Paraguay is the second poorest country in South America. You’d never know it from visiting some neighborhoods in the capital city of Asunción, though. Shiny new SUVs cruise the streets between the golf course and the yacht club. Boutique malls sell the latest in European fashion. Not a bad country for enjoying the good life.
I lived in Paraguay for a time in the late 1990s, but not anywhere near the country club. I was a Peace Corps volunteer in a dusty frontier community 100 miles off the paved road. With a government salary of $220/month I was the wealthiest person on my street. My neighbors, for comparison, had 11 children and somehow made do on about $400/year they made selling tobacco to a local distributor and onions in the nearby village. Many small farmers subsisted in the short term on bank credit, a sort of debt servitude that, carried out over years, funneled resources out of the community and upward to the elite. In the long term, some eventually lost their land and migrated to the city where I lost track of them. The slums were always growing around Asunción’s outskirts.
Most of the land was owned by only 350 people, according to a newspaper article in 1998. This statistic startled me, and explained a great deal of Paraguay’s dysfunction. 350 was half the size of my high school graduating class! The country was being run by an exclusive club of millionaires that all knew each other and, for the most part, didn’t pay much attention to the poor folks.
Paraguay was ostensibly a democracy, a 1989 coup having deposed a long-standing dictator. But the elections remained theater. A few rival millionaires would emerge from their mansions long enough to film TV spots featuring them bravely clearing brush at the ranch riding about on horseback looking folksy. To remove any remaining doubt about their populist roots, they would then toss a few bribes to the voters the week of the election. My community at the forest’s edge got free chainsaws. Thanks, General Oviedo!
In spite of the country’s political corruption, I am fond of Paraguay. The people are friendly, the natural history is rich, and the climate warm and forgiving. After my tour was up, I considered starting up a beekeeping operation and staying in country. After all, I calculated that I only needed about 30 hives to sustain a basic campo lifestyle.
In the end, though, I decided against it. The crime rate was phenomenally high, the ambient poverty depressing, and as an outsider the pervasive corruption certainly didn’t work in my favor. The society simply did not function well, and although it contained great charm it was too often punctuated by avoidable tragedy.
Mostly, I never had the security I felt in the middle class in the United States. In fact, Paraguay didn’t have much of a middle class. The wealthy were wealthy, the poor were poor, and any social mobility tended to be downwards.
Paraguay has natural resources: fertile soil, navigable rivers, and a pair of world-class hydroelectric projects. But the wealth never spreads beyond the aristocracy. The powerful have little incentive to run the country to benefit anyone but themselves. Income inequality was not just a problem, it was the single biggest obstacle to any sort of improvement to the lives of the populace.
It didn’t matter if you wanted to implement a liberal program, or a conservative program, or to regulate, or to deregulate. Ideology didn’t even really matter. If the aristocrats could make money, it would happen. If it would cost them money, it wouldn’t. Unless their family was involved. They’d fire competent staff to replace them with a nephew. If you knew the right people you wouldn’t have to work hard; if you didn’t you were basically stuck. If the powers that be didn’t like a new law, it’d never be enforced. If, heaven forbid, a rivalry among the aristocrats escalated, someone got killed. Paraguayan government was corruption in near-textbook purity, and the scam was all possible because the immense resource gap between the rich and the masses meant no one from within the system could challenge it.
Now, back to the United States.
I am not enjoying watching my own country develop the same internal dynamic that corroded the heart of Paraguayan society. As power and wealth concentrate upwards, the ability of a democracy to function in the interests of its people falters. Forget free markets, or single-payer health care, or whatever your hobby horse happens to be. None of it- left, right, or center- will happen once corruption becomes endemic. And corruption is a major product of wealth disparity.
This is why I support the 99% & Occupy movements. At long last they’ve gotten Americans talking about our nascent Aristocracy. I love Paraguay, but if I wanted to live in that sort of system I’d rather move back there than grow a banana republic at home.