By Beatrice E. Rangel
At the cusp of the roaring 80's, Alvin Toffler reigned as the master reader of tea leaves for the world. His book The Third Wave
made history as it deconstructed change into technology development stages that give rise to new modes of production.
Accordingly, the first development wave sprang from organizing labor which allowed human beings to transform themselves from hunters and gatherers into organized agricultural producers; the second from mechanical infrastructure that made manual labor more effective and efficient.
Mechanical innovations gave rise to the Industrial Age which was characterized by “mass production, mass distribution, mass consumption, mass education, mass media, mass recreation, mass entertainment, and weapons of mass destruction.”
According to Toffler, the second wave demanded “standardization, centralization, concentration, and synchronization” which gave rise to powerful bureaucracies. The Third Wave, also dubbed the Information Age, was described by Toffler as a development stage whereby the nation state would wither away giving rise to “powerful non-national entities: IGO's, multinational corporations, religions with global reach, and even terrorist organizations or cartels.
It would include the progressive hemming-in of national economies and of nation-states under a growing network of super-national organizations and affiliations; e.g. the European Union, the North American Union, the newly formed African Union, as well as organizations such as the WTO, NAFTA or International Criminal Court(.)”
Also the Third Wave would become the theatre for “the eclipsing of monetary wealth by knowledge and information as the primary determinant of power and its distribution." Finally this period would envelope "the eclipsing of manufacturing and manufacturing goods by knowledge-production and information-processing as the primary economic activity.”
If we analyze Latin American development in Toffler's paradigm, we would conclude that there have been three historical attempts to insert the region into the reigning development stage and that none have been successful in meeting the target.
To be sure, European foreign direct investment aimed at bringing the Industrial Age to 19th century Latin America, Mexico and the US.
But corporativism inherited from Spain provoked the rise of special interests inside each nation to halt or moderate the speed of modernization. Civil wars, internal strife and revolutions ensued every modernization attempt. It took about a century and a pan regional debt crisis for modernization to get a second chance. Populism ensued in half the region.
This staunch rejection of modernization leads one to conclude that failure to expand; deploy and consolidate a given technological stage is the differentiating attribute of the region. As a result, the region remains a sort of showroom of all tree modes of production represented in each of Toffler’s development stages. Value creation therefore is conducted through a collection of silos lacking linkages among themselves or capacity to create an integrated and modern production mode.
This explains the presence in almost every Latin country of production methods that cover a wide historical range in which one can travel back and forward in time from the Mayas; Incas and Caribbean nations to Silicon Valley. Yet this array of production platforms lacks synchronicity; interactivity and feedback amongst each other. Because there is no connectivity among the silos, there is little collaborative development, therefore lack of appropriation of externalities and continuous political strife among interest groups linked to each silo.
In spite of these failures the region has made great inroads concerning democracy and economic growth in the later part of the 20th century. Then the question arises: what will it take for the region to get a big development push?
To my mind one has to dissect the region into two groups. One is Mexico and the Pacific shore countries which seem to be on the road to consolidating the Second Wave while preparing their societies for the Third Wave. These nations have chosen as transforming vehicles trade and reform. And while the road is fraught with obstacles arising from corporativism, the experience of Chile proves that it can be done.
The other group of countries seem to be heading towards a crisis of similar proportions to the debt conundrum of the 1980’s. To use Toffler’s word, in these nations the future shock
will spark from civic frustration and economic stagnation. And while the depth and might of the crisis will differ from the single item producing country that is oil-rich Venezuela to the advanced manufacturing society that is Brazil, all will share the attribute of emerging from short-sighted leadership. Also by Beatrice Rangel in her Latin America from 35,000 Feet seriesRangel: While US is Away, Latin America Rethinks Development Paths
Rangel: In the Midst of Riots, a Star is Born in Brazil
Rangel: In Mexico Cinderella Gets to the Ball while Colombia Gets a Chance at Peace
Beatrice Rangel is President & CEO of the AMLA Consulting Group, which provides growth and partnership opportunities in US and Hispanic markets. AMLA identifies the best potential partner for businesses which are eager to exploit the growing buying power of the US Hispanic market and for US Corporations seeking to find investment partners in Latin America. Previously, she was Chief of Staff for Venezuela President Carlos Andres Perez as well as Chief Strategist for the Cisneros Group of Companies.
For her work throughout Latin America, Rangel has been honored with the Order of Merit of May from Argentina, the Condor of the Andes Order from Bolivia, the Bernardo O'Higgins Order by Chile, the Order of Boyaca from Colombia, and the National Order of Jose Matías Delgado from El Salvador.
You can follow her on twitter @BEPA2009 or contact her directly at BRangel@amlaconsulting.com.