Building Alternatives to Neoliberalism in Latin America Today
Leading Marxist author Michael A. Lebowitz has dedicated a big part of his research to the problem of the possibilities of building a socialist alternative. He spent six years (2004-2010) in Venezuela working as a director of the program for Transformative Practice and Human Development at the Miranda International Center (CIM) in Caracas, where he had the opportunity to participate in the building of “socialism for 21st century”.
Lebowitz was recently in Australia for the Socialism in the 21st Century conference, which was co-hosted by Links. In the interview published below, Lebowitz covers some of the topics he discussed during his visit regarding the opposition to neoliberalism and the prospects for a socialist alternative in Latin America today.
Since the election of Chavez in 1998, there has been a reaction against neoliberalism in Latin America that is often called the ‘pink tide’. Why did neoliberalism flourish across the continent?
What do we mean by neoliberalism? I think it is essential to understand that it is not simply a set of policies which support capitalism and which remove all obstacles to the growth of capital; significantly, it is also ideology — an ideology which has supported the growth of capitalism for centuries. Indeed, many of the perspectives of neoliberalism parallel very closely the arguments of Adam Smith and, in general, classical liberalism.
At the core of this ideological perspective is the starting point of the isolated, atomistic individual. And the logic is that the individual gains when free to choose. So, for example, reduce taxes and leave more money with the individual to make her own choice; the assumption is that the individual will make more efficient choices. Accordingly, end social programs and let people decide what they want to spend their money on. Reduce public school support and provide vouchers for families to make their own choice; let people freely decide as individuals the terms on which they will sell their ability to work, in other words let them function as independent contractors — and thus remove laws supporting collective bargaining.
“Free to choose” (the title of one of Milton Friedman’s books) is the mantra which provides the ideological support for neoliberal policies. Under the appropriate circumstances, this ideology makes neoliberalism appear as common sense. We all know the list: privatization, deregulation, free trade — indeed, remove all state intrusion into the economy and let capital be free to grow. In short, let capital be free to choose.
Of course, it is essential to understand that this is not an argument to reduce the role of the state in the economy. As I noted in my book, Build it Now: Socialism for the 21st Century , the state must be used (in Adam Smith’s words) to remedy the “bad effects of the folly and injustice of man.” Chile was the laboratory for this use of the state under Pinochet. As Friedrich von Hayek explained in an interview for Chile’s El Mercurio (April 12, 1981), dictatorship “may be a necessary system for a transition period. At times it is necessary for a country that there is some form of dictatorial power.
”This perspective had been eclipsed in the 1930s, in wartime, and in the so-called Golden Age of Capital. But the old mole of capital did not disappear: it was nurtured in conservative think tanks (which provided the ideological support for Thatcher and Reagan among others) and surfaced once the existing capitalist system entered a period of crisis and slump. In particular, during the 80s and 90s, neoliberal solutions flourished and nowhere more in Latin America.
There were particular reasons for the triumph of neoliberalism in Latin America. For one, the structuralist development model based on import substitution for consumer goods had clearly failed — both because the maintenance of highly unequal societies (in particular, the absence of land reform) meant that there was inadequate consumer demand in the national markets for the branch plants of international capital to function efficiently on the Fordist model but also because the global strategies of international capital changed to focus on world production in the context of growing international competition. Further, in the context of the slump, state debts incurred in the attempt to develop, serious balance of trade and payments problems, etc now led to cutbacks in government budgets and programs and, as elsewhere, to efforts dedicated to making particular countries attractive places for international capital to invest. Thus, lower taxes, driving down wages, reduced health safety and environmental controls.
The two sides of neoliberalism [strengthen capital, weaken workers] triumphed in Latin America in this period with a vengeance. However, I think it is essential to understand that contrary to the neoliberal slogan that “there is no alternative”, there always was (hypothetically, at least) an alternative. After all, when capital runs into problems, when wages are being driven down, when unemployment rises, isn’t that a time when capital, the rule of capital, the reign of capital, the logic of capital, can be challenged?
What was the response in Latin America to neoliberalism?
When popular discontent about the effects of neoliberalism grows, the default position of capitalist governments is to reverse the worst effects of neoliberalism. So, the call is to end privatization, end cutbacks of social programs, end policies which generate insecurity and precariousness. Reverse, reverse, reverse.
But that is not an attack on capitalism. The identified enemy is not capitalism but bad capitalists, not capitalist governments but bad policies. The essential perspective, in short, is a non-neoliberal capitalism or a post neoliberal capitalism — what Chavez early called “the third way”.
Capitalism without warts. But is capitalism without warts credible in a period of intense international competition in the global race to the bottom? It is subject under these conditions to the challenge of TINA — that such a policy, however desirable, cannot succeed. The general credibility of undertaking policies designed to reverse the effects of neoliberalism does, though, increase substantially with a favorable change in the economic conjuncture — as occurred with the boom in the international capitalist economy and in particular with the increased demand for natural resources generated by the growth of China.
The third way, the way of capitalism without warts, accordingly was the path that some Latin American countries took. This was the pink tide — an attempt to create a post neoliberal capitalism. The one exception was Venezuela. But Venezuela started out that way too. Its essential model was to use resource revenues to build up industry through a neo-structuralist model for endogenous economic development, to gain food sovereignty, to reduce dependence on oil and to reduce the social debt by programs in education and health. That model was a model to create a good capitalism in place of bad capitalism. The 2002 coup and the 2002-3 bosses lockout, however, revealed that the Venezuelan oligarchy and US imperialism did not want a good capitalism because they were happy with what existed.
