Like the fabled city of gold, Latin American prosperity has seemed tantalizingly difficult to attain. Finally, real progress may have come to the region. This new development is based on a solid market footing that has replaced corrupt government projects with private investment and growth. Just as the explorers searching for the city of gold brought back valuable information about regions through which they traveled, Roberts and Araujo show that the Latin American experience contains valuable lessons about the policies that nations should foster and avoid. Socialism’s failures in Latin America were inevitable and predictable.

The authors place the changes that have occurred in the region in a wide context by looking back to the area’ s colonial roots. The Spanish government created a situation in which political connections could ensure profitable monopolies while entrepreneurship was of little benefit. Public offices were lucrative means to economic advancement and could be bought and sold. These tendencies toward mercantilism were not expelled with Spanish authority. In fact, the situation become worse during the years following World War II when developed nations advocated greater government intervention in the economy as part of their aid programs. Roberts and Araujo are quick to point out the irony of this proposal which runs counter to the system under which developed nations had achieved their prosperity. Economists advocated the influx of outside aid to capitalize the economies while believing that trade would only hamper growth. Pursuing these policies, governments built huge public works projects and imposed oppressive tariffs.

“Latin America is not a poor content, but rather one impoverished by 500 years of statism. If you want to understand how the market revolution is freeing us from that bondage, you must read this book.” —JOSE PINERA, former Finance Minister of Chile

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