ECLA in the 1950s in order to avoid accusations o f ties to Soviet-style planning.

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theoretical development, in particular on its ability to react to rapidly changing economic circumstances in Latin America after World War II.

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Chapter 5 A Different Cepalino: Jorge Ahumada Introduction Opinions of ECLA are strongly divided. The commission drew a following of disciples who defended its independent philosophy and the pursuit o f an autonomous development path in Latin America. Critics, however, believe that the cepalinos were ideological, weak in theoretical preparation, alienating to the United States, and wedded to the Cuban Revolution. They argue that the cepalinos blindly advocated import substitution industrialization at the expense of macroeconomic stability. In recent interpretations, ECLA is often seen as a monolith, with a rigid and unchanging ideology poorly suited to its times and to the long-run vicissitudes o f the region’s development needs. The biography of Jorge Ahumada suggests that prevailing interpretations of ECLA miss subtle but important differences among the cepalinos. Ahumada was undeniably a cepalino who saw development as an absolute necessity in Latin America. Like his colleagues, Ahumada advocated structural transformation o f the Latin American economies through measures such as import substitution industrialization and land reform. He possessed an inherent faith in planning and in the capacity of the state to address development problems. Ahumada also shared the sense o f urgency that characterized ECLA’s early mission. In many ways, however, the story of Jorge Ahumada contradicts our traditional view of ECLA. For an organization traditionally identified with intellectual solidarity,

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Ahumada’s interpretations suggest a considerable degree o f individuality. In the words of cepalino Celso Furtado, Ahumada was one of a number of “dissident collaborators” at ECLA.1 Though ECLA was criticized for its unbending support for import substitution industrialization, Ahumada insisted on the centrality o f exports for the sustained growth o f Latin American economies, and repeatedly criticized excessive protectionism.2 Ahumada was a relatively conservative Christian Democrat, while the cepalinos were often viewed as leftist, in the United States and in more conservative intellectual circles in Latin America.3 His idea of agrarian reform was fundamentally capitalist. He advocated a strong rural middle class, moderate tenure-based land reform, and the improvement of education and agricultural productivity. These ideas set Ahumada distinctly apart from some o f his cepalino colleagues. One o f the characteristics o f ECLA’s culture was the way in which each o f its members addressed the overwhelming U.S. presence in the region. Ahumada was himself a witness to this relationship, starting in Chile where he began his career as a civil servant, in graduate study in Washington and at Harvard, and in professional practice in Guatemala and Puerto Rico, where he worked as an economist in the late 1940s, in Cuba during the Revolution, and in Chile working for Eduardo Frei. While many of the most prominent cepalinos were known for their open criticism of U.S. economic policies,

' Celso Furtado, A Fantasia Organizada (Rio de Janeiro: Paz e Terra, 1985), p. 76. " Jorge Ahumada, En vez de la miseria (Santiago: Editorial del Pacifico, 1958), p. 132. 3 Interview, Daniel Bitran, M exico City, 5 July 1994; David H. Pollock, “Raul Prebisch Versus the U.S. Government: Changing Perceptions Over Time,” Canadian Journal o f Development Studies 9, no. 1 (1988), p. 122; William Benton, The Voice o f Latin America (New York: Harper, 1961), p. 171, cited in Juan Gabriel Valdes, Pinochet's Economists. The Chicago School in Chile (Cambridge: Cambridge University Press, 1995), p. 116.

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Ahumada expressed disagreement less vocally, and insisted that Latin Americans seek solutions to their own problems.4 The Cuban Revolution attracted the allegiance of many o f the cepalinos, only to be followed by the Alliance for Progress, in which the United States incorporated many of ECLA’s basic premises into its policy towards Latin America.5 Ahumada rejected both approaches. He disagreed with Cuba’s trend toward socialism and questioned its viability in Latin America. Rather than participating in the Alliance, however, he resigned from ECLA in 1960 to became director o f Cendes, the Center for Development Studies, an independent research center in Caracas. At Cendes, Ahumada was able to attain some o f the objectives that the cepalinos had originally sought, including a measurable degree o f intellectual autonomy. On the other hand, at Cendes his influence shifted from a regional to a national scale. Jorge Ahumada shared in the professional advances o f his generation - in studying abroad, in participating in the design of a regionally specific approach to development, and as a member of the first modem Latin American technocracy. The belief in the efficacy of technical solutions shaped ECLA’s early mission as well as the thinking of Ahumada, as embodied in the case of planning and his conception o f agrarian reform. This chapter discusses two projects that Ahumada directed from this perspective: the regional ECLA Training Program in planning for economic development, launched in 1952, and second, Cendes, the Center for Development Studies in Caracas, dedicated to graduate training in planning and research in the social sciences. In the course of his

4 Interview, Georgina Licea, Caracas, 18 and 23 September 1996. 5 Pollock, “Raul Prebisch,” p. 126.

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work, Ahumada integrated an increasingly interdisciplinary interpretation o f development into training, reflecting concepts of economic and social change then emerging. Simultaneous with his involvement at ECLA and Cendes in the 1950s and early 1960s, Ahumada worked closely with the Christian Democratic Party in Chile, and in so doing reached a degree of political engagement that went beyond that of most cepalinos.6 Ahumada’s political commitment to Christian Democracy in Chile added a new dimension o f influence to the definition of a Latin American economist. His participation in the election and administration of Eduardo Frei in 1964 represented the fulfillment of his devotion to democratically-based economic and social reform.7 Ahumada stood out for his equanimity, at a time when this was not a common attribute o f Latin American economists. As an educator, he insisted on technically rigorous solutions, and is remembered for teaching his students how to think and to reason.8 He believed that training in development planning would stimulate rational answers, and “restore our faith in the capacity of reason to resolve our social problems.”9 In a period rife with ideological conflict, Ahumada was able to bring together diametrically opposing points o f view. Ahumada represented an ideal, more “modem”

6 Ahumada’s experience portended a future political role for Latin American economists, in line with what Jorge Dominguez has called “highly technically trained, politically engaged public figures.” See Jorge I. Dominguez, ed., Technopols: Freeing Politics and M arkets in Latin America in the 1980s (University Park: Pennsylvania State University Press, 1997). 7 Simon Collier and William F. Sater described Christian Democrats under Frei as having “a serious aspiration to social reform...combined with a fierce attachment to democracy.” (A History o f Chile, 1808-1994 (Cambridge: Cambridge University Press, 1996), p. 307). 8 One o f his students described Ahumada as “a representative o f the Enlightenment.” (Ahumada era un representante de la Ilustracion). (Interview, Hector Silva Michelena, Caracas, 27 September 1996). 9 “Programa de capacitacion en problemas de desarrollo economico,” Exposicion del Dr. Jorge Ahumada en la clausura del curso intensivo de capacitacion en problemas de desarrollo economico (Buenos Aires, 22 December 1958), Revista de Desarrollo Economico, Junta de Planificacion de la Provincia de Buenos Aires 2, no. 2 (January-March 1959), p. 261.

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form o f economist, what Prebisch and his contemporaries had sought in calling for a scientific approach to economic problems. Ahumada’s activities, like those o f many economists of his generation, made theoretical advances extraordinarily difficult.10 Ahumada ended his life pursuing two major, disparate projects, at Cendes, the focus of his efforts to institutionalize research and training in development in Venezuela, and as economic advisor to the Frei administration in Chile. It is difficult to imagine any kind o f theoretical innovation taking place under such circumstances. These conditions may explain why his teaching of planning, and more generally, the overall conception o f development at institutions like ECLA, did not evolve more fully. The legacy o f the ECLA culture is intimately related to the ideology of the institution, and to the appearance o f enormously popular intellectual figures. In spite of his multiple public engagements, Ahumada lacked the renown of many of his fellow cepalinos. He also displayed little o f their forceful rhetoric. Ahumada left a limited number of publications, but it has been argued that his most important work was that of an educator.11 Still, there was a basic weakness in Ahumada’s approach. His belief in technical or “scientific” solutions did not always allow for the political challenges involved in development. His insistence that planning was a neutral technique was at odds with the growing role o f the state in Latin American economic development. He

10 In the case o f Ahumada, his “ productivity imposed on him a rhythm too great to refine his ideas while he was in the process o f conceiving o f others.” (“Prologo,” in Jorge Ahumada, La planificacion del desarrollo (Caracas: Instituto de Capacitacion e Investigacion en Reforma Agraria, 1968), pp. 2-3). " Ibid.

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was relatively inflexible, and his vision o f rational, technical solutions proved extremely problematic in the face o f political radicalization, as in the case of Cuba and Chile. The intellectual biography of Ahumada suggests an entirely new perspective on the history o f the cepalinos and their relationship to the institution. It also raises questions about ECLA in the longer term development o f economics in the region. What made Ahumada’s and ECLA’s interdisciplinary approach to development so appealing in the 1950s and early 1960s, only later to disappear from view, to be replaced more recently by a much narrower field of inquiry?12 Were there enduring elements in the approach that Ahumada promoted, particularly at Cendes, in the way he interpreted economic and social change? Finally, why was Ahumada never canonized, as were a number of the cepalino colleagues of his generation, such as Raul Prebisch, Celso Furtado, Anibal Pinto, and Juan Noyola?

Origins Jorge Ahumada was bom in Santiago, Chile, in 1917. His father, a wholesale merchant, suffered a total bankruptcy in the Great Depression, which would mark Ahumada’s life and profoundly shape his ideas. Ahumada’s son, Eugenio, recalled how the difficult conditions of these years left his father with an acute awareness of problems o f economic and social welfare.13 Ahumada won a scholarship to the Intemado Nacional Barrios Arana in Santiago for his secondary education, and he later obtained a scholarship to study at the Universidad de Chile. While he originally wanted to pursue economics,

12 See Alejandro Foxley’s discussion o f economics as a “super science” in Experimentos neoliberales en America Latina (Mexico: Fondo de Cultura Economica, 1988), pp. 93, 98. 13 Interview, Eugenio Ahumada, Santiago, Chile, 4 July 1995.

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financial circumstances dictated his enrollment in the College o f Agricultural Engineering, where he graduated in December 1940.14 In 1941, during the administration o f Pedro Aguirre Cerda (1938-41), Ahumada was hired as an economist at the Department of Agricultural Economics of the Ministry o f Agriculture, where he saw the problems of politics and public administration first­ hand. Ahumada, like many in his generation in Chile, witnessed the growth of a central role for government in national economic development. New political circumstances allowed the administration to focus on industrialization and policies that favored the growing urban population, such as expansion o f the civil service and urban-based social welfare measures.15 In a move that shaped Chilean economic development in subsequent decades, in 1939, President Aguine Cerda established the state development corporation CORFO (Corporation de Fomento de la Production), to foster industrialization, including steel production and development of domestic energy resources.16 At the Ministry, Ahumada came to appreciate further the deep economic inequalities in Chile, such as the concentration of land ownership and rural poverty, as well as the fragmentation o f political parties, both o f which were at the heart o f the nation’s politics. He also became an ardent supporter o f democracy: the rise of Fascist and Nazi sympathizers in Chile during World War II troubled him deeply.17

14 Ahumada graduated in 1940 with the title o f Ingeniero Agronomo. 15 Collier and Slater, A History o f Chile, pp. 241-245. 16 Soon after its incorporation in 1939, CORFO was supplying a major portion o f capital and domestic investment for the Chilean economy. During World War II, the United States granted credits to CORFO for basic industry. (Paul Drake, “Chile 1930-58,” in The Cambridge History o f Latin America, ed. Leslie Bethell, vol. VIII (Cambridge: Cambridge University Press, 1991), p. 291). 17 Victor Urquidi, “Jorge Ahumada (1917-1965), El Trimestre Economico (January-March 1967), p. 3; Urquidi to author, 3 April 1997; Collier and Sater, A History o f Chile, p. 237.

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Ahumada studied abroad thanks to closer ties between the United States and Latin America during World War II.18 In early 1943, he received a fellowship from the U.S. Bureau o f Agricultural Economics to study at the United States Department of Agriculture (USDA), in one of a number of programs that resulted from wartime collaboration with the region.19 From February until May 1943, he enrolled in graduate courses at the USDA in Economics, Statistics, and Farm Management. From Washington Ahumada applied to the Graduate School of Public Administration at Harvard University, and was accepted with a university fellowship, supplemented by additional funds from the USDA.20 In April 1943, the director of the USDA Fellowships Program recommended Ahumada to Harvard as one of their best students, reporting that he was “better academically prepared than most of the Fellows and.. .capable of rigorous research work.”21 Harvard would prove to be a formative experience for Ahumada, for he

18 Ahumada’s former professor at the University o f Chile and colleague at the Ministry o f Agriculture, Hugo Trivelli, had been offered a U.S. government scholarship to study agriculture at Harvard through contacts with the U.S. agricultural attache in Santiago. However, the United States declaration o f war on the Axis meant that Trivelli was barred from entering the U.S. because o f his Italian last name, and he encouraged Ahumada to apply in his place. (Interview, Hugo Trivelli, Santiago, 1 December 1997). 19 John D. Black, Harvard University, to Dr. Sherman E. Johnson, Office o f Agricultural War Relations, U.S. Department o f Agriculture, Washington, D.C., 27 February 1943. [Records, Office o f the Registrar, Graduate School o f Public Administration, Harvard University Archives (hereafter HU A)]. 20 Pendleton Herring, Secretary, Graduate School o f Public Administration, Harvard University, to Jorge Ahumada, Washington, DC, 7 May 1943 (HU A). The Graduate School o f Public Administration was established in 1936 to provide training for public service. At the time, the Depression and the New Deal had stimulated a greater role for government in the United States. During World War II, nearly half o f the students in the masters program in public administration came from foreign countries, primarily Latin America and Canada, as the war drastically reduced the number o f U.S. citizens who could attend. (The John F. Kennedy School o f Government. The First Fifty Years. Prepared by the John F. Kennedy School o f Government (Cambridge, MA: Ballinger Publishing Co., 1986), pp. 15, 18, 29). 21 Carl F. Taeusch, Director, Latin American Fellowships in Agricultural Economics, USDABAE, to Prof. John D. Black, Harvard University, 12 April 1943 (HUA).

