La economía política del Uruguay contemporáneo, 1870 – 2000

Abstract

Henry Finch first came to Uruguay in the late 1960s and personally experienced the acceleration of the long economic decline that would help propel the country into dictatorship. His study of the political economy of Uruguay from 1870 to 1970 was published in 1982 and would prove to be one of the best works written by a foreigner on that subject. The volume under review here is a new edition of that book and includes two new chapters: one on the military regime since 1973, published in the English-language version of the first volume but not included in the Spanish edition published in Uruguay in 1980, and a new final chapter covering the period from 1985 to 2000.Finch faithfully captures the export-led model of Uruguay’s economic development in the last quarter of the nineteenth century and the first third of the twentieth. He crafts a true analysis of political economy by paying careful attention to the role of José Batlle and the ideology of Batllismo that would give Uruguay its sophisticated welfare state. However, one of the book’s flaws appears early on, in the disjuncture between the excellent discussion of politics and economics in chapter 1 and the subsequent chapter, which presents a seemingly disjointed description of population and urbanization that, while useful, does not flow from the preceding material.Finch is, of course, keenly aware of the British connection to Uruguay’s economic growth, performance, and development from the late 1880s through the 1930s. He notes, “At the start of the First World War, Great Britain had more than 46 million pounds sterling invested in Uruguay. Almost all the external debt was in London. The railway system . . . was owned and managed by British companies” (pp. 207 – 8).By the time we reach the height of the import-substitution-industrialization (ISI) model in the late 1940s, President Luis Batlle Beres (like Perón in Argentina) would buy most of the British operations. Taxes on imports and exports remained the key source of income during these so-called golden years of the 1940s and early 1950s. The exhaustion of the ISI model is very well analyzed by Finch, who reminds us that a small market and the absence of raw materials made it extremely difficult for Uruguay to develop a meaningful level of production of intermediate goods.The two new chapters included in this Spanish-language revised edition give the reader an accurate account of the emergence of the dictatorship and of the military’s economic program and the ultimate failure of that program. This reader’s most serious reservation with this chapter involves Finch’s failure to call attention to the myriad human-rights violations committed by the government during the military’s time in power, 1973 – 84. Although this is a volume on political economy, Finch is so close a student of Uruguay that I find it frustrating that he does not deal with this crucial aspect of the dictatorship, especially in light of the constant debate on this subject in Uruguay since the return of democracy and the recent gruesome discoveries (albeit since this volume was published) made by the current leftist government of President Tabaré Vázquez.The concluding chapter covers the 15 years since the restoration of democracy in 1985. The key theme here involves the Washington Consensus and how it played out in a country like Uruguay, with its strong welfare-state tradition. As Finch cogently observes, “It is ironic that at the beginning of the twentieth century, Batlle had created an extensive state system to ensure the integration of new urban workers into nonsocialist political institutions, while toward the end of the century, when socialism is in retreat in the rest of the world, the EP-FA [Encuentro Progresista – Frente Amplio] would be mounting a socialist defense of said system against its Colorado and Blanco critics” (p. 302).Unfortunately, despite such accurate observations, the chapter’s discussion of the first three administrations since the dictatorship relies far too heavily on formal documents — whether party platforms or government reports — and not enough on interviews and other unofficial materials. This being said, Finch’s volume was and continues to be a solid contribution to our understanding of the political economy of Uruguay over the past 130 years.