Challenging Neoliberalism

The left-wing governments which together comprised the pink tide — including Venezuela, Bolivia, Ecuador, and to a less radical extent Brazil and Argentina — first achieved electoral victory on the back of widespread popular discontent about the effects of neoliberalism. Accordingly, the main thrust of their project was anti-imperialist and anti-neoliberal.

In response to massive popular mobilizations, these governments softened the harshest blows dealt by neoliberalism, reversing privatizations, promoting growth based on production rather than speculation, recuperating the role of the state in wealth redistribution, and expanding public services, especially in health care, food, and education.

The initial objective was to build an alternative hegemonic bloc capable of breaking with US hegemony and the neoliberal world order. The shared goals of alternative forms of industrialization, trade, finance, and communications were accompanied by important efforts towards integration through initiatives such as the Union of South American Nations (UNASUR) and the Community of Latin American and Carribean States (CELAC). The most interesting of these projects was the Venezuelan initiative, the Bolivarian Alliance for the Peoples of Our America (ALBA), which sought alternative forms of cooperation based on the principles of complementarity and solidarity.

There is no doubt that the social programs of pink tide governments brought significant gains for poor and working people. Many for the first time gained access to basic goods, housing, higher education. and health care.

With the possible exception of Venezuela, the reforms of progressive governments were only designed to confront US hegemony and mitigate the effects of neoliberalism. They did little to challenge the more fundamental structures of capitalism in these countries. The main targets for nationalization were foreign assets, while the structures of power within Latin American countries were mostly left intact.

Social programs sought only to assist the poor, but they refrained from compromising the rich. There was no significant agrarian reform, and major resources like mining, agro-industry, finance, and mass media remained in the hands of a small sector of elites, who continued to profit under pink tide governance. As a result, as the pink tide project unfolded it was increasingly undermined by its own contradictions.

Neo-Developmentalism

The key defining characteristic of the pink tide’s economic strategy was the neo-developmentalist model. This was an updated version of the import-substituting industrialization model promoted by the Economic Commission for Latin America and the Caribbean (ECLAC) in the postwar period designed to help Latin American countries break North-South dependency and regain national sovereignty.

Brazil, Argentina, and Ecuador attempted to reduce dependence on foreign capital by promoting local entrepreneurship and forging alliances with their “national bourgeoisies.” But subsidies to business owners failed to promote investment in ways that could support the goals of national development or economic diversification. Throughout the pink tide countries structural economic imbalances persisted, leading these countries to depend even more on raw material exports to fuel economic growth and fund social welfare programs.

Indeed, the increasing dependence on natural resource extraction has been the most problematic aspect of pink tide development strategies.  Although the extractivist model was defended by governments as a necessary “stage” of development to move towards a more advanced economy, in fact the opposite has been true.

The “reprimarization” of economies has further restricted their productive base and locked them into a path of dependency on raw material exports. Despite attempts to implement neo-developmentalist strategies for channeling agro-mineral rents into alternative productive activities, these projects never got off the ground.

The most significant geo-economic change associated with the primary-export-led growth strategy has been the increase in ties with China. But these new trade links have been neither able to provide the basis for regional sovereignty nor break the logic of dependence. Rather, trade with China has brought new forms of subordination, reinforcing primary commodity export-led growth with very little transfer of technology.

But perhaps the biggest problem with the extractivist model is its association with a highly undemocratic concentration of power and resources, characterized by structural unemployment on the one hand, and wealth accruing in the hands of a small stratum of investors and multinational corporations on the other.

The extractivist growth model has in fact prevented the possibility of any further progressive change, instead encouraging a deeper penetration of capital into Latin American territories. Critics describe this model as “predatory capitalism” because the costs of economic growth are placed on natural resources and rural communities, dispossessing peasants and indigenous peoples and precipitating ecological disaster. This has generated a new cycle of territorial struggles against extractive projects.

As a result, despite making significant gains in social welfare, pink tide governments have been unable to overcome the tensions inherent in this growth model. They had dealt a blow to the “new world order” represented by US imperialism and neoliberal globalization by blocking free-trade agreements and reversing privatizations.

But in the end, the pink tide governments never extended their mission to that of transcending capitalism as such. Instead they accommodated to it, deepening their dependence on global capital.