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graduated with a highly favorable view o f the American system of higher education, and later used it as a model in his own teaching. In his application for a Littauer Fellowship from the Graduate School o f Public Administration, Jorge Ahumada provided some revealing answers to questions about his experience as a Chilean civil servant and his goals for graduate study at Harvard. Describing his work as an economist in the Ministry of Agriculture from 1941 to 1943, Ahumada was explicit in citing the dearth of agricultural economists in Chile, and in criticizing the School o f Agriculture at the University of Chile for not paying “much attention to Economics.” He intended to enroll primarily in economics courses as a Masters candidate in Public Administration. Ahumada was aware of the limitations of his plans for study: “I do know the courses I am thinking of attending are too much for allowing me to go deeply into any one o f them,” but he was clear about his goals as an economist with a “scientific interest in developing methods o f measurement of supply and demand.”22 Ahumada stated that his own experience in public service did not have a “long history,” but asserted, in a sentence that would echo later on in his life, “Its importance is rather a thing o f the future, I hope.” Ahumada, at 26, seemed certain of his calling as an economist and his commitment, albeit still somewhat vaguely defined, to modem notions o f economic development. At Harvard Ahumada sought to acquire skills as a professional economist, which he felt were needed in Chile. Referring to his work as a Chilean civil servant, in his application Ahumada cited the “definitive reaction against” more formalized methods of research and reporting among the staff o f the Agriculture Ministry. Even more seriously,

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“the biggest problems of our economy have not been solved or studied.” Besides, there were severe deficiencies in the organization o f public administration. In the case of agriculture, “There is no doubt about the efforts being made by the Government to solve these problems. There are 12 Agricultural Agencies who are attempting to do this job and there are no relationships among each other. On the contrary, each one believes the other is wrong.”23 Fellow cepalino Celso Furtado later wrote that Ahumada had “excessive respect towards the ideas that prevailed in the most prestigious North American universities.”24 Ahumada finished his application to Harvard by citing “American knowledge, experience and goodwill” as means for improving the Ministry’s staff and in the end, the conduct of agricultural policy in Chile. Ahumada’s interest in learning from U.S. models would distinguish him from more critical colleagues at ECLA. At the same time, his training and contacts later proved to be essential in his efforts at institution building, and foreshadowed more contemporary forms of institutionalized training abroad. Harvard had one of the most important Departments o f Economics in the nation by the mid-1940s.25 As a graduate student, Ahumada took courses in economic theory and statistics, acquiring the training in economics that he had sought since his years at the Universidad de Chile. Seeking to understand the impact o f the Great Depression in his country, Ahumada took Money, Banking, and Commercial Crises with Joseph A.

22 From Ahumada, “ What 1 propose to do at Harvard,” Application for Littauer Fellowship, 2 April 1943 (HUA). 23 “My work in the Public Service,” Application for Littauer Fellowship, op. cit. 24 Furtado, A Fantasia Organizada, p. 75. 25 Some o f the major figures in economic theory at Harvard when Ahumada attended were Joseph Schumpeter, Edward Chamberlin, Alvin Hansen, and Gottfried Haberler. (Edward S.

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Schum peter. H e took courses in A gricultural E conom ics w ith P rofessor Jo h n D. Black, the co u n try ’s leading scholar in th e field and a principal advisor to the U .S. D epartm ent o f A griculture.26 In th e course A g ricultural, F orestry a n d L a n d P olicy, B lack covered questions o f land tenure and agricultural pricing, problem s central to A h u m a d a’s w ork in C hile. E dw ard H . C ham berlin, w ho tau g h t E conom ic Theory w ith G ottfried H aberler, w as a recog n ized sch o lar on the theory o f th e firm . A hum ada to o k another course, M oney a n d B anking, tau g h t by J.H . W illiam s and A lvin H ansen, th e latter a central figure in the spread o f K eynesian econom ics in the U nited States. B y the tim e A h u m ad a arrived to study econom ics at H arvard, the N e w Deal and W orld W ar II had fo stered an unprecedented role for professional econom ists in econom ic p o licym aking.27 Ideas w ere circulating that A hum ada w ould later incorporate into the courses th at he organized and directed, particularly those related to program m ing. In particular, H arvard P rofessor W assily L eo n tie f w as then engaged in p ath-breaking research on in put-output analysis, w h ich becam e the basis for m o d e m p lanning techniques, w ith d irect applications in research in th e U nited States and ab road.28

Mason, “The Harvard Department o f Economics from the Beginning to World War II,” Quarterly Journal o f Economics XCVII, no. 3 (August 1982), pp. 420-430). 26 Ibid, pp. 418-420. 27 “The great depression and the New Deal had focused the attention o f economists in most American universities, and certainly at Harvard, on questions o f public policy.” A gift of $2 million from an alumnus, Lucius N. Littauer, for the founding o f a graduate school o f public administration established “policy and politics” as a recognized field o f study at Harvard in 1935. (Ibid, p. 429). 28 In 1941 W assily Leontief published The Structure o f the American Economy, 1919-1929, followed by several articles illustrating the use o f input-output analysis that appeared in the Quarterly Journal o f Economics in 1944 and 1946. Leontief applied input-output methodology to project post-war employment for the U.S. Bureau o f Labor Statistics, and its potential application in economic planning “was recognized almost immediately.” When Ahumada was at Harvard, Leontief and Schumpeter co-taught a course on “Programs o f Social and Economic Reconstruction.” (R. Dorfman, “Leontief, Wassily,” in John Eatwell et al., eds., The New Palgrave: A Dictionary o f Economics (London: Macmillan, 1987), p. 165).

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Ahumada also made professional ties that would last throughout his life. He attended Harvard along with a group of other Latin American agricultural economists, among them Regino Boti, an economist from Cuba, who later joined ECLA, and Manuel Noriega Morales, whom he would later revisit on assignment in Guatemala in 1949.29 After graduating in March 1944, Ahumada returned briefly to the Ministry of Agriculture in Chile, developing a plan for reform, which, he wrote in a letter to Pendleton Herring, Secretary of the Graduate School o f Public Administration at Harvard, was aimed at “building up a strong rural middle class, improving education and productivity,” and which was “well received” except “for the utterly conservative large land owners.” 30 Chilean agriculture was “primitive,” and exceedingly inequitable: a “study in 1939 revealed... that less than 1 percent o f all agricultural properties occupied approximately 68 percent of the land.”31 The Plan Agrario o f 1945, to which Ahumada referred, indicated that compensation for agricultural laborers was not adequate to cover the cost o f basic necessities, even food.32 Ahumada faced enormous political obstacles in his attempt to introduce even a moderate tenure-based plan for land reform. It was stalled when the recently elected Congress eliminated its appropriation for the following year.33

29 Interview, Hugo Trivelli, Santiago, Chile, 1 December 1997. 30 Jorge Ahumada, Universidad de Puerto Rico, Rio Piedras, Programa de Administracion Publica, to Pendleton Herring, Secretary, Graduate School o f Public Administration, Harvard University, 2 January 1946 (HUA). 31 Collier and Slater, A History o f Chile, p. 265. 32 The Plan determined that in some regions “only 16 percent o f peasants regularly ate meat, milk, and fresh vegetables; the remainder did not.” (Ibid, p. 266). 33 Not until the advent o f Eduardo Frei (1964-70) and Salvador Allende (1970-73) was there a significant attempt to alter the unequal agrarian structure in Chile, and even then, the reactionary consequences were extreme. Even raising taxes was a dangerously sensitive issue in Chile: during the presidency o f General Carlos Ibanez (1952-58), “none o f Ibanez’s eight Finance Ministers could solve the problem. Felipe Herrera, the second, had the temerity to suggest that ‘the powerful’ should pay their proper share o f taxes, and was driven from office.” (Collier and Slater, A History o f Chile, p. 278).

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After seeing his plan rejected, Ahumada sought to distance himself briefly from Chile, where political circumstances had frustrated his aspirations. In 1945 he accepted a position as Visiting Professor o f Economic Theory at the Rio Piedras campus of the University o f Puerto Rico. The Chancellor o f the University of Puerto Rico, Jaime Bem'tez, sought to attract professors who had been trained in the United States. Benitez had just established the Centro de Investigaciones Sociales in an attempt to “provide the analytical tools for a planned society.”34 In January, 1946, Ahumada still counted on returning to Chile, and wrote in a letter that he hoped to be “back in my country in May or August o f this year.” He had retained his position at the Ministry of Agriculture, and looked forward to returning; furthermore, his family could “not get use[d] to the tropics” and Puerto Rico was very expensive.35 In spite of these doubts, Ahumada remained in Puerto Rico until 1947. The island was then (as it still is) neither independent nor a state; its relationship with the United States was closer to that o f a colony. In Puerto Rico Ahumada was thus exposed to an environment permeated by U.S. influence. Rexford Tugwell, a veteran New Dealer and former Assistant Secretary of Agriculture, had been appointed Governor of Puerto Rico in 1941. Tugwell was steeped in the legacy of economic and social planning, and envisioned a formative role for social scientists “in shaping society,” as Ahumada would

34 In Puerto Rico, the governing party (the Partido Popular Democratico) “assiduously nurtured this intellectual migration, seeking to harness what they saw as the expertise o f American academics to their.. .effort to transform Puerto Rico into a ‘m odem ’ society.” (Michael Lapp, “The Rise and Fall o f Puerto Rico as a Social Laboratory, 1945-1965,” Social Science History 19, no. 2 (Summer 1995), pp. 170, 178). 35 Jorge Ahumada, Universidad de Puerto Rico, Rio Piedras, to Pendleton Herring, Harvard University, 2 January 1946 (HUA).

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do himself.36 The island was preparing to embark on a massive developmentalist project, aptly entitled “Operation Bootstrap” (Manos a la Obra), which would transform the island from a poverty-ridden, agricultural economy through planned industrialization.37 Puerto Rico provided one of Ahumada’s first models for the direct participation of social scientists in planned economic and social development. The conception o f training for development planning became vital to Ahumada’s career. In 1947 Ahumada was offered a position as economist in the Research Department at the International Monetary Fund in Washington, D.C. The Fund was actively recruiting Latin Americans at the time, most o f whom had some training abroad, and all o f whom would take on prominent positions in economic policymaking in Latin America in the two decades that followed.38 Ahumada was present at the IMF during the creation of new guidelines for the conduct of international monetary policy, at a time when the Fund was still upholding Keynesian policies of full employment, including substantial support for an active role for the state. As soon as ECLA was inaugurated in 1948, close ties developed between the institutions, including the sharing of information on recruitment o f Latin American economists, a connection that must have helped to bring Ahumada to the attention of Prebisch two years later.39 Ahumada would not remain

36 During Tugwell’s term, the Puerto Rican legislature approved the creation o f the Puerto Rican Development Agency in May 1942, followed by the Puerto Rican Development Bank in the same year. (Lapp, “Puerto Rico as a Social Laboratory,” p. 172). 37 A.W. Maldonado, Teodoro M oscoso and Puerto R ico ’s Operation Bootstrap (Gainesville: University Press o f Florida, 1997), pp. 30, 74. 38 Personal correspondence, Chief, Archives and Records Section, International Monetary Fund, to author, 23 October 1997. 39 See G.C. Burton, Chief, Field Operations Section, United Nations, to Personnel Officer, IMF, 22 April 1948, a letter which refers directly to the United Nations’ recruitment o f Latin American economists for ECLA through contacts with the IMF. (IMF File I 124 “Economic Commission for Latin America,” 1947-June 1948).

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long at the IMF, however, and remained curiously silent about the experience, perhaps he felt too distant from the problems that had already begun to interest him. Monetary issues did not seem to intrigue him as much as matters o f development and social change, concrete problems at a local level. Furthermore, at the Fund Ahumada could not fulfill his calling as an educator. In 1949 Ahumada was hired as advisor to the newly formed Guatemalan Institute for Development (Institute) de Fomento de la Produccidn) and the Central Bank {Banco de Guatemala), while occupying a teaching position at the Universidad de San Carlos. He had good connections, in that a former classmate at Harvard, Manuel Noriega, was President of the Central Bank, and the Minister o f Economy had also studied at Harvard. From 1945 to 1950, Juan Jose Arevalo governed as the first democratically elected president in Guatemala, following upon the long dictatorship o f Jorge Ubico (1931-44).40 Extraordinary political conditions and intellectual freedom drew a unique constellation of talent from all over the region. There was an atmosphere of intellectual excitement in the country; one commentator observed “a tremendous will to accomplish” among those who collaborated with the new administration.41 In this politically and intellectually charged environment, Ahumada gained one o f several direct experiences in Latin American planning and development and also observed firsthand some o f its successes and failures. Guatemala under Arevalo was experiencing a “revolutionary” attempt to transform a country overwhelmingly agricultural and unequal in the distribution o f 40 James Dunkerly, “Guatemala Since 1930,” in The Cambridge History o f Latin America, ed. Leslie Bethel, vol. VII (Cambridge University Press, 1990), p. 219.

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wealth. This experience furthered Ahumada’s exposure to planning, even though the results of the Guatemalan effort were tenuous at best. The Institute for Development was responsible for carrying out the planning and organization o f basic infrastructure and fostering the development o f Guatemalan industry and agriculture.42 Its directors sought to attract talent from abroad to overcome a shortage o f trained personnel and facilitate the collection o f accurate statistical information. In a country with no tradition o f civil service and few trained professionals, however, planning took place in a “piecemeal” fashion. In the words of one North American researcher studying social reform in Guatemala, “The government tried to do too many things too fast.”43 In addition to the problem o f scarce resources and qualified professionals, the clouds o f the Cold War were gathering: almost immediately the country became the focus o f U.S. efforts to eradicate suspected communist influence in the region 44 Whatever he may have learned in Guatemala, Ahumada’s time there was brief. Within a year he was recruited to the Economic Research Division at ECLA, which was already forming a more substantial and stable corps o f economic professionals, o f the kind Ahumada had witnessed at the IMF, in incipient stages in Guatemala, and in formation in Chile and Puerto Rico. By the time Ahumada joined ECLA in 1950, he had

41 Gonzalo Robles, “Sudamerica y el fomento industrial,” E l Trimestre Economico 14, no. 1 (April-June 1947), p. 29. 42 The Board o f Directors o f the Institute for Development included the Ministers o f Economy, Agriculture, Treasury, Communications and Public Works, the President o f the Bank o f Guatemala and the President o f the National Mortgage Credit agency (Credito Hipotecario Nacionaf). 43 Leo A. Suslow, “Aspects o f Social Reforms in Guatemala, 1944-1949. Problems o f Planned Social Change in an Underdeveloped Economy” (Hamilton, NY: Colgate Area Studies Latin American Seminar Reports, No. 1, 1949), pp. 81-84, 119-120. 44 Piero Gleijeses, Shattered Hope: The Guatemalan Revolution a nd the United States, 19441954 (Princeton, NJ: Princeton University Press, 1991).

