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Any attempt to define the changes in the Peruvian political economy that have taken place since 1968 1 must be made in terms of the relationship between the state and domestic capital on the one hand and foreign capital on the other, and must offer an explanation of the way in which this military- controlled state has tended to replace the former and establish a new relationship with the latter. In particular, the confrontation between the government and foreign capital, and the significance of internal ownership reforms cannot be understood without reference to the development of Peruvian capitalism before 1968.
One of the clearest trends in Latin American government during the past decade has been the establishment of military dictatorships in many South American countries, some of them long-term. Argentina, Brazil, Bolivia, Chile, Ecuador, Peru and Uruguay have all had this experience. In efforts to explain this phenomenon, many scholars have delved into the political history of civil-military relations in Latin American society since 1930. A recent penchant for contemporary history, promoted in part by the availability of funds for policy-oriented research, has stimulated this concern. In the process, however, the deeper historical roots of the institutional development of the Latin American military have been neglected.1
In the rhetoric of United States foreign relations, the countries of Latin America occupy a very special place. They are ‘our sister republics’, ‘the Good Neighbours’, fellow members of a unique international system, and so on. The reality, not surprisingly, is different. Because of the vast disparity of power between the United States and Latin America, relations between them are inherently delicate and subject to strains. The issue of ‘intervention’ by the United States in the internal and external affairs of the Latin American countries is ever present, whether it is a matter of marines being sent into a small Caribbean republic or of the Central Intelligence Agency (CIA) ‘destabilizing’ a major South American government.