collapsed the economy and provoked political crises in Bolivia as in most nations, the 1932 border dispute that escalated into war between South America’s two poorest nations was possibly even more significant. Despite advantages in manpower and weaponry, the Bolivians were defeated time and time again by the Paraguayans. Indecisive civilian leadership, “inept, corrupt, and cowardly” officers, and internal political disputes all hamstrung the Bolivian war effort and eventually led La Paz to cede one hundred and seventy thousand square miles of territory to Paraguay. In the end, the war exposed what historian Waltraud Quieser Morales has called the “extremes of ineptitude and inequality of the traditional and social system” and gave new impetus for radical reform, if not revolution. Feeding on this discontent, at least four major new political parties emerged over the next few years, ranging from the Falange Socialista Boliviana to the Trotskyite Partido Obrero Revolucionario.31
Foremost among the new radicals were José Antonio Arze, Ricardo Anaya, and their Partido de la Izquierda Revolucionaria (PIR). Drawing its leaders from the schools and universities, the PIR was a bourgeois organization that aimed to radicalize miners and industrial workers and to mobilize them behind a socialist vision of a modernized Bolivia. Professing independence from the Comintern, but support for the Soviet Union and Marxist-Leninist ideals, PIR leaders sought to guide the growth of the Bolivian proletariat through their enlightened leadership. The PIR extended its tendrils into many of Bolivia’s fledgling labor organizations and grew rapidly by calling for industrialization and land reform, yet it managed to maintain ties with the rosca by promising to channel and moderate working-class nationalism. By the 1940s, the PIR was Bolivia’s largest political party, one of very few with anything resembling a mass base, although hardly the only emerging challenge to the old order.32
Formed in 1941, Víctor Paz Estenssoro’s Movimiento Nacionalista Revolucionario (MNR) brought together young ex-Socialists from the upper and middle classes, disenchanted Chaco War veterans, and labor militants in a “patriotic movement of socialist orientation directed toward the defense and affirmation of Bolivian nationalism.” The party’s message was a vague but emphatic attack on the rosca’s “antinational superstate” and an appeal to “incorporate into national life the millions of peasants.” Whereas the PIR sought to gradually consolidate its strength within the working classes, the impatient leaders of the MNR hoped for an immediate entry into power to purge the nation of “false, betraying,” and “bankrupt” “pseudo-democracy.”33 The opportunistic urban intellectuals of the MNR tied themselves to the growing discontent in the mining camps through a loose alliance with Juan Lechín Oquendo, a one-time soccer star who would eventually become the secretary general of the powerful Federación Sindical de Trabajadores Mineros de Bolivia (FSTMB). The MNR critique initially said little about conditions in the countryside or the hacendados’ domination of indigenous Bolivians that was the cornerstone of Bolivian society but focused instead on the rapacious tin barons and their crimes. Although the MNR hoped for a multiclass alliance and gradual reforms, it also cultivated unlikely allies among the army officer corps.34
Arze and Paz Estenssoro both headed promising civilian movements, but a third force emerged within the ranks of the junior officers in the army in the 1940s. Whereas the PIR and MNR both sought some form of expanded democratization of Bolivian society and hoped to ally themselves with the nation’s rapidly growing labor unions, the third emerging faction, semisecret military lodges such as Iron Star and Razón de Patria (RADEPA; formerly Santa Cruz), sought for the most part authoritarian solutions to Bolivia’s many problems. Founded in a Paraguayan POW camp at the end of the Chaco War, RADEPA brought together disenchanted junior officers who were disgusted by the incompetence of their civilian leaders and military superiors. It was dedicated to nothing less than the renovation of the country and the elimination of the rosca’s stranglehold on the national polity. Fighting in the trenches, these junior officers had risked their lives with their troops while white, elite generals sat safely behind the lines and spent their time cultivating “politicians fishing for opportunities” and engaging in other political intrigues. Strongly influenced by European corporatist thought of the 1930s and bolstered by a strong sense of patriotism, RADEPA sought to revitalize the nation through a familiar mix of hierarchical statism and a vague brand of syndicalism. Although the military had long been the most formidable tool of the rosca, the officers of RADEPA saw their struggle as equal to Bolivia’s wars of independence; they proclaimed their willingness to die “for the noble ideal of forging our nationality.”35
