Latin America's New Left:

Structural change or continued dependency?

An analysis of the New Left’s potential

to challenge structural poverty and inequality

Roel van Engelen

MSc Thesis

Political Science, International Relations

University of Amsterdam

January 2010

Latin America's New Left:

structural change or continued dependency?

An analysis of the New Left’s potential

to challenge structural poverty and inequality

MSc Thesis

Political Science, International Relations

University of Amsterdam

January 2010

Student: Roel van Engelen

5796466

roel.vanengelen@gmail.com

Research Project: The Politics of Colonialism and Postcoloniality

Supervisor: Prof. Dr. Frances Gouda

Second reader: Prof. Dr. Michiel Baud

1

Politics is the science of serving the people, not living off the people.

– Evo Morales

2

Table of Contents

Acknowledgements 4

List of Abbreviations 5

List of Maps, Tables and Figures 7

1. Introduction 8

1.1 Research question 11

1.2 Definition of core concepts 12

1.3 Methodology and selection of cases 15

1.4 Chapter outline 17

2. Explaining ‘underdevelopment’: Dependency and World-Systems theory 19

2.1 Introduction 19

2.2 Studying non-Western phenomena from a Western perspective 20

2.3 Dominant theories of international relations 23

2.4 The development of underdevelopment: Dependency Theory 26

2.5 The World-Systems perspective 31

2.6 Stages in the development of the modern world-system 33

2.7 Some implications of the World-Systems perspective and hypotheses 36

2.8 Conclusion 37

3. A history of Latin America’s connection to the world-system 39

3.1 Introduction 39

3.2 The history of Latin America in the world-system 40

3.3 Colonisation and subordination, the age of mercantilism (1519-1750) 41

3.4 Towards independence (1750-1810) 44

3.5 The ‘long’ nineteenth century (1810-1914) 46

3.6 Latin America between the World Wars (1914-1945) 50

3.7 Integration into a US-dominated world economy (1945-1980) 51

3.8 Debt crisis and the spread of neo-liberalism (1980-2000) 54

3.9 Conclusion 58

3

4. The Rise of Latin America’s New Left 61

4.1 Introduction 61

4.2 Summarising socio-economic conditions in Latin America 62

4.3 Stage one: grass-roots protests against neo-liberalism 67

4.4 Stage two: the New Left claiming national government 69

4.5 Reasons for the rise of the New Left 71

4.6 Ideological basis of the New Left 76

4.7 Different strands of New Left politics 80

4.8 Conclusion 86

5. Socio-economic achievements of the New Left: the cases of Venezuela,

Brazil, and Chile 88

5.1 Introduction 88

5.2 The potential of the New Left 89

5.3 Venezuela: towards ‘Socialism of the Twenty-first Century’ 91

5.4 Brazil: a missed opportunity for structural reform 100

5.5 Chile: leftist policies in a neo-liberal straitjacket 106

5.6 Impact of the New Left on poverty and inequality 114

5.7 Conclusion 125

6. Conclusions: a new phase in Latin American history? 128

6.1 Introduction 128

6.2 A history of structural exploitation, poverty and inequality 129

6.3 Tracing the origins of Latin America’s New Left 130

6.4 Central characteristics of the New Left 131

6.5 The New Left’s socio-economic performance 133

6.6 A break with the past? 135

References 138

4

Acknowledgements

The work in front of you is my Master’s thesis, the final product of a period of five months of

intensive research into the rise of New Left politics in Latin America. With this thesis, I

complete a journey of two years into the fascinating area of Political Science. My Master’s

programme in International Relations has constituted a valuable contribution to my

academic formation, which began in Humanities, proceeded in History, and has now

culminated in Political Science and International Relations. It marks the end of an important

and formative period in my life, in which I have learned a lot, in which I have followed my

heart and my ambitions, and in which I have delved ever deeper into the areas of my personal

interest.

At this point, I would like to extend my gratitude to the people that have, directly as well as

indirectly, contributed to the realization of this thesis. Without their support, the final

product of this research would without doubt have been very different. First of all, I am

sincerely thankful to my supervisor, Professor Frances Gouda, for her many valuable

commentaries, her inspiring insights and suggestions, her always punctual feedback and her

warm and personal approach, that has continued motivate me to carry on with my research

even when other things called for attention. I consider myself very fortunate to have been

supervised by you. Furthermore, I thank Professor Michiel Baud of CEDLA Amsterdam for

his willingness to act as the second reader of my thesis. I also want to thank my fellow

students, especially the Political Economy study group, for the continued interest they have

placed in my progress, for valuable insights that have enriched my analyses and for their

friendship, formed and reinforced during numerous pleasant moments with food and drinks

at Nieuwmarkt, CREA, Atrium, or wherever else. Special thanks go out to Reijer, for his

enthusiasm about my topic and his readiness to review and comment on my draft work. And

finally, I want to thank my sweet Roos, for always standing by my side and for supporting me

in various ways during the research, near by or far away, but always being there.

Roel van Engelen

January 29, 2010

5

List of Abbreviations

AD Acción Democrática, Democratic Action, political party in Venezuela

CIA US Central Intelligence Agency

CODELCO Corporación Nacional del Cobre de Chile, National Copper

Corporation of Chile

COPEI Partido Social Cristiana de Venezuela, Venezuelan Social Christian

Party

ECLAC United Nations Economic Comission for Latin America and the

Caribbean (Spanish acronym: CEPAL)

EZLN Ejército Zapatista de Liberación Nacional, Zapatista Army of National

Liberation

FDI Foreign Direct Investment

FTAA Free Trade Area of the Americas

GATT General Agreement on Tariffs and Trade

GDP Gross Domestic Product

IFI International Financial Institution

IMF International Monetary Fund

ISI Import-Substitution Industrialisation

MERCOSUR Mercado Común del Sur, Common Market of the South

MNC Multi-National Company

MST Movimento dos Trabalhadores Rurais Sem Terra, Brazilian Landless

Farmers’ Movement

MVR Movimiento Quinta (V) República, Fifth Republic Movement,

Venezuela

NAFTA North Atlantic Free Trade Agreement

NIEO New International Economic Order

OECD Organisation of Economic Cooperation and Development

PCV Partido Comunista de Venezuela, Communist Party of Venezuela

PDC Partido Demócrata Cristiano de Chile, Chilean Christian Democratic

Party

PdVSA Petróleos de Venezuela, S.A., Venezuelan State Oil Company

PP Polo Patriótico, Patriotic Pole, political coalition in Venezuela

PPD Partido por la Democracia, Chilean Party for Democracy

PPT Patria Para Todos, the Country for All, political party in Venezuela

6

PRSD Partido Radical Socialdemócrata, Chilean Radical Social Democratic

Party

PS Partido Socialista de Chile, Chilean Socialist Party

PSDB Partido da Social Democracia Brasileira, Brazilian Social Democratic

Party

SAP Structural Adjustment Programme

UNCTAD United Nations Conference on Trade and Development

UK United Kingdom

US United States of America

USAID United States Agency for International Development

WTO World Trade Organisation

7

List of Maps, Tables and Figures

Map 1 Countries included in the definition of the term Latin America

used throughout this thesis, by ideological label 14

Table 1 Countries included in the definition of the term

Latin America used throughout this thesis 13

Table 2 Proposed model for categorisation of New Left governments in

Latin America, on the basis of domestic and international behaviour 82

Table 3 Selected Misiones Bolivarianas, by category 94

Table 4 Economic growth in Venezuela, 1998-2006 96

Table 5 Development of selected socio-economic indicators in Venezuela,

1998/1999-2006/2007 100

Table 6 Decline of poverty rates in Brazil, Chile and Venezuela (1990-2008),

by type of government orientation 120

Figure 1 Development of national poverty rates in selected Latin American

countries during the 1980s 64

Figure 2 Latin American countries with left-of-centre governments,

by year of inauguration of their (first) New Left president 70

Figure 3 Results of presidential elections and national referenda in Venezuela,

1998-2009 98

Figure 4 Development of poverty in Latin America, 1990-2008 116

Figure 5 Development of poverty in Venezuela, 1990-2008 117

Figure 6 Development of poverty in Brazil, 1990-2008 117

Figure 7 Development of poverty in Chile, 1990-2006 118

Figure 8 Relative development of poverty rates in Venezuela, Brazil, Chile

and Latin America (average), 1990-2008 119

Figure 9 Development of Gini coefficient in Latin America, 1990-2008 121

Figure 10 Development of Gini coefficient in Venezuela, 1990-2008 122

Figure 11 Development of Gini coefficient in Brazil, 1990-2008 122

Figure 12 Development of Gini coefficient in Chile, 1990-2006 123

Figure 13 Relative development of Gini coefficient in Venezuela, Brazil, Chile

and Latin America (average), 1990-2008 124

8

1. Introduction

Ever since the first Europeans set foot on Latin American soil, the history of the continent

has been scourged by pillage and exploitation. During the colonial era, the entire continent

was brought under the control of European powers, which established a mercantilist, and

later capitalist, system of extraction and full appropriation of the rich natural resources of the

continent, with the help of local and imported slave labour and in cooperation with a small

local elite, to enable and support the economic and industrial development of the West. Even

after their political independence in the beginning of the nineteenth century, de facto

colonial relations persisted, domestically as well as internationally, and Latin American

republics remained to an important extent dependent on foreign loans, compromising their

sovereignty and de facto independence. This has contributed to a situation in which at the

beginning of the twenty-first century, poverty and inequality remain among the most urgent

social issues throughout the continent.

The ability of Latin American countries to pursue autonomous social policies aimed at their

own population has historically been limited. Even until our own days, Latin America has

remained more or less locked in a system of exploitation, a world economy dominated by a

small ‘core’ group of wealthy countries and imposed and reinforced upon the periphery in

collusion with local elites who, in the role of semi-periphery, benefit from the exploitation of

the riches of the continent, at the expense of a majority of the local population (Frank 1978;

Skidmore and Smith 2001:8). The core’s ideology of laissez-faire capitalism, propagating the

free movement of capital and the opening up of markets for foreign investment, has

historically led to growing wealth and rising living standards in the West, but frustrates the

economic development and political autonomy of the developing world. The imposition of

neo-liberal principles on Latin American countries has led to ever increasing economic

inequality and decreasing social well-being for a majority of the population (Frank 1978;

Prebisch 1986).

The international dominance of the Western-originated concept of open economies and

worldwide free trade as the universal tool to stimulate economic development anywhere in

the world is reinforced by international institutions, by Western governments individually,

and by international public opinion, which is shaped to a great extent by Western-dominated

press agencies. For the periphery of the world-system, this Western-inspired model of

economic organisation has not brought the benefits it has brought the West. In reality, living

conditions in the periphery have been gradually deteriorating, exactly due to the fact that the

nature of the connection between the periphery and the core is exploitative. The political,

economic, and ideological dominance of the West over the rest seems overwhelming, and

9

there is little room for individual countries to deviate from Western-inspired norms and

practices.

The end of the Cold War and the collapse of ‘really existing socialism’ in the beginning of

the 1990s led many scholars to predict that in the twenty-first century, the neo-liberal

paradigm would consolidate itself and Latin American republics would remain loyal allies to

the United States (Skidmore and Smith 2001; 417; Castañeda 2003, cited in Rodríguez-

Garavito, Barrett and Chavez 2008:1; Stolowicz 2004:13; Arditi 2008:71). However, since the

turn of the century, there seems to be a glimpse of hope shining on the Latin American

horizon. Following the return of democratic rule in the region from the mid-1980s and the

disastrous consequences of neo-liberal structural economic reform programs undertaken in

the 1980s and 1990s, many countries in the region have elected left-oriented presidents and

governments (Vargas Llosa 2005; Castañeda 2006; Lomnitz 2006; Arditi 2008). These

governments challenge the dominant discourse of free trade liberalism, which has been

imposed upon them from outside, and are characterised by active and interventionist

domestic social policies aimed, among other things, at the reduction of poverty and

inequality. They claim to act in the interest of the poor and to represent a new way for Latin

America out of a situation of structural subordination. Except for Peru and Colombia, the

whole of South America is currently under the control of left-of-centre governments, and also

in Central America the New Left is making significant inroads, with Costa Rica, Guatemala,

Honduras,1 Nicaragua, and El Salvador being governed by presidents that claim to be left-of-

centre. Today, more than three quarters of Latin American countries, representing two-thirds

of the population of the region, is governed by left-of-centre administrations (World Bank

2007). At lower administrative levels, the picture is even clearer: in 1997, 60 million Latin

Americans lived in municipalities governed by the left; in 2003, this number had risen to

more than 200 million (Stolowicz 2004:3). The ideological shift towards the left currently

occurring in Latin America has been called a ‘pink tide’ (Lievesley and Ludlam 2009a), a

term used to emphasise the relative moderateness of Latin America’s New Left as compared

to the darker red colour, associated with communism.

1 In June 2009, a military uprising in Honduras ousted the democratically elected leftist president

Manuel Zelaya from office. In November, after a brief period of military rule under interim president

Roberto Micheletti, elections were held, bringing the conservative Porfirio Lobo to power. The election

results have not been recognised by several Latin American countries, who consider the military

takeover undemocratic. For this reason, and because at this stage it is not entirely clear how the

political situation in Honduras will develop, in this thesis I follow the position of several Latin

American governments and still consider Honduras as a New Left country. Because Honduras is not a

central part of my research, this decision will have no consequences for my analysis.

10

To many people concerned with the dramatic fate of the Latin American continent and a

majority of its inhabitants, the rise of the New Left appears to constitute a historical

opportunity for structural change, allowing the Latin American people to benefit directly

from the vast natural resources with which their continent is blessed, to arrive at a more

equitable income distribution, and to escape their position of mere providers of raw materials

and cheap labour for the core countries in the world economy. Typical achievements of the

past decade include land reforms, nationalisation of natural resource exploitation,

constitutional reforms to include indigenous rights and reassert national independence,

social measures aimed at reducing economic inequality, popular participation in decision-

making and political integration between different countries in the region.

However, these new left-oriented governments are under internal as well as external

pressure. Internally, there is fierce opposition from elite groups, who see their comfortable

positions compromised to the benefit of the poor. Internal divisions in Venezuela and Bolivia,

for example, have led these countries to the brink of civil war. Externally, the new politics of

Latin American governments are questioned by Western countries, especially the United

States, by Western MNC’s which until recently could treat Latin America as a mere colony,

and by international public opinion, which is overwhelmingly moulded and influenced by US

and European press agencies.

In this research, I analyse the rise of New Left politics in Latin America in terms of its

potential to break the Latin American continent free from its de facto colonial yoke, which

has historically continued to frustrate attempts to develop in spite of the attained de jure

political independence. The New Left movement in Latin America can be seen as an attempt

to organise society around an economic model that is not in its essence colonial (i.e. designed

to externalize all gains of economic activity and transfer them to a ‘mother country’ or –in

recent times – a group of ‘core’ Western countries), but rather geared to an autonomous and

independent economic development and improving conditions of living for Latin Americans.

What are the characteristics of this New Left movement, and which causes for this

development can be identified? Why is it that this movement seems to have great potential in

these days, while earlier attempts to establish left-oriented governments have failed, only to

be replaced by repressive dictatorships? So far, what has the New Left achieved in terms of

improving standards of living for poor Latin Americans? And to what extent can we speak of

a break with the historical practice of exploitation of Latin America by outsiders? Are the

hitherto most convincing theories on the historical development of the continent in need of

revision, or is this development just a drop in the ocean, a mere ripple on the water, an

insignificant phenomenon in a larger historical context?

11

1.1 Research question

This thesis assesses the rise of Latin America’s New Left and attempts to provide an answer

to the questions outlined above. The central question to be addressed in this thesis is:

How can the historical pattern of structural inequality and exploitation of Latin

America since the colonial encounter be explained, which factors have

contributed to the emergence and the rise of New Left politics in contemporary

Latin America, what are the central characteristics and objectives of this

movement, and what is the real potential of this development in terms of

improving standards of living for the poor and excluded population?

This research question consists of four parts, which can be divided into several sub-

questions. The first part of the question is descriptive and is addressed in chapters 2 and 3,

first from a theoretical and then from a historical perspective. The second and third parts are

analytical, as they try first to determine which circumstances and factors have caused the rise

of the New Left movement and then to summarise the central features of this movement from

a continental perspective. This analysis is done in chapter 4. The last part of the question is

analytical and evaluative, as it analyses and assesses the difficult relation between political

orientation on the one hand, and national socio-economic outcomes on the other. This part of

the question will be addressed in chapter 5.

An inquiry into the potential of New Left governments in Latin America for addressing the

issues of poverty and inequality is extremely topical and relevant in these days. There are

several reasons for this. First, it is striking and disturbing that a continent that boasts so

much natural wealth is still haunted by phenomena such as poverty and inequality. After half

a millennium of structural subordination and exploitation, the region should now finally be

enabled to resolve these issues, and any attempt to do so should be warmly welcomed and

thoroughly investigated, in order to contribute to its potential. Second, especially during the

last two decades of the twentieth century, Latin American dependence on the West has

increased and poverty and inequality figures have deteriorated, calling for an urgent solution

to these problems. And third, the image that is being externally imposed upon especially the

more radical leftist countries in the region such as Venezuela and Bolivia, focusing on the

bold international rhetoric of their leaders and institutional measures interpreted as being

undemocratic, obstruct an objective analysis by drawing the attention away from what these

countries are actually achieving in terms of improving the living conditions of millions of

poor Latin Americans. A deeper understanding of the socio-economic performance of Latin

America’s New Left may contribute in a positive way to its development.

12

In 2010, several Latin American countries celebrate their 200 years of de jure political

independence from Spain. In this thesis, I address the topical question to which extent this

independence in the beginning of the nineteenth century has really brought autonomy to

Latin America, in relation to the question whether the current rise of the New Left in the

region might constitute a new step towards the constitution of a genuinely independent

course for Latin American development. Exactly two centuries after the beginning of the

struggle for liberation and more than five centuries after the colonial encounter, the

continent again seems to have an authentic chance to challenge the historical pattern of

subordination and external control and develop a truly endogenous, Latin American way of

sustained development.

1.2 Definition of core concepts

This research is about the rise of the New Left in Latin America and the potential of this

movement in terms of improving standards of living, measured in figures on poverty and

inequality. In order to prevent ambiguity, some of the core concepts that will be used

throughout this thesis need to be defined.

To begin with, the term ‘Latin America’ is ambiguous and it has various uses and

connotations. In the broadest and most literal sense, the term refers to those parts of the

American continent where Romance languages (i.e. derived from Latin; Spanish, Portuguese,

and French) are spoken. It was first coined in 1856 by the Chilean politician Francisco Bilbao

Barguín, and later used by the French government to justify a French presence in the

Western Hemisphere, in particular in Mexico, as opposed to the Anglo-Saxon linguistic bloc

(Moniz Bandeira 2005). In spite of the French attempts, in today’s general and practical use

the term is taken to refer only to ‘the parts of the American continent where Spanish or

Portuguese is the main national language’ (Pearsall 2001:1040) or ‘those parts of the

Americas that were once part of the Spanish and Portuguese Empires’ (Skidmore and Smith

2001:3-4). These parts are divided in a South American, Central American and a Caribbean

part. For reasons of convenience and argument, I will focus on history and developments in

continental Latin America, thereby excluding territories in the Caribbean, which in some

definitions are part of Latin America, and in others are not. Arguably, the Caribbean has a

different history than countries on the continent, in the sense that the decolonisation of this

area took place later than on the continent and in rather different circumstances. The term

Latin America that will be used throughout this thesis refers therefore to all Western

Hemispherical countries south of the United States, excluding Caribbean territories as well

13

as countries where Spanish or Portuguese is no official language. This interpretation

comprises seventeen countries (see table 1 and map 1).

