Fajardo on Offner, 'Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas'

Author: 
Amy C. Offner
Reviewer: 
Margarita Fajardo

Amy C. Offner. Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas. Princeton: Princeton University Press, 2019. xv + 381 pp. $39.95 (cloth), ISBN 978-0-691-19262-8.

Reviewed by Margarita Fajardo (Sarah Lawrence College) Published on H-LatAm (October, 2020) Commissioned by Casey M. Lurtz (Johns Hopkins University)

Printable Version: https://www.h-net.org/reviews/showpdf.php?id=55265

Neoliberalism occupies a prominent place in recent historical scholarship. To explain the emergence of neoliberalism at the end of the twentieth century, Amy Offner's Sorting Out the Mixed Economy examines the making of the developmental and welfare states in midcentury Colombia and the United States. The book argues that many of the ideas, institutions, and policies classified under the epithet of “neoliberalism” emerged in the process of the consolidation of midcentury developmental and welfare states and were only later, in the 1970s and 1980s, “sorted out,” that is, redeployed, redefined, or repurposed, to dismantle those states (p. 17). While the term “developmental state” was initially used to explain East Asia’s rapid development and push back against those who attributed such phenomena to the “market” rather than the “state,” the author uses the term to remind us that the midcentury project of economic development was as much about private initiative as of state expansion. Offner shows that the use of austere social policies, the privatization of public services, and the delegation of public functions to autonomous or decentralized agencies, cornerstones of the neoliberal turn, were fundamental to the making of a previous era that both the “triumphalist” narrative of the Right and the corresponding “dissent” of the Left have conceived as radically distinct from contemporary neoliberalism (p. 284). Rather than a complete break with the past, Sorting Out the Mixed Economy presents an argument about continuity between past and present that invites the reader to rethink both the development/welfare and neoliberal eras.

Methodologically and narratively, the book is an enlightening example and useful model for writing connected and transnational histories. With cogent prose, the book skillfully takes the reader from midcentury Colombia to the United States’s Great Society and back to Colombia at the turn of the century. In the process, it examines Colombia’s Cauca River Valley and its regional development project, Bogotá’s higher education and housing programs, and the Navajo Indian Reservation’s education and housing experiments, among others. Although David Lilienthal, a New Dealer, Third World development expert, and pioneer of “social entrepreneurship” (p. 182) in the United States, is the principal binding agent of the different histories, the book has a wider set of lesser-known characters that connects the Americas North and South. Recreating the “Americas” as a shared rather than dichotomic space, Offner shows a set of individuals, ideas, and institutions moving in both directions and crafting a common discourse about the balance between public and private, the formal and informal sectors in midcentury mixed economies. Although economists and development experts as well as landowners and businessmen are the most prominent characters in a story about the fall of developmental/welfare states and the rise of neoliberalism, the book also gives voice to campesinos, community organizers, factory workers, and other important groups and classes that embraced or contested those development and welfare projects. By decentering the narrative from Washington, DC, as well as from Bogotá, the book shows not only the expansion in the reach of the midcentury states but also the alternative avenues through which influence and power flowed across the Americas.

Sorting Out the Mixed Economy makes important contributions in several fields, too many to cover in depth in this review. By focusing on the establishment of economics and business administration departments at Universidad de los Andes and Universidad del Valle respectively and on the tension between economists and managers, the book informs the debate about the rise of economists and economics. In so doing, Offner contributes to the history of the discipline and the sociology of professionalization. By focusing on self-housing projects in Bogotá, California, and Mississippi among other “austere forms of social welfare provision” (pp. 17 and 278), the book sharpens our understanding of the dismantling of welfare and development states through developmentalist and welfare strategies designed to strengthen those very same states. In so doing, it recasts the bourgeoning history of neoliberalism, making a very important intervention in an already growing and fast-moving field. In this review, my focus will be on the book’s contributions and the questions it opens with regard to the history of US-Latin American relations and the history of the region during its development era. 

In terms of the history of relations between the United States and Latin America, Offner inverts one of the field’s most important narratives. The book has a set of characters traditional in the postwar-era histories in the field: large North American corporations, US bankers and philanthropic foundations, foreign aid institutions like Point IV and the World Bank, US university professors, and development experts. Yet these actors play secondary, not primary, roles and follow more than lead local actors. Rather than portraying the “southward projection of power” of the United States in Latin America (pp. 15 and 289), the book foregrounds the stories of the Cauca Valley landowners, aspiring professional economists and managers in Bogotá and Cali, and promoters of community action programs that in turn “enlisted” US institutions, ideas, and individuals (pp. 18 and 289). Rather than bringing innovative advice or alien projects, those experts and institutions supported an existing agenda and as such, inserted themselves in local or domestic power struggles.   

