>Neoliberalism and Revolutionary Change in Latin America


Sandinista in Nicaragua, 1979.  Photo: Meiselas

NEOLIBERAL GRAND STRATEGY= “policies and processes whereby a relative handful of private interests are permitted to control as much as possible of social life in order to maximaze their personal profit.”  – Noam Chomsky

The reason why there is such a resurgence of Nationalism in Latin America is due to several factors. It is primarily due to economic reasons that deal with certain policies that the U.S. champions throughout the world,policies that stress free trade and the ability of capital to be able to move freely across borders. The effects of neoliberalism and the Washington Consensus are policies that are paramount to understanding why populist leaders such as Hugo Chavez and Evo Morales are in office.

Neoliberalism can be considered the dominant economic paradigm of the current U.S. policy towards Latin America and the rest of the world. most of the reason why the Washington Consensus (to liberalize finance and trade and let the markets set the prices and also to privatize the international economy) has failed to improve the economic conditions in Latin America is becasue american businesses and multinational corporations that enter the latin american markets go there for one reason: to make money. they often times do this with little regard for the people, culture, environment or economic well being of the country. The reductions of tariffs and trade barriers allow goods to move freely across borders and within countries enabling them to use cheap labor to produce goods in the lesser developed countries in Latin America, then export the goods back to the u.s.and other highly developed countries where they can create high capital goods and mark the products up, thus producing very lucrative profits. In the meantime,the economies of various Latin American countries are left with little to gain from the process and see virtually none of the profits that are made. It is true that they may benefit from the creation of jobs and new technologies in some cases, but the benefits are outweighed by the exploitation of latin american markets, their resources and the people, particularly the working class and poor peasant farmers. The reason why leaders such as Chavez have become increasingly popular is because they can campaign against the status quo of the Washington Consensus and argue that the U.S. economic policies towards all of Latin America are crafted by the U.S. in a manner that is meant to serve the interests of the United States and not the interests of the various Latin American countries. They make the arguement that neoliberalism produces profits for some, mostly private business interests, and not the general population.Leaders such as Chavez and Morales have the ability to stand up to neoliberalism and act against the status quo because they have control over valuable resources which are important in the global economy. Venezuela is the fifth largest oil exporting county in the world. With oil prices so high right now this gives Chavez all the more leverage to stand up to the economic imperialism of the United States.

The fact that such nationalist leaders have been winning presidental races and continue to do so speaks volumes about how the people of these various countries feel about the way the international economic system is set up. I would argue that the people are getting tired of living by the policies that the United States has set up and I think this can be illustrated fairly well by the way in which the people are voting. The leaders and the people are tired of not having any governing power over their economies, particularly under circumstances which are completely out their abilitly to control.

Since the end of WWII and especially the Cold War, the U.S. has become the main global hegemonic power in the world. The U.S. plays extremely activist role by having immense political, economic and military power. By playing the role of hegemon, the U.S. sets the rules and standards for other countries to adopt and adhere to. Through financial institutions like the World Bank and the IMF, the U.S. has the ability to tell other struggling and indebted countries how they should restructure their economies in order to recieve loans or other types of debt relief. This means that in order for other states to recieve money, they must adopt certain neoliberal policies, most of which will benefit private interests and help to further U.S. prosperity. There are also several historical of past events that have led to the current degree of nationalism in Latin America. Events such as the dependecy of Latin American countries on the U.S. economy and the debt crisis of the 80s.Various countries that are underdeveloped and not very industrialized tend to produce very few products and export simple commodities. This places them at the mercy of outside economic forces because it is the outside markets that determine the price of the exported good. Like in Brazil; when there was a decline in the price of coffee which in turn brought less money into Brazil which decreased their foreign currency and ability to import foreign goods. This led to the attempt of many Latin American countries to try and further industrialize later on in the late 60s,70s and 80s with various flawed trade agreements such as LAFTA, CACM, and the Andean Pact,which aimed at integrating the countries of Latin America. The debt crisis also plays an important role in explaining the rise in nationalism.

In the 1960s and 1970s, several countries, mainly Mexico, Argentina and Brazil borrowed enormous amounts of money from various creditors to help them industrialize. These countries had booming economies at the time so they were able to continue to recieve loans from the various international creditors and commercial banks. These large sums of borrowing led Latin America to nearly quadruple its external debt and just prolonged the inevitable economic crisies which was going to take place. Then when the world economy went into recession in the 70s and 80s, it created a downward spiral in the economies in Latin America because many of the loans that could have been refinanced, were now due immediately. These countries had to then default on the repayment of the loans thus leading the the “lost decade” of the 80s. many of these events remain in the back of the minds of Latin Americans. The U.S. was more involved in some of them than others, and Latin Americans do not want to repeat that devastating process.

