Latin America Crises and Contradictions

Dianne Feeley

Crisis and Contradiction
Marxist Perspectives on Latin America in the Global Political Economy
Edited by Susan J. Spronk and Jeffery R. Webber
Haymarket Books, 386 pages, $28 paper.

THIS EDITED COLLECTION focuses on four Latin American countries — Argentina, Bolivia, Brazil and Venezuela — examining “the relationship between state and market in late capitalist development.” (11) The collection as a whole combines theoretical explanations with concrete analyses of specific social formations presented by important Marxist political thinkers.

As Marxist economists and sociologists, these authors seek to summarize the economic decisions that various political leaders made, from the days of rentier capitalism (particularly Bolivia and Venezuela) and import substitution industrialization through the period of neoliberalism and globalization. In the global economic crisis of the late ’90s, each of these governments was replaced.

While each had its unique history and experiences, massive movements demanding an end to the growing impoverishment exploded in every one. Yet the essays in Crisis and Contradiction are not a celebration of those victorious moments but an investigation of subsequent events. The authors analyze Latin America’s “pink tide” and present a critique of the alternatives the incoming governments implemented.

Roots and Problems of Resistance

The first part of the collection takes up the decomposition and subsequent recomposition of the new working class. It opens with “Roots of Resistance to Urban Water Privatization in Bolivia, The ‘New Working-Class,’ the Crisis of Neoliberalism, and Public Services.”

Susan J. Spronk summarizes the communal victory over water privatization and investigates its results five years later. She points out that the only criterion for membership in the rural-urban, multi-class alliance, the Coalition for the Defense of Water and Life (Coordinadora), was “active participation in daily struggles.” (30)

The temporary organization developed to oppose the privatization of the water supply; tensions that existed within the Coordinadora were smoothed over in the heat of the fight. They maintained their strength against the government’s state of siege and forced it to back down. As a result, by 2005 countrywide grassroots mobilizations were able to roll back other privatizations and replace the government with Movement Toward Socialism (MAS) candidates, led by Evo Morales.

People then went back to their private lives, expecting that everything would work out. The author details the fracturing of the coalition as the reorganized public utility’s board of directors confronted the question of how to meet the debt they inherited under the conditions set by the MAS government. They needed to pay for the expansion of services into poor neighborhoods.

 In the end they decided to fire 164 unionized workers. Promised subcontracting work if they organized themselves into micro-enterprises, those fired lost stable jobs and those still employed faced speedup.

Spronk illustrates how community coalitions can unravel as consumers and utility workers are forced into deciding who is to pay for converting privatized enterprises back to public services. She quotes Coordinadora leader Oscar Olivera, who argues that “the true opposite of privatization is the social re-appropriation of wealth by working-class society, itself self-organised in communal structures of management, in neighbourhood associations, and in the rank and file.” (50) But that was not seen as a possibility.

Most other chapters of Part I outline how the alternatives to the capitalist crisis did not result in a deeper social restructuring. Under what Mariano Féliz calls the “neo-developmentalist alternative” that the Néstor and Christina Kirchner governments (2003-07, 2007-15) carried out in Argentina, capital flight ended and economic recovery could take place.

Despite Néstor Kirchner’s anti-neoliberal rhetoric, Féliz locates the restart as the “consolidation and expansion of an extractive, export-driven model.” This model extended monoculture (genetically modified soy) mostly owned by multinational corporations at the expense of food crops. The extension of soy production also led to land erosion, the yearly loss of thousands of small farms, and worsening conditions for workers. However export taxes did provide a surplus that subsidized massive state relief programs for the poor and unemployed.

Féliz explains Kirchner’s successful attempts to win over a section of the working class with a labor policy that promoted collective agreements including minimum wage increases and overtime payment for formal workers. By 2007 their real wages were 6.7% higher than in 2001, but for precarious workers they were 22.4% lower and those of state employees declined 28.4%. (66) The Kirchner governments also developed employment training and financial assistance policies that undercut the national network of unemployed workers.

As a result of restarting the economy and defanging strong popular movements, the government was able to circumvent the 2008-09 economic crisis. Cristina Kirchner, elected in 2007, carried out a controlled devaluation of the nominal exchange rate and placed caps on wages. The resulting wage stagnation in the context of a world food crisis led to massive demonstrations and roadblocks. Congress refused to go along with increased export taxes.

To maintain political support in the face of national mobilizations demanding that workers and the unemployed not pay for the crisis, the government then carried out a series of measures, providing subsidies to troubled firms to retain workers, renationalizing the pension system and creating a program that benefited four million low-income families. Féliz concludes that the form of government replacing neoliberalism and the 2001 economic crisis was “a new mode of reproduction of capitalist social relations.”

This “new” form, he maintains, renews and consolidates the capitalist restructuring that began in the 1970s. This neo-developmentalism repeats two neoliberal characteristics: a transformation of the economy based on the plunder of common goods and the extreme exploitation of labor.