Furthermore, the book explains how participation in those local political struggles transformed New Dealers like Lilienthal into “Third World Veterans” who, upon migrating back north, mobilized the lessons learned with Colombian entrepreneurs to develop the notion of the social responsibility of corporations through which “businessmen made inroads into the welfare state” (p. 209). Other Third World Veterans legitimized policy options such as self-help housing, previously considered inadmissible for the First World welfare state, and such policy became the foundation for a “nationwide anti-poverty policy” in the United States (p. 215).  

Therefore, Sorting Out the Mixed Economy shows the “entwined histories” of United States and Latin America beyond imposition and domination. Offner illustrates the not-often-recognized policy influence of Latin America in the United States. Given that the directionality of influence is generally shown to flow from north to south, especially when it comes to austere economic measures and structural adjustment programs, the trajectory of Colombian economist Eduardo Wiesner discussed in the book opens up new avenues for research. Although he was a high-level International Monetary Fund official, staff member of the World Bank in the 1980s and 1990s, and bearer of the structural adjustment bandwagon, his ideas about fiscal decentralization and austerity, Offner argues, were not the product of intellectual brainwashing but of years of thinking of and participating in the developmental and decentralized Colombian state. His story suggests the need to explore the “Bogotá”—or perhaps the Mexico City or São Paulo—and not just the “Washington Consensus.”

With regard to Latin American history, the book raises important questions. Sorting Out the Mixed Economy eschews, for understandable reasons, the question of Colombian exceptionalism. Latin America has had a wide variety of experiences, trends and patterns are always somewhat artificial, and Colombia, as the book rightly contends, merits attention “on its own right” (p. 9). However, some of the arguments upon which the book rests are perhaps due to that “exceptionalism” and therefore would have merited more discussion of the place of Colombia in the regional context. By looking at Colombia, the book attempts to disrupt the “common association between development and centralized power” (p. 10) that reduces development to national, centralizing statism and which certainly prevailed in the development narratives of the time and still looms large today.  

Yet the Colombian case might be an exception more than a rule, a question that requires further research. Although regional development corporations and autonomous development agencies that the book discusses emerged throughout Latin America, the effects varied across the region. While in the Colombian case, as the book shows, regional development corporations strengthened local economic elites vis-à-vis the central state in Bogotá, in countries like Chile and Brazil for instance, regional development corporations or autonomous agencies either deepened “centralized state developmentalism” or were “deeply tied to the Executive power,” continuing a trend of centralization of state power that began in the 1930s.[1]  Similarly, while the US-sponsored Alliance for Progress funded self-help housing programs in Bogotá, it supported publicly subsidized low- and middle-income housing projects in Chile, both of which became models for the Alliance.

As Sorting Out the Mixed Economy rightly indicates, both “impulses” for the expansion of the public and private sectors, of centralization and decentralization, appeared together in the “developmental state” in Latin America. However, Colombia opted for the short end of the stick, or rather for “cheap” or austere measures. Although the book argues that those strategies were later used to dismantle the state in the neoliberal era, sometimes it seems that, as private interests “captured” public policy or “assumed public functions” (p. 287), the state was either dismantled from the start or the developmental state was, like any other state in a capitalist economy, negotiating the balance between private and public.  

Perhaps Colombia and the United States, the two national cases that Sorting Out the Mixed Economy is built upon, lend themselves to illustrating continuities between the development and welfare era and the neoliberal era because they have, for good reason, not been what we traditionally think of as developmental states in Latin America or welfare states in the global North. These countries traditionally have also had less contentious foreign relations between them than other countries in the region, facilitating the creation of crossroads and policy, ideological and institutional cross-fertilization between the two Americas.

Despite, or rather, because it raises fundamental questions about two historical eras in the Americas North and South, Sorting Out the Mixed Economy is an ambitious and thought-provoking study that reframes our understanding of both development and neoliberalism and will shape research in many scholarly fields. With a captivating and empirically rich narrative and a lucid interpretation, the book is a well-crafted and thoughtful work of scholarship. Often, I found that the questions raised as I read were shortly after answered “con creces,” showing the careful and methodical craft of the argument and the narrative. The book speaks in many more registers than I was able to capture in this review and therefore deserves an old-style sit-down read to catch the multiple insights and provocations in what is already a provocative and insightful book at its core. Explaining the dismantling of the midcentury state, Sorting Out the Mixed Economy sharpens our understanding of the development/welfare and neoliberal eras while opening new lenses for reading US-Latin American relations.

Note

[1]. See for instance, José Orihuela and Luciana Leão’s articles in Agustín Ferraro and Miguel Centeno, eds., State and Nation-Making in Latin America and Spain: The Rise and Fall of the Developmental State (Cambridge: Cambridge University Press, 2019).

Citation: Margarita Fajardo. Review of Offner, Amy C., Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas. H-LatAm, H-Net Reviews. October, 2020. URL: https://www.h-net.org/reviews/showrev.php?id=55265

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