South America Central America

Argentina Ecuador Costa Rica

Bolivia Paraguay El Salvador

Brazil Peru Guatemala

Chile Uruguay Honduras

Mexico

Nicaragua

Colombia Venezuela

Panama

Excluded: Belize, Cuba, Dominican Republic, French Guyana, Guyana, Haiti, Puerto Rico, Surinam,

other Caribbean island states

Table 1. Countries included in the definition of the term Latin America used throughout this

thesis

By ‘the rise of the New Left in contemporary Latin America’, I mean the accession to national

power in most Latin American countries, since the end of the Cold War, of presidents that

claim to adhere to a left-of-centre political ideology. I explicitly focus on the rise of the left

on the national level, thereby excluding leftist politics on regional or local levels, as well as

grass-roots mass organisations which are based around a leftist ideology or program, insofar

as they have not reached the national political scene. This means that I treat Colombia as

right-of-centre, in spite of the fact that also in that country the left is making significant

inroads in regional and local government, for example in the capital Bogotá (Rodríguez-

Garavito et al. 2008:10). My focus on the national level is justified by the observation that key

policies with regard to poverty and national income inequality, which together constitute the

dependent variable in this research, are developed and implemented at the highest political

level in a country.

A next ambiguous concept to be defined is, of course, left and left-of-centre politicians and

politics. ‘Left’ politics is generally taken to refer to political decisions aimed at increasing

rather than decreasing the role of the state in the economy, with the objective of actively and

equitably distributing national wealth over all sectors of the population. But how can we

determine whether an individual is politically ‘left’ or ‘right’? Petras (2006) argues that the

present Latin American governments that claim to be ‘leftist’, in fact do not fit into a

traditional definition of ‘left politics’ from a historical, theoretical and practical perspective

and should not be treated as left-of-centre. By adhering too strictly to a ‘traditional definition’

of what leftist politics is about, however, Petras runs the risk of turning the adjective ‘left’ into

14

a politically empty category. Therefore, recognising the dynamic and historical development

of the ideological category that is referred to as the political left, in this thesis I let go of any

fixed definition of what leftist politics should be about according to political analysts, and rely

on ideological self-placement of politicians, policies or initiatives. That is, I accept a president

to be ‘left’ if this president defines his/herself or his/her policies and initiatives as left-of-

centre. This seems to be a workable definition, since right-of-centre presidents will not easily

publicly place themselves or their policies on the left half of the left-right continuum.

Map 1. Countries included in the definition of the term Latin America used throughout this

thesis, by ideological label (red = left; blue = non-left; blank = excluded from definition)

By these tokens, it is possible to assign to each Latin American national government a ‘left’ or

‘non-left’ ideological label (see map 1). The only non-left countries in the region at the

moment of writing would be Colombia and Peru in South America, and Mexico and Panama

in Central America. The next step in the analysis is to actually test the ‘left-ness’ of these

governments against criteria and indicators that are used to define leftist politics (see Petras

2006). This analysis is what this research is about. In the chapters that follow, the

effectiveness of three Latin American countries, each representing a different degree of ‘left-

15

ness’, will be tested as regards their performance and achievements in reducing the number

of people living in conditions of poverty and providing for a more equitable distribution of

income.

1.3 Methodology and selection of cases

In this thesis, I analyse the relationship between political orientation and national poverty

and inequality in a number of Latin American countries that can be considered

representative of the different types of left governance currently practiced in the region. The

independent variable in this research is the degree of ‘left-ness’ of a Latin American New Left

government, whereas the dependent variable consists of figures on poverty and income

inequality.

The question whether and to what extent the Latin American New Left is capable of

challenging the historically dominant pattern of poverty and inequality throughout the region

cannot be adequately answered without a thorough look at the history of the region since the

colonial encounter. After all, the seeds of structural poverty and inequality were sown in the

past, and in the Latin American case, more than five centuries ago, with the introduction of a

system of exploitation of the local population that has continued to persist to this date. The

importance of a thorough analysis of the historical background of a particular event or

phenomenon seems to be often overlooked by political scientists, who usually study political

phenomena in their current context and pay too little attention to developments prior to the

event concerned. With my own background as a historian, I recognise the importance of the

past for explaining the present, and therefore I include in this thesis an extensive description

and analysis of the historical context, which contains the roots of the persistent socio-

economic problems of the region and constitutes an important reason for the emergence and

rise of the New Left in Latin America.

In this thesis, the concept of poverty is defined as the percentage of people in a particular

country living below the national poverty line. The national poverty line varies across

countries, and is based on the cost of all the essential goods and services that an average

adult needs to live a tolerable life. By controlling for the cost of essential resources, a

comparison of poverty percentages between different countries can be made. In the analysis

of poverty indices in chapter 5, I will focus on the relative development of poverty, in order to

determine whether the accession of New Left presidents correlates with an acceleration of

poverty reduction.

From the theoretical and historical frameworks in chapters 2 and 3, it will become clear

that since the colonial encounter Latin America has been characterised by a persistent and

16

significant gap between rich and poor people, and by enormous inequalities. Although there

are many different sorts of inequalities, in this research I focus on income inequality, defined

as the absence of an equitable distribution of income among all individuals in a society. A

common measurement of income inequality is the Gini coefficient, developed by the Italian

statistician Corrado Gini. The Gini index is based on large income surveys and summarises

the income distribution in a country and has a value between 0 (perfect equality) and 1

(perfect inequality). In the quantitative section in chapter 5, I analyse the development of the

Gini coefficient in three New Left countries.

Of course, the concept of income inequality is politically charged, as the answer to the

question as to whether there should or should not be an income distribution in a society,

varies according to political convictions, as does the answer to the question what an

‘equitable’ income distribution is. A goal of this research is to determine to what extent left-

of-centre governments in contemporary Latin America have succeeded in reducing poverty

and income inequality among their populations, and because this can be measured

(relatively) objectively, the political and moral content of the term ‘inequality’ can be avoided.

However, I want to emphasise that I personally consider the significant income inequalities

in Latin America, which are among the highest in the world, appalling. They are unnecessary

and undesirable effects of free-market capitalism, and should be buffered and mitigated by

an interventionist state, through measures such as progressive taxes, public health care and

subsidies for poor, unemployed and disabled people.

The general approach of this research is continental and not country-based. The rise of New

Left politics is a phenomenon that applies to a majority of countries on the continent, and

should therefore in the first place be analysed in a continental context for greater explanatory

power. Moreover, the theoretical perspective applied in this research focuses on political

interaction in the world-system and therefore requires an outlook that is not merely based on

the state as a unit of analysis, but rather one that looks beyond the concept of the state and

treats individual states as part of a greater whole, in which the state does not exist in isolation

but is formed and influenced by other states, each with its own designated function within

the world-system.

However, for practical reasons and because of the importance of a broad qualitative

perspective to clarify any quantitative analysis, instead of analysing developments in all

fourteen Latin American countries that currently have left-of-centre governments, I limit the

scope of my research to a smaller number of cases, which represent the different strands of

New Left politics currently practiced in Latin America. My general hypothesis that leftist

politics contribute to reducing poverty and economic inequality, is therefore tested with three

cases, each occupying a specific position on the ideological continuum from radically to

17

moderately or cooperatively left. Together, these countries stand for the different types of

leftist politics that are currently being practiced in Latin America.

At the extreme left of the continuum is the Venezuela of Hugo Chávez, in the middle is the

Brazil of Luiz Inácio ‘Lula’ da Silva, and to the right (meaning closer to the centre on the left-

right continuum) is the Chile of Ricardo Lagos and Michelle Bachelet. These countries

represent, respectively, three degrees of left-leaning politics, to be labelled ‘radical’,

‘pragmatic’, and ‘cooperative’, labels that can also be applied to other New Left governments

in the region (which will be done in chapter 4). These countries are among the biggest left-

leaning countries in the region and represent almost 45 per cent of Latin American

population, and especially Venezuela and Brazil could be regarded as (partly competing)

models for other left-oriented governments in the region. Chile provides an example of a left-

leaning government that explicitly aims to work within and even promote the existing

paradigm of laissez-faire capitalism, trying to develop its economy under conditions of

international free trade; Brazil is moderately critical towards the dominant paradigm and

appears to be reorganising its economy, society and foreign policy to try to assert itself as a

regional ‘core’ power and an alternative to the dominance of external powers; while

Venezuela represents the most radical example of Left politics, stressing its national

independence and its unique Latin American ‘Bolivarian’ (i.e. based on the ideology of

libertador Simón Bolívar) legacy and ideology, and structurally engaging in criticising the

West and especially the United States, to emphasise its own alternative and autonomous path

towards sustainable development. An analysis based on these three cases, preceded by an

extensive theoretical and empirical overview of the historical background of the present

realities in the region, will constitute a representative assessment of the potential of New Left

politics in contemporary Latin America.

1.4 Chapter outline

The theoretical and conceptual framework of this thesis is presented in chapters 2 and 3. In

chapter 2, I provide the theoretical backbone for my research in the form of an analysis of the

development and the explanatory power of Dependency and World-Systems theory, which in

my opinion offers the best tool for analysing Latin American history to date. In this chapter, I

also hypothesise about the potential of different degrees of New Left politics for challenging

the socio-economic position assigned to a peripheral country. I conclude the chapter by

arguing that World-Systems theory provides a very useful framework for analysing and

explaining the historical connection between Latin America and the outside world.

18

In chapter 3, this theoretical framework is applied to the subject region of this research.

This chapter is dedicated to an extensive historical overview of Latin American development,

starting from the moment of first connection of Latin America to the world-system, when the

first European conquistadores set foot on the continent. This long-term historical perspective

is important, as the structural poverty and inequality in the region clearly originated during

the colonial era. The World-Systems perspective stresses the need of a historical analysis of

the connection between the periphery and the core, and by paying attention to the long-term

historical background of the current Latin American socio-economic realities I want to

emphasise the importance of history in any politico-scientific research. The historical

analysis in chapter 3 leads to an account of the contemporary political, economic and social

situation in the region. This analysis will provide the background for the rest of the thesis. I

argue that since the colonial encounter, Latin American history has been characterised by a

great degree of external control over internal political and economic affairs, the relentless

extraction and externalisation of the gains from economic activity, and by a notoriously

unequal income distribution, internationally as well as domestically.

In chapter 4, building on acquired insights from theory and history, I provide an overview

of the rise of the New Left in contemporary Latin America. This chapter describes the

phenomenon, the reasons for its occurrence, the main characteristics in terms of policies,

ideology, and rhetoric. Also, I elaborate a framework that can be used to distinguish between

three different strands of New Left politics. Throughout the chapter, I work from a

continental framework, providing an overview of the features of the New Left movement

throughout the region. Chapter 5 analyses in more detail the political outcomes and main

achievements of left-of-centre governments in three countries, which represent the three

different types of leftist politics that are currently being practiced in Latin America:

Venezuela, Brazil, and Chile. The chapter features anecdotal coverage on the general political

direction and outcomes under New Left governments in these countries, as well as a

quantitative analysis in which these countries are contrasted with each other in terms of their

performance on poverty and inequality indicators.

In the concluding chapter, I use the findings from the preceding chapters to provide an

answer of the central research question, and I discuss the related question to what extent the

rise of Latin America’s New Left can be viewed as a challenge to the historically developed

system of structural inequality and exploitation of the region.

19

2. Explaining ‘underdevelopment’: Dependency and World-

Systems theory

2.1 Introduction

Any analysis of contemporary macro-political phenomena or developments is incomplete

without a thorough theoretical background and justification. In this chapter, I elaborate the

theoretical framework for my research into the rise of New Left politics in contemporary

Latin America. This theoretical background will be used as a stepping stone to elaborate, in

the next chapter, on historical developments in the region that have to an important extent

generated the phenomenon that is the subject of this thesis.

After a note on the need for caution while studying non-Western phenomena like this from

a Western point of view, I argue that the political and economic realities in Latin America

cannot be convincingly explained by the two theoretical paradigms currently dominant in the

study of International Relations, neo-realism and neo-liberalism, and their mainstream

models of economic development. The position of Latin America in the periphery of the ever

more integrated and ‘globalised’ world economy compromises some of the core assumptions

in neo-realism and neo-liberalism and therefore calls for a different approach. Furthermore,

the dominant grand theories of international relations fail to take into account the

persistence of colonial forms of power and power relations in world politics. Therefore, I

provide an overview of the theoretical perspective that seems to offer the best analysis of the

historical development of Latin America in the past five centuries, which has led to the

present circumstances giving rise to the emergence of the New Left in the region. This

perspective is partly based on dependency theory, but also draws on insights from the World-

Systems perspective, developed by Immanuel Wallerstein in the early 1970s.

The theoretical framework of this research looks beyond nation-states as the central actors

in the international system, and assigns great significance to the relations between the actors

in the system, and the extent to which actions and autonomy are being determined by the

respective positions of the actors in question. It also recognises the continued influence of de

facto colonial practices in relations between ‘core’ and ‘periphery’ countries. As will be

argued, formal political independence has not led to real autonomy for Latin American

countries, whose politics, economies and societies continue to be geared to serving first and

foremost the interests of external actors, rather than their own populations. The subordinate

position in the world-system, in which Latin America has found itself since the colonial

20

encounter, can help explain the present political, economic and social realities in the region,

to which I turn in chapter 3.

2.2 Studying non-Western phenomena from a Western perspective

The subject of the present research is a phenomenon that is occurring outside the Western

world. Most literature about this phenomenon, and about non-Western political topics in

general, however, is of Western origin. My own viewpoint is also clearly influenced by

Western thinking on international relations, and my moral and ideological framework has

been shaped by my living in Western Europe for almost my entire life. However, on several

journeys to different Latin American countries my thinking has also been influenced by non-

Western perspectives on social reality. My experiences in Latin America and other developing

countries have demonstrated to me that the dominant Western frameworks of neo-realism

and neo-liberalism are not only unable to account for the immense welfare gap between the

advanced economies and the developing world, but also seem to accept this status quo as

desirable and do not offer any viable strategies to confront this reality, which in my opinion is

highly upsetting.

Paraphrasing Galtung (cited in Baud 2004), if the acquisition of knowledge about an area is

taking place outside that area itself, one could speak of ‘academic colonialism’. In order to

circumvent this accusation, it is important to avoid the pitfalls of claiming to have unlimited

and unbiased access to all kinds of data from the subject area, or claiming to advance

universal claims about the social world based on an exogenous frame of reference. In the

process, it is wise to remember that academic research in the West has been and remains

closely linked to Western foreign policy interests, and as such tends to represent the ‘official’,

Western perspective (see Baud 2004).

For Westerners, it is usually difficult to detach from a Western point of view while studying

non-Western issues in international relations. From a Western prspective, Latin America is

still routinely regarded as a chaotic region, characterised by political instability, military

takeovers, civil war, mistreatment of ethnic groups, machismo, delinquency, drug trade and

corruption, but also as the cradle of exotic dance and food, inspiring literature, and a

wonderful place to travel around. The issue of politics in Latin America, which is of concern

here, is invariably associated with volatility, bad leadership and unethical, non-democratic

practices, and dictatorial inclinations on the part of presidents. Political systems outside the

Western sphere are regarded as inferior, or at least under-developed (Baud 2004). As a result

of Western representations of Latin America, by Western governments and Western media

(see Andreski 1966), the current rise of New Left politics in the region is viewed with great

21

suspicion by many ordinary Westerners, who are tempted to accept the idea that New Left

presidents in Latin America are dishonest, corrupt, dictatorial and do not constitute a

positive force for their people (see Castañeda 2006).

The representation of non-Western political practices and cultures from a Western

perspective often leads to a negative and depreciative connotation of certain concepts. For

example, the perceived radicalism of some New Left movements and governments in Latin

America arouses suspicion and fear among people employing a Western perspective, and is

therefore often considered a threat to democracy. However, by making this judgment a

priori, the possibility of an open and objective analysis of the content and the prospects of

the political project in question is compromised. Another term that is routinely applied in a

negative and denouncing manner, especially by North American and European observers, is

populism, which in itself only means taking ‘the people’ as point of departure. Populism

refers not to the ideology or content, but rather to the style of political leadership, and has

historically been associated with the political left as well as with the right. In analysing the

New Left in Latin America, populism is often referred to as a dangerous and undemocratic

force, bearing the danger of dictatorial tendencies, while the potential of progressive popular

mobilisation that is also part of the meaning of the term, is disregarded (Lievesley and

Ludlam 2009b:223). In this context, Laclau (cited in Lievesley and Ludlam 2009b:222)

argues that the concept of populism has become an ‘empty signifier’, implying that it can be

defined according to the personal preferences of the user. An empty signifier has no

conceptual precision and can therefore not be adequately used to describe and analyse the

content of politics. For this reason, in this research, in which I focus not on the style but

rather on the content, and the potential, of Latin America’s New Left, the term populism will

not be used.

Paraphrasing Said (1978:273), the system of representation of Latin America in the West

serves a purpose in a particular historical and economic setting, reinforcing Western

sentiments of superiority and thereby strengthening the Western economic and political

position vis-à-vis Latin American countries. It can be argued, for example, that with regard

to the concept of the ‘world market’, ‘particularist interests lie hidden behind the pretext of

universalist justifications’ (Bornschier 1999:167-168, emphasis added). Or, as Motta

observes, ‘procedural structures of democratic liberalism are theorised as constituent

elements of the political’ (2009:77); any deviation from democratic liberalism, however

legitimate, causes suspicion and opposition in the West. The power of the West in

international politics is therefore not only political, economic and military, but also draws on

cultural representations, imposed on Western as well as non-Western entities (D. Kennedy

2003). Clearly, this obfuscates a more neutral vision of contemporary realities outside the

22

Western sphere. The challenge for the researcher is to go beyond the subtle Eurocentric

prejudices about Latin America that continue to persist.

In the study of phenomena taking place outside the West, it is important to recall that

mainstream academic scholarship in international relations is practiced in the tradition of

the country that is still at the centre of political, economic and military power in the world,

the United States. Although the relative power of the US vis-à-vis emerging economies such

as China and India, and to a lesser extent also Brazil, is arguably declining at the beginning of

the twenty-first century, American science is among the most advanced in the world, and

American scholars still dominate the academic debate on an important number of disciplines,

among which the field of political science and the sub-discipline of international relations.

The US-centrism of the scholarly and political debates on international relations implies a

vision of the world that is grounded in American, or at least Western historical experience.

The US-dominated disciplines of political science and international relations could be seen as

an extension of American hegemony, a cultural-scientific pillar of American hard power in

the world. A great majority of scholars and theories that are considered important in the

discipline are American citizens, or at least have been educated in an American scholarly

tradition. The same applies, although to a somewhat lesser extent, to the field of Latin

American studies. A Peruvian author once remarked that a US-based scholar writing about a

country like Peru is considered a Latin America expert, while a Peruvian scholar writing

about Peru is only considered a local voice, or a source of primary data (cited in Baud 2004).

In line with Said and along a Gramscian way of thinking, it could be argued that the

discipline of political science, which is centred in the West, not only explains and describes

political might, but in the process also moulds and reinforces it. The assertion that those in

power impose their ideas on those governed, also holds true for the disciplines of political

science and international relations.

This is not to say, however, that a politico-scientific phenomenon such as the rise of Latin

America’s New Left cannot be adequately studied by Westerners. I do not agree with scholars,

especially Latin Americans, who have recently advanced the claim that Latin American social

reality cannot be properly analysed by non-Latin Americans (see Baud 2004). I think it is

indeed possible and useful to do so, provided that the researcher takes into account the fact

that this phenomenon is taking place in a different context, in which things that Westerners

take for granted are not at all that evident. This seems to be one of the principal lessons of

post-colonial theorists; while studying phenomena taking place outside the West, one should

be prepared to challenge some of the West’s ‘unchallenged assumptions’. An approach

centred on concepts like free trade, the desirability of an integrated world market, the virtues

of the ongoing process of globalisation, concepts that are commonplace in political and

economic relations in the West and also between the West and other countries, is necessarily

23

limited in its explanatory power. Postcolonial theory reminds us of the importance of an

unbiased view, of taking into account not only the perspective of the ‘Self’, but also that of the

‘Other’, and in this thesis I do my utmost to detach myself from Western prejudices and

present an alternative to the Western-dominated dominant views on Latin American

realities.