Yet these are carried out with a “new set of public policies to contain and channel a new form of social conflict.” That is, this stronger, more stable government has not overcome class conflict, but contained it for the moment. Transnationalization also has not altered Argentina’s peripheral position in the world economy. (72)

In a second article on Argentina’s solution to the 2001 meltdown Emilia Castorina’s analysis is similar to Féliz’s, although she names the phenomenon “democratic neoliberalism.” While Féliz’s article concentrates more on the economic side of the Kirchner solution to the 2001 economic crisis, Castorina explains how Néstor Kirchner managed the social and political crisis, “without fundamentally altering the structure of social inequalities and power.” (96)

Both Néstor and Cristina Kirchner’s governments were able to weather the ups and downs of the world economy and labor conflicts. Castorina’s article ends with a warning to those who believe that neoliberalism’s poverty and social inequality in itself will lead to radical transformation: the Kirchner solution of democratic neoliberalism was able to disable a deeper alternative.

These three articles set the stage for understanding the nature and extent of the “pink tide” solutions in Latin America. The latter are taken up in greater detail in Part 2, but these initial writings form the necessary case for those more theoretical articles.

The Militancy of Permanent Tempories

There is only one case study on Brazil; I wish there were more. “Doubly Maginalised? Women Workers in Northeast Brazilian Export Horticulture” by Ben Selwyn presents a picture of the new working class — women working as “permanent temporaries” in the table grape export sector.

This is these women’s first paid employment and they form the majority of the work force. Over the years they have not only become active in the rural workers’ union, but leaders. Over two decades they have won pay rates above the minimum, overtime rates, the right to protective clothing and the right for trade union representatives to communicate with members during the lunch break.

They have fought for and won the right to crèche facilities, the right of women whose children are in the crèche to breastfeed for one hour a day (not including their lunch break) and a two-month maternity leave. After a fight against sexual harassment, they won sufficient seating space on company-provided transportation so they have personal space.

Since I tried unsuccessfully to organize my UAW local to allow women who were breastfeeding space to pump and store their milk, I was particularly impressed by their organizing accomplishments!

Selwyn notes in his conclusion that despite the general trend toward deteriorating working conditions, new sectors of the working class fight to improve their lives and when they win, they seek to extend their gains.

The Venezuelan Case

The following three articles on Vene­zuela conclude Part 1. These discuss problems in attempting to provide a more fundamental alternative to capitalist relations.

The first, “Emergent Socialist Hegemony in Bolivarian Venezuela: The Role of the Party” by Gabriel Hetland, was the least interesting. I’m not sure if my own jaundiced view of the “vanguard party” notion prevented me from finding it thoughtful, or whether subsequent events do not seem to bear out his analysis.

The second, “Venezuela’s Social Trans­formation and Growing Class Struggle” by Dario Azzellini, outlines the early history of the Bolivarian process. When Hugo Chávez assumed power in February 1999 the government encouraged unions and social organizations to help in the planning and transformative process.

Azzellini proceeds to discuss in detail how state institutions both helped and hindered the development of workers’ control in plants as well as self-government through Community Councils (CC). By 2011, there were 40,000 throughout the country. These were structures parallel to the government, developed to “overcome the rift between the economic, social and political — between civil society and political society — which underlies this dualism inherent in capitalism and the bourgeois state.” They would also prevent the over-centralization of a state where civil society is underdeveloped and the state becomes all. (144)

The CCs, however, while having plans about what the community needed, lacked financial and technical resources. Early in his article the author warns of a growing bureaucratization and how that impedes self-organization. “Since institutions tend to try and stay in control of social processes and reproduce their power, it is necessary to subordinate the old institutions to popular power.” (146) One wonders what has become of these communal organs of self-government in the present disaster.

The larger portion of the article deals with workers’ cooperatives, looking in depth at a failed attempt at worker leadership in an aluminum plant. The initial idea — that cooperatives would automatically produce for social needs and that “their internal solidarity based on collective property would spontaneously extend to their local communities — did not take place.” Instead most followed the logic of capitalist production, maximizing revenue without concern for the community. (147)

Further, there were no state institutions capable of giving support to workers who did take over factories. Most of these took place once owners downsized or stopped production. No strategy of industrialization existed until 2007, when the government announced a plan to build 200 “socialist factories.” Even then there was little substance to the announced goal of gradually transferring administration to workers and community.

In his 2012 election campaign, Hugo Chávez stated that the “dominant socio-economic formation in Venezuela is of a capitalist and rentist character.” He called for the further “construction of communal councils, communes, and communal cities and the ‘development of social property.’” (161)

In his postscript, the author notes that since Chávez’s death in March 2013, political differences within the Bolivarian process have become more visible. While the rightwing opposition attacks continue, Azzellini notes that the Maduro government’s bureaucratic apparatus has moved against left critics.

The third article on Venezuela in Part I is “Socialist Management and Natural Resource Based Industrial Production: A Critique of Cogestión in Venezuela.” Thomas F. Purcell outlines the historical and geographical process whereby Venezuela developed rentier capitalism with a high degree of dependence on the world market, especially the price of oil and agro-exports.

