Book Review: Autopsy of the Civilista Budget – How a Caste Squanders the People’s Money
“There’s nothing to do than study Peru’s
history in depth – that’s an essential recommendation of our program of
political education – because once you really know it, you immediately
understand the historical reason for the Aprista movement. Our party, after five
years of manly struggle, has managed to begin the popular crusade for freedom
in the country. I leave to the citizen and to the "compañeros" the revealing task
of getting to know this book. It is, truly, a complete autopsy. The reading it
is a clarifying lesson, a tonic and constructive stimulus.”
Haya De la Torre
Incahuasi[1] (Peruvian Andes), April 23, 1936
I’m opening this review with the translation of final
lines of Haya De la Torre’s prologue because I want to share the spirit that I felt
while reading the book. This work, published in 1936 by the Technical and
Statistical Brigade of the Peruvian Aprista Party, was about forty years ahead
of its time.
In essence, it’s a political economy work, technical and educational. It shows the authors’ ability to handle both budgets and messaging. Per example, it identifies the “civilistas” as the worst between the evil, that they are “sitting at every table with their hands in everyone’s pockets,” taking advantage of the “big lazy lord with rheumatism,” meaning the government, which lets cronies and hustlers, profit off what it doesn’t do for itself.
Haya highlights – word for word – that this is “an excellent seminar-style piece of work […] that shows to the Peruvian people the dramatic reality of our budgetary anarchy […] that the yellow press of the oligarchy “civilista” called a ‘dangerous work,’ ‘divisive action,’ ‘communism,’ ‘sectarianism,’ ‘anti-patriotic subversion.’” Speaking from Incahuasi, he’s not just confirming its political impact; he’s also saying that “oligarchic rot corrodes every area of the civilista government’s policy.”
This comparative work including budget data from four different Latin American countries, was led by “compañero[2]” Manuel “Cachorro[3]” Seoane, and like a “surgical dissection” of government spending. Today we’d call the areas analyzed: Defense and Homeland Security (including military and police payrolls), the Legislative and Executive branches, Foreign Affairs, Finance and Public Debt, Development, Education and Justice. Reviewing rents, mail and telegraph, and other government expenses items.
With a sharp and energetic style, Seoane and his teammates lift the work even higher by showing how hard it was to gather information from different countries and pointing out that they even got help from the underground party network. Also, they never wasted a word saying the Technical and Statistical Brigade was in exile – but that was the reality. Meanwhile they were proud to say, “we got the numbers, cent by cent, line by line,” to calculate the total waste.
The Brigade identified waste for 14,887,160 soles per year, in money of that time. With those possible savings, the total government investment budget for that same year (8,100,511 soles) could have been 183 percent higher. In plain language: ignoring unmet needs also means refusing to stop the waste.
Before getting deeper, I should mention that every “Aprista” reader will begin emotional intoxicated after reading the dedication to Juan Arriola. That Seoane describes him as an anonymous fellow from Pisco “who was thrown out of Peru by the hardship and the injustice.” I strongly believe these words should be part of this review, because every Aprista should take them in and then go look for the book. Which is available at the “Fondo Antiguo” room in the National Library of Peru and in the special room at the Library of Congress of the United States.
Additionally, Seoane tells us that in Buenos Aires, Arriola “understood his social duty” and turned himself into a fully devoted fellow. Chained to a hard job, he spent his free hours studying and doing party work. Seoane said “I personally know that the dawn caught him twice still working out the salary scale of the Ministry of War. In the middle of that work, galloping tuberculosis tore him from us. Disciplined, passionate, stubbornly hardworking, loyal to the point of sacrifice and death. Juan Arriola was an exemplary Aprista and deserves a collective tribute. That’s why we dedicate this book to him. It carries so many marks of his effort and his suffering.”
That’s it for the individual mentions, because only Haya de la Torre and Seoane as well are singled out. The rest of the authors present themselves as militants, standing shoulder to shoulder, insisting that credit, weaknesses, and mistakes all belong to the group – which they even show through the disciplined way they list themselves, in strict alphabetical order.
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Let me ask your patience for a short personal note about what it took just to get my hands on the book. Between pandemic restrictions and my own health limitations, it took me almost three years. I first tracked it down at the Library of Congress in Washington, DC, where is near I live. But I was only able to finally sit with it in the “Fondo Antiguo” Room at the National Library of Peru.