2.3 Dominant theories of international relations

Considering the US-dominance of the discipline of international relations, it is not surprising

that the currently dominant international relations theories, neo-realism and neo-liberalism,

take as their points of departure concepts that historically originated in the West, first in

Europe, later in the United States. Since these theories share the same epistemological

framework and core assumptions, debate between them is not very contentious, so that one is

tempted to see the possibility of some kind of hybrid international relations theory, a neo-neo

synthesis that currently dominates the debate. According to Mearsheimer, a prominent

contemporary neo-realist scholar, neo-liberalism can be viewed merely as neo-realism ‘by

another name’ (1995:85). Both theories are positivist, in the sense that they assume that it is

possible to observe some kind of objective truth. Both take the sovereign state as the central

unit of analysis, although neo-realists are somewhat more state-centric than neo-liberals,

who also recognise the importance of non-state actors (domestic and international). Also,

neo-realism as well as neo-liberalism assumes that states operate in an international

environment that is in its essence anarchic, although they draw different conclusions from

this condition. While neo-realists have a pessimist view on international cooperation,

stressing statism, survival, and self-help as inevitable consequences of the international

anarchy (Dunne and Smith 2008:100-103), neo-liberals advance a somewhat more optimist

view based on the virtues of international interdependence, cooperation and globalisation

(Lamy 2008:133).

With regard to economic development, neo-realists and neo-liberals share a set of basic

assumptions, based on the centrality of the sovereign state and the ability of each state to

pursue an objectively defined national interest in a way that is free from external or structural

constraints. According to neo-realism, there is no differentiation of function between

different units in the international system (Lamy 2008:127). Neo-realism and neo-liberalism

both employ an ‘endogenist’ perspective on development (Phillips 2006:341), and argue that

each sovereign country has the same basic features in the international system and as such

possesses the means to actively and autonomously pursue its national interest, in fair and

unimpeded competition with other actors in the system. Of course, some countries will be

24

able to develop a comparative advantage over others due to, for example, a good political

organisation, a culturally and ideologically unified population or substantial reserves of

certain natural resources, but in principle every country is thought to form a part of the

international system in conditions of equality and equal opportunities. Complemented with

the assumptions from classical economics, this leads to the assertion that each country has

the same chances of achieving sustained economic development. This assertion forms the

basis of neo-classical economic theories of growth and development, which dominated

development economics until the 1950s, and which are currently still implicitly part of the

development aid programmes and policies of Western countries. According to neo-classical

economists, trade and investment form the engine of economic growth, and economic growth

(measured in terms of increased economic output) will pave the way to sustainable

development. Thus, economic expansion in and into developing countries would ultimately

yield levels of material welfare comparable to those in Europe and the United States (Abel

and Lewis 1985:2).

In the 1950s and 1960s, there was great optimism regarding the chances of newly

independent, decolonised countries to achieve sustained economic development in the world

economy. Political independence, which had become a reality after decolonisation, would

soon integrate the new states into the international economic order and kick off sustained

economic development (Sauvant 1977:3). Classical economics and diffusion theory predicted

that economic development and industrialisation would autonomously spread from the

Western countries, which represented the most advanced and desirable type of political and

economic organisation, to the newly independent countries (Bernstein 1971:147).

Modernisation theory implied an evolutionary perspective on social and economic change,

viewing underdeveloped societies simply as being at an earlier stage of development than the

advanced Western economies (O’Brien and Williams 2007:301), and envisioning a ideal-

typical ‘destination’ of the process of modernisation that is based on the US political and

economic system (Bernstein 1971:145). An influential elaboration on this modernisation

theory was provided by Rostow (1960), who argued that foreign investments in new

economies would, under the right circumstances, automatically generate an economic ‘take-

off’, spurring accelerated economic growth. Investment was considered the prime mover of

the economy (Ghatak 1995:54), and foreign investment in newly independent countries

would create demand as well as capacity, thereby creating the conditions for sustained

economic development. In other words, development theories from the 1950s and 1960s

generally assumed that the past development of Western capitalist economies would serve as

the universal model to achieve sustained economic development outside the Western world

(Bernstein 1971:141).

25

A consequence of this straight and uniform Western-inspired mode of thinking about

development is that wherever this development does not occur under the circumstances

created and propagated by the West, it is routinely assumed that this is due to some sort of

inferiority on the part of the people of the newly independent countries. Classical

modernisation theory, which regards the problems of development in the Third World in

terms of a presumed ‘universal’ growth model or trajectory applicable to each single country,

explained the fact that sustained development did not take off in these countries in terms of a

‘historical backwardness’ of the people in developing countries (Shannon 1989:2-7).

Although modernisation theory has developed somewhat and now recognises the importance

of minimum social conditions and non-economic factors for producing sustained economic

growth (Bernstein 1971:143), even in our times this kind of thinking is still dominant in the

Western debate on development of Third World countries, not only in public debates but to a

growing extent also in politics. The view that poor Africans, Asians and Latin Americans

should learn to take care of their own business, just as ‘we’ have done before (and stop relying

on Western aid, for that matter), is gaining popularity among all sectors of society, in spite of

the fact that this view completely ignores the overwhelmingly important structural factors

that thwart sustained development in Third World countries, to which I turn below.

The ‘modernist’ line of thinking has also for a long time been characteristic for the way

Latin Americans saw themselves and their place in the world. A sense of cultural (and racial)

inferiority vis-à-vis Europeans, a result of their ethnic intermixture with indigenous and

other populations throughout history, led many Latin Americans in the ‘long century’

between independence and the Second World War to assume that their countries would

never achieve economic and political parity with Western Europe or the United States. Their

criollo descent made Latin Americans see themselves as being incapable of achieving either a

mature democracy or sustained economic development (Abel and Lewis 1985:1), and this way

of seeing oneself as inferior was further reinforced by the steadily growing gap between the

economic performance of Western countries and the new Latin American republics. The

cultural component of Western dominance, outlined above, is very well visible here: with

their sense of inferiority, Latin Americans implicitly and unconsciously submitted to

Western-dominated forms of economic organisation, of which it had not at all been

demonstrated that these would indeed be beneficial to their own countries. On the contrary,

as will be argued in the next sections, the integration of Latin America in the periphery of the

world economy under conditions dictated by the core, has historically led to a consistent

deterioration of the local situation. It seems obvious that this kind of thinking, which also

amounts to de facto racial subordination, obstructs initiatives for autonomous development

and reinforces structures of reliance and dependence on external actors and exogenous

models of development.

26

2.4 The development of underdevelopment: Dependency Theory

The classical economic assertion, that each country has the same chances of achieving

sustained economic and industrial development in the international environment, is difficult

to validate if one looks at the history of countries outside the Western sphere. In fact, the

existing international society based on the free operation of the market has until now ‘hardly

succeeded in establishing it merits outside the core, that is, the OECD countries (Bornschier

1999:167). A quick glance at world economic history since the end of the Middle Ages reveals

great and ever growing differences in economic wealth and political power among countries

in the world, differences that are not only attributable to things such as poor political

organisation, ethnic diversity, civil unrest and disobedience or the lack of natural resources.

Indeed, some of the countries that are considered politically mature, culturally and ethnically

homogenous and among the richest in important and precious natural resources, stand out

because of their lack of economic development vis-à-vis, say, Western European countries,

who themselves are characterised by a relative lack of natural resources but at the same time

by the world’s highest levels of economic development and well-being. As Bornschier

(1999:170) puts it, it seems that economic development outside the Western area is not only

regulated by rational market-based decisions concerning maximisation of profits and optimal

allocation of resources through the market mechanism, but is also influenced by other factors

beyond the control of policy-makers in developing countries.

Other than attributing the absence of sustainable development to political circumstances,

organisational inferiority, laziness, of in general some kind of ‘backwardness’ on the side of

the developing countries, classical economics does not offer a convincing explanation for the

curious fact that sustainable economic development is a central feature of Western countries,

while in Southern countries in Africa, Asia and Latin America, in spite of the emulation of

European or American development strategies, sustained economic development simply does

not experience its so-called ‘take-off’ (Rostow 1960), and poverty and inequality remain

central and growing problems. One is tempted to conclude that there must be something else

to explain the really existing and ever growing gap between rich and poor countries in the

world.

Since the 1950s, theorists have tried to provide a solution to this puzzle. The disappointing

economic performance of newly decolonised countries in that decade, and the fact that the

disparities between developed and developing countries were growing instead of diminishing

(Prebisch 1986; Abel and Lewis 1985:2), provided the impetus to devise an alternative to the

then dominant classical economic orthodoxy. The Argentinian economist Raúl Prebisch, who

would later become the first chairman of UNCTAD, was among the first to publicly challenge

the conventional wisdom that trade was the universal engine of growth. In his 1950 article,

27

‘The economic development of Latin America and some of its principal problems’, Prebisch

argued that free trade was only beneficial to industrialised countries, while in countries that

were predominantly agrarian international free trade would in fact lead to ever growing

economic difficulties. The central concept in Prebisch’s argument is the deterioration of the

terms of trade, or the relation of imports to exports, between agrarian products and

commodities on one side, and industrial manufactures on the other. According to Prebisch,

international demand for foodstuffs and raw materials is relatively inelastic, while

technological development and rising capital intensity of industrial production leads to rising

prices of manufactures. Contrary to what should theoretically be expected in conditions of

growing productivity, prices of manufactures do not go down but up (Prebisch 1986:483).

Thus, while the price of primary products does not rise and even tends to decline as a result

of rising productivity, industrial products become ever more expensive. It follows, therefore,

that under circumstances of free trade, countries that export foodstuffs and raw materials

and import industrial products are less and less able to pay for their imports with the gains

from their exports (Prebisch 1986:480). Prebisch demonstrated that the terms of trade have

moved consistently to the disadvantage of primary products since 1870 (1986:483). Latin

American countries, reliant as they were on exports of natural resources, could import less

and less industrial products with the gains from same amount of primary products exports.

According to Prebisch, the gains arising from international trade are distributed

asymmetrically between agrarian and industrial countries. The advanced economies, which

are the main beneficiaries of the gains of international trade and technological development,

form a small and wealthy ‘core’, while the great number of agrarian or primary economies

constitute the ‘periphery’ of the world economy. As a result of the uneven distribution of

gains between core and periphery, peripheral countries are unable to develop their own

industries due to a lack of available funds, and are forced to attract loans from the core in

order to pay for their imports. Thus, by the exploitative nature of the economic link between

core and periphery, peripheral economies at some stage even become exporters of capital to

the advanced economies (Cardoso and Faletto 1979:91). Furthermore, the ideology of free

trade, propagated by the core, undermines industrial development, as a beginning industry in

the periphery must from the very start engage in full competition with far more advanced

industries from the core. The declining export prices and rising import costs lead to severe

balance-of-payments problems in primary economies. In this way, countries in the periphery

become to a large extent economically dependent on countries in the core. ‘In other words,

while the centres have integrally retained the fruits of technological progress in their

industries, the countries in the periphery have transferred to them a part of the fruits of their

own technological progress’ (Prebisch 1986:483).

28

Prebisch, writing about Latin America, argued that the continent was condemned to a place

in the periphery, as a producer of foodstuffs and primary commodities for the big industrial

centres. According to him, international trade was characterised by a ‘manifest imbalance’,

expressed in the failure of the theoretical premise of an even distribution of economic gains

among all producers in the international division of labour (Prebisch 1986:479).

Nevertheless, Prebisch did not advocate a Latin American withdrawal from the international

economy, but rather a renegotiation of the terms of participation in the international

economy.2 He proposed three key policies that, when combined, would enable Latin

American countries to generate autonomous and sustained economic development:

(1) Import-substituting industrialisation; which should lead to reducing the necessary

amount of imports and change the composition of imports (p. 479-480;486);

(2) Agrarian reform; which should lead to growing productivity in the primary sector

(p. 482); and

(3) Regional integration between peripheral countries; which would create a bigger

internal market to generate demand and avoid market fragmentation (p. 482).

The basic arguments made by Prebisch have in subsequent years been further elaborated by

many neo-Marxist theorists, who together form a theoretically varied and divided school

called ‘dependency theory’. According to dependency theorists, or dependentistas, many of

whom are Latin Americans, poor countries have historically become economically dependent

on the advanced industrial economies, as a result of their history and the persistent ‘neo-

colonial’ ways of economic interaction (Ghatak 1995:65). In the definition of Dos Santos,

‘[d]ependency is a situation in which a group of countries [the periphery] have their

economies conditioned by the development and expansion of another economy [the core]’

(cited in Soares 1991:98). Consequently, the absence of sustainable economic development in

the periphery is attributed to the nature of the connection between the periphery and the

core. According to dependentistas, exploitation of the periphery by the core is the central

characteristic of the capitalist world economy: an ‘inherent structural inequality in the

pattern of capitalist development itself’ (Frank 1978:248). This exploitation arises from the

2 Following this recommendation, many scholars and politicians, led by Prebisch and his UNCTAD, would in the 1960s and 1970s engage in an international debate on a proposed New International Economic Order (NIEO). The proposed NIEO advocated, among other things, the establishment of guaranteed prices for commodities and agrarian products, the linking of prices of exports of developing countries to those of industrial countries, the transition of industries from developed to developing countries, and the elimination of tariff barriers for industrial products from developing countries. Despite a number of UN-resolutions and conferences in the 1970s, this NIEO did never materialise and was quietly abandoned in the early 1980s. The main reason for this was the lack of willingness and cooperation, from the end of the 1970s, on the part of the advanced economies (see Van Engelen 2006a).

29

‘unequal exchange’ due to the deterioration of the terms of trade, as well as from the fact that

the return to labour in primary production in the periphery is less than what it is in

manufactures production at the core (Amin 1974:13), but is further reinforced by the fact that

a major part of the generated economic surplus in the periphery is extracted by agents and

corporations (multinational, MNC’s) from the core.

A peripheral economy typically relies on the export of one or two crops, the labour-

intensive exploitation of which is regulated and dominated by a local landed elite, which

collaborates with states, merchants and enterprises from the core. Most of the profits, insofar

as they do not end up in the core, are retained by this elite, which typically does not use them

to raise wages or invest in diversification, but instead employs them to buy capital-intensive

manufactures from the core. This points at a fundamental difference between core and

peripheral economies: because in the periphery, other than in the core, the economy is

centred on the production of primary products for export and the consumption of imported

luxury goods, no domestic mass consumption market is created (Amin 1974). Although in

real terms the economy of the periphery might be growing, since no capital is left for local

economic diversification, there is no economic development. Dependentistas have called this

situation ‘growth without development’ (Skidmore and Smith 2001:8).

Exploitation of the periphery by the core has existed in the colonial era and after

independence, until today. During colonial times, peripheral areas were incorporated into the

economies of the colonial powers as suppliers of commodities and foodstuffs. There was no

stimulus for autonomous economic development in the colonies, because the organisation of

the economy was completely controlled by the colonisers, who first and foremost took care of

the economic development of their own country, in order to advance their relative power

position vis-à-vis other countries in the core. In this context, Frank (1970:233) makes an

interesting and important observation that at first sight might appear paradoxical: the richer

the soil of the newly discovered territories in the colonial era, the poorer and less developed

they are today. Most of the wealth generated in the colonies ultimately ended up in the

mother country. With regard to Latin America, it is argued that the sixteenth century saw the

incorporation of large parts of the New World into a single world process dominated by

Europe, transforming the indigenous relations and modes of production to the desires of the

colonial masters, Spain and Portugal (Frank 1978:17). The fact that during the colonial era,

all land and production factors were firmly held by a small elite with good contacts with the

colonial masters, and that the great majority of the inhabitants did not have land or possess

any capital other than its own labour, continues to play a central role in the social

organisation in contemporary Latin America (Furtado 1966:192).

After the formal independence of the colonies, informal exploitation of the periphery by the

core has persisted, but in a more subtle way. Although there is some industrial development

30

in the periphery, which generates some local employment, albeit against very low wages,

since most of the industries are owned by foreign corporations, a major part of profits is still

extracted to the core and does not serve the development of the periphery. In this respect,

Frank speaks of a ‘dual economy’ in the periphery, where core and periphery are in fact

reproduced on a local level: a small core group of local elite, politicians and entrepreneurs,

collaborating with foreign capital and interests, exploits the local periphery by the same

methods as the exploitation takes place on the international level (see also Fernández-

Jilberto 1991a:3-4; Skidmore and Smith 2001:8). In this dual economy, the peripheral

societies constitute some sort of ‘internal colonies’ of the power and business elite, which is

connected to the world-system (Cardoso 1974; Cardoso and Faletto 1979:81). These dualistic

relations within the periphery contain the seeds of structural inequality that is characteristic

of so many parts of the periphery up to our days. The persistence of these forms of

exploitation of the periphery by the core, and their reproduction at the local level, is what

Frank calls ‘the development of underdevelopment’ (Frank 1967, cited in Shannon 1989:15-

18 and in Wallerstein 2000a:76-77).

The result of this exploitation is the continuation of an international economic structure

that benefits only the countries that are already wealthy and frustrates the development of

indigenous enterprise in developing countries. Dependency theorists also argue that the

economic situation of the periphery is reinforced politically: since the core has an interest in

maintaining the existing order and in avoiding large-scale uprisings in the periphery, as well

as in ensuring the continued ability of peripheral governments to repay their foreign debts, it

actively intervenes in peripheral politics, pragmatically discarding idealist principles such as

democracy, sustained economic development and respect for human rights. As such,

dependency theorists argue, economic dependency also leads to political authoritarianism

(Skidmore and Smith 2001:8).

Dependentistas are generally more radical than Prebisch in their conclusions, many of

them considering free trade a ‘vehicle of exploitation’ (Ghatak 1995:65). According to

Cardoso and Faletto, ‘relations between advanced capitalist countries and dependent nations

leads … to a marginalisation of the latter within the global system of economic development’

(1979:93). Several dependentistas go as far as advocating a disconnection from the world

economy and a domestic mass-market oriented economic development (Amin 1974:23), or

even a total break with capitalism and the subsequent imposition of socialism, as the only

possible escape from the unjust structures of the imperialism from the centre, which lead to

continuous and growing ‘underdevelopment’ in the periphery (Frank 1975:101-106).

31

2.5 The World-Systems perspective

Just like dependency theory, World-Systems theory, developed by Immanuel Wallerstein in

the early 1970s, can be regarded as a critique of earlier theories of development and part of

the Marxist reaction to (neo-)classical modernisation theory. World-Systems theory is a

direct outgrowth of dependency theory, which never became a unified theory (Shannon

1989:15). It is basically a long-term historical analysis of the features, trends and cycles of the

development of the world-system, defined as the ‘single, all-embracing, albeit unequal and

uneven, process of capital accumulation’ (Frank 1978:239). The World-Systems perspective is

Marxist in the sense that it takes economic activity as a point of departure; economic or trade

relationships, supported by politics, define the nature of the system and the relations and

interactions within it. It studies the development of the international economy that has led to

the integration of all peoples of the globe into one unit: the modern world-system (Chase-

Dunn 1999:187-189). World-Systems theorists employ a holistic perspective and argue that

an identifiable economic system exists beyond the boundaries of individual countries.

Therefore, it is a mistake to view the world as a mere set of individual societies and to focus

only on internal events and developments. It is not enough to study events in smaller units

such as states in isolation from each other or from the ongoing process of world history

(Frank 1978:251). Rather, the economic and political interactions between the units is of

central importance and events within individual states can only be understood within the

context of the world-system that exists above all units (Shannon 1989:20-21).

In The Modern World-System (1973), Wallerstein challenged the conventional wisdom that

economic history can be conceived as a linear process, consisting of a universal set of ‘stages’.