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accumulated experience far beyond what any economist from a previous generation could have imagined. Ahumada studied at Harvard when the influence o f the Great Depression and World War II had created a much closer association between research and public policymaking. He had been strategically placed in professional settings, at the IMF, Puerto Rico, and Guatemala, and had begun to gain exposure to planning. And he had witnessed direct U.S. influence in Latin America in Puerto Rico and Guatemala, which contributed to his own seasoned view o f politics and development and, beyond his work as an economist, found expression in his commitment to Chilean Christian Democracy.

Ahumada and the ECLA Training Program After two years in the Economic Research Division, Ahumada was appointed director o f the newly inaugurated ECLA Training Program in Economic Development in 1952. Close colleague and fellow cepalino Alexander Ganz noted that Ahumada was a rival o f Raul Prebisch’s for the position of executive secretary o f ECLA, and suggested that the Training Program came as compensation. After his original two-year contract ended in 1952, Ahumada was planning to leave the institution, but Prebisch’s offer of the position as director o f the Program convinced him to stay on. In any case, Ahumada would not forget the tension he felt with Prebisch, who was unquestionably the central intellectual figure at the organization throughout the 1950s. The efforts Ahumada made in order to distinguish himself from his superior and colleague were considerable.45 Planning drew heated debate in the 1950s. Some cepalinos and their contemporaries have argued that planning represented one o f the ways in which ECLA

45 Furtado, A Fantasia Organizada, pp. 75-76; interview, Alexander Ganz, Boston, MA, 1 October 1997. 158

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negotiated a middle ground between capitalism and socialism.46 More conservative political sectors and many U.S. observers associated planning with communism. Ahumada, with characteristic rationality, tried to present the argument in other terms. In closing the Training Course on Problems o f Economic Development in Buenos Aires in 1959, Ahumada spoke of the “old and useless controversy over the advantages of private initiative versus planning....Planning or programming consists o f the application of a technique and the polemicists forget or do not know that techniques are neutral.” He responded to the controversy over the appropriateness of planning in capitalist society with his own defense: “frequently there is more attention paid to the byzantine question of whether to plan or not to plan rather than substantial questions o f the clear definition of goals and the efficiency of means.”47 In his teaching, Ahumada attempted to separate planning techniques from the debate over ideologies. He argued that “One can plan for freedom or for slavery; for social justice or for exploitation, without any change in technique.”48 Despite his characterization, however, these ideas were seen as far from neutral in the Cold War environment of the 1950s, when the United States was loudly promoting the virtue of free-market development policies. Planning required a central role for the state in economic development, a fact that precluded neutrality when ECLA’s ideology was in its prime. The effectiveness o f the ECLA Training Program was also problematic. Students in the training courses were expected to master an enormous amount of information and

46 Interview, Felipe Pazos, Banco Central de Venezuela, Caracas, 18 June 1994. 47 Ahumada, “Programa de capacitacion en problemas de desarrollo economico,” Revista de Desarrollo Economico, op. cit., pp. 260-261.

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techniques within three to eight months. They were to graduate with a basic understanding o f the nature of a developing economy, and grasp the structural changes involved in economic growth and social change.49 Between 1952 and 1959, the Santiago Program trained almost 100 students; shorter intensive courses trained more than 400 students in Argentina, Brazil, Colombia and Venezuela.50 By the late 1950s, however, it was clear that the ECLA Training Program was only barely meeting existing demand.51 The ECLA courses were receiving positive feedback for giving students a “broad vision...new techniques for evaluating” problems of economic development, and the “methodology” for the design of policy. Under the direction o f Ahumada, however, the Training Program was plagued by serious administrative problems. Courses administered simultaneously in Rio de Janeiro and Caracas, for example, meant that any disruption in the schedule in one course would have “a series o f repercussions in both places.”52 The setup became overburdened and precarious; the system o f operation was “not sufficiently

48 Ibid. 49 Examination questions for the section o f the intensive Venezuelan course on economic development programming offered in Caracas in 1957 asked students to prepare a sample development program for their country. Students were also examined on the basic elements o f macroeconomic policy. Questions included the following: “Explain how global programming ensures: (i) stability o f the balance o f payments; (ii) monetary stability; and (iii) the full employment o f manpower and capital. Briefly explain the stages involved in the projection o f the balance o f payments.” (Annual Report, ECLA/TAA Economic Development Training Programme (1957), p. 10, cited in Foreign Service Despatch no. 46 from Amembassy Santiago to Department o f State, July 14, 1958 (NARA 340.2/7-1458 HBS). 50 Informe sobre el Programa Conjunto CEPAL/AATde capacitacion en materia de desarrollo economico, 30 March 1959 (E/CN. 12/523). 51 A 1957 report, for example, declared that “ in Latin America the problem o f qualified personnel is worsening, because very little is being done to remedy the grave lack o f agricultural and industrial economists.” (Informe acerca del program a conjunto CEPAL/AAT sobre capacitacion de economistas en desarrollo economico, 7o periodo, 15 May 1957 (E/CN. 12/433), p. 11). 52 See A nnual Report for ECLA/TAA Training Program, 1957, cited in Foreign Service Despatch no. 46 from Amembassy Santiago to Department o f State, 14 July 1958 (NARA 340.2/7-1458 HBS).

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flexible to deal with a program” o f such a large scale. Furthermore, as a result o f the “very heavy work load involved in organizing and preparing three courses,” in 1957 Ahumada was unable to personally interview candidates who applied for the Santiago Program; consequently the quality o f the students entering the program began to deteriorate.53 The simultaneous administration o f training courses in multiple countries was in keeping with ECLA’s regional agenda, but in practice proved extraordinarily difficult.54 By 1960, the Santiago course was suspended for reorganization with a view to increasing the number of participants. Students in the shorter, intensive courses often left much to be desired because o f their weak preparation. In Venezuela in 1957, an intensive course revealed “serious defects” in the university training of the eighty-two participants; o f the 26 full-time participants, only 16 passed the final examinations and graduated with a certificate. This, in spite o f the momentous significance accorded the course in government circles, as attested by an inauguration ceremony in Caracas: “this course, similar to the one held at Rio, was inaugurated at a ceremony attended by four Ministers, the Rector o f the University, the Chief o f the Armed Forces and approximately 300 other persons.”55 The Program was only minimally fulfilling the needs o f Latin American governments for trained personnel, and it was extremely difficult to coordinate a project that had now attained regional dimensions. While the Training Program spread the

53 Ibid. 54 Problems persisted “ in spite o f the splendid cooperation...from the TAA Office for Latin America.” (“Problems and Prospects,” ECLA/TAA Economic Development Training Programme, Annual Report (1957), cited in Foreign Service Despatch No. 46 from Amembassy Santiago to Department o f State, 14 July 1958 (NARA 340.210/7-1458 HBS), p. 3). 55 Annual Report, ECLA/TAA Economic Development Training Programme, 1957, p. 10.

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ECLA mission effectively, the objectives o f the program were becoming increasingly unclear. Besides the enormous administrative hurdles, one o f the main problems of the course was its weakness in basic theory. In his article entitled “Development Policies and Programs,” based on lectures delivered at the ECLA Training Program in 1957, economist Hollis Chenery noted that a number o f prominent development economists had questioned the assumptions o f classical economic theory, but as yet no satisfactory alternative had been articulated. In “its absence,” development policy remained a “partial” answer, “incomplete” and “improvised.”56 Ahumada and his colleagues were teaching a fragmented field, that of planning, one that was only beginning to attain intellectual coherence. Meanwhile, economic conditions in Latin America were changing extremely rapidly, so that the training program was inevitably incomplete. Not only was the program cumbersome, but it failed to address specific areas in urgent need of attention.57 Still, the courses were already giving ECLA a local presence, beyond individual country missions and research publications. Their very existence and the attachment o f their participants to ECLA suggest that they were imparting a new form o f professional identification and recognition. At the same time, Ahumada was formulating his own

56“Authors such as Rosenstein-Rodan, Nurkse, Lewis, Prebisch and Myrdal have demonstrated to what extent the classical hypotheses o f equilibrium and perfect competition do not apply to less developed countries and how any policy which is based on the implicit use o f the model o f static equilibrium is, as a result, inadequate. However as yet no alternative type o f analysis has emerged, and, in its absence, development policy tends to be guided on the basis o f partial analyses and improvised principles.” (Hollis Chenery, “Politica y programas de desarrollo,” Boletin Economico de Am erica Latina 3, no. 1 (March 1958), p. 52). 57 Training o f civil servants engaged in budget planning, for example, was severely lacking. (Annual Report, ECLA/TAA Economic Development Training Programme, 1957, p. 3).

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political mission as well as ideas about development, ones that would distinguish him from the cepalino mainstream.

En vez de la miseria Simultaneously with his work at ECLA, Ahumada’s personal involvement in Chilean politics had grown. His publication of the political essay En vez de la miseria in 1958 was symbolic of his close collaboration with the Christian Democratic party in Chile. This was foremost a political treatise, different from ECLA’s institutionalized economic analysis. Its language was straightforward, aimed at a broad, popular audience. Not only did this book lay out the reformist agenda of the Christian Democratic program, but it also defined Ahumada’s views with respect to ECLA. In so doing, Ahumada took a stance different from that o f some o f his cepalino colleagues, one that would eventually make his presence increasingly untenable.58 En vez de la miseria provides us with the most explicit articulation of the ideas that Ahumada had developed over his professional lifetime to date. In characteristic cepalino fashion, Ahumada refused to accept the proposition that Chile’s economic and social problems lacked practical solutions.59 Chile and the rest o f Latin America could not now avoid the path of development: “material progress is an indispensable requirement for modem society to function properly.”60 In En vez de la miseria, Ahumada outlined the program of the Chilean Christian Democratic party, “non Marxist,” but allied with the left, thus pitting himself against more radical cepalinos such as

58 Interview, Sergio Molina, Banco del Desarrollo, Santiago, 25 November 1997. 59 “Tampoco hay duda que los problemas de Chile tienen solucion.” (Jorge Ahumada, En vez de la miseria (Santiago: Editorial del Pacifico, 1958), p. 50). 60 Ibid, p. 60.

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Noyola, but in line with much of ECLA's’ broader orientation. Ahumada also made a point o f distinguishing the Christian Democratic agenda from the ideas of the far right. More conservative Chileans were “accustomed to 150 years o f the ‘status quo’,” and in failing to accept change, had fed their own own “illusions” since the 1920s, in the midst of dramatic economic and social transformations in Chile.61 Thus in very broad terms Ahumada’s tendencies coincided with those of ECLA. En vez de la miseria was a call for the reform o f society, a statement o f the political agenda of the Christian Democratic party in the 1958 presidential campaign in Chile. Ahumada referred to the violent disagreement over basic economic policy in Chile at the time: “For some, all of Chile’s problems can be solved by putting an end to state intervention.” Supporters of this idea were out o f touch with reality; even in advanced countries such as England, the public sector had played a significant role in industrialization. He criticized Marxists and Leninists as equally “disoriented.”62 Ahumada addressed the three main problems facing Chilean economy and society: the need for diversification o f exports; the unequal distribution o f income; and poor conditions o f agricultural production.63 In his role as author, Ahumada went far beyond his role as a cepalino, to become a political spokesman for Christian Democracy.

61 Ibid, p. 53. 62 As a Christian Democrat, Ahumada believed that Marxists and Leninists suffered from “intellectual blindness,” and erred in making “a mechanical application o f these solutions...such that a well-known Senator publicly affirmed that Chilean inflation cannot be solved as long as the capitalist structure o f the Chilean economy continues to exist.” Periods o f economic boom led by mineral exports had not built the intellectual leadership that Chile needed; in Ahumada’s words, “outward-oriented development produced certain intellectual contagions that led Chile to form an elite that was cultured, but poor, that lived exclusively in the present.” (Jorge Ahumada, “Una tesis sobre el estancamiento de la economia chilena,” Economia, Revista de la Facultad de Ciencias Economicas de la Universidad de Chile, 18 (1958), p. 16; En vez de la miseria, p. 15). 63 “Una tesis,” p. 28.

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The State and Development Strategy in En vez de la miseria Chilean economist Oscar Munoz described the perception of the state versus the market in Latin America in the 1950s: “the market did not exist then” as it does today; “one studied it in textbooks but real economics focused on the study o f the role o f the state.”64 Ahumada argued for a more effective but interventionist state in the direction of economic policy. He affirmed, “there is nothing in the nature o f Government that indicates that its intervention is...harmful, as there is neither anything that ensures that private enterprise will always be successful.”65 This view allied Ahumada with the cepalinos o f his time. It was a misconception, he said, to think o f the state as a bad manager in all sectors.66 Ahumada spoke on behalf o f the generation of public servants who, as administrators of Chile’s first state corporations, oversaw the most crucial stages o f the country’s heavy industrialization.67 As an advocate for the role o f government, Ahumada also favored a more efficient state apparatus. Harking back to an earlier form o f policymaking, Ahumada argued that while “intuition and culture are indispensable tools,” they alone would not guarantee efficient government. The effective coordination of economic policy depended on technically competent policy advisors and on apt administrative organization; no longer, for example, could the modem state rely on insufficient and inaccurate information.68

64 Interview, Oscar Munoz, Banco del Desarrollo, Santiago, 26 November 1997. 65 En vez de la miseria, p. 40. 66 Ibid, p. 42. 67 “Government,” he argued, “is possibly a very inefficient means to administer a farm or a store, but no one can deny the effectiveness, honesty, and driving force” with which the state administered major utilities. Ahumada illustrated his point by citing the National Electric Company (ENDESA - Empresa Nacional de Electricidad). (Ibid, p. 40). 68 Ahumada observed that until recently it had been extremely difficult to obtain basic statistical information in Chile, even on the state o f the national budget. (Ibid, pp. 19, 37-38).

