To the economic elites of Latin America, intent on making their countries resemble Europe or the United States, all of this was progress. In some respects, they were surely right. Economies were growing, producing more than ever before. The population was also burgeoning; it increased from about 30 million in 1850 to more than 77 million in 1912 as public health measures (such as safe drinking water, inoculations, sewers, and campaigns to eliminate mosquitoes that carried yellow fever) brought down death rates.

Urbanization also proceeded rapidly. By the early twentieth century, wrote one scholar, “Latin American cities lost their colonial cobblestones, white-plastered walls, and red-tiled roofs. They became modern metropolises, comparable to urban giants anywhere. Streetcars swayed, telephones jangled, and silent movies flickered from Montevideo and Santiago to Mexico City and Havana.”31 Buenos Aires, Argentina’s metropolitan center, boasted 750,000 people in 1900 and billed itself as the “Paris of South America.” There the educated elite, just like the English, drank tea in the afternoon, while discussing European literature, philosophy, and fashion, usually in French.

To become more like Europe, Latin America sought to attract more Europeans. Because civilization, progress, and modernity apparently derived from Europe, many Latin American countries actively sought to increase their “white” populations by deliberately recruiting impoverished Europeans with the promise, mostly unfulfilled, of a new and prosperous life in the New World. Argentina received the largest wave of European immigrants (some 2.5 million between 1870 and 1915), mostly from Spain and Italy. Brazil and Uruguay likewise attracted substantial numbers of European newcomers.

Only a quite modest segment of Latin American society saw any great benefits from the export boom and all that followed from it. Upper-class landowners certainly gained as exports flourished and their property values soared. Middle-class urban dwellers—merchants, office workers, lawyers, and other professionals—also grew in numbers and prosperity as their skills proved valuable in a modernizing society. As a percentage of the total population, however, these were narrow elites. In Mexico in the mid-1890s, for example, the landowning upper class made up no more than 1 percent and the middle classes perhaps 8 percent of the population. Everyone else was lower class, and most of them were impoverished.32

A new but quite small segment of this vast lower class emerged among urban workers who labored in the railroads, ports, mines, and a few factories. They initially organized themselves in a variety of mutual aid societies, but by the end of the nineteenth century they were creating unions and engaging in strikes. To authoritarian governments interested in stability and progress, such activity was highly provocative and threatening, and they acted harshly to crush or repress unions and strikes. In 1906, the Mexican dictator Porfirio Díaz invited the Arizona Rangers to suppress a strike at Cananea, near the U.S. border, an action that resulted in dozens of deaths. The following year in the Chilean city of Iquique, more than 1,000 men, women, and children were slaughtered by police when nitrate miners protested their wages and working conditions.

The vast majority of the lower class lived in rural areas, where they suffered the most and benefited the least from the export boom. Government attacks on communal landholding and peasant indebtedness to wealthy landowners combined to push many farmers off their land or into remote and poor areas where they could barely make a living. Many wound up as dependent laborers or peons on the haciendas of the wealthy, where their wages were often too meager to support a family. Thus women and children, who had earlier remained at home to tend the family plot, were required to join their menfolk as field laborers. Many immigrant Italian farmworkers in Argentina and Brazil were unable to acquire their own farms, as they had expected, and so drifted into the growing cities or returned to Italy.

Although local protests and violence were frequent, only in Mexico did these vast inequalities erupt into a nationwide revolution. There, in the early twentieth century, middle-class reformers joined with workers and peasants to overthrow the long dictatorship of Porfirio Díaz (r. 1876–1911). What followed was a decade of bloody conflict (1910–1920) that cost Mexico some 1 million lives, or roughly 10 percent of the population. Huge peasant armies under charismatic leaders such as Pancho Villa and Emiliano Zapata helped oust Díaz. Intent on seizing land and redistributing it to the peasants, they then went on to attack many of Mexico’s large haciendas. But unlike the leaders of the later Russian and Chinese revolutions, whose most radical elements seized state power, Villa and Zapata proved unable to do so on a long-term basis, in part because they were hobbled by factionalism and focused on local or regional issues. Despite this limitation and its own internal conflicts, the Mexican Revolution transformed the country. When the dust settled, Mexico had a new constitution (1917) that proclaimed universal male suffrage; provided for the redistribution of land; stripped the Catholic Church of any role in public education and forbade it to own land; announced unheard-of rights for workers, such as a minimum wage and an eight-hour workday; and placed restrictions on foreign ownership of property. Much of Mexico’s history in the twentieth century involved working out the implications of these nationalist and reformist changes. The revolution’s direct influence, however, was largely limited to Mexico itself and a few places in Central America and the Andes; the upheaval did not have the wider international impact of the Russian and Chinese revolutions.

Perhaps the most significant outcome of the export boom lay in what did not happen, for nowhere in Latin America did it jump-start a thorough Industrial Revolution, despite a few factories that processed foods or manufactured textiles, clothing, and building materials. The reasons are many. A social structure that relegated some 90 percent of its population to an impoverished lower class generated only a very small market for manufactured goods. Moreover, economically powerful groups such as landowners and cattlemen benefited greatly from exporting agricultural products and had little incentive to invest in manufacturing. Domestic manufacturing enterprises could only have competed with cheaper and higher-quality foreign goods if they had been protected for a time by high tariffs. But Latin American political leaders had thoroughly embraced the popular European doctrine of prosperity through free trade, and many governments depended on taxing imports to fill their treasuries.

Instead of its own Industrial Revolution, Latin Americans developed a form of economic growth that was largely financed by capital from abroad and dependent on European and North American prosperity and decisions. Brazil experienced this kind of dependence when its booming rubber industry suddenly collapsed in 1910–1911, after seeds from the wild rubber tree had been illegally exported to Britain and were used to start competing and cheaper rubber plantations in Malaysia.

Later critics saw this “dependent development” as a new form of colonialism, expressed in the power exercised by foreign investors. The influence of the U.S.-owned United Fruit Company in Central America was a case in point. Allied with large landowners and compliant politicians, the company pressured the governments of these “banana republics” to maintain conditions favorable to U.S. business. This indirect or behind-the-scenes imperialism was supplemented by repeated U.S. military intervention in support of American corporate interests in Cuba, Haiti, the Dominican Republic, Nicaragua, and Mexico. The United States also controlled the Panama Canal and acquired Puerto Rico as a territory in the aftermath of the Spanish-American War (see Map 17.5).

Thus, despite Latin America’s domination by people of European descent and its close ties to the industrializing countries of the Atlantic world, that region’s historical trajectory in the nineteenth century diverged considerably from that of Europe and North America.