What’s more, extractivism increased governments’ vulnerability to boom-bust cycles. Plummeting commodity prices — a result of declining growth in China, reduced demand for agro-fuels, and the development of shale and other substitute oil — have been devastating to pink tide economies, leading to reduced or negative rates of growth, currency devaluations, and declining fiscal resources.

The region now faces its fourth year of economic decline. Meanwhile, very few alternative trade and industrialization goals have been achieved, compounding economic stagnation.

Transformation Undermined

There is no doubt that the extractivist model provided pink tide governments with the rents necessary to implement significant welfare programs. But unaccompanied by a more radical project for structural transformation, these social programs have only been a temporary solution; the systemic mechanisms which reproduce inequality and social exclusion are left intact.

The absence of a broader project for transforming society and social consciousness has limited the effectiveness of social programs. In Argentina, food emergency plans and soup kitchens were set up to provide life support to the most impoverished sectors of the population during the economic crisis. But they were unable to tackle the underlying structural causes of poverty in the long run. After the initial emergency these programs were never replaced by efforts to organize alternative livelihoods for people beyond the mold of individual consumption.

Emptied of their radical potential, social assistance programs became mechanisms for co-opting popular sectors and social organizations. The Kirchners’ unemployment schemes were used as a tool to divide and conquer the piquetero movement. “Loyal” activists were rewarded with official positions and resources, while those more critical were isolated. The result of these clientelistic practices was the depoliticization, demobilization, and delegitimization of the movement.

In Brazil, the rise to power of the Workers’ Party (PT), was associated with the dissolution rather than activation of left-wing social forces. The PT’s relationship with movements was primarily defined by the appointment of leaders from unions, social organizations, and NGOs to public administrative positions. But this meant that activists and progressives left the ranks of popular leaders to form part of the elite, resulting in a loss of popular legitimacy. The Left was disoriented and deactivated, unable to form an independent political stance.

Across the board, social programs were not accompanied by new forms of popular education, mobilization, unification, and political formation. The role of the poor was to act as passive beneficiaries of social programs rather than radical political subjects. They were inserted into “consumer society” but were not part of a project seeking to challenge that form of society or transform social consciousness. This has thwarted the possibility of building towards postcapitalist societies.

As a result, the political horizon of the pink tide project was limited to a temporary increase in consumption capacity for poor and working people. While this was most clearly evident in Brazil and Argentina, a similar dynamic also evolved in the more radical projects of Bolivia, Ecuador, and Venezuela.

The commodity price slump has laid bare these contradictions in the pink tide project. Governments are no longer able to fulfill their dual role as both facilitators of higher profits for capital and benefactors for the poor. And in the absence of a more radical strategic vision to confront capitalism through popular mobilization, governments have retreated to the right, implementing pro-market reforms in response to economic stagnation.

In Brazil, Rousseff cut back social policies and appointed a liberal finance minister. In Ecuador, Correa’s initial attempts to increase tax revenues and social programs were curtailed and he was eventually forced to increase public debts and exports, and award oil concessions to large corporations. Meanwhile, the governments’ market-friendly policies and strategic alliances with sectors of the elite caused confusion amongst their popular base.

Rising Tensions

The limited political horizon of the pink tide project fostered tensions between governments and social movements. Governments were unable to establish relationships with movements that allowed the latter to maintain their autonomy whilst opening up to self-criticism and holding constructive dialogue when protest arose.

The proposed societal transformations of Bolivia and Ecuador have been emptied of their radical content. In Ecuador, the popular mobilizations and constituent assemblies reached a high point in 2008, when the rights of nature were recognized in the Constitution and buen vivir — “living well,” an alternative vision of development based on the cosmovisions of ethnic groups and the principles of ecology — was incorporated into the national development plan.

But in practice, these goals were always subordinated to the neo-developmentalist growth strategy, as demonstrated last year when Correa abandoned the Yasuní Ishpingo-Tambococha-Tiputini (ITT) initiative to keep oil in the ground in favor of opening drilling operations in the Yasuní national park.

Ecuador’s extractivist growth model has heightened the tensions between the Correa government, which has become increasingly top-down, and popular protests of peasant, indigenous, and environmentalist movements. Movements organized marches and petitions against the government’s expansion of agribusiness and mining, as well as the criminalization of social protest.

