Envío Digital
Central American University - UCA  
  Number 443 | Junio 2018


Latin America

The end of post-neoliberalism

The end of Latin America’s progressive governments permits us to see how they administered a project that wasn’t post-capitalist, but merely post-neoliberal. Those governments themselves surreptitiously introduced the “conservative restoration” they are denouncing today and were the ones who paved the way for it in their countries..

François Houtart

The time when dictatorships and neoliberal governments in Latin America were replaced by several progressive governments that benefited the poor without seriously affecting the income of the rich is coming to an end. Governments are back on the Right track. This signals a new time when unity of the grassroots sectors is once again the only way forward.

More than just a favorable decade

Latin America was the only continent where neoliberal options were adopted in several countries. Reactions were swift to a series of US-supported military dictatorships carrying the neoliberal project. They culminated in the 2005 rejection of the Free Trade Agreement with the United States and Canada in a joint effort by social movements, leftist political parties, nongovernmental organizations and Christian churches.

The new governments of Brazil, Argentina, Uruguay, Nicaragua, Venezuela, Ecuador, Paraguay and Bolivia put into effect policies that reestablished the State’s role in redistributing wealth and reorganizing public services, particularly access to health care and education, and investment in public works. A more suitable share of the revenue from the exploitation of natural resources (oil, gas, minerals and agricultural produce) was negotiated between multinational corporations and the State, and the decade-long favorable international market situation for those exports allowed a significant increase in national income for these countries.

To talk about the end of a cycle conveys the idea of some sort of historical determinism that suggests the inevitability of the alternation of power between the Left and the Right—an inadequate concept if the goal is to replace an oligarchy’s hegemony with popular democratic regimes. On the assumption that the new governments were post-neoliberal but not post-capitalist, a number of factors allow us to suggest, however, that we are witnessing an exhaustion of the post-neoliberal experiences.

It would obviously be delusory to think that “instant” socialism is at all possible in a capitalist world during a systemic and therefore particularly aggressive crisis. The question of a necessary transition arises.

A post-neoliberal project

The project of the Latin American “progressive” governments to rebuild an economic and political system capable of repairing the disastrous social effects of neoliberalism was no easy task. Restoring the social functions of the State, always controlled by a conservative administration unable to be an instrument of change, led to its reorganization. In Venezuela’s case, the oil revenues permitted the establishment of “missions” (a sort of parallel State). In other cases, new ministries were created and high-ranking civil servants were gradually substituted. The process was guided on the whole by a centralized and hierarchical conception of the State (the importance of a charismatic leader), and showed a tendency to use social movements as instruments, develop an often paralyzing bureaucracy and coexist with corruption (in some cases on a large scale).

The political will to leave neoliberalism behind had positive results: an effective fight against poverty for millions of people, better access to health care and education, and public infrastructure investment—in short, a redistribution of at least part of the domestic product, which had grown considerably as a result of the rise in the world commodity prices. This benefited the poor without seriously affecting the income of the rich.

To this should be added the important efforts made towards Latin American integration, through the creation or strengthening of organizations such as Mercosur, which groups ten South American countries; UNASUR, which integrates the continent’s South; CELAC, which does the same for the whole Latino world plus the Caribbean; and finally, ALBA, a Venezuelan initiative involving ten countries, which offered a new perspective in cooperation based not on competition but on complementarity and solidarity.

But the domestic economies of these “progressive” countries remained dominated by private capital, with its accumulation logic—particularly in mining, oil, finance, telecoms and large-scale trade--and its disregard for “externalities,” i.e. environmental and social damage. This gave rise to escalating reactions from several social movements. The press, radio and television remained for the most part in the hands of large national and international conglomerates, despite efforts made to redress a conspicuous communication imbalance (Telesur and national communication laws).

What kind of development?

The “progressive” governments’ development model was inspired by the 1960s’ “developmentalism,” the import substitution proposal of the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC) through increased domestic production. Its implementation in the 21st century, in a favorable commodity price context, combined with an economic vision focused on increasing production and a conception of redistributing the national income without fundamentally altering social structures (no agrarian reform, for example), led to the “re-primarizing” of the Latin American economies and increasing dependence on monopoly capitalism, and thus even to a relative de-industrialization of the continent.

The project gradually morphed into an uncritical modernization of the societies concerned, with some nuances depending on the country, in which some, like Venezuela, emphasized community participation. This resulted in an increase in middle-class consumers of goods from abroad. Megaprojects were encouraged and traditional agriculture was abandoned to its fate to promote export-oriented, ecosystem- and biodiversity-destroying agriculture, to the point of endangering food sovereignty. True agrarian reforms were nowhere to be seen. And reducing poverty mainly through relief measures (as in neoliberal countries) did little to narrow the social gap, still the widest in the world.

Could it have been done differently?

One necessarily wonders, of course, if things could have been done differently. A radical revolution would have triggered armed interventions, for which the US has all the necessary equipment and tools.

On the other hand, the strength of monopoly capital is such that the agreements reached in the fields of oil, mining, and agriculture quickly turned into new dependences. To this must be added the difficulty of implementing autonomous monetary policies, as well as the pressures from international financial institutions, not to mention capital flight to tax havens, as evidenced by the Panama Papers.

Moreover, the education of the leaders of the “progressive” governments and their advisers was clearly designed for the task of modernizing society, irrespective of other contemporary achievements such as the importance of respecting the environment and ensuring the regeneration of nature, the critique of market-absorbed modernity based on a holistic view of reality, and the importance of the cultural factor. Interestingly, their policies contradicted some pretty innovative constitutional provisions in these areas (the right of nature, buen vivir).

The new contradictions

This explains the rapid evolution of both internal and external contradictions. The most dramatic factor was, obviously, the consequences of the crisis of world capitalism and, particularly, the partly-planned fall in commodity prices, especially oil. Brazil and Argentina were the first countries to suffer its effects, followed swiftly by Venezuela and Ecuador. Bolivia fared better, thanks to its significant foreign exchange reserves. This situation immediately affected employment and the consumption possibilities of the middle class. Dormant conflicts with some social movements and leftist intellectuals came into view. Government failures, which people until then had put up with as the price for change, and the corruption embedded in the political culture, especially in some countries, triggered popular reactions.

Obviously the Right jumped on the opportunity offered by the situation to start a process of recovering its power and hegemony. Appealing to the democratic values that it never respected before, the Right managed to recover part of the electorate: it took power in Argentina, won Congress in Venezuela, questioned the democratic system in Brazil, and ensured a majority in the main cities of Ecuador and Bolivia. It tried to take advantage of the disappointment of some sectors, particularly indigenous peoples and the middle classes. And it also tried to overcome its own contradictions, especially between the traditional oligarchies and the modern sectors, with the support of many US agencies and the media it controls.

In response to the crisis, “progressive” governments adopted increasingly market-friendly measures, in fact surreptitiously introducing from within the “conservative restoration” they regularly denounce. The transitions then simply became adaptations of capitalism to the new ecological and social demands (modern capitalism) rather than steps towards a new post-capitalist paradigm.

This doesn’t mean the
end of social struggles

The solution lies, on the one hand, in grouping the forces for change, inside and outside government, to redefine the project and the transition forms and, on the other hand, reconstructing autonomous social movements focused on medium- and long-term goals.

Francois Houtart (March 1925-June 2017) was a Belgian Marxist sociologist and Catholic priest.

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