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This conception o f an effective state was the basis for Ahumada’s teaching and his efforts to generate a modem, technically competent corps o f planners. To some extent, reliance on the state was necessary. There were certain essential economic changes in the process o f modernization which could not be accomplished exclusively by means o f private initiative. The lessons of the Great Depression had made this clear.69 Industrialization, which was now crucial for modernization, depended on the design o f “tariff barriers and other measures to protect new industries; an inflationary process had to be initiated which would increase the level o f demand and stim ulate.. .investment, by means of an increase in the profit margin,” and foreign exchange had to be reserved for essential capital imports.70 In this realm, Ahumada was a quintessential cepalino. Ahumada’s conception of industrialization differed from the classic ECLA perspective in crucial ways, however. After 1945, despite increasing liberalization in world trade, “Chileans did not know how to take advantage of an opportunity,” and instead maintained a policy of protection.71 Ahumada was particularly cautious not to create any illusions about state sponsored industrialization as a “panacea.” He warned against a “euphoric attitude towards industrialization.”72 Ahumada insisted that import

69 “The task o f restructuring which the country faced as a result o f the crisis o f 1930, could not have been accomplished by means o f the spontaneous action o f private initiative, above all because the basic sources o f this initiative depended on the agricultural, mining, and commercial sectors, where business owners were not prepared for the task o f industrial development which had to be undertaken.” (Ibid, p. 35) 70 Ibid. 71 “Una tesis,” p. 19. 72 Historically Chileans had fallen into the trap o f believing that, as in the cases o f copper and nitrate, “there must be some activity that allows for spectacular development.” Referring particularly to the “indiscriminate” protection o f industry, Ahumada argued that with greater foresight Chileans would have been more effective at changing fundamental economic structures

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substitution was not a viable long-term option for Latin America. In the case o f Chile, the market was so small that import substitution industrialization would only encourage monopolistic behavior.73 The only way that Chile could attain greater economic stability was to develop new and varied export products.74 Ahumada also foresaw the problems involved in advancing to higher stages of industrialization, predicting later findings at ECLA. Overcoming dependence on primary exports required structural changes deeper than the mere substitution o f previously imported goods. Industrialization was not simply a matter of “creating new factories,” but involved a transformation in mentality.75 Ahumada referred to the introduction of new concepts and practices that would encourage more competition and less protection.76 His writings sound familiar now, in the age o f globalization: “the country has not thought about exporting for the past thirty years. All of its commercial policy has been oriented towards protecting the status quo and has been entirely lacking in aggressively pursuing new markets for its new products.”77 Ahumada exhorted Chile to pursue a policy of export promotion and diversification, a stand that seemed oddly out of place when import substitution was at its height. so as to allow for development, rather than insisting on a form o f intervention that, he said, the nation was not prepared to use effectively. (En vez de la miseria, pp. 65, 89, 165,174). 73 “Una tesis,” pp. 16, 21-22, 25. 74 “Until the beginning o f the Second World War, Chile was not in a condition to choose between a policy o f (import) substitution and a policy o f export diversification; the world was very much closed to new exports and there was no option other than that o f substitution, but when the war began and above all at its end, conditions were especially favorable for a successful effort in favor o f diversification. The frivolity o f the leaders o f the time together with a tradition o f nearly twenty years o f protection meant that they did not take advantage o f this opportunity and that a policy was not instituted which could now be offering positive results. Fortunately, it is still possible to pursue this policy and the sooner it is begun, the better.” (En vez de la miseria, p. 7172; “Una tesis,” p. 20). 75 “Una tesis,” p. 25. 76 En vez de la miseria, p. 72.

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Inflation, Inequality and Agrarian Reform According to En vez de la miseria Echoing his earlier experience as a civil servant in the late 1930s, Ahumada decried the fact that each “Ministry prepares it own budget without taking into account the total resources the Government has available, nor the proposals of the other Ministries and public agencies. Each one seems to believe that its role is to spend as much as possible and the creation o f the budget is an exercise in the imagination o f civil servants.” This practice exacerbated already serious problems o f deficit spending and inflation.78 In the structuralist tradition, Ahumada believed that Chile’s problems o f inflation and uncontrolled spending would not be solved efficiently by radically cutting public spending, since this would lead to a dramatic slowdown in growth and massive unemployment. For Ahumada the danger of Chile’s endemic inflation was political.79 The question of inequality was extremely delicate in Chile, where the concentration o f land ownership was a legacy dating from colonial times.80 Ahumada is remembered for his quest for equality in defense of the poor, but in his case it was one to be attained through moderate, market-oriented solutions. At the time Ahumada was writing, the majority o f Chileans lived in conditions o f poverty so severe that it was impossible, in his view, for them to “progress by pulling themselves up by their bootstraps, as the North Americans would advocate,” an obvious reference to Puerto

77 “Una tesis,” p. 28. 78 Ahumada asked his readers to consider the fact that inflation had existed in Chile since 1875, even “before there were unions, automatic adjustments, and leftist governments.” He blamed inflation on the concentration o f power in Congress, and on the lack o f autonomy o f the Central Banking system. (Ibid, pp. 149, 158, “ Una tesis,” p. 14). 79 Interview, Jorge Cauas, Santiago, 1 December 1997. 80 According to the 1952 Agricultural Census, productive units over 200 hectares in size, representing 11 percent o f the total agricultural holdings, accounted for 88 percent o f agricultural

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Rico’s Operation Bootstrap, which he had witnessed in incipient stages. Furthermore, what Ahumada called “agricultural monopolization,” the concentration o f landownership, together with the unequal distribution o f income, meant that agricultural prices could not be increased sufficiently to stimulate agricultural development without jeopardizing the survival o f a large percentage of the population. In Ahumada’s view, the only way to reduce inequality was to promote agricultural production.81 Ahumada took a decidedly capitalist approach to agrarian reform: not only was the Christian Democratic program designed to overcome problems of extreme inequality through land distribution, especially the distribution o f unproductive units, but also to stimulate increased productivity and agricultural output. En vez de la miseria emphasized incentives to expand agricultural production: greater ease in acquiring land, better salaries in the agricultural sector, and improved agricultural prices.82 Ahumada advocated providing more equipment to agricultural workers, and measures to increase efficiency. The “inseparable trilogy for the agricultural transformation” o f the country consisted of “better techniques, better producers, and better prices,” a view that, within a year, set Ahumada distinctly apart from some of his cepalino contemporaries with the advent of the Cuban Revolution.83 Ahumada was firmly anti-communist. In his view, communism was dictated from abroad, and distracted politically active Chileans from seeking solutions to their own problems. Likewise, nationalization was not an adequate solution, in his view, because

land in the nation; in the Central Valley, the concentration o f landholdings was even more pronounced. {En v e zd e la miseria, p. 99). 81 Ibid, pp. 75, 77, 79. 82 Ibid, pp. 91,98. 83 “Una tesis,” p. 25.

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“this would transform the country immediately into a socialist economy, for which” Chileans “are not prepared.”84 It is not surprising that in a country like Chile, with a strong leftist tradition and where ownership o f natural resources was a paramount question o f national identity, Ahumada was easily perceived as reactionary. Ahumada emphatically defended the idea of democracy. More equitable access to education was one of his central concerns and a centerpiece o f the Christian Democratic program.85 Ahumada wanted En vez de la miseria to reach all Chileans, and thus he tried to explain economic concepts in a non-technical form that could be easily understood, even Chile’s chronic plague, inflation. His aim was to foster an “educated public which supported realistic solutions.”86 Ahumada spoke frequently of the creation o f a so-called “civic conscience,” arguing that with the experience o f rapid economic growth fueled by exports before the Great Depression, Chile became wealthy but failed to develop civic values.87 He was the consummate educator, and sought to instill notions of leadership in all of his students. En vez de la miseria and its summarized version, “Una tesis sobre el estancamiento de la economia chilena,” were widely distributed in Chile.88 These monographs became standard reading in economics courses at the Universidad de Chile in the late 1950s, when students felt that textbooks from the United States, especially

84En vez de la miseria, pp. 60, 177. 85 In Ahumada’s words, “there can be development without education, but in this case it would be development without democracy.” {En vez de la miseria, p. 59). 86 Ibid, p. 54. 87Chilean society had discovered the fruits of economic growth, but had yet to discard its “feudal” trappings. These included, in Ahumada’s view, an elitist educational system, the unequal distribution of land and an inadequate judicial system that encouraged individuals to take “justice into their own hands.” (Ibid, pp. 23, 25). 88Ahumada, “Una tesis,” op. cit., pp. 12-30. 170

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Paul Samuelson’s Foundations o f Economic Analysis, did not accurately reflect their own reality.89 Ahumada sought to educate the public in what he saw as “the lack o f faith, the lack o f understanding of social phenomena.”90 He was an economist, like others of his generation, with less sophisticated technical skills than today’s, but he enjoyed respect for his rigor and analytical capacity. He had a political vision and a genuine concern for social issues, in common with his fellow cepalinos. Curiously, he was much harsher in his critique of Chilean political economy than in speaking of Latin America as a whole; perhaps the latter is where he faced the ultimate test of his ideas, and failed.

Cuba and the Transition to Venezuela For Ahumada, the experience of administering the Training Program in multiple countries reinforced his dedication to regional development.91 But it was not entirely satisfying. The ECLA mission in Cuba of 1959-60 would come to mark the destinies o f a number o f prominent cepalinos, among them Regino Boti, Juan Noyola, and Jorge Ahumada.92 Juan Noyola acted as Chief o f the ECLA Advisory Group in Cuba, and believed fervently in the goals o f the revolution. As supervisor of the mission, which included a training program, Ahumada quickly became disillusioned with Cuba’s revolutionary setting, and its disjuncture with his belief in technical coherence, objectivity, and moderate reform.

89 Interview, Oscar Munoz, Banco del Desarrollo, Santiago, 26 November 1997. 90 “Una tesis,” p. 30. 91 In the words o f a former student, and cepalino, Osvaldo Sunkel, the course reinforced Ahumada’s “collective mission” (compromiso colectivo). (Interview, Osvaldo Sunkel, Santiago, 20 and 27 June 1995). 92 Regino Boti, a Cuban cepalino who participated in the ECLA mission to Havana following the Revolution, became Minister o f Economy, and remained in Cuba thereafter.

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The ECLA mission to Cuba arrived in Havana on May 10, 1959, and consisted of an Advisory Group, which worked with Cuban government ministries, and personnel to administer the intensive training course in economic development. As in the case of other countries, the first tasks o f the ECLA mission involved the collection o f data, the compilation of statistical series and research on individual economic sectors, in addition to mobilization and training for economic development planning.93 Already the United States was apprehensive about ECLA’s presence in Cuba. In a report provided at the demand of the U.S. mission to the United Nations, the Commissioner for Technical Assistance asserted that the “main objective o f the group is to organize a mechanism in economic programming and to train the necessary Cuban personnel.” The group was to serve exclusively “on a technical level” and was, according to the United Nations, “far removed from any policy-making level.”94 The course followed the format of others given previously. However, the setting in Cuba was entirely new.95 There was an ardor inherent in some of the lectures inspired by the revolution. For some, such as Juan Noyola, Cuba represented the symbol of a common destiny for Latin America.96 He expressed a revolutionary spirit in his lectures

93 Jorge Ahumada, Director, ECLA/TAO Advisory Groups Programme, to Raul Prebisch, ECLA Executive Secretary, “Advisory Group in Cuba: Second Progress Report,” 1 October 1959 (UNA ECLA/75-2-A). 94 Robert M. Hourtematte, Commissioner for Technical Assistance, United Nations, to Mr. S.M. Finger, Senior Advisor, Economic and Social Affairs, United States Mission to the United Nations, New York, 29 October 1959 (NARA 340.210/11-759). 95 The first intensive training course in Cuba had 66 participants, drawn from government ministries, with the purpose o f establishing a national planning system. 96 “The Cuban Revolution has presented a terrible dilemma for North American imperialism. The Cuban revolution has shown the Latin American countries that there is only one path to economic development. That path is that the people effectively take power and overcome the obstacles that...prevent economic and social development.” (Juan F. Noyola, “Punta del Este y el desarrollo economico de America Latina, Verde Olivo, 17 September 1961, in La economia cubana, p. 141). See also Noyola’s presentation in the Intensive Training Course, where he

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that was completely alien to the technical neutrality and political moderation that Ahumada had envisioned for the role o f ECLA. Furthermore, the revolution quickly began to radicalize. By November 1959, moderate policymakers in Cuba, including Felipe Pazos, director o f the Central Bank, stepped down. Expropriations o f land accelerated towards the end of 1959. As early as March 1960, U.S. preparations for the overthrow o f the Cuban regime were underway. U.S. oil refineries in Cuba were nationalized on June 29, and in July the United States protested Cuba’s policies by canceling its purchase of the Cuban sugar quota.97 By November 1960, less than a year and a half after it had arrived, the United Nations mission was terminated on orders from the UN Secretary General.98 Ahumada felt frustrated in Cuba. His ideas differed sharply from those of some of his closest colleagues, and he felt that their insistence on revolutionary priorities could jeopardize the caliber o f the mission.99 He was increasingly isolated intellectually at

declared: “I...am one o f the many millions o f Latin Americans who believe that the Cuban Revolution is our common patrim ony...that what is being achieved in Cuba today, the struggle that has cost so much blood for the Cuban people...w ill have a tremendous impact on the entire continent.” (Juan Noyola, “Curso intensivo de capacitacion en problemas de desarrollo economico,” in La economia cubana en los primeros afios de la revolucion y otros ensayos (Mexico: Siglo XXI, 1978), p. 26). 97 Jorge Castaneda, Companero. The Life and Death o f Che Guevara (London: Bloomsbury, 1997), pp. 169-177. 98 Jesus Silva Herzog, “A manera de introduccion,” in Noyola, La economia cubana, p. 10. 99 The exchange o f correspondence between Juan Noyola, Chief o f the ECLA/DOAT mission in Cuba, and Jorge Ahumada, Chief o f the ECLA/DOAT Advisory Groups Program, reveals bitter disagreement between the two. Ahumada harshly criticized Noyola’s hurried reporting, and reprimanded him for “forgetting our administrative obligations.” N oyola shot back with harsh counter accusations. [Jorge Ahumada to Juan Noyola, 9 May 1960 (ECLA/DOAT 750) and Noyola to Ahumada, 19 May 1960. From United Nations Technical Assistance Mission on Advisory Group for Programming Economic Development, DOAT/ECLA in Cuba, May 1959July 1960 (UNA LAG-3/10-426)].

