Skip to main content

Underlying FDR-era Democratic Capitalism were the economic theories of John Maynard Keynes, who posited that strategic government intervention in the economy would have long term positive consequences. He didn’t advocate full-on, generalized central planning—he colored within capitalist lines overall—but his economic philosophy skewed toward the greater good for the greater number. Antithetical to Keynes were free market policies touted by theorists like Frank Knight, Milton Friedman and their Chicago School of Economics cohort. (Please take a moment to Google Chicago School of Economics.)

Much of the mischief the US caused in Latin America was instigated by Friedman, his fellow Chicago School proselytizers, and their students (please take a moment to Google Chicago Boys, whose experiments in Chile generated widespread misery). Friedman’s free market theories resonated with right-wing policymakers: Margaret Thatcher and Ronald Reagan were true believers. Friedman et al. provided capitalists with intellectual and moral cover (once God was recruited so that Marxism could be declared immoral and evil) for overthrowing unsatisfactory, i.e., insufficiently capitalist, Latin American governments. For Chicago School cultists, Latin America provided once-in-a-lifetime opportunities to test free market theories with expendable Latin Americans serving as lab mice.

Once a Latin American country’s anti-socialist government was installed and stabilized, Chicago School economists used the World Bank (please take a moment to Google World Bank), which they had infiltrated and weaponized, to provide bridge loans (really suspension bridge loans because attached strings were made of steel). These loans leveraged capitalist greenmail. Corrupt regimes pocketed the money and left their still-poor nations with debt they could never repay, which inability to repay was then used to attach thicker strings. (Even decent regimes that borrowed World Bank money and used it to feed, clothe, and educate their citizens were unable to build their economies while multinational corporations drained profits and US-backed insurgencies drained resources.) Despite the US’s persistent pro-democracy rhetoric, well-meaning Latin American governments never really had a chance. It turns out that, for Latin America, the World Bank was Purdue Pharma, and their loans were OxyContin.

(Unlike poor countries, the US has been able to sustain continuous deficits because it borrows back from the uber rich the money that it provides them by deregulating their activities and cutting their taxes; and it can print more money. The US economy is a Ponzi scheme so bold that even as the boatless drown, we can’t help but admire its glorious chutzpah.)

While chatting with my seatmate, I had mentioned only two legs of Democratic Capitalism’s infrastructure tripod: Physical (roads, bridges, vehicles, shelter, fuel, food) and Financial (capital, credit, banking system, jobs). I tried to make it clear that for Nicaraguans hoping to develop a stable and gentle economy, the best source of those two legs—the US—was doing everything it could to kill them (literally). So given the poverty of the country, Democratic Capitalism—i.e., McDonald’s—simply wasn’t viable, while sharing what little they had—socialismo—seemed a practical alternative, at least for the short term. Unfortunately, the American rich, the US government, and the Nicaraguan elite disagreed and had hoked up a Nicaraguan Red Menace.

“For a reporter you don’t sound very objective,” he said.

“I was when I started,” I said.

He said he needed to catch up on some paperwork. For the rest of the flight, he juggled reports from his briefcase. We had stopped chatting.

His was the typical ignorance-infused arrogance of the American right: Fast food will solve every problem. Flying home (because I could) from a place where people were killing each other, I was impatient with American cluelessness and had been tendentiously schooling him about how lack of infrastructure prevented Latin American countries from harvesting the flourishing fruits of the tree of Democratic Capitalism. 

Scroll to Continue

Recommended Articles

Because it was a shortish flight, I had harangued him with only two: Physical and Financial. I had left out the more complex and important third leg: Political. (I’m using Political broadly: not just parties and voting, but the body politic and all that comprises it. Democratic Capitalism—capitalism with a human face—is less an economic protocol than a zeitgeist.

Disappearing America Series:

Disappearing America: Feeling the Bern—Part 1
Monday, 28 November 2022

Disappearing America: The Red Menace—Part 2
Tuesday, 29 November 2022

Disappearing America: I Was Objective When I Started—Part 3
Wednesday, 30 November 2022

Disappearing America: It’s Only Faire—Part 4
Thursday, 1 December 2022

Disappearing America: More For Me—Part 5
Friday, 2 December 2022

Disappearing America: Indoctrination Nation—Part 6
Saturday, 3 December 2022

America Disappeared: What We Could Have Been Doing in the Shadows—Part 7
Friday, 4 December 2022