Sorting Out the Mixed Economy: The Rise and Fall of Welfare and Developmental States in the Americas

by Amy C. Offner

The untold story of how welfare and development programs in the United States and Latin America produced the instruments of their own destruction

In the years after 1945, a flood of U.S. advisors swept into Latin America with dreams of building a new economic order and lifting the Third World out of poverty. These businessmen, economists, community workers, and architects went south with the gospel of the New Deal on their lips, but Latin American realities soon revealed unexpected possibilities within the New Deal itself. In Colombia, Latin Americans and U.S. advisors ended up decentralizing the state, privatizing public functions, and launching austere social welfare programs. By the 1960s, they had remade the country's housing projects, river valleys, and universities. They had also generated new lessons for the United States itself. When the Johnson administration launched the War on Poverty, U.S. social movements, business associations, and government agencies all promised to repatriate the lessons of development, and they did so by multiplying the uses of austerity and for-profit contracting within their own welfare state. A decade later, ascendant right-wing movements seeking to dismantle the midcentury state did not need to reach for entirely new ideas: they redeployed policies already at hand.

In this groundbreaking book, Amy Offner brings readers to Colombia and back, showing the entanglement of American societies and the contradictory promises of midcentury statebuilding. The untold story of how the road from the New Deal to the Great Society ran through Latin America, Sorting Out the Mixed Economy also offers a surprising new account of the origins of neoliberalism.

Genres: History, Politics, Economics, American History, Latin American History

400 pages, Hardcover

Published September 17, 2019

Reviews

[David Sogge · Rating 4 out of 5]

Its title may misconstrue its content, but this innovative, well-written book has important things to say. It presents a vital issue: the capture of public and not-for-profit development initiatives by for-profit interests. In today’s foreign aid and domestic welfare sectors, that strategy goes by names like ‘blending’, ‘de-risking’ and ‘public-private partnerships’. Its essence is parasitic capitalism. The term ‘mixed economy’ is far too bland. Widely acclaimed among elites, it routinely yields mediocre to downright counter-productive outcomes for intended beneficiaries (a performance record the book could have emphasized more strongly), but routinely fattens the accounts of the actual beneficiaries in the corporate sector. The writer’s deep dig into many archives reveals how, particularly in the Cold War years, this parasitism developed in US foreign aid and philanthropy, and in US domestic programmes to curb poverty through 'self-help' and decentralization. The strategy's forward motion and up-beat discourse come to life in the stories of consultants, officials and managers acting as ‘policy entrepreneurs’ and of their intersecting careers via revolving doors between public and private sectors. The book's innovative approaches put in question claims that development models travel only from North to South, and that neoliberal doctrines have been more decisive than brute business reflexes. It merits a place alongside such classics as The Anti-Politics Machine in the literature on the development industry.

[Nils · Rating 3 out of 5]

Despite the lousy title, this is an interesting book about how the institutions of the welfare and developmental state in the 3rd quarter of the 20th century were recast as tools of neoliberalism in the last quarter of the 20th century. Offner’s core point is that many of these institutions contained divergent and politically multifarious elements, which allowed them to be repurposed (one might say hijacked) for other purposes. Thus the idea of self-help housing, which begins in the 1960s as a way to make claims on the liberal state for resources that will give impoverished local communities in the United States resources and local autonomy to empower themselves, can get reworked under conditions of austerity into a story about how the poor in slums are living their best independent lives free of “state interference.”

"By the 1950s, North Americans ceased to think of their state as a developmetnal one at all -- that is a state charged with turning a poor country into a rich one. In their minds, it became something different: a welfare state that guarded against insecurity in a land of abundance." (5) Offner's point is that the conceptual and ideological severing of the relationship between the welfare state and the developmental states has obscured the many linkages between the programs that happened in both sorts of sites, and the linkages and also differences in the ways that neoliberalism arrived in both sorts of locations. "Postwar order in the Americas grew from the myth that Latin American nations had to face macroeconomic disorder that made them poor countries, but the United States confronted only marginal pockets within a healthy political economy." (6)

Offner also suggests the hidden linkages between domestic and foreign programs: "foreign aid programs became greenhouses incubating possibilities only half seen at home." (9) All of this was filtered through preexisting national narratives in both the United States and other countries: "Comparisons between home and away generated as many practical experiments and stylized pieces of wisdom as there were political traditions in the United States.... Every project of purported 'state-led' development was in equal measure a private initiative; every national economic plan intersected with a business plan." (12, 17) "US officials at the highest levels of government chose deliberately to remake the welfare state in the image of foreign and imperial policy" (14) - a point also made for policing by Stuart Schrader in his new book Badges without Borders.

A key theme is that of devolution of managerial responsibility: "The practices of devolving responsibility and squeezing social spending flourished within national plans that are often remembered," in light of the neoliberalism that came later, "as great symbols of state centralism and munificence." (10)

Finally, Offner argues that these linkages have been obscured by the dominant narratives of neoliberal transition, especially the continuities between the mid and late twentieth century models of development: "policies, practices, and institutions born together met different fates and become retrospectively reimagined as elements of two different eras.... The decline of welfare and developmental states this involved a profound reordering of ideals that masked continuities.... The mixed economy had died as a legitimating concept, replaced by others equally notional and aspirational." (279) "Businessmen and economic advisors retold history in ways that obscured their debts to the mixed economy.... It also tends to narrow our memory of the mixed economy, reducing it to those elements that the right battled and capital abhorred.... We forget the novel opportunities that capitalists found inside the state, the austere systems of social welfare provision that flourished at midcentury." (283, 285)

[Diego · Rating 4 out of 5]

Amy C. Offner ofrece un recuento del auge y caída del estado desarrollista en América Latina y Estados Unidos durante la segunda mitad del siglo XX, partiendo desde la perspectiva de Colombia. El libro es muy ilustrativo sobre las sutilezas de la transformación de los estados de sistemas de economía mixta al neoliberalismo. Más que ser un rompimiento o quiebre en el tiempo y visiones de desarrollo lo ocurrido es una serie de adaptaciones y evoluciones en las que las ideas originales de la posguerra se enfrentaron a contextos específicos en el mundo en desarrollo.

El libro es un gran ejemplo sobre como la economía política del desarrollo esta estrechamente sujeta a los cambios narrativos. Una de las grandes obras de la transformación del estado desarrollista al neoliberal fue un cambio de narrativa, la construcción de una nueva historia en la que se obviaban o resaltaban aspectos de acuerdo a las circunstancias ideológicas de los países.

Es una buena lectura, muy buena para la reflexión, la escritura es un poco no tan fluida y eso lo puede volver por momentos una lectura no tan disfrutable, no obstante, los últimos dos capítulos son realmente buenos.

[MARC L'ESPERANCE · Rating 4 out of 5]

Source Dissent Fall 2023. Well written but mostly an historical summary of Colombia from 1930-1980.