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ECLA, and Noyola’s urgency, in particular, left him in doubt.100 He foresaw problems involved in the radicalization o f the revolution and the U.S. antagonism it had already aroused. He had also witnessed Guatemala in a period o f rising tensions with the United States. In Cuba Ahumada had reached a turning point, both personally and professionally. If he remained longer at ECLA, he feared that he would not attain the intellectual freedom that he had been seeking.101 Fortunately for him an opportunity just then opened in Caracas, where ECLA had offered a training course in 1957. The Universidad Central de Venezuela was setting up a Center for Development Studies (Cendes - Centro de Estudios del Desarrollo). Cendes offered an opportunity, a place where Ahumada could focus his intellectual energy and build an internationally respected center for research on problems o f economic development and training of development planners. The institute, with local funding, might also be kept free o f U.S. interference.

Venezuela: The Setting In February 1960, the executive committee of the Sociedad Interamericana de Planificacion (SIAP) convened in Caracas to discuss the proposal for Cendes.102

100 Juan Noyola, “Posibilidades mediatas e inmediatas de la economia cubana,” from televised conference, Havana, 20 September 1960, in La economia cubana, pp. 96-141. Ahumada’s second wife, Georgina Licea, argued that Juan Noyola got “carried away” (se engolosino) with the fervor o f the revolution, and its hopes o f economic and social transformation o f Cuba. (Interview, Georgina Licea, Caracas, 18 and 23 September 1996). 101 Interview, Hector Silva Michelena, Caracas, 27 September 1996. 102 The organizing committee, consisting o f representatives from the Universidad Central de Venezuela, other Venezuelan government agencies, and foreign advisors, presented a final report in May 1960, which was accepted by the University Council. The international advisors included Professors Reginald Isaacs (Harvard), Lloyd Rodwin and Ernest Weissmann, o f MIT, and Jorge Ahumada, o f ECLA. [Centro de Estudios del Desarrollo, Fines del Cendes, IV Congreso Intemacional de Planificacion (SIAP), Santiago de Chile, 1962 (mimeo, Cendes archives)].

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In March, the Dean o f the School of Architecture o f the Universidad Central, Julian Ferris, offered Ahumada the position o f director o f Cendes, which was to open in October.103 Ferris offered a generous salary to Ahumada, of approximately 6,000 bolivares, the equivalent o f $1,791 per month.104 Additional compensation from an outside institution, such as the Banco Obrero or Cordiplan,105 was also a possibility, in addition to the provision o f housing. The director would be able to propose the appointment o f professors for the Center, subject to the approval of the University Council. Ferris added, “I am sure that there will not be a problem with your absence from the Center for two months per year,” an obvious reference to Ahumada’s advisory role in Chile in the upcoming presidential campaign of Eduardo Frei.106 Venezuela presented an ideal setting for Ahumada’s work. In January 1958, the Navy and Air Force had overthrown General Marcos Perez Jimenez, who had dictatorially ruled since 1951. A military-civilian junta replaced Perez Jimenez, and in 1959, Romulo Betancourt was elected president of Venezuela. The Betancourt administration (1959-63) launched a national development effort, with an emphasis on import substitution industrialization, and increased public investment in education, public health, infrastructure, housing, and education.107 The country’s new coalition regime presented a favorable political climate. Cendes fit naturally into a national political and

103 Julian Ferris, Caracas, to Jorge Ahumada, Havana, 25 March 1960 (Cendes Archives). 104 This was the salary currently paid at the rank o f Dean at the Universidad Central de Venezuela. 105 Oficina Central de Coordinacion y Planificacion. 106 Julian Ferris, Caracas, to Jorge Ahumada, c/o Georgina Licea, Ministerio de Economia, Havana, Cuba, 25 March, 1960. From private archives o f Georgina Licea, Caracas. 107 Judith Ewell, “Venezuela since 1930,” in The Cambridge History o f Latin America, ed. Leslie Bethell, vol. VIII (Cambridge University Press, 1991), pp. 755, 760-61.

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economic project, in which planning could grant legitimacy to the recently elected democratic government.108 Venezuela had changed radically since World War II, and planning offered a logical answer to the challenges presented by rapid economic growth.109 In 1958, Venezuelan intellectual Arturo Uslar Pietri characterized the transformation that was taking place: “This is a country in the process of a dynamic transformation,.. .a fact which no one who is not entirely...blind can deny. In the past ten years, all basic indices which are used to measure the economic development of a nation have doubled in Venezuela, and according to the best...estimates o f expert economists and statisticians, in the next ten years, they will double again.” 110 This transformation was fueled by the “torrent o f wealth” from oil revenues, which had, in Uslar Pietri’s lyrical words, appeared suddenly, “almost monstrously,” in an “economy and culture” that was “traditional...rigid and grounded in the past.” 111 Oil was creating a “tremendous...revolution in the life of the nation.” From colonial times until World War II, Venezuela had been “a rural nation, a nation of peasants,...with a population dispersed, living in huts and engaged in agrarian

108 Interview, Susan Vogeler, Caracas, 23 June 1994. Vogeler argued that “Planning was a political instrument that would give legitimacy to democratic governments...a common vocabulary” and “a sense o f the longer view....It was an attempt to encourage coordinated government planning” so as to distance policies from “party politics.” (See also Ewell, “Venezuela since 1930,” p. 755). 109 Arturo Uslar Pietri, “Venezuela, un pals en transformacion” (1958), in Hector Valecillos T. and Omar Bello Rodriguez, eds., La economia contemporanea de Venezuela. Ensayos escogidos vol. I (Caracas: Banco Central de Venezuela, 1990), p. 210. 110 Ibid. 111 Ibid, pp. 211-212. See also Ewell, “Venezuela since 1930,” p. 755.

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tasks” while in the wake of unprecedented rural to urban migration, “Venezuela today, for the first time in its history, is a predominantly urban nation.” 112 Not only did the Venezuelan state possess “immense wealth,” but growth from the oil industry had spurred the appearance of an entirely new middle class o f managers, businessmen, small business owners, and intellectuals.113 Oil revenues also allowed for generous state financing o f entities such as Cendes. The advent of oil revenues, a large portion of which now accrued to the government in the form o f taxes, led to the creation “of a powerful State,” both in its access to resources and its influence over economic policy.114 By 1962, one Cendes report put it succinctly, “Venezuelan development is already a concrete reality.” 115 It was in this atmosphere that the inauguration o f Cendes took place. Venezuela wanted to develop a corps of planners, and Cendes offered the right vehicle.116 Under the direction of Jorge Ahumada, Cendes sought a synthesis o f “the political and the technical” aspects of development in the advantageous climate that Venezuela offered during the early 1960s.117 Cendes was also the fulfillment of Ahumada’s own dream of fostering teaching and research, which he could pursue freely, without the political and professional conflicts that he had faced at ECLA.

112 Arturo Uslar Pietri described how Venezuela in 1958 was importing seventeen times what it had imported forty years previously; there were also drastic changes in social indicators, including a sharp increase in the birth rate and a reduction in death rates, which had given rise to extremely rapid population growth (Uslar Pietri, “Venezuela,” pp. 212-213). 113 Ibid, pp. 214, 216, 219. 114 Armando Cordova, “La estructura economica tradicional y el impacto petrolero en Venezuela,” in Valecillos and Bello Rodriguez, La economia contemporanea de Venezuela, p. 255. 115 Centro de Estudios del Desarrollo, Fines del Cendes, IV Congreso Intemacional de Planificacion (SIAP), Santiago de Chile, 1962 (mimeo, Cendes archives), p. 4. 116 Interview, Susan Vogeler, Caracas, 23 June 1994.

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Cendes: Philosophy and Organization Cendes was established with the premise that in developing countries “there is still no theory, or methodology, which allows for the planning o f social change that Latin American societies require. There is a need for knowledge o f the reality and techniques for diagnosis, for setting goals and implementing a vast, coordinated effort for simultaneous development, with a minimum o f contradictions, o f different sectors of economic and social activity.” 118 Cendes was an effort to rationalize economic development through the newly emerging field of planning. In tune with current thinking, the program also sought to integrate other disciplines in order to address the social issues that stemmed from growth. The program bore the mark of Ahumada, and as director and lecturer he sought high standards. He insisted that students devote themselves full-time to the course, which was very demanding.119 Ahumada recruited experts as lecturers from Latin America, Europe, and the United States, and the constellation o f talent that he drew to Cendes was impressive (see Table 5.1). O f the full-time professors, Jorge Ahumada, Luis Lander, and Jose Agustin Silva Michelena had all completed Masters degrees in the United States. Eduardo Neira, of Venezuela, and Julio Cotier, from Peru, had graduate training from European institutions. A series of visiting professors were recruited from abroad, among them Daniel Lemer, Professor of Sociology at MIT, who lectured on Social Change; Helio Jaguaribe, from the Instituto de Altos Estudos Brasileiros, who taught courses on

117 Interview, Lourdes Yero, Cendes, Caracas, 20 June 1994. 118 Centro de Estudios del Desarrollo, Fines del Cendes, op cit., p. 2. 119 Interview, Hector Silva Michelena, Caracas, 27 September 1996. Lourdes Yero, a student o f the first graduate program offered at Cendes, described the workload o f the course as “monstrous.” (Interview, Cendes, Caracas, 20 June 1994).

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Politics; Francois Bourricaud, of the Universities o f Bordeaux and Paris, who lectured on Comparative Social Systems; and William Alonso, o f Harvard University, who lectured on Regional Planning. Additional professors from Brazil, Chile, and Argentina lectured on specific topics such as industry and transportation. The first full graduate course, which lasted from October 1961 to September 1963, had 25 students, who were selected on a competitive basis. In keeping with its broad approach to development, the Cendes program drew participants from a variety of fields.120 In addition to economists, participants included engineers, sociologists, public health professionals, and architects. Cendes taught “integral planning,” through a curriculum that approached the concept o f economic development from an interdisciplinary perspective. Courses and seminars encompassed other aspects of development that reached beyond economics, including political science, sociology, culture and psychology, along with organizational theory and techniques of public administration.121 The first year was devoted to developing a comprehensive understanding o f Venezuelan economy and society, along with processes o f transformation, while during their second year students would acquire mastery o f planning techniques, with several possible specializations (see Table 5.2).122 Those who chose the field o f general economic planning, it was envisioned, would be able to draw up a general economic diagnosis o f a country or region, design a quantitative development plan for the medium and short term, coordinate sectoral goals in a consistent

120 Lourdes Yero noted that the Directors o f Cendes have all come from fields other than economics: Ahumada was originally trained as an engineer; Luis Lander was an engineer/architect; Hector Silva Michelena was a sociologist, as is the present Director, Heinz Sonntag (Ibid). 121 Ibid.

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overall economic program, and analyze and select appropriate economic policy instruments. Additional specialization was available in regional, urban, agricultural, social and industrial planning.123 Ahumada’s goal was to formulate a concept of progress that was both technically rigorous and democratically feasible.124 He displayed considerable respect for theory, and impressed participants with his capacity for explanation. Still, students were required to “draw their own conclusions.” Ahumada made his students “reason,” and in his lectures taught them to “reach conclusions on the basis o f evidence.” Maritza Izaguirre, a graduate o f the first course given at Cendes, recalled that in contrast to her undergraduate study of sociology at the Universidad Central de Venezuela, graduate training at Cendes taught her how to think. In a period in which ideology was gaining force, Ahumada stressed analysis on the basis o f evidence; he left the impression of maturity in his thinking and presentation.125 The Cendes course was nearly the equivalent o f a doctorate, and bore the influence o f Ahumada’s own graduate studies at Harvard. Students were expected to read a large amount o f material in English, and the course entailed a workload and a level of rigor that led to a considerable degree of solidarity among the participants. Furthermore, when visitors from abroad finished a cycle of lectures, Ahumada invited them to dinner

122 Cendes, “ Prospecto: Curso de Post-Grado 1961-63,” (mimeo, Cendes Archives), p. 4. 123 Universidad Central de Venezuela, Centro de Estudios del Desarrollo. “Objetivos, organizacion y actividades” (mimeo, Cendes Archives, no date); Cendes, “ Prospecto: Curso de Post-Grado 1961-63,” (mimeo, Cendes Archives), p. 8. 124 Interview, Susan Vogeler, Caracas, 23 June 1994. 125 Interview, Maritza Izaguirre, Inter-American Development Bank, Washington, D.C., 13 November 1996.

