Great fortunes,” say the editors of Forbes Magazine, who are paid to keep
track of such things, “are made in times of rapid social, technological
“and economic change by those who grasp the meaning of the change
“early on.” The number of Latin Americans on Forbes’ list of billionaires
now stands at 39, up from eight in 1991 (though down a few from just before the Mexican
meltdown of 1994). The past decade has seen an upward redistribution of wealth in Latin
America such as the continent’s already unequal economies had never seen. In Mexico,
as of 1994, a group of 183,000 individuals-0.2% of the population-held capital equivalent to 51% of total
GNP. Their 1993 profits, reports economic historian Carlos Marichal, were greater than the sum of expen-
ditures by the Mexican government on education, health, urban programs, ecology and water programs, and
all public social investments.
While free-market acumen is lauded for the creation of so much new wealth, the state has not disappeared
from the process. Those who latched on to authoritarian rule in Chile and Peru, for example, and those who
“grasped the meaning” of corruption in Mexico are among the richest of the new rich. Policy makers who
have “grasped the meaning” of the new labor discipline have succeeded in making the rich richer in their
countries. As labor’s bargaining power is weakened by the dismantling of traditional industries, the stripping
away of social guarantees, the growing practice of subcontracting and the ubiquity of “flexible” labor con-
tracts, the percentage of national income that is “earned” by capital is mushrooming.
Poverty in Chile, as Stephanie Rosenfeld and Juan Luis Marr6 tell us, used to be synonymous with rural
landlessness or urban joblessness, but the masses of the poor are no longer marginal to the national econo-
my. They are low-paid workers, frequently working full time and frequently in the formal sector. In Mexico,
where nearly three quarters of all urban families cannot afford to buy a basic basket of goods, the unem-
ployment rate is under 6%. This is one of the secrets to the creation of great wealth.
And entrepreneurs who have “grasped the meaning” of the power (and local needs) of transnational cap-
ital are also well ahead of the game. In all the countries examined in this Report, the new oligarchies are
committed neither to any particular industry nor to any particular country. They have diversified holdings in
finance, manufacturing, services and exports, and are increasingly dependent on foreign capital, which has
come to play a dominant role in the region, especially since the privatizations of the early 1990s. The list of
millionaires and billionaires making money in Latin America is by no means limited to Latin Americans.
Policy makers, backed by the new elites, are convinced that economic progress depends on foreign invest-
ment-or at least that selective enrichment does.
The drug trade is part of the general picture, and those who have grasped its meaning have done well-
even while many have died young. As Daniel Lazare shows, neoliberalism has encouraged entrepreneurs to
follow market signals and-in this case-to rely on the one sector in which they continue to enjoy a com-
parative advantage, while the very same labor discipline that has proven so helpful to “legitimate” businesses
has generated thousands of recruits for the industry. At the same time, the region’s freer financial markets
have made it easier to repatriate drug profits and invest them in legal activities.
The new concentration of wealth has been given the imprimature of the economics profession. It has been
blessed as a state of nature, against which it is not only wrong but useless to rebel. As a Chilean socialist
commented to authors Rosenfeld and Marr6: “The intellectual who proposes redistributive policies is treated
as if he were antiquated and obsessed, proposing policies that failed in the past. The idea now is that we have
to privatize everything. We have to stimulate private enterprise and hopefully we will all be entrepreneurs.”
Well, maybe some of us.
