The St. Olaf Interview

David SchodtDavid Schodt,
Professor of Economics and Director of the Center for Innovation in the Liberal Arts

By Tom Vogel

Professor of Economics and Director of the Center for Innovation in the Liberal Arts David Schodt presented the spring Mellby Lecture this month. His lecture, "Commodity Connections: Latin America and the United States," addressed how the production of commodities commonly produced in Latin America, such as cacao, coffee or bananas, have influenced the development of the region. In the St. Olaf Q & A he discusses how his time in the Peace Corps led him to research on Latin America and how the region currently is developing politically and economically.

Q You describe commodities as potential vehicles for "connecting the familiar with the foreign." Explain how this can work.
A

One challenge of teaching courses with an international focus is that for many students both the subject -- other countries or regions -- and the methods of analysis are unfamiliar. I had become interested in the role of commodities in economic development from research I have done on Ecuador. As director of the Center for Innovation in the Liberal Arts (CILA), I have been involved in doing a lot of thinking about teaching and learning. One of the things we know is that new learning does not occur in isolation from what we have learned previously. Finding ways to facilitate the connections between new and old learning facilitates the acquisition of new knowledge and skills. Commodities are one way to do this; they connect the familiar to the foreign. For example, we all know the bananas we purchase in the grocery store, but we probably don't know much about where they came from or how they are produced. We can start with what we know and work our way back along a commodity chain to learn about their production and the countries in which they are produced.

Q You were in Latin America with the Peace Corps from 1969-72. What inspired you to join the Peace Corps, and what drew you to Latin America?
A

It was the late '60s, and I was completing a degree in electrical engineering at Cornell University. Spending the next few years in a laboratory held little appeal; I was more interested in working directly for social change somewhere in the world. The Peace Corps offered the opportunity to do that. I had grown up outside of the United States, living in different countries, but I had never been to Latin America, and I wanted to learn more about it. Originally I applied to go to Chile, but I was offered a position in Ecuador. It turned out to be a remarkable experience that continues to shape my professional life.

Q What experiences led to your research and publications on the economics of the region?
A

Although the path was not a particularly linear one, it was certainly my initial experiences in the Peace Corps that led to my research and publications on Ecuador. I spent two and a half years working with poor families who were migrating from the crowded mountain regions of that country to acquire land in the Amazon region -- something like the movement west of settlers in the United States (although this was to the east). This was economic development from the bottom up. I left Ecuador knowing a lot about this country, but without much appreciation for how my experiences might fit into a broader framework for understanding economic development. After completing my Ph.D. in economics and coming to St. Olaf, I had the opportunity to take a couple of Interim classes to Ecuador to study economic development. Each time I went I learned more, but I also came back with even more questions. I had the good fortune to receive a Fulbright research award to spend six months in Ecuador trying to answer some of those questions. That led later to my first book on Ecuador and several subsequent articles.

Q You edit the Ecuador: Economy section of the Handbook of Latin American Studies for the Library of Congress. What does this responsibility entail and how did you come about doing it?
A

I was invited to do it as the result of work I'd done in the past, particularly my book Ecuador: An Andean Enigma. The Library of Congress publishes the Handbook of Latin American Studies, a series of annotated bibliographies of the scholarly literature on all of the countries in Latin America. The Handbook is a tool for scholars doing work on Ecuador and the rest of Latin America. In my case, the Library of Congress receives publications about the Ecuadorian economy that have been published in that country. They send those to me. I read them and other publications on the Ecuadorian economy by scholars from around the world. I write an annotated biography and an introductory essay that summarizes major trends in scholarship on the Ecuadorian economy over the past couple of years.

Q Aside from the recent coverage of President Bush's trip to the region, there's typically not much focus on Latin America in the news. What are some current events of which people should be aware?
A

Beginning in about 1978, following many years of military governments in Latin America, there was a return to democracy in most countries in the region. About the same time, the Latin American economies were particularly hard hit by what became known as the debt crisis. Foreign borrowing had exceeded manageable limits in many countries, and their economic growth was sustained primarily by continued infusions of foreign capital. After 1982, when the Latin American could no longer borrow from private international banks, they were forced to adopt policies, which, among other things, slowed economic growth. For many years following the debt crisis there has been very little growth in incomes. Although average incomes have started to recover since 2000, the reality is that many Latin Americans have not seen much improvement in their standard of living for a long time.

The prolonged period of economic stagnation has put great stress on Latin American governments. We're starting to see the election of leaders, such as Bolivian President Evo Morales, Venezuelan President Hugo Chavez and Ecuador's Rafael Correa, whose concern for the social conditions of their populations is welcome, but whose populist policies are reminiscent of those of an earlier period, and, similar to those, are not likely to build the foundations for sustained economic progress. Successful economic policies have to combine ways of addressing the growing social deficit in the region with an emphasis on long-run economic growth. U.S. policies toward the region in recent years have emphasized the importance of free trade. While this is not unimportant, we would also do well to pay increased attention to the growing social problems.

Q What are some examples of the ways in which Ecuador's political arena has been shaped by its production of certain commodities, such as bananas, cacao and petroleum?
A

One of the things about commodity-dependant economies is that their economic performance is closely linked to the performance of their exports. Prices for commodities tend to be more volatile than those for manufactured goods, with the result that economic performance tends to follow the boom and bust cycles of the country's exports. When a government's legitimacy rests disproportionately on its ability to provide concrete benefits for its supporters, as is the case for countries like Ecuador, fluctuations in export earnings can be transmitted fairly quickly into political instability.

We tend to think of Latin America as a homogenous region, but the countries within it are remarkably different. Ecuador is a very small country, about the size of Colorado, in which regionalism is extremely important. Many Ecuadorians have regional identities that may be as strong as their national identities, at least for their political involvement. Political parties tend to be both weak and regional, not national. Over 15 parties, for example, contested the last presidential election. The challenge for a government coming to power is to assemble a coalition that will allow it to govern, and the main way to do this is through various forms of patronage. When exports, and the economy, are doing well, governments have the resources to hold these fragile coalitions together. When things are not going so well, it becomes much more difficult to hold together a governing coalition, and the threat of political instability rises.

The process of shifting political coalitions is common enough that there's a phrase Ecuadorians use in reference to their elected representatives: "cambio de camisetas," meaning, "change of shirt." It refers to the way elected officials change their political affiliations multiple times in pursuit of personal advancement.

Q Describe the courses on Latin America that you teach at St. Olaf.
A

For a number of years, until my administrative duties expanded, I was fortunate to be able to teach the capstone course on Latin America for Hispanic studies majors. I teach a course called "Economic Development" on a regular basis. It's not just on Latin America, but looks at countries in Africa and Asia as well. It's good for students to have the comparative context, no matter which region is of particular interest to them.

Teaching international courses at St. Olaf is a pleasure. Because of the College's strong international studies programs, there are always a number of students in my classes with experiences in the countries we're talking about. They bring their experiences to class, and that enhances the course and helps other students with less knowledge of the subject.