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along with the students, encouraging an atmosphere that could effectively reconcile dramatically different points o f view.126 This was the period o f la guerrilla in Venezuela; by 1964 there were sixteen different guerrilla groups operating in the country, many drawing inspiration from the Cuban revolution.127 Ahumada encouraged discussion among participants with opposing points o f view, even though at times the debate became heated. In particular, the presence of professors who came from the United States was not without serious controversy. Sociologist Daniel Lemer, a visiting lecturer from MIT, had published The Passing o f Traditional Society, on Middle Eastern society in the process o f modernization, and many o f the students violently disagreed with his interpretations. However, this did not prevent participants from appreciating his calibre as a professor.128 Through the course, students learned to “respect one another” in an intellectual setting.129 O f the 25 students enrolled in the first Cendes course, Hector Silva Michelena recalled, “80 percent were leftists, revolutionaries, and communists,” but regardless of their political persuasions, they were serious students.130 While Ahumada’s principal

126 Interviews, Hector Silva Michelena and Maritza Izaguirre, op. cit. 127 Guerrilla activity in Venezuela was largely eliminated in the years that followed, through a series o f repressive measures taken by Betancourt, including the suspension o f constitutional guarantees. Betancourt also outlawed the Movimiento de Izquierda Revolucionaria (MIR) and the Communist Party, following an uprising by the military in collaboration with leftist groups. Betancourt was a strong opponent o f Fidel Castro: Venezuela suspended relations with Cuba in November 1961, and voted for Cuban expulsion from the Organization o f American States in January 1962, in direct response to Castro’s support o f armed guerrilla organizations abroad. (Judith Ewell, “Venezuela Since 1930,” pp. 756-57, 762). 128 In spite o f being American, the fact that Lemer was a Marxist ultimately facilitated discussion. [Daniel Lemer, The Passing o f Traditional Society. Modernizing in the Middle East (Glencoe, Illinois: The Free Press, 1958)]. 129 Interviews, Hector Silva Michelena and Maritza Izaguirre, op. cit. 130 The Cold W ar did not fail to affect the course: Hector Silva Michelena, a graduate o f the first full course at Cendes, was prohibited from entering the United States for thirty years for his

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views, and the focus o f the course, were undoubtedly structuralist, along the lines of ECLA’s thinking, a discussion of Marx was “obligatory,” which made for ongoing debate within the class. According to his students, Ahumada was a master at managing discussion among participants.131 Lourdes Yero, a student o f the first Cendes graduate course, commented that “No one was without a job in graduating from Cendes.” O f the 25 enrolled, 19 students graduated from the first course in August 1963: two went to work at Cordiplan, four joined the Ministry of Public Works, three were hired by the Corporacion de Guayana, a state-run development organization,132 one at the Ministry o f Agriculture, one in the private sector, and five joined the faculty at the Universidad Central de Venezuela. Jose Agustin Silva Michelena, also a graduate, was awarded a fellowship to study at MIT, where he completed his Ph.D.133 Besides contributing to the quality of planning at the level o f the state, by training a generation of planners who would go on to teach at the

political activities; ironically, his brother Jose Agustin completed his Ph.D. at MIT. (Interview, Hector Silva Michelena, Caracas, 27 September 1996). ^ Ibid. 132 The Betancourt administration granted the Corporacion de Guyana (CVG) broad discretionary powers to plan the development o f the region between the Orinoco and Caroni rivers. The CVG responded directly to the President, and oversaw multiple state-run companies, including steel, aluminum, and hydroelectric production. (Terry Lynn Karl, “The Political Economy o f Petrodollars: Oil and Democracy in Venezuela,” Ph.D. Dissertation, Stanford University, January 1982, p. 131). 133 Graduates also included Maritza Izaguirre, who joined Cordiplan, and later served as Minister o f Cordiplan (1982-1984) and who in 1998 was named Minister o f Finance; and Hector Silva Michelena, who became professor o f Sociology at the Universidad Central. After completing his doctorate in Political Science at MIT in 1968, Jose Agustin Silva Michelena returned to teach at Cendes. (Universidad Central de Venezuela, Centro de Estudios del Desarrollo (Cendes), Informe A nual 1963 (Caracas, February 1964), p. 2; Interview, Maritza Izaguirre, Washington, D.C., 13 November 1996 and correspondence with author, 20 July 1998).

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University, the course contributed to promote graduate studies, which in Venezuela then were previously nonexistent.134 Heinz Sonntag, a more recent director o f Cendes, remarked that “ [w]hile it sounds like common knowledge, planning rests on the understanding.. .that we are men who make our history, in the past, the present, and into the future.” 135 The Cendes graduates believed that with the tools they acquired in the course they “were capable of transforming reality.” 136 At the same time, explosive growth was taking place such that many plans could not keep up with events.137 Furthermore, there were tensions to address, as Ahumada had acknowledged, at least in theory, in the politics o f development and social transformation.138 It is questionable whether planning was effective in Venezuela. But the course reaffirmed the validity o f leadership in public policy and provided an unprecedented degree of professionalization. It encouraged a wider understanding of development. Above all, Ahumada inculcated in his students the capacity for dialogue among opposing points of view.

134 According to Hector Silva Michelena, who taught Sociology at the Universidad Central, prior to this time, the university offered neither masters nor doctoral programs. (Interviews, Maritza Izaguirre and Hector Silva Michelena). 135 Heinz Sonntag, “Discurso de Orden del Director del Cendes en el Acto Publico y Solemne del XXV Aniversario del Centro de Estudios del Desarrollo de la Universidad Central de Venezuela (Cendes, Caracas, no date), p. 4. 136 Creiamos que adquiriendo herramientos podriamos transformar una realidad. (Interview, Maritza Izaguirre, Washington, DC, 13 November 1996). 137 A Cendes report observed that “[t]he largest portion o f plans proposed until this day have not been carried out simply because events outpaced proposals.” (Universidad Central de Venezuela, Centro de Estudios del Desarrollo, Informe Final (Caracas, May 1960) (Mimeo, Cendes Archives), p. 1-2). 138 Jorge Ahumada, “El desarrollo economico y los problemas del cambio social en America Latina,” ST/ECLA/CONF.6/L.A-1 (Mexico, D.F.: Naciones Unidas, Consejo Economico y Social, 20 November 1960), p. 43.

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Conclusion By 1964, Ahumada was fully engaged in Chile as economic advisor to presidential candidate Eduardo Frei. His political commitment represented a difficult personal dilemma. In 1961 he had separated from his first wife and married Georgina Licea, whom he met in Cuba. They had settled in Venezuela, but his contributions were still highly respected among Chilean Christian Democrats, and valuable in an era of conflict over basic economic and social policies.139 After Frei’s election, Ahumada kept his position as director of Cendes in Venezuela while also acting as presidential advisor in Chile. Along with Minister o f Planning Alvaro Marfan, Minister of Finance and President o f the Central Bank Sergio Molina, Director of the Budget Edgardo Boeninger, and Vice President of the Central Bank Carlos Massad, Ahumada collaborated closely with Frei in strategy sessions for policy formulation. He worked without an official title, but held an office at La Moneda, the presidential palace. Hugo Trivelli, minister o f agriculture in the Frei administration, observed that Ahumada was “extremely perceptive, and was able to comprehend the full extent of Chilean, and for that matter, Latin American, problems.” 140 Sergio Molina, one o f Ahumada’s closest colleagues, commented that because Ahumada did not have to deal with the daily trials of a regular ministerial position, he was able to maintain a broader perspective on events and general policy.141 Ahumada was apparently ready to accept a position at the Chilean Central Bank and return to Santiago, a sign o f the seriousness with which he viewed his engagement with the administration, though his plans were cut short.

139 Ibid. 140 Interview, Hugo Trivelli, Santiago, 1 December 1997 141 Interview, Sergio Molina, Banco del Desarrollo, Santiago, 25 November 1997.

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On an ideological level, Ahumada’s insistence on gradualism and rational, measured change was considered grossly insufficient, or even reactionary, by some on the left. Even within ECLA, Ahumada’s position was not easy to sustain, especially after the Cuban Revolution. Ahumada felt that the Frei administration should refrain from trying to engage simultaneously in numerous reforms, to avoid what he feared could become an unmanageable political situation.142 Ahumada was seeking a complicated sense o f belonging, to his country and to the region. His identity was clearly no longer exclusively that of a cepalino. Ahumada died o f a heart attack, on a Sunday, while working at Cendes, at age 48, on November 7, 1965. After his death, Cendes, like ECLA, would become “more isolated” and came to be seen as politically ideological, and less scientifically rigorous, particularly when students from the Universidad Central demanded a more Marxist orientation at the Center.143 In 1968, university students forced Cendes to close in order to protest what they saw as excessive participation of foreign institutions. In 1970, President Caldera shut down the entire university in an attempt to control student and faculty unrest.144 What is the legacy of Ahumada’s work? How do we explain the appeal of planning, and why was it so fundamental to Ahumada’s times? In 1965 Ahumada wrote

142 In Sergio M olina’s words, Ahumada was convinced that a situation o f “ungovernability” must be avoided. The charged political atmosphere in Venezuela also affected Ahumada’s views on Chile: he felt increasingly concerned about the radicalization o f the left in Venezuela, especially in light o f Chile, a countiy where political parties were already more sophisticated and well organized. (Ibid). 143 Interview, Susan Vogeler, Caracas, 23 June 1994. 144 Judith Ewell, “Venezuela since 1930,” p. 770.

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a telling statement, frustrated with the inability o f social scientists to grapple with economic and social change: As Latin Americans we are dissatisfied. We have more than enough reason, both as citizens and as intellectuals, above all in the latter capacity because we have seen clearly that we are not fulfilling our responsibility as such, in being incapable of offering either concrete solutions or even coherent explanations o f the nature of the problems that aggrieve our society... .[0]ur problems are neither economic nor political, neither educational nor social. They have to do with change, which affects everything, values, attitudes, structures, and institutions.145 In part, planning was a response to rapid economic growth and dramatic social change, combined with extraordinary demands on public administration. Economist Armando Cordova commented on industrial policy in Venezuela from 1950 to 1960: “During this period, the government did not define an industrial policy o f protection, but instead this was left to the desire, understanding, or whim o f the employees of the Ministries of Development and Finance. All o f which explains the heterogeneity or irregular course of our industrial development.” 146 Later, in 1966, an ECLA report seemed to make the same observation for industrial policy in Latin America overall: there was no coherent plan, but rather “relevant provisions dispersed among the various laws and ordinances o f public bodies.” Above all there was a “great lack of consistency: decree follows decree, amending what has gone before.” Policies for industrial promotion were “in most

145 Jorge Ahumada, “Desarrollo economico, cambio social y educacion en America Latina” (1965), in Obras Escogidas (Caracas: Banco Central de Venezuela, 1986), p. 139. 146 In 1960, an editorial from Venezuela’s E l N ational commented on the virtual absence o f a mature state, presumably a prerequisite for the success o f a national planning strategy. (Ramon Escovar Salom, “Un instituto de planificacion integral,” El N ational (Caracas), January 1960. See also Armando Cordova, “La estructura economica tradicional,” p. 278).

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cases.. .a collection o f miscellaneous provisions.” 147 The Training Course was an attempt to give order to these inconsistencies and design a strategy for managing economic and social change. It was perhaps too ambitious in trying to undertake this task, but there was also a certainty in the approach o f these practitioners that was unique to their times. Ahumada saw the United States as a model, and differed from some o f his cepalino colleagues, who openly criticized its overbearing tendencies. He demonstrated respect for theories from the “Center,” while in turn such criticism was a distinguishing feature o f the ECLA agenda. At the same time, Ahumada was never entirely open about his views. While suggesting a certain affinity for U.S. models, he never endorsed U.S. foreign policy towards Latin America. When asked to participate in the Alliance for Progress, which drew heavily from his own generation o f economists, Ahumada refused, choosing to maintain his focus on Chile and Venezuela. Ahumada insisted on Latin Americans’ pursuit o f their own solution to development problems. He sought his own forms o f accommodation, obviously recognizing the strong U.S. influence in the countries where he had worked. For example, given the extent of his involvement in Christian Democracy, Ahumada could not have been unaware o f the large contributions that the United States made to ensure the election of Eduardo Frei in 1964. Jorge Cauas, who worked as assistant to Ahumada during the first year of the Frei administration (1964-65), came to believe that the ideas that Ahumada proposed, particularly the need for greater emphasis on economic opening, and his preoccupation with the political danger o f inflation, represented a reality “completely denied” in the late

147 Economic Commission for Latin America, The Process o f Industrial Development in Latin

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1950s. Ahumada was “out o f step with his times” in emphasizing these concerns. In Chile the Christian Democratic Party was besieged by both extremes, and Ahumada was pivotal in negotiating a balance during the first year o f the Frei administration in 1964-65. Cauas felt that with his death, the entire program was derailed, along with Ahumada’s characteristic moderation.148 Ahumada displayed a marked faith in academic and scientific rigor in his study o f development. At Cendes, he managed to integrate diverse perspectives in a setting that had an independent style different from that of ECLA. But both ECLA’s and Ahumada’s attempts to “rationalize” all aspects o f the development process were to founder, suggesting that the task was deeper or more complex than Prebisch or he had envisioned. ECLA was originally a project with utopian qualities; Ahumada’s was less utopian but equally idealistic. While he played a pivotal role in the election and early administration of Eduardo Frei, Ahumada never attracted the fame that characterized the other cepalinos, and lacked their ideological appeal. At heart, Ahumada was a technocrat, while suggesting the potential for influence among politically active economists in Latin America today.

America (New York: United Nations, 1966), p. 164. 148 Interview, Jorge Cauas, Santiago, 1 December 1997. 188

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Table 5.1 Teaching Staff of Cendes, 1961 Director Jorge Ahumada

Agricultural Engineer (Universidad de Chile); M.A. in Economics (Harvard University)

F ull Tim e P rofessors Luis Lander

Civil Engineer (Universidad Central de Venezuela); M.A. in Regional and Urban Planning (Harvard University)

Eduardo Neira Alva

Architect (Faculty o f Architecture, Universidad Nacional de Ingenieria, Lima); Urbanist (University o f Liverpool)

Jose Agustln Silva Michelena

B.A. in Sociology and Anthropology (Universidad Central de Venezuela); M.A. in Rural Sociology (University o f Wisconsin Madison)

Julio Cotier

B.A. in Literature & Philosophy (Universidad de San Marcos, Lima); Ph.D. in Literature & Philosophy (Universite de Bourdeaux)

V isiting P rofessors Daniel Lem er

Sociologist. Professor, Massachusetts Institute o f Technology (Social Change)

Helio Jaguaribe

Lawyer. Instituto de Altos Estudios Brasileiros (Political Structure)

Francois Bourricaud

Sociologist. Professor, Universities o f Bordeaux and Paris (Comparative Social Systems)

William Alonso

Ph.D. in Regional Science. Professor, Harvard University (Industrial Location)

Guillermo Bravo

Ph.D. in Economics, Universidad de Buenos Aires; Specialization, Harvard University (Market Analysis)

Charles Achach

Economist, Universite de la Sorbonne, Paris (Industrial Programming)

Arilo Holanda

Industrial Chemist (Universidade de Recife, Brazil); Professor, School o f Engineering o f the State o f Ceara, Specialist in Economic Development, Banco do Nordeste do Brasil, S.A. (Industrial Projects)

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Sylvia Rimbert

Geographer; Professor o f Geography, University o f Strasbourg (Cartography)

P a rt T im e P ro fe sso rs J.N. Salazar Jimenez

Ph.D. in Psychology

Tulio Vasquez

Ph.D. in Economics

Dario Pavez

Ph.D. in Economics

Mercedes Fermin

Ph.D. in Geography

Roberto Alamo B.

