Pie chart

Data compliments of Dr. Becker's HIST 140 lecture notes

The root of the problem of Latin America does not lie in the lack of wealth, but in the unequal distribution of wealth. In fact, the richest man in the world, Carlos Slim, has a net worth of $74 billion and lives in Mexico City, a city that also houses some of the poorest people in the world. Mexico City is an excellent case study of the problem of inequality in Latin America, because the residents are separated by drastic differences in social and class status. While the rich and poor of Mexico City share a nationality, basic religion, and basic interests, they also live to two separate worlds that rarely collide.

Latin America possesses the raw materials and agricultural products necessary to grow and prosper. Furthermore, Latin America could be a self-sufficient region if it used its land to grow food for its own people instead of growing tropical commodities for the rest of the world, especially the United States. What would Americans do without pineapples and bananas? However, the sad reality is that Latin America remains economically dependent on foreign capital because of its export economies. The captial earned from raw materials is not spent on internal development such as infrastructure and public goods. Instead, only select groups of elite entrepreneurs and government officials benefit from the profits while the majority of the population suffers the consequences. The growers of the export products get screwed the most because they work the hardest and make the least. An example reflecting the distortion of wealth from export economies was evident during the Brazilian rubber boom(around 1880 to 1910, chart above).

The consequences of a recent rise in technology suggest the possibility of a new relationship between the North and Latin America , "developments in technology have reduced the dependence on Southern raw materials-not intensified them" (Reuveny, 2008). The North demands for Latin American products are decreasing. In the short term the decrease of foreign intervention in Latin American economic markets will hurt economies because they will lose their main source of income. Moreover, in the long term, this change will reduce the wealth of the elite and ultimately benefit the common people in Latin America reducing inequality. Without any trade partners to do business with, Latin American exports will no longer be profitable. Consequently, governments will be forced to develop the infrastructure and public service sectors of their countries to avoid complete disaster and earn revenue from consumer spending. Furthermore, the land that was previously used to grow products to export can be used to grow food to sustain the needs of the population.

A lack of educational opportunities is the primary cause of inequality in Latin America. The literacy rate in most areas of Latin America has failed to improve demonstrating that most people still do not attend school regularly to receive an adequate education. As a result of a lack of education, many people become enslaved into a debt peonage system in which they live off of a piece of land from a landowner to whom they pay rent. In order to be granted the piece of land, the enslaved people agree to a term of servitude. The landowners recognize the fact that the enslaved people cannot read the official, legal documents that they sign. Therefore, the landowners take advantage of them by writing the documents so that they have to work past when their debt payment is supposed to be fulfilled. The children of the enslaved are born into an oppressed environment because they have to pay off the debt of their parents when they die. They are stuck in a vicious cycle of poverty in which they are taken advantage of by the educated.

An exception of an uneducated population is Costa Rican society. Costa Rica has a literacy rate of 96%. In 1869, education became free and obligatory. The government funds a free, public education for all students and they are required to pass tests to move on to the next level. Therefore, the government is encouraging a democratic system by creating responsible and informed citizens who have equal educational opportunities. Costa Rica is a dominant exporter of coffee. However, most of its citizens do not work in the fields as human labor because they are educated and have more advanced jobs. The majority of coffee pickers are immigrants from Nicaragua who desire the higher quality of life and lower unemployment rates in Costa Rica. Costa Rica is a prime example of the opportunities offered by an equal education thus enabling the majority of society to overcome the oppression of the caste system and socio-economic pyramid.