Despite the increased call for radical reform from the working classes, the PIR, the MNR, RADEPA, and the other new parties and factions, the old order remained firmly in control during the early stages of World War II. General Enrique Peñaranda del Castillo, the chief of the army in the last year of the Chaco War, easily won election to the presidency in 1940, opposed only by José Antonio Arze and his PIR. Elected explicitly to maintain the status quo, Peñaranda did little to stave off the coming radical challenges and filled his cabinet with members of the traditional Liberal, Socialist, and Republican Parties. World War II, however, forced difficult choices on the regime when Japanese expansion in Southeast Asia cut off the United States and Great Britain from their traditional sources of tin.36
Peñaranda bowed to necessity by opting for virtually total cooperation with Washington. In 1937, “military socialists” had, as part of the post-Chaco wave of nationalism, expropriated Standard Oil’s properties in Bolivia, driving a wedge between the United States and Bolivia. With war looming, U.S. policy makers hoped to unite the hemisphere against the Axis and to secure a reliable source of tin for war industries by working toward rapprochement with Peñaranda’s government. Eager to partake of U.S. economic and military aid, Peñaranda was quick to respond. He welcomed a team led by State Department officer Merwin Bohan to develop a program for economic diversification of the Bolivian economy, agreed to a number of “denazification” measures, and signed a military assistance pact. Most important, he settled with Standard Oil soon after Pearl Harbor and agreed to pay the company $1.5 million for its expropriated properties. He was rewarded with Lend-Lease aid and financial assistance to start implementing the Bohan Mission’s findings. In short, the war brought the two nations into an unprecedented partnership and seemed to offer the promise of future cooperation.37 The only dark cloud on the horizon was the undecided price for Bolivia’s tin.
Peñaranda eventually agreed to sell the nation’s entire tin production to the Allies for a price well below what most Bolivians expected. Even worse, the tin barons, with at least tacit U.S. support, squeezed their labor force to maximize production and profits. The deteriorating working conditions in the mines and the restrictive contracts with the United States, which, nationalists claimed, cost Bolivia as much as $650 million in lost revenues throughout the war, provided easy fodder for dissidents.38 The “unfavorable contracts over raw materials, the commitments to contribute to the democratic cause, the inhuman persecution of Japanese and Germans[, who had] settled for many years in the country”—persecution undertaken at the behest of the United States—brought nothing but “pain, grieving, and impoverishment” to the Bolivian people. As the foremost standard-bearers of this critique, which melded xenophobia, outrage toward Peñaranda’s subjugation of the national interest, and traditional antirosquismo, Paz Estenssoro and the MNR rapidly emerged as the foremost opposition group.39
Although Malloy describes the wartime MNR as a “small group of intellectuals stirring up what fuss they could,” the Roosevelt administration considered it the most dangerous element in Bolivian politics. In late 1941, British agents, presumably hoping to cement Peñaranda’s support for the Allied cause, had forged letters incriminating elements of the MNR and the officer corps in a conspiracy with the Germans to overthrow him. The MNR accused Peñaranda’s cabinet of forging the letters, but the State Department, alarmed over the apparent Nazi threat to the Western Hemisphere, unquestioningly accepted the forgeries as real.40 As a result, no U.S. diplomat could view the MNR as anything less than Nazi tainted for years. This was not an entirely unjustified view. In 1941, on the anniversary of Hitler’s ascension to power, one MNR newspaper editorialized that “the lesson of Hitler and the New Germany is a lesson of optimism” and that Bolivia, with its history of territorial loss to all of its neighbors, had “much to learn
