Steve Vieux

Neoliberalism and class conflict in Latin America : a comparative perspective on the political economy of structural adjustment

List of Tables - List of Acronyms - Acknowledgements - Map - Introduction - The Neoliberal Agenda and the End of History? - PART 1: THE HISTORICAL AND THEORETICAL CONTEXT - The Global and Local Dynamics of Latin American Development - The Structural Adjustment Policy Cycle - Intellectuals in Uniform: the Selling of an Ideology - PART 2: NEOLIBERALISM IN PRACTICE: CRITICAL ISSUES - Liberalism in Latin America and US Global Strategy - The Economic Recovery of Latin America: The Myth and the Reality - Neoliberalism and Capitalism in Mexico 1983-95: A Model of Structural Adjustment - PART 3: THE POLITICS OF ADJUSTMENT - Non-Government Organisations and Poverty Alleviation in Bolivia - The Movement of Landless Rural Workers in Brazil - Class Conflict in the Countryside: The Lessons of Chiapas - PART 4: CONCLUSIONS AND REFLECTIONS - The End of History or the End of Neoliberalism? - Beyond Neoliberalism: What is to be Done? - Endnotes - Bibliography - Index

Myths and Realities: Latin America's Free Markets

The decade of the 1980s in Latin America was a period of economic and social regression, commonly known as the lost decade. The massive and sustained evidence of the failure of capitalism in Latin America ill accords with the triumphalist mood that pervades the advanced capitalist countries in the wake of victory in the Cold War. To cover up the disaster, the leading ideologists of the banks and multinational corporations have adopted a threefold strategy: (1) shifting responsibility for the Latin American debacle from the free market policies of the present to the activist policies of past decades; (2) proclaiming the imminent end of the lost decade as governments turn to principles of unregulated capitalism; (3) manufacturing evidence of massive popular support for these principles. This article can also be found at the Monthly Review website , where most recent articles are published in full. Click here to purchase a PDF version of this article at the Monthly Review website.

The Global and Local Dynamics of Latin American Development

Until 1930 and for many countries well into, and beyond, the 1940s Latin American economies and societies were generally highly dependent, subject to conditions generated by an international division of labor in which they functioned as sources of raw materials and commodities for the manufacturing plants and consumer households of the industrial economies in the Northern hemisphere. Within this system (‘the old imperialism’) foreign capital in the form of direct investment and subscription to bond issues was the main source of external financing which was directed at increasing the region’s productive capacity for exports to the world market (as well as its capacity to import goods manufactured in the North).

Class Conflict in the Countryside: The Lessons of Chiapas

There is a growing popular opposition to neoliberal politics throughout the world. In Latin America the guerrilla movement in Chiapas, the landless rural workers occupation of plantations in Brazil, the peasant-Indian mobilizations and strikes in Ecuador, Bolivia and Paraguay, the urban uprising in Santiago del Estero in Argentina, form part of a global pattern. They are different expressions of mass resistance to the same liberal system. These extra-parliamentary activities are attacking electoral regimes which utilize authoritarian methods to impose liberal policies.

Beyond Neoliberalism: What is to be Done?

Our study of neoliberalism has led us to a number of conclusions that can be synthesized as follows. Like all class-divided socio-economic formations, the economic and social structures formed in Latin America on the basis of neoliberal policies suffer from inherent contradictions. One of these contradictions is that the neoliberal model of capitalist development projects the growth of society’s productive forces under conditions of macro-economic equilibrium and the concentration of wealth and income, but it has built-in limits to its capacity to generate this growth; limits which it had already reached, after less than a decade of structural reforms. At this point, in different national conjunctures, neoliberalism has begun to generate conditions of its own demise — social forces which are pushing more and more social classes in country after country into opposition, active resistance, and the search for an alternative to its model of economic development.

Intellectuals in Uniform: The Selling of an Ideology

Intellectuals serve power: that has been a truism for some time. How do they do it? Mostly by offering advice to advance the interests of the powerful and/or by offering rationales justifying the accumulation of wealth and concentration of power by the dominant classes. A special category of intellectuals — policy oriented ones — have proliferated in recent years, drawn by the economic rewards and social status associated with being part of elite policy circles. In this chapter we discuss a particular instance of the intellectuals as servants of power — those who have supported and offered helpful advice to the political and economic elites imposing structural adjustment policies (SAPs) in the Third World.

Neoliberalism and Capitalism in Mexico 1983–95: Model of Structural Adjustment?

In December 1994, one day after the EZLN resumed its military offensive, recently-elected President Ernesto Zedillo was forced to devalue the peso, precipitating Mexico’s worst financial crisis since 1982, a crisis that not only stilled any and all talk of an ‘economic miracle’ but that threatened the entire associated capitalist world economic order and in the process brought about the reform of its key institutions.37

The Neoliberal Agenda and the End of History

In 1989, with the collapse of actually existing socialism in the USSR and Eastern Europe, Francis Fukyama reworked Hegel’s thesis on the end of history with the notion of a historic dialectic of the Idea of Freedom which would achieve its maximum expression in the bourgeois state — in the institutions of liberal democracy. As stated by Business Week in a gloating and less philosophical vein in an overview (12 December 1994: 18) of ‘21st Century Capitalism’, and with direct reference to Karl Marx’s antibourgeois socialist project, ‘the bourgeoisie [has] won’. In the eyes of Business Week, the victory of the bourgeoisie consists in the ubiquity of the free market and (liberal) democracy as a model for all ‘modern’ societies. As Fukyama argues (asserts, to be precise), ‘all up-and-coming countries — those that will dominate the world — have adopted such a system (democratic capitalism) or are moving towards it’, creating in the process ‘a kind of democratic zone of peace’ in which there is an escape from ‘the relatively small-scale conflicts’ that continue to afflict the (developing) countries that remain trapped ‘in history’.

The Movement of Landless Rural Workers in Brazil

In 1973, under the directorship of Robert McNamara, the World Bank ‘discovered’ that one quarter of the world’s population, 800 million people, were ‘poor’, unable to meet their basic needs; and that close to half of these were in a state of absolute poverty or indigence. In this context, which included conditions of economic crisis in the rich industrialized countries of the OECD, and mounting pressures and movements for radical social reform and revolution in much of the South, the Bank formulated a global strategy to combat and alleviate poverty. This strategy, targeted at the basic needs of the world’s poor, was operationalized, and to some extent implemented, with measures designed to increase or ensure the viability of small scale enterprizes with a high employment and income generating capacity; increase the productivity of producers and workers; improve the social infrastructure of health and education; support government social and income redistribution programs (more to increase social consumption than provide a social safety net) and even, if and where political conditions were available, to promote more radical (structural) forms of change (land reform, and so on).

The Structural Adjustment Policy Cycle

Evaluations of Third World experience with the structural adjustment programs of the international lending institutions have most often focused upon the consequences of these programs for economic growth and social welfare. In this chapter we attempt to integrate the economic and welfare consequences of these programs into a global view of adjustment which stresses its socio-political outcomes: most particularly its consequences for the social and political power of the contending social classes in Latin America as well as for the future of the nascent liberal democracies of the region.