Latin Business: The Quest for a Role
By Joseph C. Goulden

JCG-4 Londres 190, Depto. 109 Colonia Juarez Mexico 1, D. F. June 27, 1966

A. Altruistic Self-preservation,

The plight of the hungry masses of Latin America--the tens of millions of persons bypassed by history since the 18th Century--was given articulate voice here this month by, paradoxically, the continent’s most advanced group, its businessmen and industrialists. The occasion was a plenary session of the Consejo Interamericano de Comercio y Produccion, the Interamerican Council of Commerce and Production (CICYP), most prestigious private enterprise group in the hemisphere. The 500-odd industrialists, financiers and businessmen in attendance warned each other of the keg of social dynamite on which each sits, and traded ideas on how to prevent a fatal detonation. A certain amount of self-preservation is involved, for, if the development of Latin America again takes a violent turn, as it did in Cuba A these are the persons who would be first to hear the shout, “paredon,” – To the wall. At best, the businessmen would lose their pocketbooks; at worst, their necks. And the uneasiness of their position was revealed in a debate that erupted when the Venezuelan delegation innocently referred, in a draft resolution, to the “social revolution” which is sweeping Latin America. The words brought the Ecuadoran, Chilean and Colombian delegations to their feet with roars of protest. The Chilean wondered “to what extent representatives of private enterprise should use this word ‘revolution’.” The word has entirely different connotations in Latin America than it does elsewhere in the world, he maintained. But the Venezuelan, John Phelps, Jr., was nonplussed. Business, he said, could stand some “image-changing” in Latin America; “If we show we are afraid to use this word, entrepreneurs will be called old-fashioned conservatives.” But, countered a Colombian, the forces of the extreme left, “who identify with the masses, understand only one form of revolution, the violent type, and should not be encouraged.” The Chilean now was sarcastic. “We are like a young girl who has no fun at the party and decides to shorten her skirt,” he said. “It’s meaningless.” A skilled semanticist from the United States delegation out off the talk by suggesting the substitution of “rapid modernization” for “revolution.” (“Yeah, as in the ‘American Rapid Modernization of 1776’,” a colleague quipped after the session.)

But this byplay was transitory. Even more evident, in the public talks at least, were genuine displays of altruism, of men attempting earnestly, even frantically, to find solutions to problems that have plagued their continent for generations. Another theme just as obvious was the lack of cohesion on the part of the twelve Latin American nations represented. (Argentina, Brazil, Colombia, Chile, Ecuador, Mexico, Panama, Paraguay, Peru, El Salvador, Uruguay and Venezuela; the United States is also a member, and George S. Moore, president of the First National City Bank of New York, closed a three-year term as CICYP president at the meeting. Canada and Spain, both anxious for a larger share of the Latin market, had observers present, as did the Vatican.)

The awareness by private enterprise of Latin America’s grave social problems was perhaps best expressed by Jose Campillo Sainz, industrialist from Monterrey who heads the Confederation of Industrial Chambers of Mexico (CONCAMIN), a rough approximation of the American Manufacturers Association (with obligatory membership and quasi-official standing, however). “’The economic development of the poor countries is, in reality, the great social question of our times,” Campillo Sainz said. The same problems existed in the past, he said, but modern communications and the publication of statistical data revealing the sharpness of the rich-poor cleavage make the backward nations painfully aware of their situation. “A cry arises from these poor countries,” he said, “a demand which each time becomes more of a command to accept the wealth which the civilization of our times places at the disposal of man, and the enjoyment of living standards which, if not totally comparable to the more developed countries, are at least worthy of the human being. “ Campillo Sainz also spoke of the “geography of hunger” in a world where 30 million persons a year die of starvation (of total deaths of 60 million). The burden is on the entrepreneurs he said. “Economy is scared of emptiness, and if there is a hole that we do not fill, we have no right to complain if the state tries to fill it in our place…Man is, in the long run, the supreme value to which all other values should be subordinated. Economy should…be at the service of man…An economic development that would benefit a small minority and did not show an increase in the standard of living of the masses of the population would be of no use.”

In five days of workshop sessions and corridor talks the CICYP delegates (to use the Spanish initials by which the group identifies itself) ranged over a host of problems which contribute to the “economic emptiness” of which Campilio Sainz spoke:

The lack of mass internal markets for goods produced by fledgling Latin industries because of the lack of a middle class and the low money income of the lower classes.

The tariff barriers encountered by the Latin businessman when he tries to sell his goods in the United States, Western Europe and Asia.