This idea was commonplace at the time, among liberal (neo)classical development

economists (Rostow’s 1960 The Stages of Economic Growth being a good example), as well

as among neo-Marxist theorists who, in line with Marx and Lenin, considered the capitalist

system as a mere stage on the predestined road to socialism (Shannon 1989:11-12;

Wallerstein 2000a:73-74). Wallerstein rejected the claim that the absence of sustained

economic development in the periphery is due to a ‘historical backwardness’, and argued that

problems of development and underdevelopment are not a transitional stage in the grand

history of economic development, but rather a central feature of the modern capitalist world-

system (Wallerstein 2000a:76). According to World-Systems theorists, who apply a long-

term historical approach, the unequal division of political and economic power between

states in the international system is the result of the emergence and development of the

capitalist world economy since the evolution of the concept of the sovereign state and a

capitalist economy in northwest Europe at the end of the Middle Ages and its expansion to

the entire globe, since the seventeenth century.

32

The modern capitalist world-system can be divided into three structural positions or

economic zones: core, periphery, and semi-periphery. The most efficient and capital-

intensive production takes place in the core, while the periphery, consisting of weak states,

features the least technologically sophisticated and labour-intensive production, geared

towards the export of raw materials and foodstuffs desired by the core. The semi-periphery is

a ‘hybrid’ form which has core as well as peripheral characteristics, and which is more

autonomous from core influence than the periphery (Shannon 1989:24-28).

Wallerstein argues that northwest Europe could develop into the core of the world-system

because the interests of various local groups converged, leading to the development of strong

state mechanisms and military apparatuses, whereas the interests of local groups in the later-

to-be periphery diverged, as a result of which no strong state organisations developed. This,

according to Wallerstein, is the root of the core-periphery division of the modern world-

system. The institutions of societies in the core as well as in the periphery, are organised to

serve the interests of the core. Through these institutions, the capitalist principles of profit-

maximisation and the search for competitive advantages through efficiency, the quest for

continuous capital accumulation, and the exploitation of labour by the owners of the means

of production (Shannon 1989:23), are applied to this core-periphery division, leading to the

structural exploitation of the periphery by the core through the mechanism of unequal

exchange (Wallerstein 2000a:86).

The semi-periphery, Wallerstein argues, ‘is needed to make a capitalist world economy run

smoothly’ (2000a:89). It acts as a ‘buffer’ for the enormous gap in the distribution of rewards

between centre and periphery and as such prevents the system to become unstable as a result

of massive insurrection in the periphery. The semi-periphery is allowed to gain some profit,

but at the same time is denied political rights, which remain firmly in the hands of the core.

The ‘appeasement’ of the semi-periphery prevents the core to be faced with the unified

opposition of all the others, because the middle position is both exploited and exploiter. By

providing the semi-periphery with access to a limited portion of the surplus appropriated

from the periphery, the core effectively creates loyalty and ‘buys off the potential leadership

of co-ordinated revolt [in the periphery]’ (Wallerstein 2000a:90-91).

In sum, World-Systems theorists argue that the economic development of the core is the

result of the exploitation of the periphery (Ghatak 1995:65). The world-system is conceived as

a single unit with a complex division of labour, in which economic activities in each part of

the world depend on and make possible the activities in the other parts (Shannon 1989:21).

Development and the absence of development, therefore, are two sides of the same coin:

development in one place cannot occur without a lack of development, or

‘underdevelopment’, elsewhere. Apart from attaining economic wealth by exploiting the

periphery, the core also benefits from the periphery in a cultural way, in that the periphery

33

provides the core with an image of ‘the Other’, which contributes to the assertion of the core’s

self-image and a justification of the core’s imperialistic and economic policies towards the

periphery. In this regard, post-colonial theorists have argued that the concept of the core has

no meaning in isolation from the periphery (D. Kennedy 2003:19).

Applied to a Latin American context, the World-Systems approach seems to better explain

the historical development of the continent since the colonial encounter than either realism

or liberalism. When Spain and Portugal colonised the region, they established a system of

extraction and full appropriation of the rich natural resources of the continent, to support the

economic development of their own countries. Latin America was incorporated in the world

economy in a circumstance of subordination to the interests of the colonisers, or in other

words in the periphery of the world-system, fulfilling the task of serving the economic

interests of the core. This system of exploitation has continued to dominate Latin American

development after independence, first under British and ultimately under US hegemony, to

this date.

2.6 Stages in the development of the modern world-system

Wallerstein distinguishes four stages in the development of the modern world-system

(2000a:93-95). This division into historical stages is remarkable, since at the same time he

objects to (neo-)classical and Marxist tendencies to conceive of international economic

development as a series of stages. The difference, however, seems to be that Wallerstein’s

stages are based on concrete empirical evidence from history, while the stages he objects to

are presented as theoretical, timeless and universal. In this section, I describe each of the

stages and briefly apply them to the area that is of interest in this research, Latin America.

The historical development of the region is further elaborated upon in chapter 3.

During each stage, as a result of political, economic and military developments, there were

shifts in the relative power positions of countries, as well as movements of countries between

the three categories outlined above. In acknowledging the possibility of states to move from

the periphery to the core and vice versa, the World-Systems perspective differs from

dependency theory, which claims that countries in the periphery have no chance of escaping

the system of structural exploitation and are forever locked in their peripheral state.

However, World-Systems theory claims that the essential nature of the world-system has not

changed over the past five centuries and has always remained capitalist and as such

exploitative. Furthermore, World-Systems theory agrees with dependency theory in that it

affirms that shifts between positions have not occurred in Latin America, which has, to this

day, remained in the periphery of the capitalist world economy.

34

The first stage in the development of the modern world-system, from 1450 to 1640, was

characterised by geographic expansion of the European powers to include peripheral areas in

the international division of labour. The colonisation and subordination of the entire Latin

American continent by Spain, and to a lesser extent Portugal, occurred during this stage. In

1492, Columbus set foot on Hispaniola (currently the Dominican Republic), and in

subsequent decades the Aztec and Incan empire, as well as Brazil, were brought under the

effective control of the Iberian colonisers.

The second stage, from 1640 to 1760, was the era of mercantilism, in which competing

European powers, most notably Spain, Holland and Britain, tried to maintain or establish

themselves as hegemons. Because of the already established firm Spanish and Portuguese

control over the continent, this stage did not significantly affect the situation in Latin

America. However, since the rise to hegemony in the world-system of first Holland and later

Britain altered the configuration of power in the core, the relative power of Spain began to

decline during this period, and this development would later contribute to the rise of the

independence movement in Latin America.

The third stage, from 1760 to World War I, involved the development of industrial rather

than agrarian capitalism, and led to a further geographic expansion on the part of European

industrial powers, in search for new markets and new sources of labour and raw materials,

ultimately to encompass the entire globe. Especially from 1840, the development of the first

truly global capitalist economy accelerated, as a result of Britain’s unparalleled and

unprecedented worldwide economic and military dominance. According to Furtado

(1966:192), the definitive integration of national economies in Latin America into the

international markets took place in the second half of the nineteenth century. According to

Maurini, structural dependence of the peripheral countries was reinforced at this stage

because the new Latin American republics largely ignored each other and only established

direct trade links with Britain (cited in Soares 1991:98-99). In the core, the system was

maintained through consent, as British dominance served the general interest of the other

core countries; while in the periphery, the system was maintained by coercion, involving

regular political and military intervention, especially from Britain and the US, but also other

European powers, to secure the gains of the extraction of resources in the periphery (Arrighi

1999:222-223). The political independence of Latin American countries, which occurred

during this stage, did not alter their peripheral status; although their integration into the

world economy was not complete, the new republics remained mere providers of agricultural

products and raw materials for the core, the roles of Spain and Portugal gradually being

replaced by Britain, and later the US.

Finally, stage four starts with the Russian Revolution of 1917 and constitutes, somewhat

paradoxically, ‘the consolidation of the industrial capitalist world economy’ (Wallerstein

35

2000a:97, emphasis in original). During this stage, the rise of the Soviet Union to a semi-

peripheral state led to the weakening of the political and economic position of the periphery

and hence to a strengthening of the position of the core (Wallerstein 2000a:97-101). With

regard to Latin America, this period shows two different tendencies. The inter-war period

was characterised by a loosening of core control over Latin America, arguably as a result of

the decline of British hegemony and the occupation of core powers to intra-core conflicts and

crises such as the Great Depression, or issues regarding other peripheral areas, for example

the rise of independence movements in the European colonies in Asia and Africa. During this

period, taking advantage of the loosening grip of the core, some initiatives aimed at

autonomous industrial development were taken in some Latin American countries, most

notably Argentina, Brazil, and Mexico. However, as World War II catapulted the United

States to the position of hegemon in the world-system, from the second half of the twentieth

century Latin America became subjected to the British and American-inspired ideology of

laissez-faire capitalism (see Louis and Robinson 2003). The establishment of the GATT, with

the goal of eliminating all barriers to international trade, and later the emergence of the

Anglo-American ideology of neo-liberalism and its programmes of structural adjustment

(SAPs) in developing countries, had an especially significant impact on Latin America. In this

period, American hegemony in the region manifested itself not only economically, by means

of increased US control over resource extraction and industrial production (Cardoso and

Faletto 1979:80), but also ideologically, in the form of fierce anti-communism, and militarily,

in the form of American (overt and covert support for) interventions to counter left-leaning

movements and governments throughout the region. Without denying relevance to the

significance of earlier historical developments, it could be argued that this last period, which

in the case of Latin America amounted to the reconsolidation of the capitalist world economy

and the deepening of the de facto subordination of the region to American economic, political

and ideological interests, is responsible for planting the seeds of widespread popular

discontent, which would ultimately lead to the rise of New Left politics in the region.

While developing his theory in the 1970s, Wallerstein did not anticipate the collapse of the

Communist bloc. Elaborating on his line of thinking, however, it is tempting to speculate on a

fifth stage in the development of the modern world-system, beginning in 1989 and continuing

up to our days. During this stage, at first the capitalist world-system seemed to comfortably

consolidate itself further, but the past few years have witnessed the emergence of a number of

overt challengers to the existing world-system. The rise of the economic giants China and

India, but also the rise of the New Left in Latin America, could be seen in this regard.

However, it remains to be seen to what extent these development really constitute a serious

challenge to the existing system, or whether this is rather a slight reconfiguration of relative

36

positions in an ever continuing world-system, which remains essentially and predominantly

neo-liberal and capitalist.

2.7 Some implications of the World-Systems perspective and hypotheses

The World-Systems perspective was born as a moral and political protest against existing

practices of social scientific inquiry, dominated by unquestioned a priori assumptions

(Wallerstein 2000b:129). It is a perspective centred not upon (Western) states as units of

analysis, but rather upon the world-system as the only existing social unit. By looking at the

historical development of the relationships between core and peripheral areas in the world,

Wallerstein presented a different perspective on world history. This perspective continues to

be relevant and useful to date, especially for researchers interested in political developments

taking place outside the Western sphere.

One of the principal lessons from the World-Systems perspective is that international

politics and economy have been dominated for centuries by Western powers and Western

organisational models such as nation-states and capitalist firms, recklessly pursuing

rationally defined economic interests in competition for shares, thereby ultimately

encompassing the whole globe (Chase-Dunn 1999:189-190). Because of the exogeneity of

these models to the periphery, peripheral countries first have difficulty in successfully

implementing them, and then find themselves in a hostile world, in which competition,

coming mainly from far more advanced units from the core, is fierce. It could be argued that

in circumstances like these, autonomous and independent development in the periphery does

not stand a fair chance. Economic development in poor countries can, therefore, best be

understood not as a result of autonomous decisions by local leaders, but rather as an outcome

of interactions with a Europe- or US-centred system of aggressive capitalist expansion. It

seems reasonable to argue that the World-Systems perspective makes us aware of the

paramount importance of external factors and interests in the historical development of

countries in the periphery.

Because of the circumstances outlined above, peripheral countries are practically in no

position to autonomously pursue policies geared to escaping their peripheral status, as this is

easily perceived as contrary to core interests. This is a second conclusion from the World-

Systems perspective: the integration into the world economy, on the basis of conditions

determined by core powers, has historically been detrimental to the development of

peripheral countries. Core powers have made sure peripheral areas or countries pursued

policies that were in the economic interest of the core, and because the interests of the core

37

are only served when the interests of the periphery are damaged, this has necessarily led to a

deterioration of the situation in the periphery.

In sum, this leads to two of the hypotheses of this research into the rise of the New Left in

Latin America. First, I hypothesise that historically, political outcomes in Latin America have

tended to be substantially influenced by external actors and interests, and have as such not

benefited the well-being of the population, while the contemporary tendency toward left-of-

centre politics can provide a significant contribution to reducing inequality and improving

well-being of Latin Americans. A related hypothesis, based on an analysis of Latin American

history and that of its connection to the core of the world-system, is that there seems to be an

inverse relationship between the military power, ideological unity and political determination

of the West on the one hand, and the prospects for Latin America to pursue autonomous

policies and determine its own destiny, on the other. In other words, I hypothesise that

during periods of loosening core control over the region, due to intra-core conflicts or other

occupations of core powers elsewhere, Latin American countries have better chances to

develop initiatives geared to their own development.

2.8 Conclusion

This chapter has outlined the theoretical framework that is used throughout this research. It

consists of two mutually related central elements. First, I have stressed the importance of

post-colonial notions on social reality and history, and the need to look beyond too often

unchallenged, Western-originated assumptions when studying developments that are taking

place outside the Western sphere. In this sense, I partly adhere to post-colonial theorists such

as Said, who claim that Western social science and historiography are instruments of cultural

imperialism and constitute justifications of the de facto continuation of colonial practices in

international relations.

Secondly, I have outlined the long-term perspective on world history that is used in this

research and that seems to explain best the history of the connections between Latin America

and the outside world. As I have argued, conventional Western theories of international

relations, neo-realism and neo-liberalism, with modernisation theory and neo-classical

economics as their developmental outgrowths, do not offer a convincing explanation for the

persistence of a big and ever growing gap between rich and poor countries. The present Latin

American reality, the circumstances that gave rise to the emergence of the New Left, are

better explained and analysed by a perspective that looks beyond the concept of the nation-

state and discards erroneous assumptions of sovereignty and insertion into the world

economy on equal terms. The World-Systems perspective offers such an approach and, as will

38

be shown in chapter 3, is historically very well applicable to Latin America. Ever since the

colonial encounter, the continent has been integrated into the capitalist world-system as a

part of the periphery, and relations between Latin America and the Western, first European

and later American, core, have been historically characterised by the appropriation of surplus

generated in the periphery by the core, in colonial times as well as after formal political

independence. I have underlined the importance of external factors in the historical

development of peripheral countries, and the problems these countries face when attempting

to pursue policies aimed at autonomous economic development.

The issues and processes addressed in this theoretical chapter now need to be situated into

the perspective of the area that is of interest in this research. In the next chapter, I further

elaborate upon the findings from this chapter and provide an insight into the economic and

political history of the Latin American continent since the colonial encounter.

39

3. A history of Latin America’s connection to the world-system

3.1 Introduction

Just as a theoretical background is indispensable for a good analysis of political phenomena

or developments, in order to really come to a thorough understanding of a development, we

need to take a look at the historical developments that preceded it. As I have argued above,

the importance of history seems to be often overlooked by political scientists, who usually

study political phenomena in their current context and pay too little attention to

developments prior to the event concerned. The explanatory power of any conclusion about

social and political life is limited when one disregards the historical background. It cannot be

emphasised enough that political events, as all events, never take place in isolation from

earlier events; they are the result of complex interactions between different actors operating

in the present, but also and not less importantly, in the past. Thus, after having outlined the

theoretical framework for my research in the previous chapter, in this chapter I apply this

theory to the conceptual framework of this research, the history of Latin America. The goal of

this chapter is to provide, through an application of theories based on the World-Systems

perspective, an insight into the historical background against which the rise of the New Left

in Latin America is taking place. This background can provide an answer to the question why

this development is currently occurring, and which factors have contributed to its

development.

The first suggestion that comes to one’s mind when studying Latin American history is the

continuous exploitation of the region by external powers, ever since the first Europeans set

foot on American soil, in the beginning of the sixteenth century.3 Also, the peripheral location

of Latin America in the world-system and the resulting consequences for economic

development, have been central throughout the history of the continent. Working from these

and other ideas and notions resulting from World-Systems analysis, this chapter will provide

a historical overview of Latin American history since the colonial encounter to our days. After

a justification of the starting point of the historical analysis and an elaboration of some

central continuities in Latin American history, I will chronologically go through the most

important and significant economic and political developments in the region since the

3 My definition of the concept of Latin America, outlined in the Introduction, implies that the

‘discovery’ of the continent begins not with Columbus’ arrival to the island of Hispaniola in the

Caribbean, but with Hernán Cortés setting foot on present-day Mexico, in 1519.

40

colonial encounter, working from a free interpretation and application of Wallerstein’s stages

in the historical development of the modern world-system. The historical sequence ends

when the phenomenon that is the subject of this research begins; at the end of the twentieth

century. This will provide the historical background for the circumstances that have

contributed to the rise of the New Left in Latin America.

3.2 The history of Latin America in the world-system

For reasons outlined in the previous chapter, concerning the importance of looking beyond

Western perspectives on international history and politics when studying phenomena that

are taking place outside the West, it might seem contradictory to take as the starting point for

the analysis of Latin American history the ‘discovery’ (to use just one Eurocentric term) of the

continent by European explorers, in the beginning of the sixteenth century. It could be

argued that this is exactly what post-colonial theory warns us for; to look at Latin American

history from a European perspective, as if pre-Columbian history had no significance

whatsoever. By the decision to start the analysis at the moment of the first European-

American encounter, the entire pre-colonial history is left out as being irrelevant.

While partly acknowledging this critique, I think it is justified to start my overview of Latin

American history at the moment when Latin America established its first links to the world-

system. The theoretical framework outlined in the previous chapter stresses the importance

of analysis of events not in isolation, but indeed in connection to the world-system structure

and the relations that are being established therein. According to the World-Systems

perspective, the history of the capitalist world-system began precisely when European powers

started to expand overseas and to integrate newly discovered areas into their Europe-centred

economic system. There was no integrated world-system prior to the European overseas

expansion. Therefore, in a research into, among other things, the applicability of the World-

Systems perspective to contemporary Latin America, it seems justified to start the analysis of

Latin American history from the moment of the encounter with the first European explorers.

The World-Systems perspective offers a plausible and valuable framework for describing

and explaining political and economic developments in Latin American history since the

colonial encounter. During the different stages of Latin American history, which will be

discussed in greater detail in the following sections, at least three characteristics seem to be

consistently applicable to the Latin American situation. First, there has been a great amount

of external control of politics, economics, events and development in the region throughout

the entire modern history. Before and after independence, development could only take place

when foreign states or enterprises were prepared either to provide loans or to make

41

investments in the economy. The nature of Latin America’s position in the world economy

has historically frustrated attempts at autonomous development. Second, there has been an

important degree of externalisation of profits from economic activity, meaning that a major

part of all gains generated in Latin America has been, and still is, extracted from the

continent and transferred elsewhere. And third, the entire period is characterised by a

substantial gap between rich and poor, or in other words economic inequality. This inequality

applies internally as well as externally: domestically, there is the accumulation and

concentration of capital in the hands of a small and powerful elite and the impoverishment of

the majority of the population; internationally, the integration of Latin America into the

periphery of the world economy implies a net transfer of capital and resources to the core, as

a result of which the core gets richer and the periphery gets poorer.

3.3 Colonisation and subordination, the age of mercantilism (1519-1750)

In chapter 2, it has already been argued that Spain, from the first decades of the sixteenth

century, surprisingly quickly succeeded in establishing firm control over the entire Latin

American continent, except for present-day Brazil, which according to the Treaty of

Tordesillas of 1494 was bequeathed to Portugal (Davies 1967). Wallerstein’s observation, that

non-European regions developed into the periphery because of divergence of interests of

local ruling groups, seems to hold true for Latin America. During their campaigns in the

Aztec and Incan empires, the Spanish conquistadores happily took advantage of internal

divisions and local opposition against the supreme rulers (Frank 1970:30-31; Frank 1978:43;

O'Brien and Williams 2007:51). With the help of local allies, they were able to subject both

empires to Spanish control in a remarkably short time and with relatively little manpower.