The U.S. has constantly intervened either through the military directly, the CIA or through economic sanctions in the domestic affairs in Latin America. Cold warriors, such as John Foster Dulles, opposed any policy that was against the U.S. way of doing business. They relied on the public’s fear of communism to intervene with any country or leader who was a threat to U.S. economic policy. If policy makers opposed intervention they would be castigated and accused of being soft on communism . Salvador Allende in Chile, Jacabo Arbenz and the United Fruit Company in Guatemala, Iran-Contra conflict in Nicaragua, Bay of Pigs in Cuba, Agusto Sandino in Nicaragua, and the list goes on and on. As much as the United States promotes self determination of free people to determine their own affairs in rhetoric, it severely lacks in action, or more properly inaction. It is as if the United States only supports the “free” will of the people if the current policies of that country support to economic policies of the United States. It doesn’t matter if the government is severly authoritan like Agusto Pinochet and severly violates human rights,just as long as the government bows down to the economic policies of the United States and any other country that supports the neoliberal trade order and the Washington consenus.

i will help show how the United States also supports repressive regimes as long as they support the neoliberal grand strategy and other interests of the US.A. Let’s take the example of Salvador Allende and Chile. Chile was one of the longer running democracies in Latin America that had a european style democracy with rival coalitions and a full range of parties from the far left to the full right. The socialist Allende ended up winning the election in 1970 democratically. Although he won by plurality, it is clear that the leftist parties easily had more of the vote. In office, Allende pursued a policy known as ” The Chilean Way to Socialism” which included nationalizing certain industries such as copper and banking. Two U.S. companies, Kennecot and Anaconda, controlled most of the copper industry. Under the Chileanization of Chile, the u.s. copper companies had to sell 51% of their shares and capital to the copper company run by the Chilean government. This nationalistic economic policy, as i’m sure you can probably see, did not play to the advantage of the united states economic policies and business interests. It is undeniable that the U.S. had very hostile contentions towards the Allende government. Documents released during the Clinton administration unveil “project FUBELT”, which involved the CIA carrying out operations which involved supplying weapons to general Camilo Venezuela to help engineer a coup to kill the Commander in Cheif of the Army Rene Schneider who was a constitutionalist, which meant that he wouldn’t support a military coup. But instead, General Schneider was killed in an attempted kidnapping by another group of conspirators who had been meeting with the CIA. His death helped to rally the Chilean people toghther to support Allende who was then sworn into office by the Chilean congress. In the end a military coup led by Agusto Pinochet, who supported the neoliberal grand strategy of the U.S. The military coup carried out by Pinochet was successful and took out Allende who was a democratically elected socialist leader in 1973.Allende was killed or committed suicide and pinochet took the reins to exercise his dictatorship that supported market-oriented economic reforms. Pinochet’s dictatorship lasted from 1973 to 1990 and was brutal and repressive. He outlawed all leftist parties and his “caravan of death” killed many Marxist and socialist sympathizers.

Allende helps to illustrate that the U.S. doesn’t care what type of government a state adheres to as long as they bow down to the neoliberal policies carried out by the U.S.

The next time you hear our president or any other public official tell you that the u.s. is doing something because the government of a certain country is repressive or has a brutal dictatorship or has no regard for human rights, it is bullshit and you need to open your eyes and realize that their are ulterior motives being carried out. Motives that pursue economic imperialism and accumulation of capital, not human dignity.
The truth is that many people see America as nothing more than an imperialist empire who serves the interests of the few at the cost of the well being of many in Latin America and various other regions in the world. What is in the best interest of the plutocracy in the United States is not even remotely in the same interests of the people who have for decades been exploited and seen as the “little brown brothers” of the United States.

I am convinced now more than ever in the imperative of revolutionary change. When there are 16 million children that die every year from hunger, war,and preventable disease the time to act is now. The oppressed can wait no longer for a system where the means of production are shared in common to produce goods required for the common good, not greed and profit. Production based on use values, not profits.The injustices of Capitalism will continue until we decide that they should end. So let us begin, from the streets of Seattle to the alleys of Kabul; from the universities of Colombia to the corn fields of southern Mexico. Ever onward to victory! 

(This piece was written a little while back, thus making it a little dated at some spots.)


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: