The Idiot's Bible

• By MARY ANASTASIA O'GRADY

Just days after Hugo Chávez gave President Barack Obama a copy of "Open Veins of Latin America" in Trinidad last week, the English-language version of the book shot to the No. 2 slot on Amazon.com.

AP

Hugo Chávez hands Barack Obama a copy of "Open Veins of Latin America."

Americans seemed to be curious about Mr. Chávez's reading tastes. But in Latin America, "Open Veins" is a well-known rant by Uruguayan Marxist Eduardo Galeano. And it also has another distinction that Mr. Chávez may be less inclined to publicize: It is widely regarded in free-market circles as "the idiot's bible."

The book was tagged with that moniker in the 1996 best seller, "The Manual of the Perfect Latin American Idiot." Penned by three Latin American journalists -- Plinio Apuleyo Mendoza, Carlos Alberto Montaner and Alvaro Vargas Llosa -- the "manual" is a witty assault on the populist, militarist, caudillo mentality that has dominated the region for hundreds of years.

Chapter three is dedicated to explaining the importance of Mr. Galeano's book for the idiot: "For the past quarter century the Latin American idiot has had the notable advantage of having at his disposal a kind of sacred text, a bible filled with all the nonsense that circulates in the cultural atmosphere that the Brazilians call the 'festive left.' Naturally we refer to Open Veins of Latin America."

Open any page of Mr. Galeano's book and you will learn that Latins are losers. Not on their own account, mind you. It's all because Europe and the U.S. (the world's winners) buy raw materials from them and don't pay a fair price. In this way the haves of the world exploit the have-nots. "The history of Latin America's underdevelopment is, as someone has said, an integral part of the history of world capitalism's development."

Mr. Galeano wasn't alone in promoting these ideas back in 1971 when the book came out. "Dependency theory," the economic dogma that drove regional policy for much of the 20th century, operated from the same premise. Its roots are in something called "structural economics," championed by Argentine economist Raúl Prebisch, the first secretary general of the United Nation's Economic Commission for Latin America.

Prebisch argued that Latin American poverty persisted because while rich countries could boost living standards through productivity gains, poor countries exporting only agricultural products and raw materials could not because of excess labor. Thus, they could not build the surplus capital they needed to move up the economic ladder.

These beliefs mixed well with fascism and Marxism. Politicians, whether from the extreme right or left, got behind Prebisch, and a regional policy emerged in favor of subsidization for local industries and protection from international competition. The state took a prominent role in this "import substitution industrialization," fueling corruption and hyperinflation and destroying any hope of rising living standards. By the late 1980s, with Latin America in crisis, Prebisch and his antitrade ideas were thoroughly discredited.

But Mr. Galeano remained an icon of the revolutionary left and a rich source of ideological hatemongering. Chilean novelist Isabel Allende wrote the foreword for the 25th anniversary edition, bemoaning the fact that her cousin Salvador's effort to convert Chile into another Cuba had been thwarted.

Equally amazing was Ms. Allende's praise of Mr. Galeano's "stupendous love of freedom." Of course, not for those engaged in voluntary exchange. Mr. Galeano condemns this guilty group: "The more freedom is extended to business, the more prisons have to be built for those who suffer from that business."

Confused? Novelist Mario Vargas Llosa explains in the foreword for "The Manual of the Perfect Latin American Idiot": "History" for the idiot "is a successful conspiracy of the evil ones against the good, in which they always win and we always lose." In other words, exchange is a zero-sum game. This may sound like parody, but it is precisely Mr. Galeano's reasoning.

In "Forgotten Continent" (2007), Michael Reid, the Americas editor for the Economist, says Mr. Galeano's "history is that of the propagandist, a potent mix of selective truths, exaggeration and falsehood, caricature and conspiracy theory."

The Galeano book was not a present to Mr. Obama, though it was hyped as such. After all it was in Spanish, a language Mr. Obama does not read -- and Cuban and Venezuelan military intelligence surely would have advised Mr. Chávez of that fact. Its purpose was instead a way for the resentful Venezuelan to shove his anticapitalist, anti-American prejudices in Mr. Obama's face before rows of television cameras.

