Silent Revolution: The Rise of
Market Economics in Latin America
by Ilene Grabel
Duncan Green's Silent Revolution: The
Rise of Market Economics in Latin America is an extremely useful and
nuanced account of the creation of market-driven "neoliberal"
economies throughout Latin America. The book is very much in the
spirit of Karl Polanyi's The Great Transformation . Following
in Polanyi's footsteps, Green's principal argument is that the most
lasting - and in his view, over-looked - legacy of the Latin
American debt crisis is the opportunity it provided for the
restructuring of economic life around market relations. Uncovering
the factors that led to this economic and social revolution is the
single-most important contribution of the book.
Green argues persuasively that the
creation of market systems in the 1980s was the result of a complex
interplay of economic, political, and intellectual developments at
the national and global levels. He focuses our attention on the
economic pressures that gave rise to calls for reform in the 1980s.
These economic pressures include the global recession of the 1970s,
the problems encountered by import-substituting regimes in
developing countries during the 1970s, and the debt crisis and the
rise of International Monetary Fund/World Bank (IMF/WB) structural
adjustment programs in the 1980s. On the political level, Green
emphasizes the way in which general and heterogeneous calls for
reform became condensed into demands for a specific type of economic
transformation - namely, neoliberalism. These political pressures
emanated from a powerful coalition of the IMF/WB, the United States,
and Latin American governments (which were authoritarian in some
cases and "modernizing technocratic" regimes in others). Green's
discussion of the role of intellectual and ideological pressures for
market-oriented reform adds a final dimension to his account of why
general calls for economic reform took the particular form they did.
Here he focuses attention on the way in which the ascendant
neoclassical orthodoxy of the academic economics profession helped
to create the intellectual conditions for a market revolution in
But this is no mere listing of diverse
causal factors. Instead, having analyzed carefully the individual
forces that contributed to this "great transformation," Green
proceeds to weave a compelling and rich empirical analysis of their
complicated interaction. Social change is inherently complex, and it
is to Green's credit that he presents a layered and nuanced
analysis. This approach allows him to contextualize the significance
of these forces across countries. On this basis, Green is able to
account for the heterogeneity of the forms of actually existing
neoliberalism across Latin America.
The second major goal of the book is
to drive home the point that the market transformation of Latin
America has failed to live up to the promises of its proponents. The
market transformation has wrought hardship and dislocation for the
vast majority of Latin Americans. By documenting the depth of the
economic, social, and environmental devastation associated with this
transformation, Green ably counters the all-too-common argument that
these costs are unfortunate, albeit temporary adjustment phenomena.
Green does note that neoliberalism has been successful in one
important sense - by inducing severe recessions, it has curbed
inflation. Although Green's thrashing of neoliberalism does not
distinguish his book from many other excellent studies that are
guided by the same effort [e.g., Altvater et al. 1991; George 1990],
his rich empirical presentation makes his work more useful and, I
think, potentially convincing than these other works (especially for
use in the classroom).
The book is organized as follows. The
introduction describes the nature of the transformation of Latin
American economies and explains what is meant by the term
neoliberalism. Chapter 1 discusses the rise and fall of
import-substituting industrialization and links this to the broader
debate over states versus markets. Chapter 2 describes the formation
and operation of the IMF/WB and other multilaterals. This chapter
also discusses the logic of conditionality and structural
adjustment. Chapter 3 describes the institutional aspects of Latin
America's market transformation and presents the first of many
scorecards on the successes and failures of neoliberalism. Due
attention is paid here to privatization and stock market creation.
Given the date of the book's publication, it is impressive that
Green manages to link the latter to the 1994-95 Mexican financial
crisis. Chapters 4-6 continue the scorecard on neoliberalism, with
Chapter 4 focusing on its human and environmental costs, and
Chapters 5 and 6 focusing on its effects on international and
interregional trade. The trade chapters present non-technical
analyses of the problems of export-led development (Chapter 6), the
Southern critiques of GATT (Chapter 5), and NAFTA (Chapter 6), and
they provide a list of all existent regional trade agreements
(Chapter 6). Chapter 7 examines the politics of neoliberalism under
authoritarian and elected regimes. This chapter also presents a
country-by-country compendium of popular protests against
neoliberalism. Chapter 8 discusses the search for alternatives to
neoliberalism. Here, Green discusses the national varieties of
neoliberalism, the structuralist and neostructuralist alternatives,
the work of the Sao Paulo forum, and the lessons for Latin America
of East Asian development strategies. The book concludes with brief
(and somewhat uninspiring) speculation as to what can be done.
The book has two appendices that are
excellent sources of material for student research papers. Appendix
A is a country-by-country statistical guide and thumbnail political
and social history of the Latin American economy from 1982 to 1994.
Appendix B contrasts the views of the three existing paradigms in
Latin American economic development debates - neoliberalism,
neostructuralism, and a rather awkwardly termed
"import-substitution" paradigm - on a variety of key issues (e.g.,
the role of foreign capital and international trade). The book also
has a useful glossary, index, and suggestions for further reading.
I highly recommend this book to anyone
interested in understanding the market revolution in Latin America
and to anyone seeking to explore the record of this revolution. This
book would be suitable for both undergraduate and graduate courses
in economic development and Latin American studies. No familiarity
with economics is necessary.
ILENE GRABEL University of Denver
Altvater, Elmar, Kurt Hubner, Jochen
Lorentzen, and Raul Rojas, eds. The Poverty of Nations: A Guide to
the Debt Crisis from Argentina to Zaire. London: Zed, 1991.
George, Susan. A Fate Worse than Debt.
San Francisco: Food First Books, 1990.
Polanyi, Karl. The Great
Transformation. New York: Rhinehart, 1944.