During that time, I stayed motivated thanks to a prior review of Manuel Marcos, historian, and San Marcos University professor. I want to thank him here and make clear that what I’m writing is not a critique of his work. Not at all. I have a different, humbler goal – to get Aprista people to read this book, and hopefully to push for a new edition.
This book, published in 1936, is a jewel of technical-political work. It uses plain words and simple figures to pull any reader into an analysis of numbers and behavior. Like I said, it’s 40 years ahead of its time because institutions like ECLAC (the UN Economic Commission for Latin America and the Caribbean) didn’t start publishing work like this until 1976, when they launched the first number of the “CEPAL Reviews[4].”
Now let me get into the body of the autopsy, to back up what I have been said. From the table of contents, the authors make it clear that no “organ” of government spending escapes examination. I’ll highlight in this review two organs: the Ministry of Finance and Commerce (the biggest savings found), and the Ministry of Foreign Affairs (a smaller amount, but very politically revealing).
FINANCE
From the introduction, they describe the “stinking” civilista budget as marked by incompetence, immorality, and abuse – and they pin the blame on a caste. That “caste,” they say, is obvious in the way “the biggest shares go to keeping up the repressive machine of the tyranny, and the smallest sums go to supporting national productive activity, to public education and culture, to health and social assistance.” That is their definition of a caste budget.
They open the section on public finance with a punch line that grabbed me and I’m going to quote it because everyone deserves to read it up front: “No Ministry shows better than finance the disorganization, trial-and-error guesswork, routine, and bribery typical of classic civilismo. Starting with its very name – ‘hacienda,’ which reflects the feudal landlord mentality – and continuing through its structure and functions, it is a standing indictment of the sellout policy carried out by Peru’s current rulers.”
It’s obvious that if you find waste in other sectors, it’s because the money manager of the government allows it. But that doesn’t automatically mean that the same Ministry is clean or free of this behavior, it’s necessary to prove it. And in fact, Finance – together with Public Debt – is where the Technical Brigade found the biggest leaks: seven out of the fourteen million soles in waste. Money that was urgently needed to address long-ignored social needs or to boost the government’s own productivity.
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They also show, with growing indignation, how the government “handed over tax collection to a private company created for profit […] how judicial deposits were basically handed to a semi-private bank […] and how port operations were turned into a source of outrageous private gain.” They call this “the old civilista trick: turning any public function into a lucrative personal business.”
The civilista, they say, “outsources the job to someone else, then sits at home talking about patriotism and sacrifice, attacking the Apristas, while quietly cashing his percentage and squeezing as much as he can out of the concession. That’s the mentality of drones. That’s why this group reacts with such rage when a force like ours demands that the state return to being the real administrator of public assets in the name of the nation.”
Another Finance responsibility was the public debt. Here are a few key ideas from that section: the authors point out that “the growth of the debt under the so-called ‘peace and harmony’ regime is even more serious because, after Peru shut itself out of world credit markets by suspending debt service and interest payments, the government went and raided the Reserve Bank’s funds, openly violating the laws that created that institution.”
They report that Peru devoted 10.51% of its total budget to debt service. But, they say, “the government has neither the moral authority nor the economic standing to negotiate as an equal with foreign companies, because it humiliates itself by begging them for loans they grant under predatory terms.” As an example, they point to the loan from International Petroleum.
They also lay out proposals on debt: negotiate with creditors, set a realistic payment capacity, and reopen Peru’s access to international credit markets — because without new financing “it’s absolutely impossible to plan any real national-scale government transformation.” They underline exchange-rate stability as a crucial factor, warning that devaluing the currency is basically “creating new taxes on the people without their consent.” They add that Lima’s “serious” newspapers were split between devaluers and revaluers, “but none of them out of any concern for the people’s real interests – which is the side we speak from, in our trenches.”
FOREIGN AFFAIRS
In the section on foreign affairs (pages 78–87), they document, with tables and drawings, show about three quarters of a million soles in savings would be made in the diplomatic corps – which they describe as “the dukes and barons of the new civilismo […] floating like old, unsinkable pontoons of our parasitic democracy next to the shiny destroyers formed by the foreign-oriented generation.” They sketch the civilista diplomat as someone who “thinks he’s handsome, carries fancy last names, knows how to dance everything from tango to the rigodon, and eats complicated gourmet dishes – but in exchange, has no clue about Peru’s real problems.”