The government’s hostility to these protests ended up providing an opening for the Right, which took the opportunity to mobilize against higher taxes with the ultimate goal of restoring the conservative government.

Similarly, in Bolivia the MAS’s appeal to “plurinationality” and “pluriculturalism” emphasizes the issues of identity and values for indigenous peoples primarily through legal recognition, but pays insufficient attention to the material conflicts arising for these communities within the national development strategy.

The model of “Andean-Amazonian” capitalism acknowledges the coexistence of diverse cultural-economic modes within Bolivian society: the ayllus, the family, the informal sector, small business, as well as national and transnational capital. But again, the practical experience of conflict between these sectors over infrastructure and mining projects would appear to demonstrate the dominance of the latter two.

When the highway proposal for the Isiboro Sécure National Park and Indigenous Territory (TIPNIS) was pushed through despite popular protests, the Bolivian government was accused of intimidating, dividing, and criminalizing indigenous organizations. Social movements have been weakened in the face of divisions over popular protests, suffering a loss in autonomy and militancy. In this context, the project risks becoming not one for promoting radical activation, but for accommodating social forces to the demands of capital accumulation.

Governments too focused on the economic agenda and technocratic state administration have lost their relationship with autonomous, organized social sectors. Mass protests against the PT in Brazil in 2013 started as left-wing demands concerning public transport. However, the party’s disregard for these popular demands opened the doors for the right-wing media and upper middle classes to seize the opportunity to mobilize the discontent, which eventually became a major force behind the toppling of the government in 2016.

It has become evident that the social mobilizations that initially brought pink tide governments to power have had little continuity. This is partly because they lacked a long-term project to become a self-sustaining force, but also because they were undermined by the agendas of their governments. Even if activism has not disappeared completely, it is nonetheless the case that forces on the Left are a far cry from constructing a clear project to build an alternative hegemonic force.

The result is that social forces on the Left were unprepared for the current economic crisis. While governments made alliances with the Right and adopted pro-market policies, popular forces lacked the capacity to understand what was happening and mobilize for a popular alternative. Absent a strategy to push for a radical exit from the crisis, in both Brazil and Ecuador movements criticizing governments ended up promoting the cause of the Right.

What these experiences make clear is that a project for societal transformation cannot be limited to greater social redistribution without also seriously confronting deeper power structures and building a radical popular base. It is not that greater access to basic goods, education, and health are unimportant, but that their effectiveness does not fundamentally alter the reproduction of class and power inequalities.

Nor do they necessarily encourage the mobilization, education, and political formation necessary for a longer-term transformative project. It is not enough to defeat neoliberalism without also having a transitional strategy towards a postcapitalist society.

Venezuela’s Example

Venezuela is the only country that attempted to go beyond the post-neoliberal project, paving the way towards a postcapitalist society. Following the coup attempt and the oil strike of 2002, Hugo Chávez realized that his social agenda could only move forward if it turned in a more radical direction on the basis of popular participation. Chávez’s vision of “twenty-first-century socialism” sought to construct a communal state accompanied by revolutionary activism and popular protagonism.

Venezuela’s Bolivarian Missions are an extensive set of social programs tackling a range of issues from poverty reduction, food, housing, education, and health care to indigenous rights. But more important than material redistribution in Venezuela has been the attempt to transform popular political culture, with a surge in grassroots organization, class consciousness, and popular mobilization.

The Bolivarian Missions have been accompanied by new mechanisms for political participation. Community councils have empowered people to make decisions on a variety of issues in their everyday lives, from health to water and transport. There is no doubt that elements of these processes demonstrate a radicalism that sets them apart from those of the rest of the pink tide, promoting the activation of popular forces outside the state bureaucracy and the transformation of social consciousness.

Yet the limitations of Venezuela’s project for socialism still lie in the structural contractions of the process. Throughout the Venezuelan process there has remained a major contradiction between the expansion of popular protagonism and the failure to accompany these processes with fully socialized productive property.

The nationalization of oil and other industries represented important steps in precipitating a rupture with capitalism and bringing the economy under social control. But these projects were often carried out as an immediate response to conflict and were not part of a broader strategic plan for societal transformation.