The unequal race between agricultural production and population growth which forces Latin American nations to import $600 million worth of food annually, a “necessary squandering” of dollars needed for internal development.

The shortage of investment capital, the political dangers of too heavy a reliance upon foreign dollars, and, conversely, the reluctance of investors to risk money in countries with histories of political and fiscal instability.

The futility of economies based on such crops as bananas, cocoa beans, coffee and sugar, which are subject not only to the natural calamities of drought and wind, but also to the man-made calamities of sudden market breaks.

The inefficiencies of Latin industries which have no reason to reduce high per-unit costs because of protective tariff walls which keep goods from other nations from reaching their markets.

Dr. Lincoln Gordon, U.S. Undersecretary of State for Interamerican Affairs, with characteristic frankness, said the U. S. government – “and I’m speaking of both political parties” – made a serious error from 1945 to 1960 by taking Latin America for granted while unduly concentrating its economic efforts in other areas. But, he cautioned, Latin businessmen are making an equally serious error “by taking for granted” their own role in continental development. Private enterprise is by no means a universally accepted institution, he said, and many Latin intellectuals, writers and students – “and not just the Communists” – still view profits as the “immoral fruits of monopoly” rather than the sign of a successful business. Private enterprise preserved itself in the United States and Western Europe for a simple reason, Dr. Gordon said: “Because it worked. But here in Latin America, the case still has to be made.” (This was confirmed at another point in the session by Gustavo Vollmer, one of Venezuela’s most prominent industrialists, who complained plaintively that private enterprise has been excluded from his country’s national planning save for “informal, isolated personal contacts,” and for post-facto criticisms it is permitted to make on programs already formulated by the government.) Dr. Gordon said Latin private enterprise could improve its community standing through it “more affirmative human relations,” by considering its work force to be something more than a “bundle of muscle.” Save for Cuba, Dr. Gordon said, no Latin American government is inherently hostile to private enterprise, “but there is room for much improvement.” All too often, he said, Latin business survives only because of “special government privileges” which permit them to be both secure and inefficient.

Both Dr. Gordon and Moore made it plain that insofar as the United States is concerned, the main burden of solving Latin economic problems rests on the Latins. In doing so they reiterated what President Johnson said here during his “pril visit. Moore said he didn’t think the industrialized nations have the resources to “solve all the economic problems of the less developed nations.” Changes in tariff policies could help give foreign exchange to developing nations, he said, “but real success can come only to those developing nations which help themselves, according to their own capabilities.”

Having heard the American advice the Latin countered with pointed remarks about U. S. trade policies which negate much of what is done by Latin nations. Octaviano Campos Salas, Mexican Minister of Industry and Commerce, said Latin America sees its “economic and relative technological situation continually deteriorating” while at the same time there is unending progress by “the industrial nations of the world, with one of which, the wealthiest of them all, we share this continent.” Campos Salas said improved trade treatment from the industrialized nations is essential – otherwise, Latin efforts towards continental economic integration will be for naught. “I do not consider either ethical or equitable the current world trade distribution, which daily favors more and more the industrial nations,” he said. “Certainly it is no stimulant to us that some of these nations promote competitive, uneconomical agricultural products, which in effect results in export subsidies, and the classic dumping operation which is nothing more than unfair competition with similar production in underdeveloped nations.” If the industrialized countries are sincere in the professions of Latin friendship, Campos Salas said, they should stop selling cut-rate farm products abroad, and make industrialization loans more readily available to Latin businessmen. Another Mexican delegate, banker Eustaquio Escandon, said the U. S. and other industrialized nations followed the “law of the jungle” in dealing with Latin America. Mexico City newspapers, commenting on the remarks of Campos Salas and Escandon, termed them the strongest official attacks on U.S. trade policies since the beginning of the administration of President Gustavo Diaz Ordaz. (The commodity price and foreign trade situations, and the pros and cons of the Latins and the import nations, are too tangled to pursue here. But two sets of statistics give the roots of the Latin gripe: In the past decade Latin America’s export growth has been only 35 percent, compared to 50 percent for all of the less-developed nations as a group. And, according to the Economic Commission for Latin America (ECLA), a United Nations agency, although Latin exports increased 23 percent in volume during the period 1957-62, commodity prices dropped so sharply that the money return increase was less than one percent.)

