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By William J. Duiker

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The Native Americans remained poverty-stricken, debt servitude was still a way of life, and the region remained economically dependent on foreigners. Despite its economic growth, Latin America was still sorely underdeveloped. The surface prosperity that resulted from the emergence of an export economy had both social and political repercussions. One result socially was the modernization of the elites, who grew determined to pursue their vision of modern progress. Large landowners increasingly sought ways to rationalize their production methods to make greater profits.

As in Europe and the United States, industrialization led to urbanization, evident in both the emergence of new cities and the rapid growth of old ones. Buenos Aires (the “Paris of South America”) had 750,000 inhabitants by 1900 and two million by 1914 — one-fourth of Argentina’s population. By that time, urban dwellers made up 53 percent of Argentina’s population overall. Brazil and Chile also witnessed a dramatic increase in the number of urban dwellers. Latin America also experienced a political transformation after 1870.

These reforms occurred because workers and their representatives had begun to use the democratic political process to their own advantage, organizing labor unions and political parties to improve working conditions and enhance the role of workers in the political system. Many of these political parties were led by Marxists, who were learning that in the absence of a social revolution to bring the masses to power, the capitalist democratic system could be reformed from within to improve the working and living conditions of its constituents.

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