From this point on, Venezuela moved in a new direction; it began in 2003 to build an alternative to capitalism with what it called the social economy. And in 2005 and 2006, it named that alternative “socialism for the 21st century”, fostering worker management and communal councils — what Chavez called cells of a new socialist state. In contrast to the social democracy and populism characteristic of the pink tide, Venezuela began to create elements of a revolutionary democracy in which people develop their capacities through their protagonism.
Venezuela, as we know, is a very sad story these days — but not because of its moves in the direction of revolutionary democracy (as opposed to the effects of an embedded culture of clientalism and corruption plus incompetent and incomprehensible economic policies). Indeed, if there is any hope for Venezuela these days, it is because of those steps toward revolutionary democracy (in particular in the communes).
But what about the Pink Tide? What happens to social democracy and populist policies when the engine dies out? Because it is obvious that the slowdown in the international capitalist economy and, in particular, the reduced rate of growth of demand in China has created a crisis not only for countries which took a social democratic path (like Argentina, Brazil, Ecuador, and to a much lesser extent Bolivia so far) but also countries like Chile and Mexico which did not. We see again the problem of international balances (exacerbated by the growth in popular consumption and imports associated with the reduction of poverty), deficits and debt. So, what will happen? All other things equal, the same thing that occurred in the ’80s and ’90s. The message will be TINA, at best TINA with a human face. And that will mark the end of the Pink Tide.
But all other things are not necessarily equal. That result is not inevitable.
What are the prospects for the coming period?
Although the prospects for a return to neoliberal policies (and, likely, new governments which are unequivocal in pursuing that course) are high, we need to understand that there are alternatives. A government can win the battle against neoliberalism, I argued in 2004 (in an essay reprinted in Build It Now), but only if it is “prepared to break ideologically and politically with capital, only if it is prepared to make social movements actors in the realization of an economic theory based upon the concept of human capacities.” If it is not (I continued), “such a government inevitably will disappoint and demobilize all those looking for an alternative to neoliberalism; and, once again, its immediate product will be the conclusion that there is no alternative.”
I cited this passage last year in an essay I wrote called “Social democracy or Revolutionary democracy: Syriza and us” because I think the lesson of the Syriza government in Greece is an object lesson for Latin America (and indeed us). As I wrote in that essay:
"There are always choices. We can take the path of ‘defeats without glory’ (Badiou) characteristic of social democracy or we can move in the direction of the revolutionary democracy that builds the capacities of the working class. At the core of the latter is that it embraces the centrality of the concept of revolutionary practice — ‘the coincidence of the changing of circumstances and human activity or self-change’.
So what are the prospects in Latin America of avoiding yet another “defeat without glory”? Although the current trajectory of the Pink Tide and of the Bolivarian Revolution is not very promising, I think it is important to keep in mind those choices. Even after the absolute betrayal of the Greek people by the Syriza government (even after it said “yes” when the people said “no”), I wrote that “despite all that has occurred, revolutionary democracy is still a path open to the Syriza government. As a government, it can introduce measures that can help to produce revolutionary subjects and to unleash the creative energies of the masses. Further, it can use its power as government not only to support the development of a new state from below but also to ensure that the existing state (with its police, judicial, military, etc powers) is not under the direct command of capital.”
Is it possible in Latin America to take the path of revolutionary democracy? I think we need to recognize that the social democratic path, the path of populism, is not an option in a period of capitalist retrenchment and slump. So the question becomes one of whether the masses of Latin America are prepared to return to the neoliberalism barbarism so fresh in their memory or whether they are receptive to challenging capital with a socialist alternative. Although the latter path would not at all be easy, there are glimpses of that alternative. In the communes and communal councils of Venezuela, that struggle continues. And in Argentina, resistance to the return of neoliberalism and the experience of self-management of recovered enterprises point to the possibility of combining the struggle against the existing state with the building of peoples’ capacities from below. Of course, too, there are the governments of Bolivia and Ecuador — governments that could be pressured from below to choose a socialist alternative rather than neoliberalism.
In this struggle, both in Latin America and elsewhere, it is essential to challenge directly the ideology which makes the logic of capital appear to be common sense. In place of the focus upon maximization of the self-interest of atomistic individuals, the centrality of human development should be stressed — a concept which emphasizes the full development of human capacity (what Marx called “the worker’s own need for development”), the concept of community (and the recognition, in the words of the Communist Manifesto, that the “free development of all depends upon the free development of each”) and, in particular, the key link of human development and practice (a point stressed in the Bolivarian Constitution’s insistence that protagonism and participation is the “necessary condition for full development, both individual and collective”). In short, the Battle of Ideas is essential.
Making the importance of human development common sense challenges not only neoliberalism but capitalism itself. And that necessitates practice — not only to struggle to capture the existing state in order to serve the needs of people rather than capital but also to build the capacities of the working class through its protagonism in both workplaces and communities. Too often the practice of socialist movements has been limited to recruiting and organizing people with only the goal of capturing the state and forgetting about producing a strong working class. Here again we should learn from the experience of Syriza which for a time gave us all hope because it emerged as a movement from below and was active at the base. The lesson of Syriza, I wrote in my essay on social democracy and revolutionary democracy, “should be to never forget the concept of revolutionary practice — the simultaneous changing of circumstances and human activity or self-change. It is never too late to remember and apply this … and never too soon.”
I think that Latin America is entering a period in which there will be revolts, demonstrations and occupations. But spontaneous eruptions are like volcanoes that often leave little behind but cooling lava. I have argued and continue to argue that you need a party to coordinate, a party that is linked to the movements (rather than superior to them). Is it possible to succeed in the struggle against neoliberalism and capitalism itself? My mantra is “pessimism of the intellect, optimism of the will”, and optimism of the will refers to struggle. Class struggle changes the equation — it makes all other things no longer equal.