Ph.D. in Economics

Manuel Balanzat

Ph.D. in Mathematics

Eduardo Valenzuela

M.A. in Mathematics

Angel Monti

Ph.D. in Economics (Universidad de Buenos Aires). United Nations staff.

Jorge Trebino

Ph.D. in Economics (Universidad de Buenos Aires). United Nations staff.

Jose Olalquiaga

Civil Engineer (Universidad Catolica de Chile)

Jose Gonzalez Lander

Civil Engineer (Universidad Central de Venezuela); M.A. in Transportation (MIT)

Antonio Bocalandro

Civil Engineer, specialization in Transportation (MIT)

Lorenzo Azpurua

Civil Engineer, specialization in Transportation (University o f California)

Pompeyo Rios

Agricultural Engineer (Universidad de Chile)

J.A. Casanova

Economist (Universidad de Cuyo); M.A. in Regional Science (University o f Pennsylvania)

Source: From Centro de Estudios del Desarrollo, Fines del Cendes IV Congreso Intemacional de Planificacion (Sociedad Interamericana de Planificacion - SIAP), Santiago de Chile, 1962. (Mimeo, from Cendes archives).

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Table 5.2 Courses Offered in the Cendes Graduate Program First Year Course

Instructor

Structure o f the Economy

Angel Monti

Mathematics I

Manuel Balanzat

Structure o f Society

Jose Angel Silva Michelena

Statistics I

Tulio Vasquez

Structure o f Politics

Helio Jaguaribe

Demography

Roberto Alamo Blanco

Economic Geography o f Venezuela

Mercedes Fermin

Theory o f Resource Distribution

Dario Pavez

Economic Development I

Jorge Ahumada

Social Change

Daniel Lerner

Matrix Algebra

Eduardo Valenzuela

The Individual and the Social Process

J.M. Salazar Jimenez

Comparative Social Systems

Francois Bourricaud

Human Establishments

Eduardo Neira Alva

Projects

Jose Olalquiaga

Finance

Jorge Trevino

Location o f Economic Activity

William Alonso

Problems o f Regional Development

Luis Lander

Seminar on Structural Integration

J.A. Silva and Julio Cotier

Seminar on the General Theory o f Planning

Luis Lander

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Courses Offered in the Cendes Graduate Program Second Year Course

Instructor

Industrial Planning

Marcel Achach

Industrial Projects

Arilo Holanda

M arket Analysis

Guillermo Bravo

Analysis o f Industrial Viability

George Parazich

Industrial Planning in Venezuela

Max N olff

Operating Budgets

Dario Pavez

Economic Planning I

Jorge Ahumada

Analysis and Projections

Teresa Martinez

Projects

Jose Olalquiaga

Community Development

J.A. Silva Michelena

Techniques o f Social Research

J.A. Silva Michelena, E. Valenzuela

Economics o f Transportation

Jose Lorenzo Azpurua Jose Gonzalez Lander

Techniques o f Transportation

Antonio Bocalandro

Economics o f Land

Jorge A. Casanova

Cartography

Sylvie Rimbert

Agricultural Planning

Gustavo Pinto Cohen

Note: The second year allowed for specialization in one o f the following fields: Regional, Agricultural, Industrial, and Social Planning.

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Course

Instructor

M atrix Calculus

Eduardo Valenzuela

Human Settlements

Eduardo Neira Alva

Theory o f Economic Development

Jorge Ahumada

Finance

Jorge Trevino

Agricultural Economics

Pompeyo Rios

M athematical Programming

Alejandro Grajal

Development Administration

Gerardo Bayol

Educational Planning

Hector Correa

Regional Analysis

Jean Paelinck

Source: Informe de actividades del Centro de Estudios del Desarrollo (CENDES), peri'odo correspondiente a mayo-noviembre 1961 (CENDES Archives).

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Conclusion John Kenneth Galbraith once wrote a splendid and humorous article about the arrival of Keynesianism in the United States.1 In numerous ways, his depiction o f the introduction and spread o f Keynesianism here is a model for ECLA’s arrival and influence in Latin America. Galbraith speaks o f Keynes as a “Messiah,” and, like Prebisch, “As Messiahs go, Keynes was deeply dependent on his prophets.” One of his best-known works, The Economic Consequences o f the Peace, is characterized as “brilliantly polemical,” while The General Theory o f Employment Interest and Money specialized in “fascinating obscurity,” echoing Prebisch’s essay, “The Economic Development of Latin America and its Principal Problems.”2 Parallel to the appearance of Keynes’ theories in 1936 in the United States, a new generation o f “young economists and statisticians” was forming under the leadership of Simon Kuznets at the University o f Pennsylvania, the National Bureau o f Economic Research, and the U.S. Department of Commerce.3 Specific individuals, primarily economics professors and a few key policymakers, played central roles in the spread of Keynes’ ideas. At Harvard, which Galbraith calls the center of a “crusade” to promote Keynesianism, Professor Alvin Hansen and a handful of economists promoted its basic tenets, and extended their reach into government through courses at Harvard’s recently founded Graduate School of Public Administration and ongoing exchanges with

1John Kenneth Galbraith, “How Keynes Came to America,” in A Contemporary Guide to Economics, Peace and Laughter, ed. Andrea D. Williams (Boston: Houghton Mifflin Co., 1971), pp. 43-59. ' Ibid, pp. 44, 47. 3 The General Theory was released simultaneously in Great Britain and in the United States in 1936. In the United States, the new generation o f Keynesian economists and statisticians included Alexander Ganz, who worked at the U.S. Department o f Commerce from 1946 to 1950, prior to joining ECLA’s Economic Development Division in 1952.

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Washington.4 Almost immediately, according to Galbraith, Keynesianism attracted a generation o f “disciples,” about whom Keynes “wrote admiringly.” From the late 1930s into the early 1950s, professors such as Hansen and Paul Samuelson promoted Keynesianism, boosted by Samuelson’s best-selling textbook on economics.5 Even after the end o f five consecutive Democratic administrations, and in spite o f declarations to the contrary, the Eisenhower presidency and its successors continued to practice Keynesian deficit spending unabated.6 Beyond the obvious theoretical connections, what is most remarkably similar between the Keynesian “revolution” in North America and the culture of ECLA is the mission of the prophets. Even though their dissemination may not have followed any specific master plan, Galbraith writes o f the Keynesians, “All those who participated felt a deep sense of personal responsibility for the ideas; there was a varying but deep urge to persuade.”7 ECLA in its heyday likewise featured a deliberate effort to disseminate economic ideas, giving rise to several generations o f disciples, and featuring a number of prominent prophets, among them Celso Furtado, Anibal Pinto, Osvaldo Sunkel, Juan Noyola, in addition to Prebisch. As I have described it here, ECLA also harbored a large number o f less vocal but equally persistent communicators who employed the written word, research, teaching, and training, as in the case of Jorge Ahumada, Julio Melnik, Hugo Trivelli, Pedro Vuskovic, Alexander Ganz, and Santiago Macario, not to mention

4 Galbraith, “Keynes,” pp. 48-50. 5 Paul A. Samuelson, Economics. A n Introductory Analysis (New York: McGraw-Hill Book Co., 1948). 6 Galbraith, op. cit., pp. 51, 57. 7 Ibid, p. 54.

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their disciples, such as Maria da C oncei^o Tavares in Brazil and David Ibarra in Mexico.8 What makes ECLA distinct from Keynesianism, however, is the difference in responses to these two so-called revolutions over the longer term. Galbraith cites evidence o f “some effort at counterrevolution” in reaction to Keynesianism.9 In Latin America the reaction was violent, a result of the ubiquitous nature of the cepalino ideology.10 The Chicago Boys in Chile and other Latin American economists trained in the United States shared a zeal that surpassed even the enthusiasm of the cepalinos. A Wall Street Journal article called the disciples of the Chicago School “technically skilled policy makers with a fervor for ffee-market solutions and a disdain for state intervention”; another cited the solidarity among ffee-market advocates trained in the United States in the 1970s as the inspiration for a generation dedicated to “Spreading the Market Gospel.” 11 While Thatcher and Reagan also displayed steadfast support for free market policies, the direct association o f neoliberal policies with military dictatorships in Latin America differentiates the onslaught against structuralist-based policies from the

8 Maria da Conceifao Tavares was one o f the founders, in 1973, o f the first graduate program in economics at the University o f Campinas in Brazil, and published numerous works on Brazilian political economy; David Ibarra was Secretary o f the Treasury in Mexico from 1977 to 1982. Galbraith, “Keynes,” p. 54. 10 Economist Alejandro Foxley called the introduction o f neoliberal policies in the Southern Cone the “neoconservative revolution” (la revolution neoconservadora), one that involved not only the implementation o f new economic policies but also the imposition o f profound social and institutional changes. (Alejandro Foxley, Experimentos neoliberales en America Latina (Mexico: Fondo de Cultura Economica, 1988), pp. 11, 13). 11 According to Arnold Harberger, the intellectual sponsor o f the Chicago Boys, “The tune we’ve been singing all along has become a chorus.” (Jonathan Friedland, “ U.S. Scholar is ‘Godfather’ of Latin-Market Revolution,” Wall Street Journal Interactive Edition, September 12, 1996. See also Matt Moffett, “Seeds o f Reform: Key Finance Ministers in Latin America are Old Harvard-MIT Pals,” Wall Street Journal, August 1, 1994, p. 1).

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anti-statist “counterrevolution” elsewhere.12 Even more serious was the failure of ideologues from both the structuralist and the neoliberal camps to allow for any useful discussion o f policy alternatives.13 Galbraith spoke of accusations against the Keynesians for having practiced a form of “literary incest,” in reviewing each other’s works.14 In the case of the cepalinos, such incest was real and problematic. The introspectiveness of many o f the cepalinos was a feature that hindered any true dialogue among different theoretical and practical points of view. The ECLA culture has left a number o f significant legacies. The cooperation of economists at ECLA, the dissemination of ECLA literature, and the cepalinos' engagement in teaching heightened awareness of Latin American economic development. The training of recent generations of Latin American economists in the United States and Europe has built upon the goal of professionalization that ECLA pursued in its Training Program. And today, thanks to the pioneering work o f the cepalino generation, we are working with a much more powerful base of information than ever before. The recognition that Latin American economists gained in their association with the ECLA culture warrants further exploration. Whereas in the United States economists are still considered foremost on their technical merits, in Latin America they have come to wield major political influence. As a result, identification with the cepalino economic

12 Foxley argued that “authoritarianism” became “practically a requirement for the success of orthodox policies,” at least in the case o f the Southern Cone countries. (Foxley, Experimentos neoliberales, p. 23; Albert O. Hirschman, “The Political Economy o f Latin American Development: Seven Exercises in Retrospection,” Latin American Research Review 22, no. 3 (1987), pp. 13-17). 13 Hirschman argued otherwise, at least in 1987, that the North had become excessively dogmatic, whereas the “Latin Americans have become skeptical o f their former sets o f certainties and solutions.” (“Political Economy o f Latin American Development,” p. 34). 14 Galbraith, “Keynes,” p. 55.

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ideology provoked reactions both of extraordinary reverence and disdain.15 Neoliberal economists have also become extremely powerful, but possess none o f the aura o f their predecessors nor their reputation for originality. ECLA established the role of the state in economic policy as a fundamental issue in development strategy. Since the 1980s the prevailing discourse has suggested that an overarching state is no longer viable in Latin America, but there is clear evidence that the state cannot go away.16 Recent decades have brought some more interesting, less orthodox combinations o f policies that have drawn both from structuralism and marketoriented approaches.17 Moreover, new relations have emerged in all countries, reaching beyond the state, to include a new and vastly diverse Third Sector. No longer is Latin American development solely a matter o f the adoption of appropriate government policies, particularly in light of recent drastic increases in poverty, along with a precipitous decline in confidence in the public sector. There are now many more actors involved in the development discussion, providing the potential for solutions that the state never managed to achieve alone.

15 The stature o f economists in Latin America is symbolized in the reverence displayed in three days o f official mourning declared in honor o f Venezuelan economist and central banker Pedro Tinoco upon his death on March 30, 1993. (Luis Manuel Escalante, “Fallecio el doctor Pedro Tinoco, hijo. Una enfermedad doblego su ferrea voluntad,” E l Universal, 31 March 1993, p. 2-1). 16 The failure o f the Chilean banking system in 1983, and o f banks in Venezuela in 1994, suggests that while the management and operation o f the Latin American state needs considerable reform, its role cannot be entirely ignored. (Alejandro Foxley, “El experimento neoliberal en Chile,” in Experimentos neoliberales en America Latina, pp. 87-91; Love, “Economic Ideas and Ideologies,” p. 460). Following a long history o f provision o f basic social services, the state needs to modernize, but it is not clear that its wholesale reduction is a viable alternative in Latin America. (See Moises Naim, “Latin America: Rediscovering the State” New Perspectives Quarterly 10, no. 4 (Fall 1993), pp. 27-29). 17 See “ Heterodox Shock Therapy for Fighting Inflation in Argentina and Brazil,” in Hirschman, “Political Economy,” op. cit., pp. 25-28.

