This volume studies the relationship between big business and the Latin American dictatorial regimes during the Cold War. Between the 1950s and 1970s, many civilian governments in Latin America fell in quick succession and were replaced by military regimes often supported by the US government. These regimes were considered a bulwark against the advance of communism, which was viewed as a credible threat both by Latin American elites and by the United States, particularly after the triumph of the Cuban Revolution and its subsequent popularity among significant segments of the Latin American working and middle classes. Contemporary studies viewed big business (both foreign multinationals and domestic firms) as the natural allies of the right-wing military regimes: segments of the military, which were concerned about âforeign infiltrationâ from international communism through labor activism, were able to find common ground with managers frustrated by union-led disruptions of their business operations and frightened by the growth of anti-business and obstructionist political organizations, not to mention violent ones (as well as the obvious potentially negative effect on their bottom line).1 During that period, many analysts and casual observers found clear and unequivocal evidence of such business-military collusion in events such as the 1954 overthrow of Guatemalaâs President Jacobo Arbenz following his conflict with the United Fruit Company, or the 1973 coup against Chileâs President Salvador Allende following clashes with foreign firms like the International Telegraph and Telephone Company (ITT) and the Chilean elite.2 Further evidence of this collusion was also located in the subsequent adoption by the military regimes of Chile in the 1970s and Argentina in the 1980s of open-market policies that overwhelmingly benefited big business and foreign investors.
Despite the perceived importance of the role of the Latin American Cold War dictatorships in creating a business-friendly environment during the 1980s and 1990s, no single volume provides readers with a view of the relationship between big business and the authoritarian regimes on a continental scale. Country-focused studies published by some of this collectionâs authors have made important contributions. This volume seeks to enrich this debate by bringing together case studies on Argentina, Brazil, Chile, Colombia, Peru, and Central America, plus chapters on particular industries, including infrastructure, defense, finance, and automobile manufacturing. The chapters of this volume go beyond the traditional view, which focuses on US corporations and the global agenda of the United States. To date, the literature has honed in overwhelmingly on firms originating in the United States. In addition to examining US foreign investment and foreign policy in the region, the volume makes an unprecedented contribution by considering firms from Germany, France, Italy, and Canada, with a particular emphasis on the relationship between German foreign policy and the cooperation of German firms with the military dictatorships. In addition to analyzing the operations of multinational corporations, the volume also studies the role of the banking sector in financing authoritarian regimes and the local elitesâ accommodation of the military governments.
Big Businesses and Dictatorships in Latin America engages in dialogues with recent studies on these types of relationships in other parts of the world. Some recent studies, for example, have shown the complexity and variety of relationships between big business and the Nazi regime. After decades of attempting to silence, deny, and muffle this history, most large German corporations began to open their archives in the 1990s in response to high pressure from a critical public and often from international clients threatening to boycott these firms. Many, but not all, major German corporations have commissioned independent historians to analyze their history during the Nazi dictatorship, yielding an impressive array of high-quality scholarship that illuminates important and often disturbing aspects of this history.3 None of this has happened in Latin America, where the general attitude of companies is still silence, denial, and closed archives. However, scholars now benefit from the large quantity of evidence and sources, some of which were generated during legal actions against firms involved in repression carried out during the dictatorships. The time that has elapsed since the fall of the Latin American military regimes, the freedom Latin American scholars have managed to achieve since then, and the opening and discovery of new archival sources provide optimal conditions for revisiting, through a variety of lenses, the complex ties between Latin American military governments and different types of businesses ranging from large domestic firms, family firms, foreign multinationals, and state-owned enterprises.
