Anyone studying the history of the Andean republics in the 1920s and ’30s comes inevitably across Edwin Walter Kemmerer and begins to wonder about his true importance, the exact nature of his economic missions, and the sort of person he was. After reading Paul Drake’s ten-years-in-the-making, meticulously researched, and clearly written new book, one knows that Kemmerer was genuinely important; and one knows just about all there is to know about his missions. But Kemmerer the man remains an unknown. Behind the economist must have lurked a human being.
A professor of economics at Princeton University, Kemmerer ranged all over the world, bringing to the unenlightened the allegedly infallible teachings of scientific economics. Just as medical doctors trusted in their ability to curb disease among the unwashed, so the “money doctor” trusted in his competence to sanitize economics and banish fiscal ills. Drake writes about Kemmerer’s missions to Colombia, Chile, Ecuador, and Bolivia in the 1920s and to Peru in the early ’30s. Often, when he appeared in their midst, the natives hailed Kemmerer as a “messiah,” as their “Moses” (p. 139). It is reminiscent of the South Sea Islanders in Gilbert and Sullivan’s “Utopia, Limited” who implored contingents of British experts, “Oh teach us to be civilized.”
Behind the publicly expressed adulation in four of the republics—Peru’s frosty reception proved an exception—lay vicious infighting. Different interest groups hoped to coopt the money doctor’s mission so as to gain advantage over rivals. When their expectations were not realized, they lost interest in the prophet of scientific economics. By the time Kemmerer reached Peru, the world depression was underway, and it had become clear that Yankee economists had not discovered the sure road to prosperity.
Basically, Kemmerer preached the conservative gospel of the gold standard, scientifically managed central banks, careful budgeting, and honest collection of taxes, including a graduated income tax. As prescribed by him, scientific economics sometimes included rather more humane features than the version preached by U. S. experts in the 1980s. Long-term consequences of the Kemmerer missions included expansion of the state’s economic structure and the locking of Andean economies into the world system—developments that, as Drake suggests, might have come inevitably even without the money doctor’s housecalls.
Andean leaders hoped the respectability gained from “Kemmerization” would attract U.S. investment and loans in sufficient quantities to guarantee prosperity. But Andean leaders and foreign bankers acted no more responsibly than they would in the 1970s. In both eras they joined to produce disastrous consequences that money doctors warned against but were powerless to prevent.