The drawings show that in 1936 “Peru has more — though less useful — diplomatic staff than Uruguay and Chile, and of course it can’t compare with Argentina or Mexico. This exposes the small-time domestic logic of our diplomatic budget.” They also find the same bloating in Peru’s consulates, “which in many cases have turned into political prizes for people of questionable morals.”
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They uncover waste in cable and telegram costs, which were very expensive at the time. They show that “Peru’s Ministry of Foreign Affairs spends more on cable services than Mexico, which has 330 diplomatic employees abroad, and more than Argentina, which has 289 officials posted all over the world.” The point here is that the real “social justice with bread and freedom” the Apristas talk about is not just about trimming diplomatic fat. It’s about ending cronyism, submission to foreign interests, social climbing, and indifference in how the state acts and spends abroad.
CONCLUSIONS
With the bluntness of watching someone run for their life, the Technical Brigade strips the civilista budget naked and shows that it had “no rational method, no scientific system, not even the smallest sign of a general plan or guiding idea” behind how Peru’s public budgets were being drawn up. Their counterproposal, voiced by Haya De la Torre, is that in the face of this “budget anarchy,” Aprismo promises to “issue a scientific budget, with a mandatory share set aside to promote the exploitation of national wealth.”
That decision – plus the clear explanation of why the Aprista great transformation was necessary – is, to me, the treasure of the book. It’s the part that doesn’t age. It says: the government must be transformed so it can actually do what is needed. Because without changing how the budget is built and run, you can’t carry out a real democratic revolution.
Unlike today, when most budget-reform advice comes from the IMF, the OECD, or the World Bank, Aprismo itself pushed for core ideas like: 1) properly classify all spending units; 2) constantly study income and expenses and publish monthly results; 3) collect revenue forecasts from the Bank Superintendency, consulates, and chambers of commerce; 4) review vague budget lines to check if they’re calculated honestly. And more. Those demands made it into real budget rules.
The publication forced changes. The work done by the Technical and Statistical Brigade pushed through Law 8488 of December 30, 1936, creating the Budget Service. That turned the Budget Directorate of the Ministry of Finance and Commerce into the body responsible for reshaping the national budget so that it followed technical standards. Other measures followed in later years.
The graphics and drawings comparing, for example, the cost of tax collection across countries are central pieces. The only weakness I’d point out is that they don’t include detailed data tables, just total percentages. For me, that doesn’t discredit their conclusion that there was full-blown “budget anarchy,” because in almost every case Peru had the worst deviations.
Another thing you don’t see much in the book is sustainability ratios (like debt or deficit as a share of output). Maybe that’s because, as Haya often said, “in Peru people confuse finance with economics.” The idea there is that only tough fiscal discipline (on both spending and revenue) that makes the state more productive can balance the effort needed to get what people are demanding. Today, some people would call that “fiscal legitimacy”: the trust the state earns by managing spending and taxes responsibly.
By the end, it’s totally clear what an “Aprista government” is supposed to be: a government that has been redesigned to actually serve the people. Anyone who wants to talk seriously about Aprismo in the 21st century has to start there. Because, at its core, Aprismo is about this: “Transform the government so it can serve the people who have been left behind.”
Keep a clear mission is the heart of Aprista transformation for the 21st century: The mission is to transform the state so it can finally carry out what has been postponed for so long. Without goverment transformation, it can’t be done. According to of them, the people who’ve been excluded can’t do by themself, and the people already in power won’t cut their own privileges just to meet those overdue needs. Only from the goverment can do what’s necessary — and if we don’t transform it, the resources will never be there. That’s the core lesson of the 1936 “civilista” budget autopsy.
Reading the book also makes one thing obvious: in the 1930s, Peru’s public budget was run by a sellout mindset that left behind a trail of indifference and centralist arrogance. Which means we now have the duty to carry out a similar surgical dissection of today’s budgets. Because everything suggests that, even though today’s numbers look more orderly, there are still “ghosts” walking around in them, leaving the same old traces.
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