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About the Author
Roger Burbach is director of the Center for the Study of the Americas and a visiting scholar at the University of California, Berkeley. He has written extensively on Latin America and US foreign policy for over four decades. His first book, Agribusiness in the Americas (1980), co-authored with Patricia Flynn, is regarded as a classic in the research of transnational agribusiness corporations and their exploitative role in Latin America. His most notable book is Fire in the Americas (1987), co-authored with Orlando Núñez, which is an informal manifesto of the Nicaraguan revolution during the 1980s. With the collapse of twentieth-century socialism in the Soviet Union and eastern Europe he began to study the emergent system of globalization and to write about the new Latin American social movements and the renewed quest for socialism in the twenty-first century. Michael Fox is a former editor of NACLA Report on the Americas. He has worked for many years as a freelance journalist, radio reporter, and documentary film-maker covering Latin America. He is the co-author of Venezuela Speaks!: Voices from the Grassroots (2010) and the co-director of the documentary films Beyond Elections: Redefining Democracy in the Americas and Crossing the American Crises: From Collapse to Action, both available through PM Press. He is on the board of Venezuelanalysis.com and his articles have been published in The Nation, Yes Magazine, Earth Island Journal, and more. His work can be found at blendingthelines.org. Federico Fuentes edits Bolivia Rising, is on the board of Venezuelanalysis.com, and is a regular contributor to the Australian-based newspaper Green Left Weekly, serving as part of its Caracas bureau from 2007 to 2010. During his time in Caracas he was based at the Fundación Centro Internacional Miranda as a resident researcher investigating twenty-first-century political instruments and popular participation in public management. He has co-authored three books with Marta Harnecker on the new left in Bolivia, Ecuador, and Paraguay. His articles have been published with ZNet, Counterpunch, MRZine, Venezuelanalysis.com, Aporrea, Rebelión, America XXI, Comuna, and other publications and websites in both Spanish and English.
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Latin America's Turbulent Transitions
The Future of Twenty-First-Century Socialism
By Roger Burbach, Michael Fox, Federico Fuentes
Zed Books LtdCopyright © 2013 Roger Burbach, Michael Fox, and Federico Fuentes
All rights reserved.
Globalization, neoliberalism, and the rise of the social movements
Nowhere else in the contemporary world have so many left-leaning governments come to power in such a short period of time: Argentina, Bolivia, Brazil, Ecuador, El Salvador, Nicaragua, Paraguay, Peru, Uruguay, and Venezuela. These governments largely owe their ascendancy to the social movements that have exploded onto the scene in the new millennium. These movements are militant and highly diverse. They originated in the 1990s or earlier, and include indigenous movements, landless peasant associations, women's and sexual rights organizations, environmental groups, radical student associations, and many others.
The call for a new socialism is embedded in the social upheaval that is sweeping the continent. Latin America is entering a new era in its history, which provides hope and inspiration in a world ravished by imperial wars and economic disasters. The press and many political commentators have focused on what is described as the 'pink tide,' the emergence of leaders such as Hugo Chávez, Evo Morales, and Rafael Correa. However, mainstream media have largely ignored the broad-based social movements over the past quarter century and how they helped lift the pink tide presidents to power.
The political definition of this turbulent period of change defies easy classification. It isn't simply the old populism of Latin America, nor is it like the revolutionary movements that gripped Latin America with the Cuban revolution. The forms of struggle and organization are many: the communal committees that formed in El Alto, Bolivia, to descend on La Paz and depose governments in 2003 and 2005, the piqueteros, or pickets of unemployed workers, in Buenos Aires and other parts of Argentina, the Movement of Landless Rural Workers in Brazil, the national indigenous organizations of Ecuador, Bolivia, and other countries in Latin America, and the student upheaval in Chile in 2011 calling for a radical restructuring of the country's educational system and a plebiscite for a constituent assembly.
The rise of these social movements needs to be placed in the context of the destructive impact of capitalist globalization. Over the past four decades the world economy has undergone a transition from a system of international trade centered on national economies to a globally integrated system of production under the aegis of transnational corporations. This has marked a new epoch in the history of capitalism. Neoliberalism has served as the economic doctrine for breaking down barriers to the free flow of capital around the globe.