The conquest was further facilitated by the sheer force of European firepower, which was

unknown to the local population, and by the unintentional introduction of European diseases

such as smallpox and measles, ravaging local populations that had no defence against them,

killing millions of people (Skidmore and Smith 2001:16; O’Brien and Williams 2007:59).

In their hunger for gold, the Spaniards quickly spread over an area about twice the size of

Europe, first defeating the Aztecs in Mexico, then the Incas in Peru, and later the

Araucanians in Chile (Pendle 1976:39-49). They proceeded to establish a number of separate

kingdoms formally equal to Spain, and subordinate lesser divisions (captaincies-general), all

subject to the Spanish Crown. The new kingdoms were allowed, and due to geographical

circumstances even compelled, to develop more or less independently of each other, but were

all maintained under strict control of the monarch (Pendle 1976:52-55). The central element

42

of external control of internal affairs, which is characteristic throughout Latin American

history, was firmly established during the colonial era.

With regard to the economy, the foundations for the historical exploitation of Latin America

by external powers were laid during the colonial era. The Spanish (and the Portuguese) had

little concern for the local indigenous population; all policies were pursued in the interest of

the Iberian Peninsula and that of the peninsulares. Just like other European powers did with

their overseas possessions, Spain restructured the economies of the conquered territories,

introducing forms of production oriented to satisfying European demands (O’Brien and

Williams 2007:58). Exploitation of resources was in the hands of a small elite of

peninsulares, and later also criollos (creoles, people of mixed Spanish-indigenous descent),

who owned large plots of land including the people that lived on them. There was no regard

for local development; all economic activity was geared to the extraction of natural resources,

with the help of indigenous and imported slave labour, externalising all gains of economic

activity to the Spanish state. Franks concept of a ‘dual economy’ in the Latin American

periphery (see section 2.4) originated here: power and wealth were concentrated in a small

group of land-owners, effectively creating an oligarchy in the colonies that reproduced itself

by exploiting the labour of the majority of the population. As such, colonial production

structures have been at the root of the dualistic nature of Latin American societies to date, in

which there is a ‘coexistence of two distinct but linked worlds within the same national

territory: the rich (along with portions of the middle class and some workers) and the poor’,

with an ‘enormous social distance between them, despite their often close proximity’ (Karl

2000:153). In turn, this dualistic society lay at the basis of the structural inequalities that up

to our days keep haunting Latin America.

In order to ensure that other countries would not benefit from the riches of the New World,

all trade with Spanish America was declared a state monopoly and was to be effectuated

through a limited number of monopoly ports in the New World. This meant that, until the

partial trade liberalisation of the second half of the eighteenth century, all manufactured

goods going from Spain to Buenos Aires would have to be offloaded at Porto Bello, in

present-day Panama, taken overland to the Pacific coast to be loaded again, pass through the

port of Callao (near Lima) and then be carried on mule over land (Pendle 1976:64). This

monopoly trade system, which arguably was totally inefficient, was part of a colonial

exploitation system referred to as mercantilism, which was also practiced by Portugal but

which stands in contrast with the more liberal and capitalist colonial trade policies of later

European empires such as Holland and Britain. Mercantilism has been defined as a state-

controlled economic policy geared to generating wealth for the state, with the ultimate goal of

increasing the power and prestige of the state (Skidmore and Smith 2001:18-19). The

economies of the Latin American colonies were completely geared to enhancing the power of

43

Spain and excluding the access of Spain’s competitors to Latin America’s riches. The nature

of Spanish trade with Latin America during the colonial era confirms the analysis of World-

Systems theory, that Latin America was from the beginning integrated into a peripheral

position within the international division of labour of a Europe-centred world economy. The

ships travelling the Atlantic Ocean in an eastward direction carried gold, silver, cacao,

quinine, vicuña wool and other primary products, while the ships travelling to the New World

carried manufactures such as silk gowns, woollen suits, and iron utensils (Pendle 1976:63).

The peripheral position of the colonies was further confirmed and maintained by an

elaborate bureaucracy and a firm and rigid control of all activity (Skidmore and Smith

2001:18). The criollos were virtually excluded from power, only being allowed minor

functions in local administration and trade. Seen from a World-Systems perspective, the

criollos could be regarded as a sort of semi-periphery, a power position designed to support

the system controlled by the core. By granting the criollos some minor privileges, the core

(the peninsulares) allowed them access to a limited portion of the surplus accumulated by

the exploitation of the periphery (the local indigenous populations and imported slaves),

thereby buffering the wealth gap between core and periphery, and preventing the criollos

from siding with the indigenous peoples and revolting against the peninsulares. However,

the privileges granted to the semi-periphery eventually were insufficient to ensure the

continued stability of the colonial system: the nearly complete denial of political rights to the

criollos would eventually develop into a main source of discontent and destabilise the system

of colonial exploitation (Pendle 1976:55).

In contrast to Spain, which regarded its possessions in the New World as vital, Portugal was

primarily occupied with its lucrative trading posts in the Far East, and west and southern

Africa, and initially showed little interest in present-day Brazil. The colonisation of Brazil,

which was not as populated and rich in precious metals as the Spanish part of the continent,

was only hesitatingly and gradually pursued from 1530 onwards, and development was only

accelerated after the discovery of gold and diamonds in the interior. Portuguese colonial rule

was lighter and less thorough than the Spanish; for example, it allowed the Brazilians to trade

with nations other than Portugal, which led to increased standards of living compared to

those of the Spanish Americans, who were condemned to monopoly trade with Spain only.

The fact that directives from Lisbon never affected the Brazilians as much as regulations from

Madrid affected the Spanish Americans, arguably contributed to the fact that in Brazil no

violent liberation campaign was launched, in contrast to the violent campaigns of the Spanish

American libertadores (Pendle 1976:69-75).

44

3.4 Towards independence (1750-1810)

In the second half of the eighteenth century, development of Latin America was influenced by

the emergence, in Spain as well as in Portugal, of enlightened rulers committed to reforming

the colonial systems and improving their efficiency, and even to grant some civil rights to the

indigenous populations. The reign of the Bourbon king Charles III in Spain (1759-1788) was

characterised by a significant reform of the Spanish American empire: local administration

was improved and centralised, controls on trade were somewhat loosened, and in 1776 the

new Viceroyalty of Río de la Plata was created in order to provide the Buenos Aires region

with a better defence against Spain’s enemies. Portugal effectuated similar, although less

centralistic, measures in Brazil under the reign of Marquis de Pombal (1751-1777) (Pendle

1976:75).

Whereas the Portuguese reforms helped to reduce local discontent by allowing people of

mixed descent access to positions in the administration (Pendle 1976:75), the Spanish

reforms had an opposite effect. The centralisation of administration, intended to create more

efficiency and to put an end to corruption, aggravated the long-standing polarisation between

peninsulares and criollos. Freer trade led to increased wealth among criollos and bred

greater regional self-consciousness, helped by the influx of new liberal ideas from Europe

(Pendle 1976:67-68). Applying a World-Systems perspective and elaborating on the concept

of the semi-periphery introduced in chapter 2 (Wallerstein 2000:89-91), it could be argued

that the fact that the core did not sufficiently recognise and attend to the wishes of the semi-

periphery would eventually cause a destabilisation of the system of colonial rule.

The growing assertiveness and self-consciousness of the criollos created a common

sentiment of belonging to one and the same ‘nation’, as opposed to the oppressors from the

peninsula. This emerging nationalism in the New World was based on ‘imagined

communities’ (Anderson 1991), and lay at the root of the Latin American emancipation and

independence movement. However, Keen (1992:160-161) correctly argues that the causes of

the independence movement in Spanish America were largely external. Apart from the

reforms discussed above, which were intended to improve the colonial system but in the

Spanish colonies ultimately had the opposite effect and ignited a sense of nationalism, he

points to the declining power of Spain vis-à-vis other European powers from the second half

of the eighteenth century, the invasion of Spain by Napoleon in 1808 and the resulting power

vacuum in the colonies, and the rise of Britain to the status of global maritime power. The

Anglo-Spanish War of 1796-1808 would provide the occasion for the ignition of the Latin

American independence movement, in the city of Buenos Aires. The inhabitants of the city

had profited enormously from the Spanish colonial reforms, because they had no longer been

45

dependent on overland trade through faraway Peru, but had now been allowed to trade

directly with Spain. The sharp decline in the prices of luxury goods, which had resulted from

a more direct trade link with Europe, had created unprecedented wealth in the city. During

the war, trade with Spain was interrupted and the British even invaded and conquered the

city of Buenos Aires, issuing a proclamation including free trade and the right to private

property. These liberal ideas persisted when the criollo inhabitants defeated the British and

retook the city. The wealth and power the inhabitants of Buenos Aires had tasted, and which

were now under threat to be removed again, would eventually cause the criollos to turn

against Spain.

With Spain’s decline, the political institutions in the colonies, which were dominated by

peninsulares, ceased to function as they had done before (Skidmore and Smith 2001:22). The

combination of increased economic gains and continued exclusion from important positions

in the colonial administration led to growing discontent and self-consciousness among the

criollos and made them increasingly hostile towards the peninsulares (Keen 1992:158). This

destabilized the system and led to the emergence, in the first decade of the nineteenth

century, of a number of criollo independence movements, pursuing the goal of liberating

Latin America from its colonial yoke. These movements tried to take advantage of the power

vacuum in the colonies resulting from the occupation of Spain by Napoleon’s troops in 1808

and initially argued that since the Spanish government was under the control of the French

occupier, there was no legitimate Spanish administration in the colonies anymore, justly

entitling the criollos to self-rule under the authority of the banished Spanish king Ferdinand

(Keen 1992:162; Skidmore and Smith 2001:28).

Three parallel liberation movements can be distinguished, all beginning in 1810: one

originating in April in Caracas and moving west and then south along the Andes under the

command of Simón Bolívar; another one initiated in May in Buenos Aires and led by José de

San Martín, moving west to Chile and then north to Peru; and a last one in Mexico which

began in September and was led by Miguel Hidalgo. Keen (1992:162) observes that the

movement resembled the American Revolution, in that it was geared to throwing off the rule

of an external power whose mercantilist system obstructed local development, in that it was

led by local elites (criollos in Latin America) and inspired by ideas from the European

Enlightenment. It should be noted, however, that the struggle for power between criollos and

peninsulares in practice did not substantially affect the lives and the position of the

indigenous peoples in Latin America, who were not liberated but remained in an inferior

position, denied access to power and trade, and under alien control. Ever since the colonial

encounter and even after the political independence of Latin America, the original

inhabitants have continued to occupy a marginal position in politics, economy and society.

46

A detailed historical account of the liberation wars that led to the granting of political

independence to the countries of Latin America by Spain and Portugal is beyond the scope of

this chapter (for a good overview, see Pendle 1976; Keen 1992). What is important, is that

Spain as a declining core power desperately tried to hold on to its possessions in the New

World, but that it was ultimately unable to resist the mounting criollo pressure for

independence, which was supported by Britain, in an attempt to weaken the power position

of its Iberian adversaries (Krasner 1999:176-177). From 1810 onwards, within a few years and

after a number of violent and brutal battles which caused many victims on both sides, Spain

had to withdraw from its possessions and recognise the independence of the new republics.

In contrast to the violent campaigns in Spanish America, the decolonisation of Brazil

proceeded without significant struggle; in 1825, after a minor war of independence, Portugal

recognised the independence of its South American territory.

3.5 The ‘long’ nineteenth century (1810-1914)

In the first decades after independence, with Spain’s mercantilist monopoly terminated,

Latin America entered the capitalist world economy, dominated by Britain and centred upon

the principle of free trade. Britain, at the time being the only industrialising nation in the

world, was in a position to promote international trade because it produced more efficiently

than any other country and could seize the biggest benefits from unimpeded trade.

In Latin America, however, the granting of political independence had not been

accompanied by the economic and social changes that could have enabled the newly

independent countries to successfully participate in the capitalist world economy on the basis

of free trade. Political power passed into the hands of the criollos, and the new republics were

allowed to pursue a formally autonomous foreign and commercial policy, but in effect the

social structures remained unchanged (Furtado 1966:222). There was no redistribution of

land to enable the poor people to generate their own income, and no redistribution of income

to create local purchasing power. Power and wealth remained firmly concentrated in the

hands of a small landed elite, and production remained centred upon large estates or

haciendas. Writing about Brazil, Fernandes (1996:114) argues that the roots of the present

social inequality lie in the fact that decolonisation did not correct colonial forms of

domination and subordination. This argument could easily be taken to apply to Latin

America as a whole. Furthermore, there was little technological innovation and little foreign

investment, due to political instability and the fact that capital was retained in Europe and

the United States for industrial development (Keen 1992:181). Latin American economies

remained largely dependent on primary production and the liberalisation of international

47

trade introduced competition from Europe and decimated the small manufacturing sector.

Furthermore, due to geographical circumstances and a number of territorial conflicts, the

new republics did not develop any substantial intra-regional trade, remaining relatively

isolated from one another and largely dependent on their own national economies and their

connections with the core, which affected their political stability and harmed their position in

the world economy (Keen 1992:178).

Politically, the new republics in Latin America were only formally democracies, elections

being an ‘exercise in futility’ because the ruling party usually counted the votes, and executive

power being concentrated in the hands of military strongmen called caudillos. The main

political debate was between conservatives (the old elite, striving to keep the colonial social

and hierarchical order intact) and liberals (the new entrepreneurs and merchants, advocating

Enlightened ideas from Europe, social reforms and individual and political rights) (Furtado

1966:193), but neither of these groups displayed much interest in the fate of the indigenous

peoples (Keen 1992:182-183). Karl (2002:12) contends that the constitutions that replaced

the colonial system in fact provided for a continuation of that same system, with all power

concentrated in highly centralised governance structures, and without regard for

(re)distribution of power or income. Skidmore and Smith (2001:39) argue that for

indigenous people, independence actually meant a step back. They were forced off their

communal lands, which under Spanish colonial rule had been inalienable, and had to enter

the competitive market praised by nineteenth-century liberals without being provided the

political and economic tools to do so successfully. As a result of independence, the indigenous

peoples became more isolated and poverty-stricken.

Paul Kennedy contends that the relative stability among the European powers from about

1840 onwards led to a ‘spectacular growth of an integrated global economy, which drew ever

more regions into a transoceanic and transcontinental trading and finance network centred

upon Western Europe…’ (1987:143, emphasis added). This ‘drawing’ of ‘ever more regions’

into the international economy summarises the next step in the development of the world-

system and signals the definitive entry of the newly independent republics in Latin America

into the capitalist world economy (Furtado 1966:192). According to Arrighi (1999:219), the

years 1840-1875 were indeed the formative years of the first truly global market, dominated

by Britain and centred upon the principle of free trade. During these years, a growing number

of states and territories was informally, but no less thoroughly, ‘caged’ by the international

division of labour dominated by Britain, strengthening each of the participants’ interest in

partaking in the Britain-centred global market. Seen from peripheral regions such as the

newly independent republics in Latin America, the absence of conflicts within the core in this

period meant more external control over their economies, and the development of a ‘global’

48

economy meant more externalisation of profits, in spite of the attained de jure political

independence.

The peripheral position of the Latin American republics in the world-system meant that

their economies specialised in the export of agricultural and mining products, while having to

import manufactured goods and services. From 1880 onwards, thanks to the rising demand

for primary goods in the core, this system of ‘export-import growth’ provided Latin American

countries with an apparently stable source of income and wealth. However, as Prebisch

would later demonstrate, this growth model does not provide a viable way towards sustained

economic development for peripheral countries (see section 2.4). Partly as a result of the

supposed superiority of foreign manufactures, but mostly because of the unavailability of

funds for investment, there was no impetus for industrial development, and a passive Latin

America continued to rely on external dynamics for its economic development (Skidmore and

Smith 2001:36-38).

According to Paul Kennedy, this specialisation in primary exports was in fact beneficial for

Latin America. He argues that Argentina, for example, found a market in the United

Kingdom for its beef and grain, and that with the revenues generated Argentina could pay for

imported British manufactures and repay long-term debts from London, thus keeping its

credit rating high for further borrowing (P. Kennedy 1987:156n). However, Kennedy’s liberal

and Eurocentric line of thinking is disturbing. Considering British hegemony as a given, as a

preferable situation, he appears to assign to Argentina the perpetual status of agricultural

exporter, continuously dependent on foreign loans. British hegemony in trade and finance in

the nineteenth century in reality only further consolidated and reinforced the positions the

different areas in the world-system had already assumed. Kennedy seems to accept without

objection the historically asymmetric division of gains between the industrialising core on

one side, and the agricultural periphery on the other.

In sum, the first decades after Latin American independence were characterised by the

emergence of Britain as a formidable world power and simultaneously by prolonged

economic stagnation in the newly independent republics. The process leading to

independence had left existing political, social and economic structures virtually intact. In

fact, in most Latin American countries, urgently needed redistributive measures for land and

income have yet to be implemented, rendering this claim true even almost two centuries after

independence. In these de facto colonial circumstances, autonomous economic development

remained difficult, and economic gains remained externalised, be it not anymore to Spain or

Portugal, but still to an external power.

In the second half of the nineteenth century, during the era of European imperialism, the

connections between Latin America and the world economy intensified, again as a result not

of internal developments but mainly of external dynamics. The accelerating pace of

49

industrialisation in the core increased the demand for primary products from the periphery,

resulting in a steady growth of agricultural and mining sectors in Latin America, but

simultaneously frustrating autonomous industrial development in the region. Local

industrialisation would have required protection, and this was a step no Latin American

government was willing to take. In an attempt to modernise their countries, Latin American

leaders regarded the United States and Britain as their examples (Keen 1996:448).

Liberalism and free trade were viewed as essential on the road to prosperity, and a sense of

racial inferiority because of their mixed Spanish-indigenous descent (see also section 2.3)

caused Latin American leaders to emulate the European and American examples as much as

possible (Skidmore and Smith 2001:40-45; Keen 1996:270). Although European political

control had disappeared, European influence in Latin American politics remained strong, as

did Latin American admiration for their young northern neighbour, the United States (Keen

1996:445).

The nature of the economic link forged during this period has continued to trouble the

region to this date. Latin American economies were definitively integrated into the capitalist

world economy on the basis of the exchange of raw materials and foodstuffs for factory-made

goods from Europe and the US, creating patterns of exploitation and an ‘unevenness’ in the

economic development of the periphery vis-à-vis that of the core (Cardoso and Faletto

1979:85-86). Core powers, especially Britain, with the full support of Latin Americans eager

to connect to a culturally superior Europe (Keen 1996:270-271), started to invest in the

building of the infrastructure needed to export primary products to Europe and the United

States (Furtado 1966:199-200). Especially from 1870, the accelerating industrialisation in the

core caused an enormous inflow of foreign investment in Latin America, leading to the

modernisation and expansion of production and trade, but keeping all activity subordinated

to external interests and steadily expanding foreign control over Latin American economies

(Keen 1992:211). The direction of economic development was decided by external actors,

which as a result of their capital investments also attained more political influence and did

not eschew military interventions to advance and protect their economic interests (Keen

1992:213).

Foreign investment by the core caused each country to specialise and become dependent on

the export of one or two primary products desired by the core (Argentina and Uruguay

specialising in wheat and meat, Chile in copper and nitrates, Colombia and Ecuador in

bananas, Brazil in coffee), rendering them extremely vulnerable to world price fluctuations.

According to Keen, this led to the creation, by 1900, of a ‘new structure of dependency, or

colonialism, … with Great Britain and the United States replacing Spain and Portugal as the

dominant power[s] in the area’ (Keen 1992:178).