Although the CICYP delegates were unanimous in recognizing their mutual problem of underdevelopment, there was by no means a consensus on what should be done about it. Two areas of discussion were particularly illustrative of the lack of continental unity, and the differing viewpoints Latin Americans can take on the same subject. The first, economic integration, displayed the distrust – for competitive reasons and otherwise – that exists in the nations’ business sectors; the second, foreign investments, showed the differing receptions the American dollar can expect once it goes south of the border.

B. Regional Economic Integration

Intrigued by the prospects of matching the rapid growth rate of the European Common Market, the industrialists spent considerable time mulling why they can’t achieve the same degree of economic unity. The continent now has two infant regional groups: The Latin American Free Trade Area (LAFTA), composed of Argentina, Brazil, Colombia, Chile, Ecuador, Mexico, Paraguay, Peru and Uruguay; and the Central American Common Market (CACM), whose member nations are Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. The markets show considerable latent strength. Inter-regional trade in the CACM rose from $30 million to $140 million between 1960 and 1965, and member nations set up their own Central American Bank and Central American Clearing House, which handle international monetary exchanges and make investment loans within the area. LAFTA intrazonal trade increased from $659 million in 1961, its first complete year of operation, to $1,204 million in 1964, the last year for which full figures are available. Yet LAFTA has its drawbacks, chief of which is a charter provision for a product-by-product method of negotiating the elimination of tariffs, and lack of an automatic across-the-board provision for complete removal of duties. (The latter is found in both the European Common Market and the European Free Trade Association.) Consequently, the members have been generally unwilling to include any manufactured products in their tariff liberalization schedules. It is estimated that only five percent of the intra-LAFTA trade consists of manufactured goods; and, further, that dealings among the five southernmost nations in ten commodities – timber, livestock, wheat, coffee, cotton, sugar, mate, fresh fruit, copper and mineral oils – account for 70 percent of LAFTA’S trade. Further, Venezuela and Bolivia are conspicuously absent from LAFTA (although a Venezuelan governmental commission recently recommended to congress that she become a member).

A number of recent economic surveys point up the savings and lack of duplication that would be made possible through true integration. The Latin auto market is split between some 40 plants owned by a dozen foreign firms, which produce between them some 300,000 units a year. Conversely, each of the major European auto producers turns out from 300,000 to 500,000 units per year – and at a per-unit cost half that of the Latins. Another study, of the paper industry, concluded that building of 12 mills with a 200-ton daily capacity, rather than 50 mills with a 50-ton daily output each, would satisfy the Latin market, cut investment costs by half, and reduce prices from 60 to 80 percent. Established industrial fiefdoms, however, are hard to disturb, and corridor comments by any number of CICYP delegates indicated they would rather continue their existing operations – with a guaranteed profit--rather than risk intrusion by outsiders. The lesser-developed nations --and this is the reason Bolivia gives for non-membership – fear it would be impossible to establish any type of industry whatsoever under conditions of uninhibited continental competition. And it is this disparity in industrialization which causes much of the opposition towards integration. From this standpoint the continent can be split into three groups: Argentina, Brazil and Mexico, the most highly industrialized, with mass production of autos, tractors, chemicals, machinery and tools; then Chile, Colombia, Peru, Uruguay and Venezuela, which produce most of the articles needed in housing construction, textiles, electrical fixtures, some household appliances and “support” machinery such as compressors; and, lastly, the sub-marginal industrial nations of Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua and Panama. (Industrial production ranged, in 1960, from the $14.9 billion of Argentina to the $112 million of Panama.) As was noted by Ernesto Ayala, of the Mexican delegation, LAFTA’s ideas for regional industrialization may be “theoretically sound, but nonetheless will be “very difficult to put into effect.” He candidly conceded that in the manufacturing and finance sectors of some states ”nationalism and the local need for development” outrank LAFTA’s regional and supranational plans, “rational and well-coordinated as these may be.” He still urged strongly an immediate regional customs plan with equal tariffs towards outsider nations and abolition of all internal duties. “If this were done on steel, for example, a market could be created for about three million tons which are presently bought from third countries,” Ayala said.