This meant that the social power of capital was concentrated within the form of the landlord state. His argument is that the state-led initiative of co-management (cogestión) attempted to improve efficiency through workers’ control, but lacked the “scale of intervention necessary to address the material root conditions of declining productivity.” (164)

Essentially Purcell sees that the industrial strategy exceeded the scale of Venezuela’s internal market and was therefore forced to compete internationally. It was thus dependent on workers bearing the bulk of the responsibility for planning, productivity and distribution, under conditions where only massive state subsidization from the oil revenue could make that happen through financial and technical aid.

Given both bureaucratic state institutions and divisions among the workers, such a leap proved impossible. The only positive alternative Purcell notes in passing is that that a regional Chavista union called for consolidating all aluminum companies “in a unified worker-controlled enterprise.” Only then could they hope to compete internationally.

What Way Out?

While I learned a great deal from these articles about some of the concrete problems posed in deepening the Bolivian revolution, I found myself asking how could Venezuela reduce its dependence on oil, mining and the aluminum industry and prioritize food production, housing, education and health for itself.

That leads into the more theoretical Part II of the collection, “State and Market in Late Capitalist Development.” Three of the five articles introduce ecosocialism as a necessary component to 21st century socialism.

Leandro Vergara-Camus refutes the idea that sugarcane ethanol and the growth of agribusiness in Brazil under the Lula/Rousseff Workers Party governments opens the path to a workers’ centered and stable economy.  Nicolas Greinberg and Guido Starosta reveal the problem underlying the agribusiness model center of left governments adpted in Brazil and Argentina. Finally, Jeffery R. Webber outlines how the building of a road through TIPNIS, Bolivia’s indigenous forest territory, was a betrayal by the Morales government.

The other two articles bookend the section. Juan Grigera’s “Conspicuous Silences: State and Class in Structuralist and Neostructuralist Thought” reveals how capitalism separates politics — found in the supposedly neutral state — from the market and its “invisible hand.” That is, the state pretends to stand above social classes and their particular interests. This is what the author calls “conspicuous silences,” since in reality there is no separation and class bias is present in its laws and institutions.

All the articles in Crisis and Contradiction point to the role the state plays in manipulating the market, noting how social policies are targeted for some rather than available to all. Other mechanisms of the state include regulations over bank loans and credits, trade policies, rules regarding debts and capital flight, devaluation of the currency and uneven exchange, labor legislation over wages, pensions, flexibilization of work, health and safety conditions and property laws.

These issues are briefly summarized by Claudio Katz in “The Three Dimensions of the Crisis.” While Katz sees the capitalist economy as always functioning with various imbalances, these tensions become more significant between trading partners with different productivity levels. They are resolved periodically in ways “which are paid for by the oppressed classes.” Today, Katz notes, the severity is so extreme it requires “politico-strategic changes that come up against resistance from the global economy’s principal actors.” (278)

Neoliberalism, the economic restructuring that has taken place since the 1980s, resulted In capital’s capacity to expand into new territories (especially the ex-“socialist” countries), operate production, trade and finances at a global scale and utilize information technology to manage production, distribution and finances.

This, along with the economic downturns over that period, weakened the official trade unions and, in a series of confrontations, forced them to take concessions. The process swept away the Fordist model of production that raised wage increases when productivity rose.

Katz sees the neoliberal framework as “based on prioritizing competition to reduce wage costs.” This creates a gap between production and wages, and makes for a more unstable world “with sharp regional and sectoral inequalities that combine prosperity and stagnation, with the forms the crisis take are essentially determined by this unprecedented framework.” (282)

Katz sees three processes as characteristic of this era: high foreign investment by transnational corporations, the information revolution and structural unemployment. Automation alone has made 5.6 million jobs disappear in the first decade of the 21st century. These have increased “the organic composition of capital, resulting in a relative deterioration of the rate of profit.” (286)

But Katz reminds us that the rate of profit is still high given the rate of exploitation caused by wage stagnation and labor flexibilization, a declining cost of raw materials and the cleansing of capital through bankruptcies and mergers.

If neoliberalism has given capitalism a new lease on life, the author reminds us that it is based on the overproduction of commodities, intensified urbanization and degradation of natural resources. Katz points out that neoliberals deal with both environmental degradation and financial crises by assuming there will be some technical remedy. Meanwhile Keynesians posit that some combination of re-regulation and “green capitalism” will be the answer.

While Katz reminds us that capitalism has undergone several mutations, the growing environmental crisis has added a new factor. He concludes by looking to the anti-capitalist mobilizations at Copenhagen as the means through which an ecosocialist perspective can take hold, one that prioritizes the creation of social goods and reduces the manufacturing of products that harm the environment.

While Crisis and Contradiction would be difficult for someone looking for an introduction to Latin America today, any beginner who reads the articles thoughtfully would have much to gain because they employ a Marxist method, and not just an analysis of recent history, to inform the reader.

November-December 2018, ATC 197