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In 1994, Mexican intellectual and writer Octavio Paz pronounced, “I think modernization is not a benediction. It is a kind of air-conditioned hell.” 18 Ultimately the Latin American development discussion has to do with the vision o f economy and society that is most desirable for the region. The ECLA mission centered on an interpretation of economic development noted for its long-term perspective and concern for social issues.19 Today we look back on the “lost decade” of the 1980s and two decades of pessimism with regard to the Latin American economies. A serious void in Latin American economic thinking resulted from the atmosphere o f crisis of the 1980s.20 Nor are some reconsiderations of policy, such as neostructuralism, entirely satisfactory. It is common to associate Latin American economic development with a history o f dependence on ideas from outside sources.21 Recent generations of Latin American economists trained in U.S. graduate programs “now speak the same economic language as their counterparts in Washington.”22 In contrast ECLA is remembered for its independent approach to economic policy. Highly respected institutions have grown up 18 From interview with Octavio Paz in New Perspectives Quarterly (1994), cited in Jonathan Kandell, “Octavio Paz, M exico’s Man o f Letters, Dies at 84,” New York Times, April 21, 1998, D22. 19 Interview, O scar Munoz, Santiago, 26 June 1995. 20 “Countries in which there has been a serious attempt to transform the economic structure in the 1980s are really the exception....In the rest o f the countries o f the region the ‘development strategy’ has been absent from the agenda for discussion; structural changes may be taking place, but as mere by-products o f the effects o f short-term adjustment programmes. Thus, export promotion and fiscal austerity are generally common ingredients in such programmes but it would be difficult to assert that they represent profound changes in the development thinking o f the governments which implement them.” (Jose Antonio Ocampo, “New Economic Thinking in Latin America,” Journal o f Latin American Studies 22 (February 1990), p. 176). 21 Examples include the American economist Edwin Kemmerer, who advised Latin American central banks in the early part o f this century; the University o f Chicago in the 1970s; and the World Bank and International Monetary Fund in the 1980s and 1990s. See Albert O. Hirschman, “A Dissenter’s Confession: The Strategy o f Economic Development Revisited,” in Rival Views o f M arket Society and Other Recent Essays (Cambridge, MA: Harvard University Press, 1992), p. 8; also Paul W. Drake, M oney Doctor in the Andes: The Kemmerer Missions, 1923-1933 (Durham, N.C.: Duke University Press, 1989).

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in its legacy, including professionals familiar with the past and less prone, perhaps, to the dogmatism o f their predecessors. In this tradition, the Inter-American Development Bank (IDB), for example, has been defined in terms that ECLA established: “money is not the IDB’s main resource; ideas are.”23 The cepalinos did not answer all o f Latin America’s development problems but, as participants in ECLA’s institutional project, they created new spaces for the generation and critical evaluation of ideas in the region.

22 Moffett, “Key Finance Ministers in Latin America,” p. A6. 23 “View from the Executive Floor. The IDB’s departing executive vice president reflects on the Bank and on the region’s prospects,” IDB America (September-October 1998), p. 9.

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Bibliography Primary Sources Interviews Jose Besa, ECLA, Santiago, June 23, 1995, and December 3, 1997 Ricardo Bielschowsky, ECLA, Santiago, June 22, 1995 Daniel Bitran, Mexico City, July 5, 1994 Manuel Caballero, Universidad Central de Venezuela, Caracas, September 23, 1996 Fernando Calderon, ECLA, Santiago, August 18, 1993 Jorge Cauas, Santiago, December 1, 1997 Luis Escobar Cerda, Santiago, July 6, 1995 Alexander Ganz, Cambridge, MA, February 10, 1995, September 13, 1996, and October 1,1997 Adolfo Gurrieri, ECLA, Santiago, August 20, 1993 Maritza Izaguirre, Banco Interamericano de Desarrollo, Washington, DC, November 13, 1996 Georgina Licea, Caracas, 18 & 23 September 1996 Richard Mallon, Harvard Institute for International Development, Cambridge, MA, August 26, 1993 Sergio Molina, Banco del Desarrollo, Santiago, Chile, November 25, 1997 Oscar Munoz, Santiago, June 26, 1995 and November 26, 1997 Felipe Pazos, Banco Central de Venezuela, Caracas, June 18, 1994 Anlbal Pinto, ECLA, Santiago, August 16, 1993 Hector Silva Michelena, Caracas, September 27, 1996 Heinz Sonntag, Cendes, Caracas, September 18, 1996 Osvaldo Sunkel, ECLA, Santiago, August 17, 1993, and June 20 & 27, 1995

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Jorge Trebino, Cordiplan, Caracas, September 25, 1996 Hugo Trivelli, Santiago, Chile, December 1, 1997 Victor Urquidi, El Colegio de Mexico, Mexico City, July 4 & 5, 1994 Juan Gabriel Valdes, Santiago, July 4, 1995 Annibal Villela, Rio de Janeiro, August 21, 1995 Francisco Vivancos, Banco Mercantil, Caracas, June 21, 1994 Susan Vogeler, Caracas, June 23, 1994 Lourdes Yero, Cendes, Caracas, June 22, 1994

Archival Sources Jose Besa, former director of the ECLA library in Santiago, compiled a complete collection of the writings o f all o f the major cepalinos, which is open to researchers in the Sala Cepal at the ECLA library. ECLA archives, however, are virtually nonexistent, reportedly due to losses suffered in a flood at ECLA headquarters. Therefore other than published ECLA documents, interviews, and memoirs, I have relied on materials from secondary archives.

International Monetary Fund Archives The International Monetary Fund has a very well organized archive, and while I was not permitted to consult any files on individual personnel, I obtained excellent sources that reflected on ECLA from the perspective o f the Fund. The main files that I researched are found under “1124 Economic Commission for Latin America,” for years 1947 tol966. These documents include memoranda prepared by Fund staff who attended ECLA sessions, as well as correspondence between staff at ECLA and the Fund (primarily Latin Americans working at the Fund), and detailed reports prepared by the Fund’s Research Department on the development of ECLA. Much material is available to constitute a rich history of the Fund and Latin America.

United Nations Archive The United Nations Archive is much more confusing and obviously underfunded, although many interesting items can be found with the assistance o f the attentive research staff. These documents include some published items that are also available through the Dag Hammarskjold library (which requires a formal application for consultation).

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The United Nations Archive is organized into categories difficult to comprehend, but I will list those that I consulted for this dissertation. The sources included drafts of reports and official addresses, formal correspondence between ECLA and the United Nations headquarters, and progress reports that the ECLA Executive Secretary submitted regularly to the headquarters. RG 17 A/94 RR Box 33 File 6 “Economic Commission for Latin America, 1948-49: Correspondence” RG 17 A/94 RR Box 33 File 7 “Economic Commission for Latin America 1949” RG 20A/316 RR 62/1232 Box 34 File 7 Confidential “ECLA-Regional Commissions Section 1952-53” M. Pollner RG 20 A/316 RR 62/1232 Box 34 File 8 “ECLA History 1950-51: ECLA-Regional Commissions Section” RG 20 A/309 RR G2/1179 Box 35 File 1 “ 1951 ECLA 4th Session in Mexico City” RG 20 A /316 RR G2/1232 Box 36 File 5 “Progress Reports - ECLA, 1952-53” M. Pollner.

United States Department o f State Archives I consulted United States Department o f State documents housed at the U.S. National Archives and Records Administration facility in College Park, Maryland. All o f the documents I reviewed belong to Record Group 59, General Records o f the Department of State. Most o f the material I cite is from the Decimal File, divided into the periods 1945-49, 1950-54, and 1955-59. The Department o f State central or decimal files for ECLA appear as 501.BD-ARA for the period 1945-1949 and 340.210 for the periods 1950-1954 and 1955-59. I also consulted Lot File number 61 D332, corresponding to Records of the Bureau of Inter-American Affairs, for coverage o f Vice President Nixon’s trip to South America in May, 1958; and decimal file 342.10 for information on the ECLA mission to Cuba following the Revolution.

Cendes Archives The following are the documents that I consulted in the small but well organized archives and library o f the Centro de Estudios del Desarrollo (Cendes) in Caracas, Venezuela: Centro de Estudios del Desarrollo. Fines del Cendes, IV. Congreso Intemacional de Planificacion (SIAP), Santiago de Chile, 1962.

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Universidad Central de Venezuela. Centro de Estudios del Desarrollo (Cendes). Informe Final. Caracas, May 1960. ________ .“Objetivos, organization y actividades.” Mimeo (no date). ________ . “Prospecto: Curso de Post-Grado, 1961-63.” Mimeo (no date). ________ . Informe Annual 1963. Caracas, February 1964.

Government Documents Mexico Memoria. Primera Reunion de Tecnicos sobre Problemas de Banca Central del Continente Americano. Celebrada en la Ciudad de Mexico del 15 al 30 de agosto de 1946, a invitation y bajo los auspicios del Banco de Mexico, S.A. Mexico: Banco de Mexico, 1946. United States United States. Department o f State. Proceedings and Documents o f the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1-22, 1944. Vol. I. Washington, D.C.: U.S. Government Printing Office, 1948.

United Nations Publications I consulted regular reports on the ECLA Training Program that appeared in the ECLA annual reports housed at the ECLA library in Santiago. Reports are variously entitled Informe sobre elprogram a CEPAL/AATde capacitacion en materia de desarrollo economico, or Informe acerca del programa conjunto CEPAL/AAT sobre capacitacion de economistas en desarrollo economico, and are included in the Informe Annual that appears under Naciones Unidas, Consejo Economico y Social, Comision Economica para America Latina. I consulted these reports for the period 1952 to 1964. Below I have included all published reports that I consulted in my research on ECLA. Signed articles appearing in ECLA publications such as the Economic Bulletin fo r Latin America are listed in the next section. Naciones Unidas. Comision Economica para America Latina y el Caribe. Informe Annual. 1952-1964. ________ . Problemas teoricosypracticos del crecimiento economico. Mexico: Naciones Unidas, Consejo Economico y Social, 28 May 1951 (E/CN. 12/221).

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________ . Manual de proyectos de desarrollo economico. Estudio preparado por el Programa CEPAL/AAT de capacitacion en materia de desarrollo economico. Mexico: Naciones Unidas, December 1958. ________ . Raul Prebisch: Un aporte al estudio de supensamiento. Santiago: CEPALC, 1987. United Nations. Economic Commission for Latin America. Economic Survey o f Latin America. New York, 1949-1964. ________ . Analyses and Projections o f Economic Development I. An Introduction to the Technique o f Programming. New York: United Nations, Department of Economic and Social Affairs, 1955. ________ . Towards a Dynamic Development Policy fo r Latin America. New York, 1963. ________ . The Process o f Industrial Development in Latin America. New York: United Nations, 1966. United Nations. Conference on Trade and Development. Raul Prebisch: Thinker and Builder. Proceedings o f the Tribute and Symposium Organized in Honour o f Raul Prebisch. Geneva, 2-3 July 1986. New York: United Nations, 1989.

Memoirs, diaries, and contemporary accounts Ahumada, Jorge. En vez de la miseria. Santiago: Editorial del Pacifico, 1958. ________ . “Programa de capacitacion en problemas de desarrollo economico.” Exposition del Dr. Jorge Ahumada en la clausura del curso intensivo de capacitacion en problemas de desarrollo economico (Buenos Aires, 22 December 1958). Revista de Desarrollo Economico (Junta de Planificacion de la Provincia de Buenos Aires) 2, no. 2 (January-March 1959): 259-263. ________ . “El desarrollo economico y los problemas del cambio social en America Latina.” Naciones Unidas, Consejo Economico y Social, 20 November 1960. (ST/ECLA/CONF.6/L.A-1). ________ . La planificacion del desarrollo. Caracas: Instituto de Capacitacion e Investigation en Reforma Agraria, 1968. ________ . Obras Escogidas. Caracas: Banco Central de Venezuela, 1986. Boti, Regino and Felipe Pazos. “Algunos aspectos del desarrollo economico de Cuba.” Revista Bimestre Cubana LXXV (Second semester 1958): 249-82.

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Bulhoes, Octavio Gouvea de. Depoimento. Rio de Janeiro: Memoria do Banco Central, Programa de Historia Oral do CPDOC/FGV, 1990. Chenery, Hollis B. “Politica y programas de desarrollo.” Boletin Economico de America Latina 3, no. 1 (March 1958): 51-78. ________ . “From Engineering to Economics.” Development Discussion Paper No. 456. Harvard Institute for International Development. Cambridge, MA, June 1993. Cordova, Armando. “La estructura economica tradicional y el impacto petrolero en Venezuela.” In Hector Valecillos T. and Omar Bello Rodriguez, eds. La economia contemporanea de Venezuela. Ensayos escogidos.Vol. I, pp. 243-268. Caracas, Banco Central de Venezuela, 1990. Cosio Villegas, Daniel. “Errores y soluciones en la ensenanza de las Ciencias Economicas.” Revista del Banco Central de Venezuela (January-February 1948). Reprinted in Revista de la Facultad de Ciencias Economicas (Universidad de Buenos Aires), 1, no. 6 (August 1948): 827-845. ________ . “La Conferencia de Chapultepec.” In Extremos de America, pp. 185-209. Mexico: Tezontle, 1949. ________ . Memorias. Mexico: Editorial Joaquin Mortiz, 1976. “Discurso pronunciado por Carlos Massad al recibir el premio como el Ingeniero Comercial Destacado de 1989.” Asociacion de Egresados en Ingenieria Comercial, Universidad de Chile, 1 de noviembre de 1990. Estudios Sociales (Santiago) 63, no. 1 (1990): 163-168. Dorfman, Adolfo. El desarrollo industrial de America Latina. Santa Fe: Imprenta de la Universidad Nacional del Litoral, 1942. Escalante, Luis Manuel. “Fallecio el doctor Pedro Tinoco, hijo. Una enfermedad doblego su ferrea voluntad.” El Universal, 31 March 1993, p. 2-1. Fishlow, Albert. “Brazilian Size Distribution o f Income.” American Economic Review 62 (1972): 391-402. Funda9ao Getulio Vargas. Instituto de Documentafao. Fundaqdo Getulio Vargas: 30 Anos a Serviqo do Brasil 1944-1974. Rio de Janeiro: Editora da FGV, 1974. Furtado, Celso. “Ideas en tomo a la creation de una escuela latinoamericana de economia.” Economia (Santiago) 19, nos. 72-73 (1961). ________ . “Adventures of a Brazilian Economist.” International Social Science Journal 25, no. 1/2 (1973): 28-38.

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