An indication of the Latins’ attitude towards free trade came at a round table discussion at which CIGYP President Moore proposed creation of a hemispheric trading area in which the United States gave priority to South American imports. Moore said Latin America faces double discrimination in Europe, which has the “cream” of the Common Market, and which also bas free access to the U.S. market. The hemispheric market, Moore suggested, would be a means of pressuring Europe to remove this discrimination. The market could have two levels, Moore said: One of the relatively developed nations, such as Mexico, Argentina and Brazil, which in return for their U. S. export profits would be able to give trade preference to poorer nations which have different wares and export problems. His idea got the prompt endorsement of Mexico, which feels it could increase by one-third its national market were it given tariff-free access to California and Texas alone. Argentina, however, just as quickly let it be known that it didn’t desire to clash with American exporters, arid that the subjection of Latin industrialists to such competition would be grossly unfair. Moore’s idea thus never got to the resolution stage.

Jose Gomez Gordoa, also of the Mexican delegation, suggested that the developed nations don’t particularly desire to help LAFTA and the CACM. “In the first place,” he said, “we must admit that Latin America, as a group of countries in the developing stage, and with justified eagerness for self-improvement, is surrounded by an atmosphere that, without being hostile, has been, indifferent…” Measures taken to cooperate with the integrated Latin market “have not been efficient enough to achieve an improvement in our economic standard and improvement in our capability to solve our ancestral problems,” Gomez Gordoa said. His references were both to the United States, which was openly suspicious of LAFTA when it was being drafted during the Eisenhower Administration, and to the European Common Market. There is considerable European discrimination against South American agricultural products. At the insistence of President Charles deGaulle of France, the ECM, after the end of its transitional period, is to give priority to former French colonial territories in Africa on imports of tropical food products. Moore remarked that elimination of this “serious competitive disadvantage” should be a prime goal of LAFTA, and noted that the United States, in the current Kennedy Round tariff negotiations in Geneva, is “pressing, and pressing hard,” for the abolition of the preferences on African fruits, most of which now enter the United States duty-free.” The African products, after the transition period, will come into ECM countries duty-free, while the ECM duty on Latin bananas will be 20 percent; on coffee 9.6 percent, and on cocoa 5.4 percent. Britain also assured preferential treatment for some of its Commonwealth members.

The United States’ Dr. Gordon – who spoke in English after apologizing that his Spanish was still handicapped by a heavy Portuguese accent he acquired while U. S. Ambassador to Brazil-praised the gains of LAFTA and the CACM, but warned there is a “serious danger” of halting at a plateau” unless reforms are made. He suggested a more rapid reduction in tariffs, a freer movement of capital and manpower between member nations, and inclusion of Caribbean nations (excluding, by implication the present Cuban government). In previous years an influential body of U. S. opinion – both public and private – looked with disfavor on LAFTA, primarily because it is the brainchild of Raul Prebisch, the Argentine economist who formerly headed the Economic Commission for Latin America. These persons considered ECLA – and therefore LAFTA – be to “socialist” and a first step towards Latin American “statism.” U. S. firms with heavy foreign trade interests in South America also feared a whittling away of their markets. But Dr. Gordon asserted that the current U. S. policy – as enunciated by Washington, at any rate – now favors Latin economic integration. “We are wholeheartedly in support,” he said, even though there might be short-term harm to some U. S. exporters. “But in the long run the United States can only stand to gain” by Latin growth, he said.

Despite the problems encountered by LAFTA, Mexico’s Gomez Gordoa was optimistic to the point of discussing – and seriously – a supranational organization “capable of deciding matters even of national governments.” Latin America has a better chance of federation than members of the European Common Market, he said, because of common backgrounds of race, religion and historical background. Gomez Gordoa said Latins have also characteristics “of a spiritual nature, which constitute what can be called the sociological infrastructure without which the creation of the Latin American world is impossible.” He and other integration advocates urged a gradual amalgamation of LAFTA with the Central American Common Market, saying that “justice in distribution and the most adequate allotment of merchandise and goods among our people” should be goals of private enterprise in Latin America.

C. Foreign Investments: Boon or Bugaboo?

The framers of the Alliance for Progress projected a $2 billion annual inflow of capital into Latin America, including $300 million in direct private investment by United States businessmen – a not unreasonable target, considering that investments during the 1950s averaged more than $400 a year. Yet in 1962, the year after the signing of the Alliance charter, U. S. business actually liquidated $32 million more than it invested, reacting to Castro jitters. And annual investments now are running only about half the $300 million goal. There are two sets of losers: The Latins, who find their development hampered because of a lack of capital and technological know how they could acquire from U. S. firms, and U. S. business itself, which is deliberately absenting itself from the lucrative Latin market. (One study quoted at the CICYP meeting said the average net earnings, after local, but not U.S., taxes, of all the North American branches and subsidiaries in Latin America was 14.58 percent of the book value of their investments in the period 1951-61. According to the U. S. Department of Commerce, about 50 percent of these net earnings were reinvested locally, meaning that the percentage transferred back to the States as dividends amounted to slightly less than 7.3 percent on the foreign investment.)