Moreover, the project would always be limited by its inability to escape the extractivist model that, as described above, is inherently undemocratic. Despite major attempts to channel oil funds to diversify the economy through a system of cooperatives, these lacked the capacity to become self-sustaining independently of the government subsidies that propped them up.

Dependency on subsidized imports for food and other basic goods left the top-down rentier model intact. With no economic diversification, local business remained dedicated only to imports rather than productive industry.

This has limited real popular participation. Despite a significant surge in popular protagonism, the fact that these new forms of organization had no foundation in the productive relations of Venezuelan society meant they were unsustainable. Social transformation was mainly limited to the political sphere, taking place only at the local level with no foundation in the productive base of the economy.

This means that it is still top-down decisions made by the state and in the world market that will ultimately impact people’s livelihoods. In Venezuela this top-down model has been accompanied by an extensive corruption of state bureaucrats that popular mobilization could not overcome.

These underlying contradictions have been unveiled by the current economic crisis. When oil prices plummeted they took with them the access to food and medicine for the poorest sectors of society. Even if the horror stories presented in the mainstream media of famine, desperation, and the failure of socialism are politically motivated exaggerations, there is nonetheless no doubt that the Venezuelan project has proven unsustainable.

Like his counterparts, Maduro has desperately turned to Canadian mining companies to make up for the shortfall in dollars. The hope for Venezuela lies in the continued empowerment of popular classes, who have mobilized bottom-up solidarity initiatives like communal networks for production and consumption of basic goods to confront the crisis.

Left Neoliberalism

The experience of left-wing governments in power is representative of the problems of trying to “humanize” capitalism, or build an “Andean-Amazonian” capitalism without going beyond it. Despite a fierce anti-neoliberal platform, with the exception of Venezuela few steps were taken towards a complete rupture with the previous order.

Instead, the result was what some described as “left neoliberalism,” whereby the new governments continued to manage a post-neoliberal society but were not able to overcome capitalism. So far, they have been successful neither in preventing the contradictions of the operations of global capitalism in Latin America from erupting into crisis, nor in preparing the masses to organize and propose their own solutions going forward. This must change if these governments are to retain their hold on power.

In the face of crisis, people want change. Bolivian vice president Álvaro García Linera has pointed out that the Right has no alternative proposal. The neoliberal policies they propose resemble those implemented in the 1980s and 1990s that initially caused economic devastation and popular protest. Yet after over a decade in power, the pink tide governments seem unable to move beyond the impasse and provide an alternative to the economic woes facing the people.

Rather than implementing pro-market policies and making pacts with sectors of the elite, the key is to push for a solution to the crisis by increasing popular protagonism through mobilization, unification, and education. In the face of crisis, the popular sectors must be prepared to build towards another type of society.

This involves strengthening political consciousness and collective organization to protect the social gains made under progressive governments, but also providing greater space for social activism to limit the expansion of capitalism, and building a social and ecological economy beyond extractive capitalism.

This cannot be achieved simply by spontaneous self-activity, but nor can it come from technocratic decisions from above. Political parties must open up to self-criticism and national-level debate with popular movements about the type of social, ecological, and economic model people need, that will have a real impact on the party’s program. The primary task is to steer away from extractivism towards a socialized economy that is ecologically sustainable.

An important example of a left alternative is emerging from the continent-wide ALBA social movements project. The goal of ALBA movements is the construction of a continental social movements network in order to mobilize, unify, and educate diverse sectors of the popular movement around a common project, from peasant, indigenous, and African communities to students, workers, and co-operatives.

ALBA’s response to the current conjuncture is to build towards “the creation of an alternative proposal based on popular power” which “seeks a solution [to the crisis] in accordance with the interests of popular organizations.” This means precipitating the struggle for the construction of an alternative, postcapitalist economy that can be “socialist, ecological, communal, feminist, and self-sustaining.”

In the face of an exhausted model, processes like ALBA will be critical to building “political subjects” capable of acting as forces of radical change. The pink tide governments may have failed to tame capitalism, but what the Peruvian journalist and socialist activist José Carlos Mariátegui envisioned as “the socialism of our Americas” is still a project worth fighting for.