50

3.6 Latin America between the World Wars (1914-1945)

The period between the beginning of World War I (1914) end the end of World War II (1945)

was characterised by a relative loosening of external control over Latin America. Obviously,

this was to an important degree due to the fact that during this turbulent period, the

European powers and the United States were mostly occupied with internal affairs, conflicts

and crises. This seems to confirm my hypothesis, outlined in section 2.7, that there is an

inverse relationship between the military power, ideological unity and political determination

of the West on the one hand, and the prospects for Latin America to pursue autonomous

policies and determine its own destiny, on the other. The horrors of World War I greatly

affected most European economies and disrupted European trade links with the world.

British hegemony in the world-system came to an end, and the United States, according to

many destined to become the new hegemon of the system, was reluctant to assume

leadership and during subsequent decades pursued an inward-looking and isolationist policy.

The Great Depression of the 1930s caused the resurgence of protectionism in the core and

undermined international trade links with Latin America: ‘world capitalism retreated into the

igloos of its nation-state economies and their associated empires’ (Hobsbawm 1992, cited in

Arrighi 1999:231). Finally, the outbreak of World War II in 1939 meant that European

powers, and later also the United States, were again principally committed to an essentially

intra-core conflict.

After World War I, recovering demand in Europe and the US led to a period of continued

prosperity and rising living standards in Latin America. During this period, the region’s

biggest countries, Argentina, Brazil, and Mexico, continued to pursue a model of export-

import growth, which worked very well in conditions of high external demand, but rendered

Latin America extremely vulnerable to economic crises. The Great Depression of the 1930s,

although not endogenous to Latin America, proved to be catastrophic for the entire region.

With external demand falling, international capital unavailable and tariff barriers raised by

all core countries, Latin American countries had no means of paying for the imports of

manufactures necessary to maintain standards of living. The total value of Latin American

exports in the years 1930-34 was 48 per cent lower than what it had been for 1925-29

(Skidmore and Smith 2001:51).

The consequences of the Great Depression, exposing the ultimate failure of the export-

import model of externally dependent development and exposing once again the decisive

importance of events in the core for development in the periphery, prompted Latin American

leaders to change their macro-economic policies. Economic necessity combined with a

relative freedom from external intervention led to the adoption of new economic policies,

geared to local industrial development and featuring a larger role for the state. From the

51

1930s onwards, several countries began to pursue policies of import-substitution

industrialisation (ISI), a state-induced attempt to reduce Latin America’s dependence on

external economic forces by developing a local industry to produce the products that are

usually imported, using the primary products that were produced locally, and in the process

stimulating local employment (Skidmore and Smith 2001:52-53). This development, which

was again influenced by external circumstances, was helped by the formation, since the last

decade of the nineteenth century, of radical and democratic political parties and socialist,

anarchist and syndicalist groups which advocated a stronger position for the middle and

lower classes (Keen 1992:214). Especially the larger countries Argentina, Brazil, and Mexico,

because of their big internal markets, booked some successes in developing national

industries behind protective barriers and achieving economic growth, and in the process

reinforced the strength of labour as a political force, leading to the emergence of the first

populist movements (Skidmore and Smith 2001:54-55).

Where the export-import growth model roughly equalled laissez-faire economic policies,

inspired by the dominant discourse of the capitalist world-system, ISI meant a radical break

with this tradition and involved direct government intervention in the economy. ISI can be

regarded as the first attempt by Latin American countries to implement macro-economic

policies that were not primarily in the interest of the core. However, this seems to have been

possible only due to the occupation of the core powers with intra-core issues, such as the

Great Depression, and later World War II. Furthermore, the success of ISI was limited

because in order to produce manufactured goods, Latin American countries still had to rely

on imported capital goods from the industrial core, and thus remained vulnerable to

deterioration of the terms of trade. According to Skidmore and Smith (2001:55), ISI did not

end Latin American dependency, but merely altered its form and socio-economic content.

3.7 Integration into a US-dominated world economy (1945-1980)

The period since the end of World War II is referred to as the era of US hegemony or the

‘global age of capitalism’ (Arrighi 1999:236). Emerging from the war as the only true

superpower, at least in the Western bloc, the US was able to dictate the organisation of the

international capitalist world economy. The international economic policies advocated by

institutions created during the 1944 Bretton Woods conference, such as the IMF and GATT,

clearly reflected the US interest in maintaining its overwhelmingly dominant economic

position vis-à-vis the developing world. Even more than under British hegemony during the

nineteenth century, from the second half of the twentieth century the international economy

became organised around the primacy of the market and international trade liberalisation.

52

According to US policy-makers, worldwide free trade, stimulated and facilitated by a fixed

exchange rate regime, was to be the engine of economic growth, and classical economic

theories of growth, outlined in section 2.3, emerged to prominence in the discourse on

international economic development.

Latin America, being historically located in the periphery of the world economy, had no

influence in the organisation of the post-war economic system, which was designed by and

geared to serving the interests of the core states, first and foremost those of the United States

(Ikenberry 1992). The incorporation of the continent into the US-dominated and US-centred

world economy meant that economic activity in Latin American countries became more and

more controlled by US firms, and economic gains were to a growing extent extracted to the

United States. Examples include the United Fruit Company (bananas) in Guatemala, ITT

(telecommunications) in Chile, and Texaco (petrol) in various countries across the continent.

At the same time, the US-inspired measures to organise the world economy around the

principle of free trade contributed to a stagnation of ISI growth in Latin America and led to a

re-emergence of export-import models (Skidmore and Smith 2001:56-58).

The US influence in Latin America went further than the economic realm. Wherever the

economic interests of the United States were threatened, Washington regularly applied

political pressure and sometimes even intervened militarily, in order to secure US-friendly

governments, committed to serving American economic interests, often at the expense of the

local population. A striking example of this is the US-sponsored overthrow of the

democratically elected leftist president Jacobo Arbenz of Guatemala in 1954, which secured

the interests of the United Fruit Company in the country, but also paved the way for a long

period of civil strife and repressive military rule in the country. Other examples include the

CIA’s nefarious role in the overthrow of Chile’s Allende government in 1973 (CIA 2000), to

which I turn later, and the US support for counter-revolutionary activities in Nicaragua (the

Iran-Contra affair) in the 1980s (Hayes 1990:181-184).

One of the few truly autonomous developments in the region that was sustained in the long

run, and which was contrary to the direction in which the capitalist world economy was

pushing during this period, was the Cuban Revolution of 1959, carrying through an agrarian

reform and the nationalisation of all foreign enterprises in the country, and offering, for the

first time, a radical alternative to the dominant model of capitalist development (Keen

1992:260). The Cuban Revolution was greeted with enthusiasm throughout Latin America,

but also coincided with one of the high points of the ideological battle between the United

States and the Soviet Union during the Cold War. From the 1950s onwards, US foreign policy

towards Latin America was first and foremost motivated by fear for the spread of

communism in the Western Hemisphere, and the Cuban Revolution was taken as a

justification for strengthening the American ideological grip on the Latin American

53

continent. President Kennedy’s ‘Alliance for Progress’, announced in 1961 and intended to

strengthen economic cooperation between North and South America, was gradually replaced

by a more ‘realist’ and less considerate US position towards Latin America, featuring support

for undemocratic regimes and Latin American elites fearful of the spread of the Cuban

Revolution, and for irregular armed groups formed to fight any leftist movement on the

continent (P. Kennedy 1987:407; Keen 1992:260).

Another radical break with traditional paths of development came in 1970, when the

Marxist Salvador Allende was democratically elected president of Chile. Allende’s election

was considered a major victory in the struggle against neo-colonialism. The new Chilean

government developed an ambitious program of nationalisations, reform of land, housing,

health and education, but progress was frustrated by opposition from the traditional power

elite, backed by the CIA and the US government (Keen 1992:261; 1996:392). Washington,

suspecting Allende to be a henchman of the Soviet Union trying to establish a communist

stronghold in the US backyard, announced a boycott and economic blockade against Chile,

which obstructed Chile’s trade and made internal development difficult. On 11 September

1973, Allende’s socialist experiment was abruptly ended with a military coup led by general

Augusto Pinochet, prepared with US acquiescence and covert support (Keen 1996:392-393;

CIA 2000), ushering in a period of seventeen years of repressive military rule, in which Chile

would serve as the experimental garden for neo-liberal economic policies (Ferguson

2009:215-216).

According to Ferguson, the 1973 coup in Chile symbolised a clash between two rival

economic systems, the existing system of universal benefits of the welfare state and the

contending system of the market-guided economy. This distinction may be too stark, as

Western European welfare states manage to combine these two systems, but the polarised

climate in Chile implied that a compromise between both systems was not attainable. In an

attempt to end the grave economic situation in the country, Pinochet’s government

implemented a program of economic shock therapy, more radical than what has later been

attempted in the US or the UK, inspired by the American economist Milton Friedman and a

group of young Chilean economists who had studied at the University of Chicago, called the

‘Chicago Boys’. All measures were directed at halting inflation and stabilising the economy by

reducing the role of the state and assigning primacy to the market. Government spending was

cut, the money supply reduced (literally by setting fire to piles of banknotes), state

enterprises were privatised, trade was liberalised, and the responsibility for pensions and

health care was transferred from the state to the private sector (Ferguson 2009:214-220).

After an initial period of economic hardship, these ‘proto-neo-liberal’ reforms led to a

stabilisation of the Chilean economy, but also to increased vulnerability of the poorer sections

of society.

54

The surge of the left in the third quarter of the twentieth century, not only in Chile but also

in a number of other countries such as Guatemala, Bolivia, the Dominican Republic and

Nicaragua (Lundestad 1986:274; Keen 1996:394), was met with a general counter-offensive

of conservative and authoritarian forces on the continent, mostly the military and the

traditional elites. They were backed by foreign allies, most notably the US which, in the

middle of the Cold War, tried to counter left-leaning movements anywhere in the world, and

especially in the hemisphere it considered its own. This counter-offensive undid the

burgeoning movement for structural economic and social change on the continent and

brought a return of authoritarian, conservative, military regimes in many countries. By the

end of 1976 Argentina, Bolivia, Brazil, Chile, Ecuador, Paraguay, Peru and Uruguay all had

authoritarian military governments. Economic growth was realised through the reduction of

wages and public services, high inflation and foreign takeovers. O’Donnell refers to this kind

of government as bureaucratic-authoritarian, and argues that they were to an important

extent legitimised not by popular support but by their alliance, or even mutual

indispensability, with international capital (O’Donnell 1978:15-16; 22). Hence, the core (i.e.

the US) interest in assisting them to achieve and remain in power. Illustrating the systemic

practice of a net transfer of capital from the periphery to the core in the modern world-

system, for every dollar invested by foreign companies in Latin America in the 1970s, an

amount of US$2,20 was repatriated to the home country (Keen 1992:261). The terms of trade

continued to move against Latin America and produced a growing gap between the value of

exports and that of imports. The economic policies of these authoritarian governments meant

the abandonment of earlier efforts to achieve economic independence and amounted to de

facto de-industrialisation, a reduction in industrial employment and therewith a weakening

of the electoral influence of the working classes (Fernández Jilberto 1991b:72). The military

regimes of the 1970s were supported by the (US) core and in turn reaffirmed the core’s

hegemony over the Latin American periphery (Keen 1992:261-262).

3.8 Debt crisis and the spread of neo-liberalism (1980-2000)

Without discarding the significance of the long-term historical approach outlined in the

previous sections for a sound understanding of contemporary political, economic and social

realities in Latin America, it could be argued that the last two decades of the twentieth

century have been the most important for the formation of the phenomenon that is the

subject of this research, the rise of the New Left in Latin America. According to Sader

(2005:59), the extremity of the impact of economic restructuring in Latin American countries

since the 1980s is the main reason for the current wave of leftist governments in the region.

55

The debt crisis of the 1980s and the ensuing economic downturn not only contributed to the

fall of many authoritarian governments in the region, but the socio-economic consequences

of the crisis are arguably one of the main reasons for the current left turn throughout the

region. The period from 1982 until the end of the 1990s suddenly revealed the structural

constraints to development, inherent in Latin America’s position in the world-system more

clearly than before.

In the 1970s, Latin American countries had borrowed significant amounts of money to

finance their economies. As a result of the 1973 Oil Crisis, petrol exporting countries in the

Middle East profited enormously from the rising petrol prices and invested their surplus

capital in developing countries. Latin America was an especially attractive destination for

surplus capital, owing to the relative macro-economic and monetary stability, and the

favourable investment climate created by authoritarian governments. The total value of Latin

American external debt, amounting to some 27 billion dollars in 1970, had by 1980 increased

almost tenfold (Skidmore and Smith 2001:58), and reached an amount of 300 billion dollars

in 1982 (Ferguson 2009:309).

In the early 1980s, commodity prices declined and interest rates rose, leading to a loss of

revenue for traditionally commodity-reliant Latin American economies and a heavier debt

burden, in absolute as well as relative terms (Skidmore and Smith 2001:58). Latin American

countries came to realise their inability to service their enormous accumulated debts, and in

August 1982, with the entire continent on the brink of bankruptcy, Mexico defaulted. This

was the beginning of the Latin American debt crisis, which resulted from the persistent

practice of dependent development, based on foreign loans, combined with the easy

availability of enormous sums of capital in the international market (Keen 1992:261), and

would usher in a period that is currently still looked upon as the ‘lost decade’ for Latin

America (Hayes 1990).

The creditor countries, led by the US, fearing the loss of even more loans they had extended

to Latin America, responded with emergency aid packages and loans through the IMF and

the World Bank, centred around watchwords such as ‘austerity’, ‘policy reforms’, ‘structural

adjustment’ and ‘conditionality’, which would later be referred to as the Washington

Consensus. The Washington Consensus was a ‘wish-list’ of ten economic policies, nine of

which were not geared to resolving the structural problems of Latin American economies, but

rather towards creating a stable environment in which foreign companies could operate

without restrictions from the state (Williamson 1990). Even more than in the formative years

of the post-war international economic system, the state was considered an obstacle to

growth and had to effectively retreat from the economy in the country of its own sovereign

jurisdiction, making way for foreign investment, which was supposed to bring economic

growth and therewith development (Fernández Jilberto and Mommen 1996:6-7). Concerns

56

about poverty and especially inequality were largely ignored in the Washington Consensus; it

was believed that redistribution policies would undermine growth, and that a focus on

growth would in the long term automatically be beneficial for poverty and inequality

reduction. Therefore, a policy aimed at extending free markets would in time produce

sustained development and thus reduce poverty and inequality (Karl 2002:1-2). For the Latin

America periphery, this turned out to be a false assumption.

According to Ferguson, the Washington Consensus criteria ‘would have gladdened the heart

of a British imperial administrator a hundred years before’ (2009:309). They represented a

de facto neo-colonial way of organising the economy of a country, just to serve the interests

of external actors, while providing some minor incentives for the local population, especially

the upper class in the role of semi-periphery, to avoid large-scale uprisings.

Paradoxically, in spite of the suggestion of a consensus, Latin American debtor countries

had no say in the prescriptions laid down by the IMF to combat the crisis and stabilise their

economies, with the only obvious goal of restoring Latin American creditworthiness and

ensuring repayment of debt to the core. The problems of Latin American countries were

attributed to domestic economic mismanagement only and not to structural constraints to

development that have characterised the history of the continent. The Washington Consensus

first and foremost reflected the US interest in ‘prudent macroeconomic policies, outward

orientation, and free-market capitalism’ (Williamson 1990).

Because the IFI’s held the ‘seal of approval’ for international creditors, they could

determine the nature of the measures and force the debtor countries to comply with their

structural adjustment programmes (Fernández Jilberto and Mommen 1996:5). In fact, the

accumulation of foreign debt had triggered an accelerated transfer of state sovereignty to the

IMF (Fernández Jilberto 1991b:67). However, just as during the first decades after

independence, when the newly independent Latin American republics regarded Western

liberal ideas as superior to indigenous practices and values, in the 1980s and 1990s most

Latin American governments proved to be disciplined pupils on the subject of liberal, or in

this case neo-liberal, ideas on economic organisation. In several countries privatisation

programmes were undertaken in order to create revenue for the state and reduce government

intervention in the economy, the average tariff for the continent was almost halved between

1991 and 1993, and most countries removed controls on capital flows (Fernández Jilberto and

Mommen 1996:16-17). The attraction of the Western model appears to have been big enough

to constitute a powerful drive to implement the prescriptions from the SAPs and to integrate

Latin America more deeply than ever before in the neo-liberal capitalist world economy. The

ideological power of the West was reinforced by the end of the Cold War and the

disappearance of ‘really existing’ socialism as a viable alternative, leading to an appealing

rhetoric of free-market capitalist triumphalism (see Fukuyama 1989). It is telling that the

57

initiative for a Free Trade Area of the Americas (FTAA) in 1994 was actually not taken by the

US government, but by Latin American governments, eager to gain better access to North

American markets (Phillips 2006:334-335).

The liberalisation of Latin American economies following Washington Consensus

prescriptions, had severe consequences, many of which became manifest in the 1990s. The

opening up of their economies and the liberalisation of finance rendered Latin American

countries extremely vulnerable to price movements in international markets and

international short-term capital flows and, together with the privatisation of state-run

enterprises, increased foreign ownership of important economic sectors significantly: by the

end of the 1990s, some 63 per cent of manufacturing activity in Latin America was in foreign

hands (Phillips 2006:337-338; 340). After an initial period of enthusiasm, in the mid-1990s

Latin American economies again became struck by crises. Dependence on imports increased,

current-account deficits and debt burdens rose; in 1990 Latin American foreign debt totalled

more than 400 billion dollars (Hayes 1990:180; Keen 1992:262; Skidmore and Smith

2001:59), which amounted to almost half the region’s total GDP (CIA 1990). Domestic

investment and consumer demand were choked off by high interest rates, unemployment

rose and inequality increased. The result was a series of deep recessions and currency

collapses in, among others, Mexico (1994), Brazil and Ecuador (1999), and Argentina (2001)

(Sader 2005:60).

As I observed in chapter 2, a consequence of a narrow, Western-inspired mode of thinking

about economic development is that whenever this development along Western lines does

not occur, this is attributed to some kind of inferiority on the part of the developing country.

This reasoning is still dominant among powerful political and economic elites. Indeed, the

fact that several Latin American countries did not achieve sustainable economic growth in

the 1980s and 1990s, was easily attributed to ‘incorrect’ government policies and failures of

economic management, or in other words, a failure to fully implement the Washington

Consensus agenda (Fernandes 1996:96; Karl 2002:20-21; Phillips 2006:332).

In sum, the implementation of neo-liberal reforms as a response to the debt crisis of the

1980s meant a significant step back in the cautious process of economic development of Latin

American countries and the post-war macro-economic models that had been followed in the

preceding decades. According to Skidmore and Smith (2001:59), it amounted to a complete

reversal of earlier ISI strategies. It undermined the chances for Latin American countries to

find a market niche in which to participate competitively and reinforced Latin American

dependence on external actors, or the periphery’s dependence on the core. The Washington

Consensus prescriptions paved the way for increased foreign control of Latin American

economies and reduced government influence on economic processes. By increasing rather

than decreasing Latin American dependence on foreign loans, the SAPs in fact aggravated

58

the factors that had caused the crisis, and reinforced and reaffirmed the core’s determination

to retain full control over activity in the periphery. The foreign debt burden, which Latin

American politicians privately consider to be truly prohibitive and unpayable under existing

conditions (Keen 1992:262; 1996:465), has increased Latin American dependence on

external political and economic interests. Just like in the colonial period, a major part of

economic activity in Latin America has fallen to the control of external actors, who

principally serve their own interests and neglect those of the Latin Americans themselves.

According to Dominguez (2009:46), the socio-economic consequence of neo-liberalism for

most Latin Americans was ‘catastrophic devastation’.

