Five Centuries of Latin American Inequality

Most analysts of the modern Latin American economy hold to a pessimistic belief inhistorical persistence—they believe that Latin America has always had very high levelsof inequality, suggesting it will be hard for modern social policy to create a moreegalitarian society. This paper argues that this conclusion is not supported by what littleevidence we have. The persistence view is based on an historical literature which hasmade little or no effort to be comparative. Modern analysts see a more unequal LatinAmerica compared with Asia and the rich post-industrial nations and then assume thatthis must always have been true. Indeed, some have argued that high inequality appearedvery early in the post-conquest Americas, and that this fact supported rent-seeking andanti-growth institutions which help explain the disappointing growth performance weobserve there even today. This paper argues to the contrary. Compared with the rest ofthe world, inequality was not high in pre-conquest 1491, nor was it high in the postconquestdecades following 1492. Indeed, it was not even high in the mid-19th centuryjust prior Latin America’s belle époque. It only became high thereafter. Historicalpersistence in Latin American inequality is a myth.