The Twilight of Sovereignty? Walter Wriston, High Finance, and Peripheral Neoliberalism in Latin America

• In Event: States and Sovereignty

Abstract

Recent literature in political science has argued that American bankers unwittingly built the financial infrastructure that the United States has since used to implement economic sanctions, in the mistaken belief that they were escaping the power of the state. In this paper, I argue that Walter Wriston, the central figure in the development of American banking, instead relied on the state to build what I argue is an early instance of the Wall Street Consensus, one which helped to lay the groundwork for future iterations of neoliberal development policy. Based primarily on an archival collection of speeches given by Walter Wriston during his tenure as the head of Citibank’s overseas division (1959-1967), I trace the development of Wriston’s interventionism through his remarks to Citibank’s 1959 overseas investment customers as well as to later meetings of businessmen, bankers, and politicians. Wriston’s intervention in development policy arose in response to threats to international financial investments posed by nationalist and communist movements in the context of decolonization, which led him to lobby the US government both to condition aid on states implementing policies that improved business conditions and to offer insurance for private investment against political risks like expropriation. Far from an waging an attack on the state, Wriston sought state support to reorient development efforts around private investment and finance, which included calls for US military intervention on behalf of American business, globalizing the takings clause of the Fifth Amendment, and derisking foreign investment. Finally, I show how Wriston coordinated an attack on the Alliance for Progress in 1963, which helped to turn American businessmen and politicians against President John F. Kennedy’s plan for development aid in Latin America. Critically, Wriston’s intervention was coordinated with Latin American businessmen, lending further evidence to recent scholarship on the significance of peripheral neoliberalism, which has been overlooked in the literature on neoliberalism.

Author

• Conrad Jacober, Johns Hopkins University