3.9 Conclusion

From the different stages in Latin American development outlined above, the three

observations from the first section of this chapter clearly stand out. First, since the colonial

encounter, Latin American development has been characterised by a significant amount of

external control over political and economic affairs (Skidmore and Smith 2001:28). This was

most direct during the colonial era, when all development depended directly on initiatives

taken on the other side of the Atlantic, but after the ‘liberation’ of the continent it was

replaced by a new form of control, first under British and later under US hegemony. Latin

American countries’ dependence on foreign borrowing limited their autonomy and enabled

core powers to determine the course, the direction and the speed of development. Formal

empire was thus replaced by a more informal sort of empire, but dependent development

persisted. Structural adjustment in the 1980s and 1990s increased external control and

reinforced Latin America’s structural dependence on political and economic decisions taken

in the core. Especially this last phase in the economic development of the continent seems to

amount to a de facto ‘neo-colonial’ practice of organising peripheral economies entirely to

serve the interests of the core, while disregarding those of Latin Americans themselves.

Second, a persistent feature of Latin American history has been the externalisation of

economic gains. Again, this was most clear during the colonial era, but continued after

independence, in a more subtle form. From the second half of the twentieth century, and

especially after the debt crisis of the 1980s, it has become ever clearer again, with the forced

implementation of neo-liberal reforms in Latin American countries. The measures envisioned

a retreat of the state from the public and economic spheres and the creation of a macro-

economic environment suitable for investments and takeovers by foreign companies which,

although generating some local employment, take most of the generated profits to their home

countries. There seems to be a continuity between the ‘formal colonialism’ of the Spanish and

59

Portuguese empires, the ‘informal colonialism’ of British merchants in the nineteenth century

and the de facto ‘neo-colonial’ practices of the period since the Latin American debt crisis.

And finally, the economic history of Latin America has been characterised by a persistent

and significant gap between rich and poor, a notoriously unequal distribution of income,

applying to the international as well as the domestic setting. Internationally, the integration

of Latin America in the periphery of the world-system implies a continuous net transfer of

capital to the core of the world economy. This was most pervasive during the colonial era, but

continued as well after independence. Most of the time, Latin American countries pursued

strategies of export-import growth, relying on the export of primary products to service the

costs of imports of manufactures. The movement of the terms of trade against primary

producers implies a growing income inequality between core and peripheral countries,

reaching a new high point with the implementation of structural reform programmes in the

1980s and 1990s.

The observation of a persistent and growing gap between rich and poor also applies to the

domestic setting. Karl (2000:154) argues that ‘for most of its history, Latin America has been

defined by … a “pathology of inequality”, which has reinforced political, economic, and social

exclusion in virtually every realm’. Again, this process was most visible during the colonial

era, when the interests of the indigenous peoples were completely disregarded and all wealth

that was not transferred to Spain and Portugal, was firmly put in the hands of a small elite of

peninsulares, and later also criollos, owning the land and controlling the exploitation of

natural resources. This dualistic development has continued up to our days. In the nineteenth

century, political might and capital were concentrated in the hands of a conservative landed

elite and a merchant class that collaborated with Britain, while at the same time the

indigenous population remained poor, living in miserable conditions, without regard from

the elite for their situation. In more recent times, power and wealth have remained in the

hands of a small elite, which collaborates with international investors and multinational

companies in the extraction of the natural riches of the continent. This has become especially

pervasive with the arrival to the region of neo-liberal structural adjustment, prescribed by the

Washington Consensus.

Confirming one of my hypotheses outlined in the previous chapter, it seems that there has

historically been an inverse relationship between the military power, ideological unity and

political determination of the West on the one hand, and the prospects for Latin America to

choose its own destiny, on the other. Freedom of movement for Latin American countries was

most limited at times when the West was militarily strong, unified behind a shared ideology,

and determined to maintain its dominant position. Conversely, many of the most important

political developments on the continent took place just because of temporary weakness,

ideological division and lack of determination on the part of Western countries. The few

60

periods in history that Latin America was able to pursue more autonomous and independent

policies were periods in which core control was somewhat loosened, due to conflicts and

crises within the core. The decline of Spain and the rise of Britain provided the space for the

liberation movement that led to independence, the World Wars and the Great Depression

enabled Latin American countries to develop strategies of state-led industrialisation (ISI).

Whenever the core seemed occupied with other, mostly intra-core affairs, Latin America had

some room to manoeuvre to choose its own direction of development. It remains to be seen

whether the first decade of the current century can be characterised as a period of continued

firm core control over Latin America, or whether we can speak of the burgeoning of some

degree of freedom for Latin American countries to decide upon their own destinies. After

having outlined the historical background, it is time to turn to this matter, in relation to the

actual subject of the present research, the rise of New Left politics in Latin America. In the

next chapter, the findings from theory and history will be combined for a description and

analysis of this phenomenon in a continental context.

61

4. The Rise of Latin America’s New Left

4.1 Introduction

Having outlined the theoretical framework for this research and provided the contours of the

historical background of the present socio-economic reality in Latin America, it is now time

to turn to a description and analysis of the New Left. Why is this phenomenon currently

occurring? Which factors explain its emergence, how can its ideology and core ideas be

characterised and which different types of leftist politics can be distinguished? In this

chapter, I attempt to provide an answer to these questions by describing and analysing the

rise of the New Left in Latin America.

Interestingly, Latin America’s left turn came as a surprise to many scholars. At the end of

the twentieth century, several authors assumed that the end of the Cold War would usher in

the definitive consolidation of the neo-liberal model in Latin America, and that ‘the socialist

route appeared to have led to a dead end’ (Skidmore and Smith 2001:417). Krauthammer

(1990) even observed a ‘unipolar moment’, which would last for several decades and in which

the US, as the only remaining superpower, would be able to influence the world like never

before due to its overwhelming political, economic, cultural and military power. Latin

America, being located in the US backyard, was expected to turn into a US-friendly region,

supporting American hegemony. As the Mexican political scientist and former foreign

minister Castañeda put it: ‘The United States and capitalism have won. … Today,

conservative, pro-business, often democratically elected and pro-US technocrats hold office

around the hemisphere’ (2003, cited in Rodríguez-Garavito et al. 2008:1). In Latin American

politics, development models other than the Washington Consensus were regarded as

obsolete; conservative and liberal positions were considered commonplace or even

‘hegemonic’, and their validity was hardly being discussed in politics, within left and right-

oriented parties alike (Stolowicz 2004:13; Arditi 2008:71). The end of a period of

authoritarian rule in several Latin American countries, occurring in the same period, would

bring an end to ‘populism, statism and nationalism’ in the continent and usher in an era of

‘democracy, fiscal austerity, and market globalisation’. Government policies would from now

on be determined by market-friendly technocratic politicians and no longer by social

mobilisation or political pressure groups (Castañeda 2006; Roberts 2007:4).

Nevertheless, during the 1990s and into the 2000s, Latin America saw a new wave of left-

oriented movements, ideologies, political parties, and leaders. First, during the 1990s,

popular uprisings protesting the negative consequences of neo-liberal policies occurred in a

62

number of countries; then, starting in Venezuela in 1998 but acquiring momentum in the

2000s, the New Left moved to national power, winning presidencies in a majority of Latin

American countries and establishing left-oriented governments in thirteen out of seventeen

countries at the end of the first decade of the twenty-first century. Latin America’s left turn,

the most significant part of which occurred in a relatively short time span of a couple of years,

demonstrated that the prospect of a continued and unchallenged US hegemony in the

Western Hemisphere well into the present century had been an illusion.

This chapter describes and analyses the rise of New Left politics in Latin America. First,

drawing upon the findings of the previous chapter, I summarise some of the socio-economic

causes that have contributed to producing the popular shift towards the left since the 1990s.

This background can provide an answer to the question why the political shift towards the

left is occurring, and which factors have contributed to its development. In the next two

sections, I sketch the most important events that characterise the rise of the New Left to

national power in several Latin American countries; first using a ‘popular’, or grass-roots

perspective focusing on popular movements from below, then applying a more ‘statist’

framework and concentrating on the election of New Left leaders to national power. This

historical sequence will be followed by an overview of some factors that may have contributed

to the development of this phenomenon. Then, I outline the basic ideologies, ideas and issues

that can be considered characteristic for the New Left movement throughout the continent

and finally, working from an evaluation of different ways to categorise the New Left

movement in Latin America, I suggest a model that can be used to distinguish three different

strands of New Left politics. This distinction will provide the basis for further analysis of the

achievements and outcomes of different types of leftist governments in contemporary Latin

America, which constitutes the subject of chapter 5.

4.2 Summarising socio-economic conditions in Latin America

As has become clear from the analysis in the previous chapter, development in Latin America

has historically been largely dependent on and to an important extent determined by external

factors, external actors and exogenous ideas. The core powers have consistently made sure

that most of the economic surplus generated in Latin America was extracted out of the

continent. Core powers, merchants and firms have remained in control of important sectors

of the economy and politics, in a collusive cooperation with a small local elite, which received

minor incentives in return for maintaining in place a system of exploitation, at the expense of

the majority of the population. Living conditions of ordinary Latin Americans did not seem to

matter a great deal in political decisions: politics was foremost an instrument to serve the

63

local elite and foreign corporations, not the poorer part of the population; the landless

farmers, the jobless city-dwellers, and the indigenous peoples. Since the colonial encounter,

this pattern has been recurrent throughout the continent, irrespective of which state

constituted the dominant power in the world-system at a given moment.

During the last two decades of the twentieth century, it seems that many of the structural

constraints to development and well-being, and the persistent dependence on decisions taken

in the core of the world-system, suddenly became deeper, more visible and more urgent than

before for a majority of Latin Americans (Keen 1996:396). The immediate cause for this

development was the debt crisis that swept the region in the 1980s, and more significantly

the conditional aid packages that were extended to Latin America by the IFI’s in response to

the crisis. Most of the measures prescribed by the IMF as conditions for receiving new loans

were directed at reducing the role of the state in the economy, and to liberalise and open the

economy for foreign activity, takeovers and investments, under the neo-liberal assumption

that free trade and open economies would provide the impetus for sustained economic

growth. In chapter 2, it has been argued that this assumption cannot be validated if one looks

at the historical development of the world-system, and that especially in the periphery of the

world economy there are other, structural, factors at work which obstruct development. In

line with World-Systems theory, I have contended that the core countries benefit most from

an open world economy organised around the principle of free trade, and that the movement

of the terms of trade against producers of primary products implies that the periphery in the

longer run only stands to lose from trade liberalisation. Therefore, it could be argued that the

neo-liberal reforms implemented by Latin American governments, under the pressure of the

Western-dominated IFI’s, had the only obvious goal of providing a safe and stable

environment for Western (i.e. most significantly, US) multinational corporations to operate

without impediments or restrictions in Latin American countries, and were not in the best

interest of the majority of poor Latin Americans (Heath and Avellaneda 2007:11). In the

previous chapter, I have referred to this practice as de facto neo-colonialism, serving first and

foremost the goal of extracting the material wealth of the periphery to increase the wealth of

the core.

Consequently, the 1980s and 1990s in Latin America were characterised by an overall

retreat of the state from the economy, leading to a situation in which there were no viable

instruments left to provide for an equitable distribution of the total available income (Heath

and Avellaneda 2007:3). A free market does not provide for an even income distribution; on

the contrary, free trade and open competition lead to the accumulation of capital and

resources in the hands of a small (and theoretically declining) elite, while a big (and

theoretically growing) majority is confronted with falling income and deteriorating

64

conditions of living. Figures on poverty, inequality and external debt for Latin America

confirm this assertion.

Poverty

If one looks at poverty figures for Latin America from 1970 to 1995, it can be observes that

the historically lowest value is 23,7 per cent in 1982, just prior to the debt crisis. The

percentage in the mid-1990s is comparable to that of 1970, with absolute numbers in 1995

being higher than in any year before (Londoño and Székely 1997:16; Dominguez 2009:46).

This suggests that neo-liberal structural adjustment policies have not been successful in

combating poverty in Latin America. This is confirmed by data from ECLAC on poverty in the

1980s, summarised in figure 1.

Latin America's Lost Decade

0

10

20

30

40

50

60

Brazil1979 / 1990

Colombia 1980 / 1991

Costa Rica 1981 / 1990

Mexico 1984 / 1989

Venezuela 1981 / 1990

Latin America 1980 / 1990

Percentage of poor people

Figure 1. Development of national poverty rates in selected Latin American countries during the

1980s (Source: ECLAC).

According to Londoño and Székely (1997:19), the 1990s brought Latin American countries

some economic recovery and growth, but produced no significant decline in poverty and

inequality. In countries with egalitarian income distributions, economic growth benefits all,

but in peripheral states with great income inequalities, growth bypasses the poorest (New

York Times 2005). In spite of some slight improvement during the 1990s, at the turn of the

65

century 43 per cent of Latin Americans still lived below the poverty line, having to get by on

less than two dollars a day (Stolowicz 2004:17n).

Inequality

To date, Latin America remains the most unequal region in the world (Altimir 1997:5; Karl

2002:5), with inequality figures that are much higher than could be expected on the basis of

the level of development of the region (Londoño and Székely 1997:12; Karl 2002:6). Income

inequalities in most Latin American countries are at levels that elsewhere in the world are

only found in some African states, whose per capita income levels are about half that of Latin

America’s (Karl 2000:150). The impression that the implementation of structural adjustment

programmes has led to a deterioration of socio-economic conditions is confirmed by figures

on income distribution in Latin America. Londoño and Székely have shown that the Gini

coefficient, measuring inequality in the whole of Latin America and the Caribbean, was

gradually declining in the 1960s and 1970s, to reach a historic low in 1982. Since then,

inequality has been steadily increasing, in 1994 amounting to a higher value than in 1970

(Londoño and Székely 1997). This trend towards increasing income inequality occurred

despite positive growth rates throughout the 1990s; it is suggested that inequalities in the

region are so high that poverty does not decline as a result of economic growth, as classical

liberal and neo-liberal economists assumed (Karl 2000:150; 2002:5-6).

Another, and somewhat more palpable, measure of inequality is the income ratio between

the upper 10 per cent and the lower 40 per cent of the population. At the end of the 1990s in

Western European countries, this ‘10/40’ ratio was about 4 to 8, while in Latin America it

was about 8 to 12 (Fernandes 1996:114). In other words, the poorest 40 per cent of Latin

Americans shared only 15 per cent of national income, while at the same time the richest 10

per cent of the population shared 40 per cent of national income (Karl 2000: 150; Stolowicz

2004:5).

External debt

External debt is a burden to a country, as the servicing of debt puts a heavy pressure on the

budget, meaning there are fewer funds available to the state to pursue social policies aimed at

improving conditions of living. Figures on the development of Latin American external debt

suggest that, paradoxically, the debt crisis has been addressed not by alleviating the debt

burden that lay at the core of the crisis, but instead by hugely increasing the total external

debt. From 1992 to 2001, more than 1,2 trillion dollars in external debt servicing flowed out

66

of Latin America. In the same period, Latin American external debt doubled, from 400 billion

dollars in 1990 (Hayes 1990:180; Keen 1992:262; Skidmore and Smith 2001:59) to a

staggering 817 billion dollars in 2001 (Stolowicz 2004:5). According to Stolowicz (p. 5), for

every dollar received from the core for poverty reduction, the Latin American periphery

returned more than six dollars in debt servicing.

Latin America at the turn of the century

By way of conclusion of this section, it seems clear that the last two decades of the twentieth

century have witnessed a deterioration of crucial socio-economic indicators that summarise

the living conditions of a majority of Latin Americans: poverty, inequality, and external debt.

In spite of some obvious variation between countries, the conditions around the turn of the

century were remarkably homogenous throughout the continent (Stolowicz 2004:7). All three

indicators have a significant impact on conditions of living for the majority of the people in

the region. Sudden deterioration of these factors can influence the voting inclination of the

people, and with it the political orientation of national governments.

From the historical analysis in chapter 3 it has already been demonstrated that the nature

of the integration of Latin America in the world economy implies that poverty, inequality and

external debt are central and continuous characteristics of life in the periphery. However,

neo-liberal reforms in the last two decades of the past century have caused a sudden and

sharp deterioration of all these factors. The debt crisis and its consequences have once again

demonstrated the value of the arguments of the dependentistas of the 1960s and 1970s, who

contended that for peripheral countries, there is a negative association between participation

in the world economy and development. Increased reliance on capital from the core meant

that Latin America in fact became more dependent on exogenous decisions and policies

(Bradshaw and Huang 1991). The implementation of neo-liberal policies meant a retreat of

the state from the economy, resulting in a reduced ability on the part of the state to regulate

and improve the income distribution. In this environment economic growth, which during

the 1980s and 1990s was indeed achieved in a number of Latin American countries, could no

longer have a noticeable impact on poverty reduction, income distribution or debt regulation.

External (IFI and MNC) control over the economy, and therewith the degree of

externalisation of profits, increased. Of course, this did not negatively affect the political and

economic elites in Latin America, who cooperated with international business interests in the

exploitation of the region’s wealth and people. It affected the poor and excluded Latin

Americans, who were unable to support themselves and had to rely on social protection. The

67

results were not ‘balanced development and rising living standards’, but ‘increased misery

and social crisis’ (Keen 1996:396).

4.3 Stage one: grass-roots protests against neo-liberalism

As I have argued in the previous chapter, it seems that the last twenty years of the twentieth

century have been crucial for the emergence of Leftist movements in Latin America.

Especially as a result of neo-liberal, IMF-prescribed reforms implemented by many Latin

American governments during the 1980s and 1990s, living conditions of ordinary people

deteriorated drastically and many of the structural constraints to development, inherent in

Latin America’s position in the world-system, became clearly visible to a growing number of

people. Indeed, two of the events that are commonly taken as starting points for the rise of

the New Left in Latin America, were sparked off by government decisions which were in line

with IMF or US interests and were considered contrary to the interests of the Latin

Americans themselves.

The starting point for the current wave of New Left movements in Latin America is

currently taken to be the Caracazo uprising in Venezuela in February 1989, the ‘first post-

neo-liberal insurgency’ (Beasley-Murray 2007) and according to some, the beginning of the

anti-globalisation movement (Kozloff 2006:44). Gott (2005:4) argues that the Caracazo was

as important for Latin America as the fall of the Berlin Wall, later that year, was for the West.

According to López Maya, the Caracazo was a ‘massive and violent protest carried out by a

society, which did not have at its disposal adequate channels for making itself heard or

heeded by those in the corridors of power’ (2003:135-136). Keen (1996:464) remarks that

this event, taking place in oil-rich, democratic Venezuela, constituted a warning that the

patience of the Latin American masses had reached its limits.

The Caracazo was a direct result of the decision by President Carlos Andrés Pérez to

implement a package of neo-liberal reforms prescribed by the IMF in an attempt to put an

end to the economic crisis in the country. Apart from privatising state companies, tax reform,

and reducing the role of the state in the economy, part of the package was the measure to

eliminate subsidies on gas, which increased petrol prices by 100 per cent overnight and

caused the cost of public transport to rise by 30 per cent (López Maya 2003:120-121; Kozloff

2006:44). On February 27, outraged about this sudden sharp increase in prices and a

subsequent deterioration of purchasing power, tens of thousands of poor Venezuelans, in the

capital but also in other cities and towns throughout the country, spontaneously took to the

streets and started protesting, rioting and looting (Keen 1996:464). The government declared

a state of martial law and in subsequent days intervened brutally, especially in the poorer

68

quarters of Caracas, killing many hundreds (277 according to the government; see Inter-

American Court of Human Rights 1999; López Maya 2003:120-121) to thousands (3000

according to protesters; see Grant 2009) of civilians. The Caracazo sparked off the

movement that would later become known as Hugo Chávez’s Bolivarian Revolution. Later,

president Pérez himself would remark that the uprising had been caused by ‘the policy of the

great industrial powers to compel us to pay our debts when we cannot rationally do so’, and

that therefore, the responsibility for destabilising the democratic processes in Latin America

rested with the creditor countries (quoted in Keen 1996:465).

