What a spectacle it was last March to see Venezuelan President Hugo Chavez chasing President George W. Bush up the length of Latin America, from Buenos Aires to Port-au-Prince, shouting challenges and insults at the American leader. Gilbert and Sullivan could have turned this indirect single combat between the hemisphere's two most self-consciously macho presidents into a smashing comic opera. 

The absurdity of that week in March was compounded by the fact that Bush was not "wearing his cowboy boots", so to speak. In fact, on visits to Brazil, Uruguay, Colombia, Guatemala and Mexico, he didn't even wrestle with any foreign security guards, as he had done in Chile in 2004, but by all reports constantly behaved like a diplomat discussing issues of real interest to Latins and Americans. The president focused on social justice, energy, trade and migration, substantially downplaying the U.S. security concerns that had become the increasingly abrasive core of U.S.-Latin relations after 9/11. Bush promoted a constructive alternative to the Chavez-style authoritarian populism that has spread in Latin America during recent years, without ever publicly uttering the Venezuelan president's name, and took at least a preliminary major step forward in relations with much of the region, particularly the largest country of them all, Brazil. 

In contrast, Chavez was wearing his paratrooper boots and was in no mood for conventional diplomacy. He began his safari in Argentina with a broadside at Bush, "the political cadaver." He went on to Bolivia, Nicaragua, Jamaica and Haiti, ceaselessly blasting the U.S. with the kind of wild-eyed fanaticism Klaus Kinski portrays so brilliantly as the opera-nut on the Amazon in Werner Herzog's Fitzcarraldo. Chavez massaged anti-American crowds that rallied to him, though most of the "crowds" were not as crowded as had been expected. 

When speaking of U.S. policy in Latin America more broadly, we must examine the context, or what the Chavez phenomenon tells us about the region, as closely as how we respond to and interact with what is going on.

The Chavez Message and Style

Polls in Latin America have found Bush slightly more popular than Chavez, but nonetheless much of what the Venezuelan has to say resonates in varying degrees with many Latins, and much more so now than ten years ago. He has eagerly taken the role Fidel Castro held for decades as the region's foremost anti-American purveyor-in-chief of false hopes. If one flushes out the incessant ad hominem attacks on Bush and other American leaders, Chavez's message can be boiled down to three basic points: (1) most of Latin America is plagued by seemingly intractable poverty and inequality; (2) the United States and entrenched domestic elites and institutions are responsible for this; and (3) his 21st century socialism is the hope for the impoverished masses who seek a free and prosperous future. He is dead right on the first point, partly right on the second and dead wrong on the third.

Exploitation, inequality and extreme poverty have characterized Latin America since pre-Columbian times, which the Spanish and Portuguese colonial governments institutionalized beginning more than five centuries ago. Most regimes since independence-whether autocracies, military dictatorships or democracies-have also failed to respond seriously to popular needs. Thus populism seems to be a life jacket for drowning people and nations, and, in one form or another, has won presidential elections in Venezuela, Argentina, Bolivia, Ecuador and Nicaragua, with near-wins in Peru and Mexico.

Chavez is a new-fangled old-fashioned caudillo who is far more inclined toward faith than objective analysis-and the faith is in Himself as the New Messiah whose gospel is 21st century socialism. Chavez talks of socialism but his style is more left-fascism, and his sermons and actions lead to an authoritarian paternalism that involves parents who exploit rather than nurture their children. In essence, his message is simple: "Go home gringo and leave Latin America to Latins, and Me."

This is the earthly salvation offered in some form or other by every Chavista messiah in Latin America today. But Chavez's gospel is just corked wine in a new bottle. Twenty-first century socialism is an aggressive and globalized rehash of the authoritarian statist paternalism that caused and sustained Latin America's underdevelopment over the centuries. It is the latest adaptation of the late-15th century Iberian view of God, leaders, institutions and the common man's place in that scheme of things that over many centuries put elites in charge and very deliberately made and kept Latin America the most unequal region on earth.