The CICYP delegates heard a three-phase discussion of the foreign investment question: The reasons some countries discourage outside capital; a “code of conduct” for foreign companies who operate abroad; and inducements which Latin governments can offer to lure in U. S. dollars. (The conference fell into its most heated controversy on the last part, of which more will be said later.) The thoughts came from Dr. Jose A. Martinez de Hoz, head of the Argentine delegation, who advocated an open door policy for foreign capital. Most of the objections, he asserted, are based on “erroneous,” economic reasoning. As an example he cited the claim that foreign investment has a contrary influence on the balance of payments of the host nation because (a) although payment of dividends to internal investors means a redistribution of income, dividends sent abroad mean a “reduction” of national income; and (b) in cases of high earnings, the transfer of dividends may exceed the initial capital investment, producing a net loss of foreign exchange. Arguments of this nature, said Dr. Martinez, ignore the “multiplying effect of the new investments” which produces new income at all levels of the economy. But an even more serious national obstacle to foreign investors, Dr. Martinez said, comes from persons who through “mental laziness” assign certain characteristics to groups (i. e., businessmen) rather than judging each by his individual qualities. “In the case of isolated and static societies, these attitudes tend to become deeply rooted in the personality of the individuals…Some ideologists have converted foreign capital into the propitiatory victim, into the cause of all the social, economic and political evils which our countries suffer. The facile expedient of attributing a whole complex structure of problems, maladjustments and difficulties to a single cause has led to creating the prototype of the foreign capitalist as someone who wants to keep the people in poverty, take over the natural resources, and get the biggest possible dividend for himself, even at the cost of the country itself. The actual effect of this prejudice has materialized itself in some countries in acts prohibiting the entry of foreign capital, in the belief that all the ills will thus be cured,” Dr. Martinez said. Since this type of opposition is “of an irrational nature,” the Argentine industrialist said, investors should strive to replace stereotyped attitudes “with the real image” of the entrepreneur who is a “ dynamic factor in social and economic development.” Here are some other points from the Argentine’s “code of conduct” for foreign visitors:

Provide indigenous workers and managers with access to modern technological methods; and require strict compliance with quality control standards, both from suppliers and employees, so as to improve local technicalization.

Import U. S. management methods and introduce Latin business to quality control, marketing, motivational research, communications and employee health and safety systems.

Emphasize “zonal” development, rather than concentrating plants in areas that are already booming. Construction of processing facilities near the source of raw materials will aid in correcting economic inequalities within a nation, and give social and economic mobility to its people.

Introduce social welfare services such as hospitals, schools, recreation centers, commissaries, libraries and health centers, especially in conjunction with rural projects.

Give local investors a chance to buy shares in the business, and “induce local employers to adopt a similar attitude, instead of keeping their companies in their personal or family estate, as is frequent today.”

Reinvest as much of the profits as is possible, so as not to aggravate the balance of payments problem by taking money out of the country.

Dr. Martinez was mindful of the fear among U. S. businessmen of nationalization of foreign properties. At the outset he said legislation applicable to Investments of foreign origin ought not to be different from that governing the domestic investment sector. But, he said, constitutional provisions for the protection of private property are not sufficient, because “the enforcement of expropriation measures has frequently violated this principle.” Indemnity in a lesser amount than the true value of the property, payments after a long period during which there has been monetary devaluation, the imposition of regulations which prohibit the conversion of Indemnity payments into the currency of origin--all were cited as means in which “nationalization” can be in fact “confiscation.” As a solution Dr. Martinez proposed treaties to safeguard foreign investments against political or non-commercial risks. The system would be administered by an international agency; it would also serve as a guarantee of the right of an investor to repatriate his capital in the currency of origin. The Argentine also called for “judicial stability,” saying that investments cannot be considered when governments decrease or cancel benefits already granted. (In an aside Dr. Martinez said his proposal wasn’t as radical as it appeared at first blush; that all he asked was that Latin nations put into the form of multilateral treaties what is already said in their constitutions, and give an international agency the right to enforce compliance.)