Prior to the 1970s, the global economy had consisted of trade between many different national economies. Each country produced raw materials or finished products that were traded with other national economies, often on a limited scale. As Marxist geographer David Harvey points out, for the United States, 'The proportion of GDP growth attributable to foreign trade remained less than 10 per cent up until the 1970s.' In the countries of the North, Keynesian economic policies predominated while in Latin America import substitution industrialization flourished as the state played a central role in replacing imported manufactured goods with nationally produced products by raising import tariffs and subsidizing national industries. Capital controls – greatly aided by the fixed exchange rates of the time – gave states significant power over capital to determine economic policies within a nation's borders.
During this first phase of the postwar period (1945–70), the United States dominated the capitalist world and waged a cold war against the Soviet Union. It propped up right-wing dictatorships around the globe (Iran, Indonesia, the Philippines, and in much of Latin America) and helped local elites suppress leftist governments and rebellions whenever possible (Guatemala, the Dominican Republic, Vietnam, Brazil). The US dollar served as the de facto global currency, ensuring that all countries were dependent to a certain degree on US economic policy. The United States was unchallengeable, dominating in production, technology, and military power.
However, by the early 1970s the Keynesian economic model and US supremacy increasingly came under pressure. Military expenditures, particularly in the Vietnam War, led to unsustainable deficits. The United States responded by printing more dollars, increasing inflation. For two decades, labor power and wages had been on the rise. With declining returns on their investments, capital searched for new opportunities to increase profitability. Pushed by declining gold reserves due to the expense of waging war and pulled by capital's need for greater flexibility, the United States stopped fixing its currency by the gold standard in 1971. The rest of the western world followed suit. The open fluctuation of exchange rates meant that capital was freer to flow around the globe since it was no longer tied down by the capital controls that are implied in fixed exchange rates. Transnational corporations began expanding their production chains, as these processes became globalized.
Facilitated by new communication and transportation technologies, capital flowed around the globe in ever greater quantities. It dictated its own conditions of investment, thereby forcing countries to lower their trade and environmental regulations while gaining virtually unfettered access to a cheap labor force. As sociologist and globalization theorist William Robinson explains:
'Going global' allowed capital to shake off the constraints that nation-state capitalism had placed on accumulation and to break free of the class compromises and concessions that had been imposed by working and popular classes and by national governments in the preceding epoch ... Capital achieved a new found global mobility, or ability to operate across borders in new ways, which ushered in the era of global capitalism.
In the previous epoch, US-headquartered transnational corporations, such as Dole in Central America, Exxon in Venezuela, or the Kennecott Copper corporation in Chile, had an important presence in Latin America, but they represented the old model. Countries and companies specialized in particular export commodities and corporations had to abide by internal controls and taxation policies. Today, transnational corporations engage in a far greater diversity of activities, as they search for the most efficient production locations and conditions in each step of an increasingly global integrated process.
Neoliberalism facilitated the rise of this transnational system. It began in Chile with the dictatorship of Augusto Pinochet (1973–90) and reached its formalization in the 1980s with the 'Washington Consensus' during the early Reagan administration. US-led multilateral financial institutions such as the International Monetary Fund (IMF) and the World Bank imposed neoliberal policies on the highly indebted countries of the South as a condition for further lending.
In the 1960s and 1970s, many Latin American countries had borrowed heavily to finance big, sometimes wasteful, development projects. By the close of the 1970s, in the midst of a global economic downturn, the banks began to call in their loans. Meanwhile Latin America faced rising interest rates, increased production costs, and shrinking export markets for its goods. The resulting debt crises of the 1980s and 1990s gave Latin American governments – in some cases fragile new democracies – little choice but to accept devastating conditions for debt rescheduling.
