World on Fire - Brownstein, Michael [131]
Anti-market Backlash against Western Investors
For a hundred years throughout the developing world, the market dominance of Western foreign investors has provoked the same anti-market backlashes that have been directed at domestic market-dominant minorities. Indeed, from the viewpoint of the “indigenous” majorities, marketization and privatization campaigns in Africa, Southeast Asia, and Latin America have been virtually synonymous with “handing over to foreigners” ownership and control of the country’s most valuable industries and resources, including oil, gas, timber, communications, utilities, transportation, and gold, silver, and copper mines. As American investors and corporations have become increasingly preeminent in global markets, Americans have come to bear the brunt of the reaction.
Confiscations of foreign-held property are an integral part of the history of most developing countries, often wrapped up with their most celebrated revolutionary movements. In the late 1930s, for example, Mexico’s President Lázaro Cárdenas famously nationalized the country’s railways, seizing control from wealthy American and British bondholders. More dramatically, decrying the “innumerable outrages [and] abuses” by foreign oil companies that pursued “private, selfish, and often illegal interests” while relegating Mexicans to “misery, drabness, and insalubrity,” Cárdenas nationalized the entire oil industry. This nationalization was immensely popular at every level of society, from bishops to bartenders to university students. Hundreds of thousands of ordinary Mexicans marched through Mexico City carrying mock coffins inscribed with “Standard Oil” and the names of other fallen American behemoths.
32 As is always true of expropriations targeting a market-dominant minority, Cárdenas’s nationalizations proved economically disastrous. Nevertheless, in Mexico to this day, Cárdenas stands for the promise of a “Mexico for the Mexicans.”
In Argentina, laissez-faire economic policies in the late nineteenth and early twentieth centuries led to the humiliating domination of Argentina’s economy by American companies like Swift, Armour, Wilson, Goodyear, and ITT. By 1935 roughly 50 percent of the country’s industrial capital was owned or controlled by American or other Western investors. Anti-American sentiment intensified, culminating in a powerful nationalist reaction under the charismatic populist leader Juan Perón. Masterfully inciting hatred against foreign capitalists and the landed estancieros, Perón nationalized Argentina’s foreign-owned railroads, gasworks, and utilities in the name of the “true Argentinians.”
33
Similar majority-supported, anti-market confiscations targeting Western foreign investors, often along with internal market-dominant minorities, have occurred throughout the developing world. In Chile in the early 1970s, democratically elected president Salvador Allende nationalized hundreds of private businesses, including the American Anaconda and Kennecott copper companies, in the name of “Chile for the Chileans.” In Uruguay, Don José Batlle y Ordóñez swept to electoral victory on an antiforeigner, nationalist platform; once in office Batlle nationalized the foreign-dominated railway, electricity, and insurance industries. In Burma, the country’s revered first prime minister U Nu nationalized major British teak, cement, sugar, and transportation companies along with Burmese Indian and Burmese Chinese businesses in the name of “Burmanization.” In Indonesia, Sukarno’s sweeping nationalizations in the late fifties