Chavez's "socialism" may survive for a while at home where his consolidation of power has sped up since Venezuelan voters gave him a new mandate last December. There he can throw billions of petro-dollars into usually failed or failing socialist schemes, and the schemes may survive as long as the dollars flow in, though some in the opposition told me in Caracas in February that the economy is in such bad shape that they don't think he can last two more years. Other countries that have fallen or fall under the spell of a Chavista messiah but lack the petro-billions will either crash more quickly or smolder on in the hopelessness that made Chavismo so appealing in the first place.

Confronting Poverty and Inequality

The underlying problems in Latin America today, as throughout history, are the seemingly intractable poverty and inequality we, Chavez and most Latins lament. Latins repeatedly say in polls that they want individual and national development, meaning much better jobs, housing, education and, in general, equal access to opportunities and protection under the law. They also express their frustration with the general failures of all forms of government to deliver the goods or, even worse, to provide good education and the opportunities people need to lift themselves out of hopelessness.

Thus Latin America's real need now, as in centuries past, is precisely the opposite of Chavista authoritarian socialism. It needs greater pluralism, economic liberalization, truly free trade, much higher quality governance, greatly expanded and improved education, and opportunity under impartial law. These policies must be devised and implemented in individual countries with wise and determined popular input, for only thus will most leaders, elected or not, make changes their predecessors have consistently stonewalled or diluted. Latin America is not likely to have reforms in a more "Asian" mold, for those have often relied on superior leaders combining vision, realism and patience that have not turned up often in the Latin world. (Former Peruvian President Alberto Fujimori told me a decade ago that one of the essential differences between Asians and Latins is that the former are more patient.) But up until now most Latins have been unwilling, which is their choice, or unable to significantly modify traditional cultural and/or institutional norms that prevent their societies from growing like the "tigers" and "dragons" in Asia. In fact, much of Latin America is rapidly falling behind other parts of the developing world, particularly Asia.

Taking Responsibility

These domestic realities result in widespread frustration that in Latin America often turns into scapegoating the United States and increasingly China. Chavez specializes in these accusations, but many of his predecessors have ignobly led the way. One major case-in-point that far transcends Chavez is the demagogic blaming of the United States for the shortfalls and failures of so many reforms in the 1990s. Indeed, in 2001-2002 Argentina, the most pro-American and successful development Latin model In the previous decade, plunged into economic and social chaos. During just a couple of weeks five presidents scurried through the presidential palace, the government declared the largest debt default in world history to cheers in the national legislature, poverty mushroomed and scapegoating of the United States exploded into the most virulent anti-Americanism in the hemisphere.  

But the United States, China and even Spain cannot be seriously blamed for Latin America's continuing poverty and inequality. Kishore Mahbubani, one of Singapore's foremost diplomats, drew up some "commandments" for countries seeking development, taken in large part from the experiences of his own small and very successful country. The first is, don't blame others for your past failures. Seeking scapegoats is a cop-out that prevents critical self-examination and thus in the end guarantees continuing failure. It is time for Latins to stop blaming others for their problems and take control for themselves of their own presents and futures. That of course is what Chavez says he is doing, but he and his followers are themselves marching into the past. 

U.S.-Latin American Relations Today

All the above relates directly or indirectly to U.S. relations in the hemisphere, but policy today is also strongly affected by several additional factors. First, the United States traditionally has had little real interest in Latin America beyond economics. Though the Bush Administration denies it, most of Latin America's real problems have received less attention in Washington since 9/11, with bilateral trade and the stabilization of Colombia being important exceptions. Second, in recent years Washington's constant emphasis on security has led to punitive, often self-isolating policies. To be sure, the bulk of our most counterproductive policies pre-date Bush, but the current president has continued them, sometimes with intelligent alterations, sometimes not. Bush was right to say that the drug war in Colombia, however fundamentally misguided, requires confronting guerrillas as well as drug dealers, in part because they are often one in the same. But he has been gravely misguided in intensifying the confrontation with Cuba and in extraterritorial legislation that undermined U.S. relations with much of the region's militaries. He started to deal seriously with our hypocritical immigration policies but turned away after 9/11. Third, many of the above policies in various ways undercut sincere, but usually half-hearted, parallel efforts to support the development and consolidation of democratic political, judicial and other institutions. Finally, there is widespread opposition to Bush's foreign policies in general, particularly the Iraq War, which seem to prove Washington's basically predatory nature. 