Throughout the Third World, the IMF assisted transnational capital in its efforts to free itself from national restrictions by imposing structural adjustment programs (SAPs) that countries had to implement as a condition for receiving loans. The SAPs reduced tariffs and subsidized production, cut back social spending, dismantled workplace and environmental regulations, and privatized state enterprises. Simultaneously, transnational capital engaged in capital flight and investment strikes if countries tried to impose restraints or controls on their investments. This deadly combination of the IMF and the transnational corporations ushered in the epoch of globalization in Latin America and around the world.
The effect that the transnational corporations and globalization had on Latin America can be seen by the fact that trade as a percentage of gross domestic product (GDP) nearly doubled from 10 percent in 1989 to 18 percent in 1999. In another measure of Latin America's integration into the globalized production process, foreign direct investment increased from an average of $38 billion per year from 1993 to 1997, to $74 billion per year between 1998 and 2003. Nevertheless, ordinary Latin American citizens did not benefit from this corporate-driven growth. SAPs prevented governments from capturing profits – through taxation and other measures – to invest in social services and development.
While the IMF and World Bank pushed neoliberalism on the Third World via its creditors' cartel (dubbed a cartel because private banks would not lend to countries unless they first had an IMF agreement), the General Agreement on Tariffs and Trade institutionalized this process by converting from a general agreement into the World Trade Organization in 1995, a fixed institution with headquarters in Geneva, Switzerland. The World Trade Organization, which has 153 member countries and represents 95 percent of world trade, became an effective tool for the implementation of neoliberalism owing to its dispute resolution process, which almost automatically gives private corporations priority over Third World governments and principles of economic sovereignty.
Neoliberalism ushered in a period of deregulation and privatization as social spending was gutted. Budgets for education, healthcare, public services, and social security were cut. Water supplies in large urban areas were turned over to private companies that profited from this most fundamental human need. The cost of public transport rose dramatically in many countries, causing massive protests in countries such as Guatemala and Venezuela. As educational spending was reduced, public schools including universities declined in quality. Families that could afford it sent their children to private for-profit educational facilities.
Large reasonably profitable state-owned corporations were placed on the trading block and sold to private interests. Telecommunications enterprises were privatized in many countries, including the largest in Argentina, Brazil, and Mexico. National economies were opened to international trade and multinational capital, boosting export sectors, particularly in agribusiness, petroleum, and mining. Finance capital sat in the driver's seat of the neoliberal system as stock markets and transnational banks determined the rise and fall of economies.
Neoliberal policies, though, gradually undermined political legitimacy in many Latin American countries because they resulted in a decoupling of economics from politics with the abdication of public control over the economy. In other words, governments not only gave up their role in helping redistribute wealth – particularly with cutbacks in social spending – but also ended up with ever fewer policy tools to lower unemployment, fight inflation, protect the environment and the workplace, or guide investment. Many of the same parties that half a century before had led nationalist struggles (including the Peronist party in Argentina and the Revolutionary Nationalist Movement in Bolivia) were now introducing neoliberal policies. Presidential candidates often ran for office in opposition to neoliberal policies, only to find that once they took power neoliberalism appeared to be the only viable option.
One of the salient examples of such a reversal was the 1988 campaign and election of Carlos Andrés Pérez in Venezuela, who ran on an explicitly anti-neoliberal platform. Merely three weeks after taking office in early 1989 he reversed completely and implemented a full IMF structural adjustment package. Similar unexpected shifts toward neoliberalism took place in Argentina under Carlos Menem (1989–99), in Peru with Alberto Fujimori (1990–2000), again in Venezuela under Rafael Caldera (1994–99), and in Brazil under Fernando Henrique Cardoso (1995–2003). These neoliberal policies did often help to lower inflation, but they also contributed to the public's general disenchantment with politics, as expressed in opinion polls. The polling organization Latinobarómetro reported in 2000 that only 37 percent of Latin Americans were satisfied with their democracies, which was 20 points less than Europeans and 10 points less than people living in sub-Saharan Africa.
