The Cold War took place after the end of World War II between the United States and the Soviet Union. No direct military action ever occurred, but the two nations and their allies engaged in other forms of resistance such as military coalitions, aid to what are called client states (countries that were subordinate to either the U.S. or the Soviet Union), propaganda, espionage, the nuclear arms race, appeals to neutral nations, rivalry in sports (see the film “Miracle”), and technological competitions (Space Race). During the Cold War, the Soviet Union attempted to spread its influence by spreading communism throughout the world. In response, President Harry S. Truman (one of our best presidents ever) of the United States adopted the policy of containment, which was a policy dedicated to preventing the spread of communism.

In Latin America, the United States applied the policy of containment to the countries of Guatemala, Brazil, and Chile through several coups and revolutions in order to avoid left-wing communist governments. In Nicaragua, the United States supported the Nicaraguan Contras which were accused of several human rights violations like executing children and torturing citizens. In many cases, these revolutions were fought between two opposing nationalists. The Cold War was a violent era for Latin America, and by the end of it, most people were ready to leave the nationalists behind in order to escape the violent revolutions and manipulation that they had administered during the cold war. That and the increase of foreign debt in Latin American in the 1980's opened the door for neoliberalism in Latin America.

Neoliberalism essentially is characterized as a period of policies of austerity. In other words, the economy is no longer exclusively controlled by the state and stratification is further expanded.  By the mid 1990’s neoliberal leaders were in control of most Latin American countries specifically economically, including Brazil, Argentina, and even Mexico.

Neoliberalism was thought to have benefitted Latin America as it did tame the debt crisis in the 1980’s and solve the hyperinflation in Argentina. Neoliberalism also opened the economy of Latin America to the world. As U.S. investors took advantage of the emerging markets, foreign capital flooded in and fast food restaurants spread through Latin America like wildfire. Then came free trade zones, that neoliberalism encourages, and Latin America opened up to the world even more. Chile benefited the most 

from the neoliberal policies as it experienced steady growth in the 1990’s with good credit and low inflation.

Neoliberalism has done its part, however the problems of neoliberalism have been increasingly detrimental to the economic status of the majority of Latin Americans. The middle class of Latin America has benefited greatly from neoliberal policies through the absence of trade barriers and the ability to access foreign markets. But those with the most need have become more needy due to the policies of the neoliberals. For example, neoliberalism decreases the amount of government spending, which is the reason for its success in battling foreign debt and inflation. However, now that these state-run corporations are gone, millions of people have been left unemployed and are forced to work in manufacturing plants like maquiladoras: offering terrible pay without labor laws. State-run services providing the poor with water and electricity were also cut along with state-run telecommunication. This raised the costs of owning a telephone and utilities. An important example of these policies of auserity is transportation. The government and corporations supressed wages while cutting subsidies for transportation, therefore leaving the lower class without the ability to even afford to make it to work which then left immoral employment as one of the only options. 

Producers in Latin America have also been negatively affected by neoliberal policies. When the neoliberals opened the economy of Latin America to the world, it brought in competitors. Foreign competitors have run many Latin American producers into the ground. Nationalists fought hard to keep these foreign competitors out for this very reason. Now, the collapse of these Latin America Industries has left millions unemployed or underemployed, forcing many to find jobs in manufacturing plants like maquiladora. 



Hugo Chavez

The neoliberal system was clearly no longer working for the majority of Latin Americans. Although the poor of Latin America understood they were not being benefited by this system, there could not do anything, because they had no power in government. Finally in 1992, an ex-military commander was elected President of Venezuela, claiming he would represent the poor (Chasteen 338). Hugo Chávez realized how mistreated the poor were and watched out for their best interests. The lower-class citizens of Venezuela finally had a voice. Many people doubted Chávez saying that once he took office, powerful government officials would pressure him to revert back to old neoliberal policies (Escobar). This was sensible to believe, since Venezuela has been one of the world's largest oil suppliers, especially to the United States.

The United States has always been a supporter of neoliberal economic policies in Latin America. The U.S. constantly pressured Venezuela, specifically to allow the U.S. control the oil. Many Latin American leaders of the 1900's mentioned previously were educated in the United States about neoliberal policies and the United States encouraged them to apply these policies while in office. The United States supports Latin America's neoliberal policies so they can continue to have access to cheap labor and an open market. Those opposing neoliberalism are automatically enemies of the United States. Because of this, Hugo Chávez and U.S. have knocked heads as the United States continues with its attempts to make Venezuela a neoliberal country. Practically every opponent Chávez must face is a right-winged, neoliberal and an advocate of American interests. These opponents receive an abundance of funding and control the media so they can print slanderous articles about Chávez as well as other government officials opposing neoliberal policies.

Luckily for Venezuela, Chávez held strong to his original ideas which were against neoliberalism. Due to this, the Venezuelan lower class has repaid him with devout loyalty. The middle class however, does not support these same ideals and finds Chávez domineering. Chávez even faced a coup attempt in 2002, but in the end, Chávez prevailed and his supporters trusted him even more (Chasteen 338). Although many factors are not on his side, he still continues to improve Venezuela. While he has been in office, unemployment has gone from 20% to 7%, 22 new universities were built, and illiteracy was eradicated (Escobar). Overall, Chávez's anti-neoliberal government seems to be working great, which is why neighboring Latin American countries also began turning away from neoliberalism.

Hugo Chávez was the catalyst for a new movement in Latin America, a movement where everyone in a society is benefited rather than just the rich and this is why Chavez encompasses the qualities present-day Latin Americans strive to achieve. The time for neoliberalism has passed and now Latin America is entering into a new era, an era of equality.


Escobar, Pepe. Why Hugo Rules, Tehran Times. 8 Oct. 2012. Web. 10 Dec. 2012.<>.

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