The historiography of this book is as excellent as could be, within the limitations of a developing economy like Colombia. In contrast, it is somewhat meandering in its treatment of the topic, and the reader can easily get lost in the comings and goings of the volume. Within these extremes, it provides important lessons within the field of political economy.Mucha tela que cortar illustrates Colombian history in the twentieth century, emphasizing economic and political events, and leaves us with lessons applicable not only to that country. The story begins just before the First World War, at the height of the international economy based on expanding trade, capital, and labor movements across regions, and a world currency system based on a flexible gold standard. Politically the world lived in the midst of a colonial system in which the Western nations dominated, formally or informally, what were called the poor nations. A few years earlier Colombia had had a civil war, which was partially responsible for its loss of the province of Panama.The story begins in the province of Santander in the central highlands of Colombia, when the Caballero family, led by Liberal general Lucas Caballero, had a dream of industrial development in a forlorn provincial setting called San José de Suaita. They were latifundistas in the region with extensive land holdings, and their mostly rudimentary industrial undertakings were based on the manufacture of non-centrifugal sugar and its by-products, leading to a distillery and a chocolate factory. Surely the fact that Caballero’s party was in power at the time and that he had occupied important government positions led him to dream of an expansion of industrial activities in his possessions and to involve foreign capital in them.Thus begins a saga that extended from 1912 to 1995 and illustrated important paradigms in the literature of economic development. The first was established by one of a few American economists who spent part of their professional lives in Colombia. Professor Albert Hirschman ended his career at Columbia University, where he wrote his famous Strategy of Economic Development (Yale University Press, 1958). He pointed out that attempting to develop an economy or region based on the balancing of many different economic activities is doomed to failure. This was the major mistake of the Caballero family, whose attempts to develop cotton and textiles based on that plant were combined with sugar cane and its derivative products cacao and chocolates, wheat and flour, and cattle with some of its by-products. If they would have pursued an unbalanced growth approach, concentrating their efforts on cotton fabrics alone, they would have stood a better chance of success.The second lesson consists of illustrating how important social overhead capital is for development of directly productive activities. Unless infrastructure precedes industrial efforts in an unbalanced way, agro-industry will be doomed to failure. The Caballero brothers’ enterprises had to transport inputs and outputs through a rigmarole of means that alternated among rivers (frequently canoes), lakes, railroads, pack mules, and country roads. Implicit in such varied transportation methods were lengthy delays, demurrage costs, embarkation and disembarkation charges, with the corresponding breakage, sinking, and other losses. Suffice it to say that the arrival of machinery and equipment, mostly imported from New York, was delayed for one year in arriving to the production site. Although not as extreme, the serving of regional markets was also quite burdensome.The third important lesson of this volume reinforces the imperviousness of having politics determine economic success in what has been characterized as rent seeking. The obstacles in making political power a determinant of economic success become abundantly clear when the Caballero family splits and the even more powerful López family becomes intertwined by marriage with the Caballeros, provoking an economic impasse for the agro-industrial project (which was even called a dream by family descendants). What began in 1912 meandered through failures up to 1965 and involved former Colombian president Alfonso López Michelsen and the mainstream media in that country.It is worthwhile to navigate this winding but extremely well-documented book to illuminate these three important lessons, as well as the struggles between the Antwerp, Paris, and New York foreign investors and the local politicians turned entrepreneurs.
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Mar 8, 2012
Walter R Jaffé 
Open Access