Another factor that contributed to this disaffection with politics was the abysmal failure of neoliberalism as an economic doctrine. According to its promoters, neoliberalism was supposed to bring about growth and economic stability. However, what it actually brought was increasing inequality and poverty, sluggish overall growth, and instability. The Gini coefficient, which measures inequality, rose in almost every Latin American country between 1990 and 1999. Economic growth averaged only 0.5 percent per year between 1980 and 1999, compared with 3 percent from 1960 to 1979. In agriculture, a sector expected to benefit greatly from adjustment through the correction of relative prices, there was little change in output performance from the 1970s. As sociologist Max Spoor points out, SAPs adversely affected the agrarian sector by increasing volatility and inequality.
Severe economic and financial crises struck Mexico in 1994, Brazil in 1999, and Argentina in 2001/02. In every case these calamities were directly traceable to neoliberal economic policies. In short, while neoliberalism succeeded in opening countries to transnational corporations and in strengthening corporate power worldwide, it failed in its own goals of producing sustained growth and financial stability.
Feeling that their governments and politics could not resolve their problems, Latin America's poor and disenfranchised reacted spontaneously to the hardships caused by neoliberalism, protesting, rioting, and clashing with state security forces. One of the first reactionary responses to neoliberalism's harsh policies took place in Venezuela on 27 February 1989, the same day that Carlos Andrés Pérez imposed an IMF adjustment program that privatized state businesses and cut social services. Gas prices doubled and public transportation prices rose by 30 percent. Residents took to the streets of Caracas. After two days of protests and riots, the Andrés Pérez government responded by sending the police and military into the poor barrios, shooting residents almost at random, killing somewhere between four hundred and a thousand people, in one of the worst human rights catastrophes of late twentieth-century Latin American history.
The Caracazo riot was merely one of a much larger wave of leaderless urban revolts against neoliberal policies among the poor and marginalized sectors of Latin American society. Cities across the region, including Mexico City, Santo Domingo, Guatemala City, Sào Paulo, Rio de Janeiro, Buenos Aires, and Santiago del Estero, Argentina, experienced similar spontaneous rebellions against unjust neoliberal policies between the mid-1980s and the mid-1990s.
The challenge of the social movements
At about the same time a wave of social movements and organizations led by peasants and indigenous groups emerged in the rural areas of Latin America. By the early 1990s they had assumed the lead in challenging the neoliberal order, particularly in Ecuador, Mexico, Bolivia, and Brazil. These new organizations were generally more democratic and participatory than the class-based organizations that traditional Marxist political parties had set up in rural areas in previous decades.
In general, they came to fill the gap left by a working class that, although growing in numbers, was more fragmented, disoriented, and dispersed than ever, and therefore unable to provide any real leadership. With a broad range of interests and demands, including indigenous and environmental rights, these new social movements transcended the modernist meta-narratives of both capitalism and socialism.
The Ecuadorean indigenous movement was the first to gain both national and international prominence as a new militancy of the 'original' peoples of Latin America. Founded in 1986, the Confederación de Nacionalidades Indígenas del Ecuador (CONAIE, Confederation of Indigenous Nationalities of Ecuador) united two major indigenous organizations, one from the highlands, and the other from the Oriente – Ecuador's eastern Amazonic region where the transnational petroleum corporations were ravaging the rainforests.
Excerpted from Latin America's Turbulent Transitions by Roger Burbach, Michael Fox, Federico Fuentes. Copyright © 2013 Roger Burbach, Michael Fox, and Federico Fuentes. Excerpted by permission of Zed Books Ltd.
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Table of Contents
Introduction: turbulent transitions and the specter of socialism,
1 Globalization, neoliberalism, and the rise of the social movements,
2 The pink tide and the challenge to US hegemony,
3 Between neo-extractivism and twenty-first-century socialism,
4 Venezuela's twenty-first-century socialism,
5 Bolivia's communitarian socialism,
6 Ecuador's buen vivir socialism (by Marc Becker),
7 Brazil: between challenging hegemony and embracing it,
8 Cuba: 'updating' twentieth-century socialism?,
Conclusion: socialism and the long Latin American spring,
Appendix: nationwide elections in Venezuela, Bolivia and Ecuador,