Did the doctrine of economic neoliberalism, which took root across the Western Hemisphere in the 1980s and 1990s, represent a fundamental repudiation of the welfare and developmental states that had seemed so dominant a generation earlier? Many scholars of the United States and Latin America assume so, but historian Amy Offner challenges such orthodoxy in her wide-ranging and ambitious new book, Sorting Out the Mixed Economy. As she reveals, even though politicians and economists of the late twentieth century rhetorically attacked the large footprint of midcentury social-welfare governments, they borrowed and repurposed vital elements from them, particularly the long-standing interest in decentralized governance and “bootstrap” self-help. But Offner argues that this trajectory cannot be fully understood when peering solely into the national container of the United States. Only when considering the United States as part and parcel of a greater American hemisphere can scholars understand the surprising and circuitous paths taken by economic doctrines during the twentieth century. For Offner, Colombia in particular serves as the crucial companion to the United States, and her book is a study of the conjoined metamorphosis of political economy in the two nations. Yet as such, it is far greater than the sum of its parts.
Offner’s narrative teems with a diverse range of U.S. and Colombian protagonists, but the figure who appears most frequently is David Lilienthal. Lilienthal first came to prominence during the 1930s and 1940s as a board member and then director of the Tennessee Valley Authority (TVA), the quintessential New Deal experiment in antipoverty planning. Though the TVA is most frequently remembered for its concrete dams, equally revolutionary was its reconfiguration of state power. A federal agency that was headquartered not in Washington, DC., but in East Tennessee, the TVA was an autonomous public corporation rather than a standard bureau, spanning multiple jurisdictions and serving as a potential model for a decentralized state.
If that model was not quickly imitated within the United States, after World War II it proved attractive to dozens of other nations in the emerging “Third World.” Much of the first half of Offner’s book details efforts by Colombian elites in the Cauca Valley—Lilienthal’s “second favorite valley,” as he often claimed—to adapt the TVA’s decentralized approach to uniquely vallecaucano desires. Created in 1954, the Corporación Autónoma Regional del Cauca, or Cauca Valley Corporation—curiously known in Colombia by the English acronym CVC—borrowed some rhetoric from its U.S. inspiration, but it was primarily an effort by large landholders to concentrate their power and increase production. In time, the CVC would ultimately become a training ground for a generation of Colombian planners and economists who fused their faith in social welfare and state-led development with a belief that a semiprivate, decentralized government was the most effective government.
The CVC was joined by a range of other governmental projects that aimed to wage development on the cheap by similarly refiguring state authority and blurring the boundary between public and private. Many were also inspired or funded by U.S. actors. Offner is particularly interested in the housing construction campaigns that sought to address the needs of rural migrants flocking to Colombian cities at midcentury. Bankrolled in large part by the Alliance for Progress—the U.S. investment program in Latin America meant to counterbalance Cuba’s model of social revolution—the Colombian housing program extended materials to residents, who would then supply their own labor to construct their homes. Yet rather than becoming wards of the state, residents of superblock communities such as Ciudad Kennedy in Bogotá would become private homeowners—which both U.S. and Colombian planners believed would forestall radical instincts in the population. But just as was true of the CVC, these ostensibly public, welfare-oriented measures provided, after the 1970s, the blueprints for undoing the developmentalist state.
When President Lyndon Johnson launched his “War on Poverty” in the mid-1960s, he called home many of the overseas experts who had been serving in the Alliance for Progress, asking them to turn their attention to domestic rather than foreign poverty. It was here that the lessons of Latin America would return, in boomerang fashion, to transform U.S. policymaking. Lilienthal reemerged as a major public figure, and as Offner writes, “if the New Deal had been his teaching tool in Colombia, the CVC [now] became his instructional aide at home” (175). But Lilienthal and his ilk were not merely reimporting New Deal planning but a version refashioned by its Latin American sojourn: one that emphasized decentralization and privatization, the role of businessmen as natural public leaders, and self-help over redistribution. Thus, in Offner’s account, the War on Poverty paradoxically sowed many of the seeds that would later sprout into neoliberal economic doctrine. Their transnational origins were not among Austrian economists but in the long exchange between U.S. and Latin American state planners, many of whom had, ironically, been the architects of large welfare and developmental states. As readers of this journal will recognize, this is a highly provocative claim—yet one that Offner convincingly substantiates.
This short review can hardly encompass the richness of the book, which also sheds light on multiple topics unaddressed herein: the making of the Colombian economics profession, the place of U.S. Indian Country in serving as a laboratory for refashioning economic liberalism, and the surprising origins of for-profit educational consulting in the United States. Offner’s argument is one that demands a wide audience, yet unfortunately the book’s length, at nearly three hundred pages of text, and its density, alongside its ocean of acronyms, makes it an impractical volume to assign to undergraduates or suggest to nonspecialists.
That hardly diminishes the profound contribution of this study. It may well be the most compelling appeal yet for historians to abandon the binary straitjacket of “First” and “Third” worlds. The book comprehensively demonstrates that one of the most-discussed concepts of our day—“neoliberalism”—was not the Global North’s imposition on an unsuspecting South, but one born from conversations and exchanges between those unequal societies, with disastrous consequences in both.
