This is a fascinating and exasperating book. In part it is a personal memoir, in part a treatise on the cause and cure of inflation, with dogmatic commentaries on Bolivia and on Latin America in general. The personal reminiscences are fascinating—at least to this reviewer—the rest mostly exasperating.
In 1956 the U.S. International Cooperation Administration chose George Jackson Eder to go to Bolivia to work out a program for harnessing the country’s galloping inflation. Eder had impressive credentials as an expert on Latin American economic problems, having been chief of the Latin American section in the Bureau of Foreign and Domestic Commerce and for many years an international lawyer dealing particularly with Latin American problems. One branch of his family has lived in Colombia for a hundred years.
Part of this book is a blow-by-blow account of working out, defending, and administering the price stabilization program. It tells of Eder’s negotiations with government leaders and his work in convincing the chiefs of the governing party, the Movimiento Nacionalista Revolucionario. This section also describes the need for a drastic program of price control and the measures which he thought desirable. It recounts at length the meetings of his National Monetary Stabilization Council to work out details and to decide how to deal with the innumerable attempts by interest groups to chisel away at basic elements of the program.
The volume is filled with assessments of Eder’s associates during the nearly twelve months that he spent in Bolivia. At times, when he has something nice to say about them, he names names, but many remain anonymous, although anyone familiar with Bolivia can fill in some of the blanks.
On the one hand, Eder is obviously a master of what the Latin Americans call “la politiquería.” Much of the book’s exasperation arises from the fact that he is, on the other hand, quite oblivious to “la política.” Nowhere in this volume does he give any evidence of understanding the broader, longer-range transformations going on in Bolivia before, during, and after his stay there. Nowhere does he recognize that, whatever its errors, the MNR government has sought to reverse 450 years of history and quite literally “to give Bolivia back to the Indians.” Nor does he appreciate the reasons behind the economically disastrous nationalization of the tin mines, e.g., the desire to break the stranglehold of the Big Three mining companies on the economic life and the politics of Bolivia. Finally, he shows little sympathy with the efforts of the MNR government—however misguided in detail—to end Bolivia’s excessive dependence on a single export product, to diversify the economy, and to begin exploiting the vast and virtually untouched resources in the east.
Whatever the criticisms of this volume, the fact remains that George Eder’s effort to curb Bolivian inflation largely succeeded. Because it gives a detailed account of how this success was achieved, this book should interest not only students of Latin American affairs, but also economists concerned with the almost universal problem of inflation.