On their March trips, both presidents cited what they called very generous aid packages of several billions of dollars in recent years. But this aid is insignificant, except usually for propaganda purposes, when compared to other forms of economic interaction where the United States is light years ahead of Venezuela. Incomparably more constructive are investments, trade and remittances, which of course the Chavistas and many traditionalists condemn as modern exploitation. These include U.S. foreign direct investment of more than $350 billion, twenty times the U.S. investment in China. More than 1.6 million Latins are employed in businesses with majority U.S. ownership. Latin exports to the United States last year topped $330 billion, substantially more than much discussed U.S. imports from China, and remittances last year by Latins working in the States probably totaled more than $60 billion. As for the importance of trade, Chavez pays for most of his anti-American socialism with the billions of dollars he makes from oil sales to the United States at astronomical market prices. Clearly a good "socialist" has to take his cash where he can find it.

U.S. Policy in Transition?

U.S. policy did not cause Latin America's problems, nor can it resolve them, but it can help or impede constructive reform if Latins want it. Besides reforming some of the counterproductive U.S. policies noted above, which no recent president has wanted or been able to do, there are other things we can change. Bush's newly-discovered interest in issues Latins say are at the top of their agendas is a step in the right direction, though in truth it is hard to imagine the United States playing a very active role in substantially improving conditions. Bush's 2007 trip was far more effective than the one to the APEC forum in Santiago, Chile in late 2004. At that time Bush went down swinging like Casey at the bat while a much more personable Chinese President Hu Jintao got something between a triple and a home run on his much longer visit to the region.  

Bush also seems to be taking seriously the need to draw the region's moderate leftist governments, particularly, but not only, the one in Brazil, away from neutrality vis-à-vis Chavez's debilitating demagoguery and populism. Traditional Latin leftists now running several countries have been reluctant to criticize populist leftists like Chavez, though after the people in countries that go Chavista the moderate leftists are the ones who have the most to lose from the spread of Chavismo. To the degree that these moderate leftist countries are succeeding economically, they along with Mexico, Colombia and others are much more indebted to Milton Friedman than Karl Marx. In varying degrees they accept that free trade and markets offer the only productive alternative to Chavez's scapegoating, paternalistic recipe for continuing inequality and poverty.  The more Chavismo wins in Latin America, the more the moderates lose.

So Bush's March trip was the most potentially constructive action he has taken toward Latin America since he took office. Brazilian President Luiz Inacio Lula de Silva met with him in Brazil and then again several weeks later in the United States, and cooperative programs for the promotion of sugar-based ethanol were highlighted on the agendas. Part of Lula's incentive in this may be making Brazil the "big" country of Latin America, instead of Venezuela, which is what Chavez is rather successfully pursuing. No matter. In Colombia (and Peru and Panama as well), significant progress in anti-guerrilla wars must now be backed up with the immediate passage of the free-trade agreement before the U.S. Congress. And serious attention to immigration, which disappeared after 9/11, must again be the focus with Mexico. But getting Latin America's moderate socialists and others to even quietly side with the United States on these critical issues will demand U.S. actions, not just words, to prove our willingness to give as well as take for the common hemispheric good.

Despite his links to Iran and Russia, Hugo Chavez is not in the first instance a major threat to the United States, but rather to the well being of Latin Americans themselves. His socialism will further reduce their chances of prospering or even surviving in the modern world and that, more than anything else, will make him a challenge and threat to the interests of the United States. Thus our focus in combating him and his ideas should above all be more constructive attention to the region as a whole rather than direct confrontation with Caracas.

William Ratliff is a fellow and curator at Stanford University's Hoover Institution.