The Mexican delegation, however, reacted as if Dr. Martinez had called for the abolition of the tortilla. Simply, they felt he had insulted the governmental prowess of a country that has learned to live with foreign investors, and quite comfortably, despite nationalistic feelings that are perhaps the strongest on the continent. Juan R. Martinez, vice president for international relations of the Banco Comercial Mexicano, S. A., emphatically said foreign investors should have no more guarantees than nationals--and that no sovereign nation would permit an international agency to supervise its dealing with domestic business firms. And the Mexicans won a majority of delegates to their viewpoint, and with ease. A draft Argentine resolution embodying the guarantees was watered down until it said that “private foreign capital will not ask for special privileges not afforded local capital.” All the Argentines retained was some weak wordage to the effect that governments would offer unspecified “special incentives” to attract foreign investors. (The Mexicans, it might be said in passing, have no objection to Argentina offering foreign investors whatever it chooses; however, they prefer to make their own agreements without the aid of hemispheric pressures.)

D Some Immediate Steps

The issues of economic integration and foreign investment, when stripped to their essentials, are matters which ultimately must be decided by Latin governments, not Latin businessmen. What, then, can the business sector do on its own initiative that will improve the lot of their fellow citizens?
To Dr. Alfredo Anzola-Montauban, president of the Creole Petroleum Corporation and head of the Venezuelan CICYP section, a first step could be improving the “human bedrock” of Latin America--the persons who, because of underdevelopment of their physical and mental capacities, are at the bottom of the pyramid made up of the varying social and economic classes. Because of a lack of qualifications, he said, a great body of Latin Americans have a “negative attitude of passiveness and apathy towards work.” Both aptitudes and attitudes must be improved, Dr. Anzola-Montauban declared, “before the tensions, naturally or artificially produced, end up in an explosive situation.” The bedrock campaign, he said, must be a joint effort of government, the church, business, the political parties and universities, and must be forthright enough to overcome demagogic appeals aimed at urban masses. Private enterprise’s voice, he said, will determine the ideological bent of future Latin governments. “If this influence is decisive, we shall avoid the rise of Marxist states, and therefore a Marxist society. But at the present time, we must acknowledge that our influence as private enterprisers in the election of our governments is limited. On the other hand, the influence of the growing populations in the underdeveloped areas, subject to intense and attractive propaganda, is immense. If we abandon popular advancement to governments born of that influence, we shall witness the gradual disappearance of our system, instead of its extension to popular sectors.” And the end result, said Dr. Anzola-Montauban, would be governments devoted to “’protective and paternalistic” measures which would tax private enterprise out of existence.

The problems of the barrio, the favelo, the rancho--the names by which slums are variously known in Latin America – “consist principally in the fact that the people who live in these conditions are reasonably satisfied and do not have sufficient desire to rise above this way of life,” he said (a conclusion which is by no means shared by sociologists and other persons who have studied the slum-dweller at first hand).

Dr. Anzola-Montauban’s version of a Latin “war on poverty” – he even called it a “community action program” – was pragmatic in that it recognized the shortage of working capital, and the fact that persons now crowded into the Latin slums are unlikely to relocate in significant numbers. He proposed organization of “economic cells of production of goods and services” as a “link integrating the economic process of our countries,” with the individual worker acting as the “creative agent.” Dr, Anzola-Montauban conceded that his idea is an abrupt departure from typical industrial organization but said there is ample reason for doing so: “Unemployment and under-employment in Latin America is such that the investments necessary to create employment in the manufacturing, service or farming industry are so great that they surpass the financial capacity of the private sector and of the state. Besides the scarcity of capital, we have so scant consumption that the inclination to invest such hypothetical capital would be limited.” The cell-building process must start in the schools, he said, where slum-dwellers learn that it is possible that “with his own hands man can produce an item of current consumption, or perform a service which has an economic value.” Financing of these minute enterprises could come from direct loans from private enterprises or stock corporations in which the business community participates – the latter a “genuine integration (of interests) which can do away with isolation and prevent the class struggle.” Private enterprise, he said, has a legitimate right to defend its interests, and to do so actively by changing the economic structure of a nation if necessary for self-preservation.

Dr. Anzola-Montauban said the “magnitude of the problem is such that we cannot hope to bring about a solution by the year 2000.” But, he added, “One cannot remain indifferent when faced with a problem the effects of which are in plain sight.”
Received In New York July 5, 1966.

©1966 Joseph C. Goulden, Jr.

Mr. Goulden is a 1965 Alicia Patterson Fund fellowship winner on leave from The Philadelphia Inquirer. Permission to publish this article may be sought from The Managing Editor, Philadelphia Inquirer.