The Intellectuals Roots of Neoliberalism in Guatemala and Its Controversial Relationship with Military Regimes, 1960–80

This paper delves into the early dissemination of neoliberal ideas in Guatemala by examining the works of one of their major advocates, Manuel Ayau, his correspondence with leading neoliberal intellectuals in Europe and the US, and his articles in newspapers and journals between the 1960s and 1980s. The paper also explores the relationship of the Guatemalan neoliberal project with military regimes and institutional violence. Through the founding of the Centro de Estudios Económicos y Sociales (CEES) in 1959 and the Universidad Francisco Marroquin (UFM) in 1972, as well as through pamphlets, newspaper columns, lectures by international neoliberal intellectuals, and collaborations with major neoliberal think tanks, Ayau disseminated what he considered “the principles of a free society.” Indeed, neoliberalism constituted, for Ayau, the intellectual weapon to counter, on the one hand, the threats represented, externally, by the Cuban and the Sandinista revolutions and internally by guerrilla organizations; on the other hand, the developmental policies implemented by Guatemalan governments with US backing. However, aware of the limits of his “battle of ideas”, Ayau joined the Movimiento de Liberación Nacional, a paramilitary group and extreme right-wing party, and sought the support of Carlos Arana Osorio – a president who enforced torture, disappearances, and killings against political adversaries – to found the UFM. Accordingly, several founders and members of the CEES and the UFM supported the dictatorial and genocidal regime of Efraín Ríos Montt by entering the State Council, the Ministry of Economy, and the Ministry of Finance. The paper thus investigates the controversial relationship between the neoliberal project and the military regimes. It shows that although the military dictatorships hindered economic liberalization by advocating for state interventionism, Guatemalan neoliberal intellectuals supported them because, by forcefully suppressing socialist and communist organizations, they could set the political conditions for the establishment of the market order.