Purging the Forces of Darkness: The United States, Monetary Stabilization, and the Containment of the Bolivian Revolution

As Bolivian inflation spiraled out of control in 1956, the United States-which had been aiding the revolutionary Nationalist Revolutionary Movement (MNR) government since 1953 in hopes of steering it down a conservative path-deployed banker George Jackson Eder to implement a monetarist stabilization plan that in many ways presaged the neoliberal reforms imposed across Latin America three decades later. The "Eder Plan" initiated in late 1956 stabilized the Bolivian currency, slashed government spending, and reoriented fiscal policy to prioritize payment on Bolivia's foreign debt and compensation to the deposed tin oligarchy. By restoring "free rein to private enterprise," Eder also sought to "purge" the government of all elements sympathetic to socialism, structuralism, and Keynesianism-what he called the "forces of darkness." The Eder Plan was a key turning point in the MNR's economic policy, and also signaled the beginning of the process of estrangement of the MNR from its working-class support base.