Omnia Q&A: Capital Constraints

Decades of negative media attention have reinforced Colombia’s reputation as a violent region controlled by drug cartels. Amy Offner views the nation through a much different lens.

“The world tends to associate places with their dominant problems, even though no country is about just one thing,” laments Offner, an assistant professor of history. “Colombia once symbolized economic development and democratic reform, and its transformation in the mid-20th century can help us understand the origins of our own time in the U.S.”

Offner’s new book, Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas, explores how Latin American economic and social welfare initiatives in the years following World War II were later reimagined by U.S. leaders who had very disparate goals in mind.

Below, Offner—who teaches history and in the Latin American and Latino Studies Program—outlines some of those initiatives and how their inherent contradictions induced the downfall of the U.S. welfare state.

Why did U.S. businessmen and economists turn their focus to Latin America after World War II?

By 1950, these groups felt that programs and reforms carried out through the New Deal had eliminated the problem of poverty in the U.S., and that the Great Depression had been overcome. Many shifted their sights southward to adapt what they regarded as the lessons of capitalist recovery, believing that they had ways to turn poor countries into rich ones.

What inspired you to write about U.S. development efforts in countries like Colombia?

We usually think of influence flowing southward in the Western Hemisphere, but I wanted to show how important Latin America was as a laboratory for experiments in public policy. When I looked at the practices incubated in Colombian development programs, it became clear that many of them are what we consider hallmarks of neoliberalism today: the decentralization and privatization of state functions, for instance, or the creation of austere systems of social welfare provision. The book presents neoliberalism as a parasitic phenomenon that appropriated mid-century tools of statecraft used in developing countries and welfare states.

You begin the book by introducing David Lilienthal, former chair of the Tennessee Valley Authority, a federally owned agency created to revitalize one of the regions the Depression hit hardest. Why?

Lilienthal was a champion of state decentralization, at home and abroad. He facilitated the creation of Colombia’s first government-chartered autonomous regional development agency, which took power from the central government and invested it in a group of regional businessmen. During the 1960s, he turned his attention back to poverty in the U.S., where he adapted the idea of decentralization to propose the privatization of all sorts of public functions. During the War on Poverty, the U.S. government began using for-profit contractors to operate things like job training and education programs. Lilienthal was part of a cohort of U.S. foreign policymakers who popularized that idea.

Latin American governments—and later, the U.S. government—also implemented what the book terms “austere social welfare programs.” Can you provide an example?

A particularly austere form of housing provision called self-help housing circled the globe during the mid-20th century. I look at one exemplar of the policy: Ciudad Kennedy, constructed in Bogotá, Colombia, in 1961. Ciudad Kennedy housed over 80,000 people on a shoestring, giving them land, materials, and mortgage loans, and then deputizing them to construct their own houses. During the War on Poverty, the U.S. government adopted the same policy in rural areas and on Indian reservations. Both here and in Colombia, the program never actually reached the poorest people because they couldn’t qualify for loans.

If mid-century policies and practices used to develop Colombia reverberated so strongly back in the U.S., why don’t we hear more about them?

For good reason, when we think about empire, we tend to think about power emanating from metropoles into colonial or foreign spaces. In public debate, that’s the image we get from both defenders and critics of U.S. empire. But the image of power moving outward or southward can blind us to the fact that the attempt to remake other societies usually transforms metropoles themselves. That blindness is evident even in people like Lilienthal, who spent years adapting ideas from Colombia but sometimes obscured that fact in the stories he told about his own life.  I needed to research lives like Lilienthal’s rather than take autobiographical writing at face value.

What are the key lessons from the book?

First, Latin America was a significant source of ideas about political economy in the 20th century. Second, the phenomena of profit-making in social services, state decentralization, and austerity have deep and tangled roots. Many books about neoliberalism attribute these ideas to a few intellectual and political communities on the right, but I think they were more parasitic than iconoclastic. Often, they were picking up ideas left lying around by the authors of midcentury development and welfare programs. This book shows the limited ambitions and internal contradictions of mid-century states, so often remembered as profligate and overweening. Welfare and development programs were powerfully shaped by business and were often resources to capital, and by the 1970s, many of their tools were susceptible to appropriation by the right.