This project began with a workshop at the University of Göttingen in September 2016 about âCorporations and Authoritarian Regimes in Latin America,â where preliminary versions of some of the chapters were presented. It became clear at that academic event that the topic was as relevant as it was complex, with highly contentious dimensions and aspects. Therefore, this book is a product of a conscious attempt to make progress in this field by bringing together contributions from specialists in economic history, business history, labor history, and human rights and Transitional Justice, which are often completely separate realms or in disagreement with one another. To welcome contributions from different theoretical perspectives, scholarly traditions, and research trajectories developed in various geographical and institutional frameworks was a considerable challenge that took time and energy. We hope this collective effort, which is necessarily diverse and multifaceted, will help foster knowledge and debate about issues of relevance not only to global and regional history but also to current economic and social relations.
This volume dialogues with several scholarly communities. First, we reflect on the debates generated by studies on the relationship between the Nazi regime in Germany and the corporate sector and connect them to an important area of the world that was dominated by right-wing dictators (many of them more or less openly inspired by European fascism) in the 1970s and 1980s. Although history never exactly repeats itself and comparisons across different times and continents should be treated with great caution, there are some stunning parallels between the experience of Germany and Latin America as far as the relationship between the business community and right-wing dictatorships is concerned. In all cases, the dictatorships emerged in unstable democracies that were particularly unpopular with the corporate world.
In Germany, most businessmen perceived the Weimar Republic (1918â1933) as the poisoned fruit of World War I. The military defeat and the Treaty of Versailles were generally seen as unfair and humiliating, burdening the republic with a painful legacy. The establishment of the Weimar Republic generated features that were diametrically opposed to business interests. These included an unprecedented rise of the labor movement and the temporary participation of the Social Democrats in government. German business was forced, for the first time in history, to accept labor unions as legitimate representatives of their workers. In 1920, the principle of codetermination was introduced. All companies with more than 20 employees had to set up elected works councils whose task was to advocate for employeesâ interests vis-Ă -vis the management. Workers in Germany gained such rights for the first time; never before had there been so many strikes and lockouts. A second business-undermining feature of the Weimar Republic was that, in stark contrast to the German Empire of 1870â1918, it was characterized by economic instability and social unrest. The experience of hyperinflation, recurrent political turmoil, the emergence of an expansive welfare state, and higher levels of corporate and personal taxation added to the business classâs disenchantment with democracy, which, in general, was a new historical experience for all Germans that seemed frail by itself. Thus, it comes as no surprise that for the middle classes, in general, and most members of the business community, in particular, the authoritarian monarchy of the German Empire looked like a land of milk and honey in retrospect.4
As a result, there was little loyalty to the republic but rather a great deal of disapproval and hostility toward it. However, this negative attitude did not translate into support for the NSDAP (National Socialist German Workersâ Party, commonly referred to in English as the Nazi Party), which remained a chaotic splinter party on the lunatic fringe for a long time. Even after it had increased the number of seats it held in parliament from 12 (1928) to 107 (1930), the party disturbed most businessmen with its anti-capitalist manifesto. After all, it was a âNational Socialist Party.â Most businessmen wanted an authoritarian alternative to the republic that would put labor back on a short leash and ensure law and order as they understood it. The view that big business backed Hitler5 has proved to be erroneous. Rather, in addition to the general crisis of the economy and the state, the support of large landowners and parts of the military was decisive. They were under the illusion they could instrumentalize Hitler to make up for lost ground, that is, to secure government subsidies for crisis-ridden agriculture and to restore the army, which had been drastically downsized by the Treaty of Versailles, to its former size and glory. The business community was primarily responsible for having weakened the republic, not for having given direct support to Hitler prior to 1933, although there was a minority of businesspeople who backed Hitler early on and saw Germanyâs savior in him.6
After Hitler became chancellor and acquired dictatorial powers, the business community eagerly looked for ways to come to terms with the new rulers and take advantage of the dictatorship. They joined the NSDAP in large numbers, and some prominent businessmen took up top positions in the new state. Kurt Schmitt from Allianz Insurance became the Reich Minister of Economics in 1933 but was already released from his duties in 1934. His successor became the internationally renowned banker Hjalmar Schacht, who also served the regime as the president of...