Yet, unwittingly, Mr. Chávez's gag gift served another purpose. If there has been any doubt about how he has run his oil-rich country into the ground during a decade of booming petroleum prices, the mystery is now solved. Mr. Galeano's book is Mr. Chávez's bible.

The Idiot’s Bible

The Idiot’s Bible
Alvaro Vargas Llosa

WASHINGTON—Hugo Chavez’s gift to President Obama at the recent Summit of the Americas—a copy of Eduardo Galeano’s “Open Veins of Latin America”—has many people wondering what the fuss is about.

A decade ago, I and the other two co-authors of the “Guide to the Perfect Latin American Idiot” devoted a chapter to refuting the historical and ideological fallacies contained in Galeano’s tract, which we called the “idiot’s bible.” Everything that has happened in the Western Hemisphere since the book appeared in 1971 has belied Galeano’s arguments and predictions. But I guess Chavez has given it the kiss of life and, since people are asking, here I go again.

The author claims that relations between Latin America and rich countries have been so pernicious that “everything . . . has always been transmuted into European—and later United States—capital.” Actually, for years that relationship has transmuted into the exact opposite: Latin American capital. In the last seven years alone, Latin America has benefited from $300 billion in net capital flows. In other words, a lot more capital came in than went out.

The book rails against the international division of labor, in which “some countries specialize in winning and others in losing.” That division of labor in the Western Hemisphere has not changed—Latin American countries still export commodities—and yet in the last six years, poverty in the region has been reduced to about one-third of the population, from just under half. This means that 40 million were lifted out of that hideous condition. Not to mention the 400 million pulled out of poverty in other “losing” nations worldwide in the last couple of decades.

The author pontificates that “raw materials and food are destined for rich countries that benefit more from consuming them more than Latin America does from producing them.” Sorry, amigo, but the story of this decade is that Latin America has made a killing sending exports abroad—the region has had a current account surplus for many years. Rich countries are so annoyed with all the things poor countries are exporting to them that they are asking their governments to “protect” them in the name of fair trade. The “buy American” clause in the fiscal stimulus package approved by Congress a few weeks ago is a case in point. The U.S. had a trade deficit of more than $800 billion last year. The poor, if I may echo Galeano’s hemophilic language, are sucking the veins of the rich.

The book claims that for years “the endless chain of dependency has been endlessly extended.” The story now is that the rich depend on the poor. That is why the Chinese have $1 trillion in U.S. Treasury bonds! The book’s jeremiad goes on to say that “the well-being of our dominant classes . . . is the curse of our multitudes condemned to exist as beasts of burden.” One of the few countries that exemplifies that curse is the author’s beloved Cuba, where a worker cannot be paid directly by a foreign company employing him or her; the money goes to the government, which in turn pays the worker one-tenth of the salary—in nonconvertible local currency.

Galeano’s mathematics are hugely entertaining. He states that the average income of U.S. citizens is “seven times that of a Latin American and grows 10 times faster.” The gap has actually shrank, dear comrade. Many “poor” countries in modern times have seen their income gap with the Unites States narrow dramatically. Thailand and Indonesia have seen theirs cut almost by half in three decades.

The book’s Malthusian predictions invite no less compassion than its economic forecasts. Overpopulation, Galeano maintains, will mean that “in the year 2000 there will be 650 million Latin Americans,” the implication being that the region will starve. In 2000, the region’s population was 30 percent smaller than the author predicted.

To top it all, Chavez’s literary muse states that “the more freedom is extended to business, the more prisons have to be built for those who suffer from business.” Actually, the greater (though still insufficient) freedom given to business in the era of globalization has resulted in increasing prosperity in developing nations. This decade, the pace of economic growth per person has been four times higher in developing nations than in rich nations.

I would pay anything to be a fly on the wall when President Obama opens the first page of the idiot’s bible.

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Alvaro Vargas Llosa
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Alvaro Vargas Llosa is Senior Fellow of The Center on Global Prosperity at The Independent Institute. He is a native of Peru and received his B.S.C. in international history from the London School of Economics. His weekly column is syndicated worldwide by the Washington Post Writers Group, and his Independent Institute books include Lessons From the Poor: Triumph of the Entrepreneurial Spirit, The Che Guevara Myth: And the Future of Liberty, and Liberty for Latin America.