Another crucial event, which occurred less spontaneously and was better organised, was the

Zapatista uprising (named after the Mexican revolutionary leader Emiliano Zapata) of

January 1994 in Chiapas, the poorest state of Mexico (Keen 1996:331). Because of the higher

degree of organisation and planning, some authors (see Rodríguez-Garavito et al. 2008)

consider this, and not the Caracazo, as the real starting point for the New Left in Latin

America. The Zapatistas, due to their organisation and continued commitment to spreading

their message, have received much attention and are internationally regarded as a

constitutive part of the alter-globalisation movement.

The immediate occasion for the uprising was the coming into effect of the NAFTA between

Mexico, the United States, and Canada. The Zapatista Army of National Liberation (EZLN)

assumed that free trade with the US within NAFTA would be detrimental for income

inequality in Chiapas and declared a state of war on the Mexican government, which it

considered illegitimate for representing the interests of the people. The EZLN promoted four

themes that are currently accepted as part of the general agenda of the political left:

empowerment of indigenous people, critique of neo-liberalism, discussion of alternatives to

electoral democracy, and a call to promote solidarity on a global scale (Arditi 2008:65). The

EZLN further called for democratisation and land reform, which had been mandated by the

1917 constitution but had been largely ignored.

The Zapatista uprising consisted of armed EZLN members seizing several towns and cities

in Chiapas, including the tourist town of San Cristóbal, in the morning of January 1, 1994

(Keen 1996:329). The attack came as a surprise, but the next day the Mexican army forcefully

intervened and forced the EZLN to retreat into the jungle. Fighting ended ten days later, but

the EZLN’s commanders have never been captured and have entered into an international

campaign to create awareness and solidarity for the fate of poor Mexicans, landless farmers

and indigenous peoples. Concrete achievements in the situation of the poor in Chiapas have

not yet occurred, but the Zapatista campaign can be considered symbolic for the increased

awareness among poor, landless, exploited Latin Americans that they should no longer be

victims of their states, but rather demand protection from the state and improvements in

their conditions of living.

69

This popular bottom-up process of spontaneous uprisings was also visible elsewhere in the

region. In several countries, the poor and excluded started to express their growing

discontent with neo-liberal policies and their consequences and became increasingly active

(Gott 2005:5). In 2000, protesters in Cochabamba, Bolivia, were able to reverse the

government’s decision to privatise the water supply; in 2001, a popular uprising overthrew

the Argentinean government, which was held responsible for the grave economic crisis; in

2002, a military coup against Venezuelan president Hugo Chávez failed because supporters

of the president organised a massive mobilisation to demand his return (see section 5.3); in

2003, massive protests in Bolivia obliged the government to undo the privatisation of

national gas reserves. Also in other countries such as Brazil, Peru and Paraguay, farmers,

students and indigenous peoples protested against neo-liberal measures implemented by

their governments (Stolowicz 2004:3-4; Arditi 2008:65-66).

4.4 Stage two: the New Left claiming national government

The rise of the New Left did not stick to the phase of bottom-up protests to improve the

situation of poor Latin Americans. With democracy returned to all Latin American countries,

leftist movements could aspire political positions to put into practice their ambitions to alter

the structure of Latin American economies from the top down; to redistribute land and

income and to ensure that their countries’ riches would benefit the people instead of the

foreign business elite. This provoked the accession to power, between 1999 and today, of

leftist Latin American presidents in most countries on the continent.

Just as the Caracazo of 1989 was the first incident in which poor people massively took to

the streets to protest neo-liberal reforms, Venezuela was also the first country to

democratically elect a New Left president (Gott 2005:4). On February 2, 1999, the radical

Hugo Chávez was sworn in as president and immediately started a sweeping reform of the

Venezuelan state, economy and social policy. One year later, Chile elected the moderate

socialist Ricardo Lagos to the presidency. 2003 saw the ascension of leftist presidents in

Brazil (Luiz Inácio ‘Lula’ da Silva) and Argentina (Néstor Kirchner); by the end of the year,

almost 45 per cent of Latin Americans was ruled by left-of-centre governments (World Bank

2007). In 2005 Uruguay elected a leftist coalition (the Frente Amplio, of Broad Front, headed

by Tabaré Vásquez), in 2006 Evo Morales was sworn in as president of Bolivia and in Chile

another leftist president, Michelle Bachelet, took office, becoming the first woman to ever

occupy the presidency of the country. From that moment, the New Left movement also

started to gain momentum in Central America. In January 2006, Honduras elected to the

presidency the liberal Manuel Zelaya, who during his presidency would move sharply to the

70

political left. A few months later, Honduras was followed by Costa Rica (Oscar Arias). In

January 2007 Nicaragua (Daniel Ortega) and Ecuador (Rafael Correa) joined the New Left

movement, and later that year Argentina elected Kirchners spouse Cristina Fernández de

Kirchner to the presidency. In 2008 Guatemala (Álvaro Colom) and Paraguay (Fernando

Lugo) were added to the list. In April 2009, Ecuador re-elected Rafael Correa after a

constitutional referendum (Romero 2009a). The most recent country to elect a leftist

president is El Salvador (Mauricio Funés), in June 2009.

In October 2009, Uruguay elected its second New Left president, a former Tupamaros

rebel leader (José Mujica), to succeed Vásquez in office. In December 2009, Evo Morales was

re-elected for another term of five years in office (Romero 2009b). On January 17, 2010, the

centre-right candidate Sebastián Piñera beat the leftist candidate Eduardo Frei in the second

round of the presidential elections in Chile, effectively producing a Chilean swing back from

the left to the centre-right within the next months. However, at the beginning of 2010, 13 out

of 17 countries in Latin America, representing more than 65 per cent of the population of the

region (World Bank 2007), were governed by left-of-centre governments.

It is worth noting that a significant part of Latin America’s left turn, if taken to mean the

accession of left-oriented presidents, occurred in a relatively short time span. Figure 2

provides a time-line, in which it can be observed that more than two-thirds, or nine out of

thirteen Latin American countries that are currently being governed by left-of-centre

administrations, turned left between January 2003 and January 2008.

New Left turns in Latin America

Paraguay

El Salvador

Guatemala

Venezuela

Chile

Brazil

Argentina

Uruguay

Bolivia

Honduras

Costa Rica

Nicaragua

Ecuador

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Figure 2. Latin American countries with left-of-centre governments, by year of inauguration of their

(first) New Left president (upper area: Central America; lower area: South America).4

4 The results of the 2009/2010 presidential election in Chile, which on January 17 led to a victory of

the centre-right candidate Piñera, causing the end of almost two decades of Concertación rule and a

shift ‘back’ to the right in Chilean politics, have not been included in this figure.

71

4.5 Reasons for the rise of the New Left

When studying the current left turn in Latin America, it is important to determine the

reasons why this development is occurring. Which circumstances have contributed to the

emergence and the rise to power of the New Left in Latin America? It seems that at least four

factors, which are undoubtedly interrelated with each other and also with other factors, have

contributed to the creation of the socio-economic, institutional and international conditions

in which left-oriented movements and political parties could successfully aspire national

presidential offices in Latin America.

Socio-economic factors: the legacy of structural adjustment

The socio-economic legacy of structural adjustment in the 1980s and 1990s, as outlined in

chapter 3 and in the beginning of this chapter, is seen by many scholars as the principal

factor that explains the current wave of left politics in Latin America (Sader 2005: 59; Heath

and Avellaneda 2007:3; Boron 2008; Rodríguez-Garavito et al. 2008; Stokes 2009). In

contrast to the advanced democracies in the West, the opening up of Latin American markets

and trade was combined not with an increase in government spending to cushion the effects

of exposure to the market for the poor, but instead with an IMF-mandated reduction of the

size of the state and the social budget. Therefore, neo-liberal policies led to an increased

vulnerability of the poorest sections of society to international markets and left the state

unable to take social measures to compensate for this. The consequences have been outlined

in the previous section; more poverty and increased inequality.

Popular frustration and discontent with the negative social and economic consequences of

neo-liberal reforms triggered the rise and mobilisation of existing and new social actors,

protesting against the deteriorating living conditions of the majority. Poor and even middle-

class people denounced neo-liberal policies and politicians that had implemented them, they

criticised the US for attempting to re-affirm its hegemony and increase its grip on Latin

America, and demanded a more active role of the state in the economy, with the aim of

buffering market forces and arriving at a more equal distribution of income (Vargas Llosa

2005; Boron 2008:236). In sum, neo-liberal policies as implemented during the 1980s and

1990s by several (mostly right-oriented) governments in Latin America, significantly

contributed to the increased appeal of leftist ideas about the role of the state in the economy.

More and more people became convinced that laissez-faire capitalism with its neo-liberal

‘night-watch state’, primarily concerned with maintaining public order and filling the pockets

72

of politicians but forgetting about the fate of the poor, was not the right model for their

countries and were successfully able to call for change.

Institutional factors: the return of democracy

In spite of the force and appeal of the argument that neo-liberal reforms are the principal

cause of the rise of the New Left in Latin America, one should take into account that a

worsening of conditions of living alone is probably not enough to produce an ideological shift

at the highest political level. It is the interplay with another crucial factor that accounts for

the current left turn in Latin America. The painful transition to free-market economies in

Latin America occurred roughly simultaneously with the transition, in many countries, from

authoritarian to democratic rule (Heath and Avellaneda 2007:13-14; Roberts 2007:3). From

the early 1980s, authoritarian governments lost their legitimacy due to their bad economic

performance and were held responsible for the crisis. Although authoritarian governments

are not formally accountable to the public, popular dissatisfaction and pressure from civil

society played an important role in the eventual demise of military regimes, for example in

Argentina and Chile. By 1990, the last dictatorship in the region had fallen and the whole of

Latin America was governed by democratically elected governments (Keen 1992:262-263).

The two parallel transitions outlined above, the beginning of the era of neo-liberalism and

the return to democracy, have both been instrumental, and indeed necessary conditions for,

the rise of Latin America’s New Left. According to Castañeda (2006), the shift to the left has

occurred regardless of the consequences of the economic reforms of the 1980s and 1990s,

because ‘[t]he combination of inequality and democracy tends to cause a movement to the

left everywhere’. Seen from this perspective, the crucial factor is the return of democratic rule

throughout Latin America; this, together with the inequality that has been characteristic for

Latin American society throughout history, would have triggered the popular and political

shift towards the left. It seems, however, that Castañeda exaggerates the contribution of

democracy and underestimates the magnitude of the decline in socio-economic

circumstances of Latin Americans since the debt crisis. Employing too strong a focus on

democracy, he omits the other crucial variable in his own equation, inequality. The

unprecedented inequality at the turn of the century was a consequence of neo-liberal reforms

in the region, and this should not be ignored. Probably the rise of Latin America’s New Left

would not have occurred if either one of the two factors would have been absent.

The return of democracy in Latin America logically compelled leaders to be more sensitive

to the feelings and desires of the population. Latin Americans had become hugely

disappointed by the neo-liberal reforms undertaken in their countries and their preferences

73

shifted from acquiescing to right-oriented positions about the virtues of the market to

submitting to more left-oriented ideas regarding the need for redistribution, state regulation,

and solidarity (Stolowicz 2004:6). According to Latinobarómetro (2007), a yearly survey of

public opinion in Latin American countries, Latin Americans have increasingly realised that

neo-liberalism is not going to solve their problems and that an alternative is needed (cited in

Arditi 2008:71-72). Legitimisation of politics is therefore increasingly coming to be defined in

terms of delivering on leftist ideas and ideologies, instead of in terms of acquiescing to neo-

liberal reforms, as the political right has disappointingly done in the 1980s and 1990s.

However, and contrary to Castañeda’s assertion, the return of formal democratic rule was

not enough to trigger an immediate shift to the left, although deep inequalities were already a

reality at the time. One of the reasons for this is that in spite of the return of democracy, the

armed forces retained considerable institutional autonomy in several countries, as well as the

potential to intervene in the civilian administration (Slater 1991:52). Keen (1992:262-263)

observes that immediately after the return of democratic rule, the left in several countries

was divided and wary of military repercussions, as a result of which no radical left positions

were developed and expressed at the national political level (see Stolowicz 2004:9). In the

next chapter, it will be argued that in Chile in the 1990s, for example, there was no real ‘left’

option for voters. Therefore, one should speak not of the formal return of democratic rule as

an explanatory factor for the current left turn in Latin America, but rather of the existence of

a fairly open and representative political system, which in most countries took some time to

develop.

Moreover, the shift to the left came only when it appeared that the first democratic regimes

were, just as their military predecessors, unable to provide better conditions of living to the

people, and continued to operate within the confines laid down by the IFI’s, to the detriment

of poverty and inequality figures (Karl 2002:21). Stolowicz (2004:9-10) argues that the

excesses of neo-liberalism seriously damaged the credibility of the system of representative

democracy, manifest in the high rates of electoral abstentionism during the 1990s. Because

the return of democracy in Latin America initially brought precarious labour conditions,

unemployment, an increase in poverty, inequality, external debt and foreign ownership of the

economy, Boron (2008:236) refers to this period as ‘the failure of democratic capitalism’ in

Latin America.

Changing geo-political circumstances

Although Latin America’s current left turn is first and foremost a consequence of the

interplay between the parallel transitions outlined above, especially in a Latin American

74

context one should never forget about the importance of external factors influencing events.

In chapter 2, I have argued that development in Latin America has historically been

dependent on actors and events external to the continent. In relation to this, in chapter 3 I

have suggested that there is an inverse relationship between the military power, ideological

unity and political determination of the Western core on the one hand, and the prospects for

the Latin American periphery to pursue autonomous policies and determine its own destiny,

on the other. It seems that this assertion is also applicable to the rise of the New Left in Latin

America. I want to argue here that the current left wave in Latin America is partly made

possible because the present power relations in the world-system allow it to develop, possibly

because the core is no longer strong or determined enough to dictate the course of Latin

American politics. A recent example of the shift in power relations between core and

periphery is the outcome of the Copenhagen climate summit of December 2009, when a

group of developing countries, among which Venezuela and Bolivia, openly objected to the

draft agreement, claiming it to be undemocratic, non-transparent and ‘imperial’ (Chávez

2009; Gupta 2009; Links 2009).

During the Cold War, countries that elected leftist governments would face external

boycotts and CIA-backed military coups, especially in Latin America which was considered

the US ‘backyard’ (Lomnitz 2006). Now that the Cold War is over, the Western fear for the

spread of socialism has disappeared, allowing left-oriented movements the space to

participate in politics under fairer circumstances, without being thwarted by external actors

and interests. This is reinforced by the fact that since the 1990s, the so-called ‘unipolar

moment’ is clearly over, and that a multipolar world has emerged in which the US, despite its

still overwhelming military power, is no longer in the position to dictate the course of

international events to serve its own interests. Consequently, the core of the capitalist world-

system is no longer determined in its opposition against the New Left in Latin America,

which constitutes one of the very reasons for the occurrence of this phenomenon. This

condition is further reinforced by the relative decline of the core’s political interest in the

state of Latin American democracies. Seen in the light of the inverse relationship between the

power and determination of the West and the prospects for autonomous development in

Latin America, this circumstance of relative international irrelevance may have contributed

to the rise of New Left politics in the region.

This is not to say that actors in the core of the world-system no longer take initiatives to

sabotage, frustrate and undermine some leftist governments in Latin America. Former US

President George W. Bush’s recurrent rhetoric against Venezuela is a good example of this.

However, the US no longer seems to consider itself in a position to intervene and forcefully

change the course of Venezuelan politics. The rhetoric remains, also against other countries,

but the changed geo-political environment means that Latin America and its New Left forces

75

are left relatively unhindered by external actors in the formulation and implementation of

their policies.

Hugo Chávez’s ‘contagion effect’

A last factor that can account for the rise of New Left politics is suggested by Heath and

Avellaneda (2007; see also Blanco 2009; Buxton 2009:57). They argue that the Venezuelan

president Hugo Chávez, the first exponent of Latin America’s New Left who made it to the

presidency, has a positive and significant effect on the leftist vote in the region. This

‘contagion effect’ plays out on two levels. First, Chávez’ radical rhetoric against neo-liberalism

appeals to poor people outside Venezuela and for some people symbolises the assertion of a

Latin American identity, an alternative way as opposed to the dominant discourse of free

market capitalism; and second, Chávez’ numerous visits to other Latin American countries

and his repeated overt interventions in election campaigns and rhetorical and financial

support for left candidates in other countries (Heath and Avellaneda 2007:6) further

influences their voting inclination. At both levels, the contagion is probably greatly facilitated

by the universality of the Spanish language in all Latin American countries, except Brazil.

With the notable exception of the election of the centrist Alán García to the presidency of

Peru at the expense of the radical left candidate Ollanta Humala, whose campaign was openly

supported by Chávez, this may have contributed to the election of a number of more radical

leftist presidents in the region, most notably Evo Morales in Bolivia (Kozloff 2006:165),

Rafael Correa in Ecuador, and Daniel Ortega in Nicaragua (Castañeda 2009).

Apart from Chávez’s personal influence on the leftist vote in the region, there seems to be a

more general leftist ‘contagion effect’ at work that influences voting inclinations of Latin

Americans. During the re-election campaign of the Brazilian president Lula in 2006, he

obtained the support of the landless farmers’ organisation (MST), in spite of the fact that he

had not yet fully delivered on his promise to initiate the so badly desired land reform. MST

argued that ‘…the continent is in a process of transition … from neo-liberalism and stand[s]

up to American policy … An Alckmin (Lula’s opponent) victory would tip the balance in

favour of the United States, with Brazil joining the group of servile allies’ (quoted in Sánchez,

Borges and Marques 2008:64). Thus, the widespread belief that the Latin American

continent is involved in a momentous shift away from the external dominance that has

historically determined their fate seems to play a role in the voting inclination of Latin

Americans, rendering them more favourable to leftist candidates.

76

4.6 Ideological basis of the New Left

In this section I try to give a general account for the ideological characteristics of the New

Left movement in Latin America. This is no easy exercise, as differences between various left-

oriented governments are significant, and some analysts contend that Latin America’s New

Left knows far better what it opposes than what it favours (Lomnitz 2006). The government

of Michelle Bachelet in Chile is here considered in the same category as that of Hugo Chávez

in Venezuela, while it could be argued that Venezuela and Chile have very different ideas

concerning, for example, the acceptability of the neo-liberal international macro-economic

framework. However, a comprehensive overview of the ideological basis and similarities

between the various left-oriented governments in contemporary Latin America can provide a

basis and a further justification for treating all these governments as belonging to one, ‘New

Left’, category.

Latin American identity and dignity, the re-establishment of the nation

Many New Left governments in Latin America propose, at least in their rhetoric, a new phase

in their countries’ history, or the continuation of a just and right ideological project of

domestic origin that has historically been frustrated by external forces and events, occurring

from colonial times until the neo-liberal era. In rhetoric and policies, the New Left manifests

itself as the ‘torchbearer of equality and solidarity’, as explicitly opposed to the legacy of

political (neo-)liberalism, which has remained historically indifferent to the systemic

inequalities of capitalist accumulation (Arditi 2008:62). In Bolivia, the presidency of Morales

is seen as a return to the indigenous values of the pre-colonial society; in Venezuela,

president Chávez appeals to the ideals of one of the founding fathers of Latin American

independence, Simón Bolívar; in Uruguay, the Vásquez government is seen as the

continuation of the country’s social-democratic welfare state of the 1920s, and in Chile, the

Bachelet government posits itself as representing a continuation of the Chilean road towards

socialism, initiated with the election of Salvador Allende in 1970 (Lomnitz 2006; see also

Dominguez 2009:37-38). The notion of a ‘re-founding of the country’ by the New Left is

further manifested by the fact that two countries recently even changed their names;

Venezuela became the ‘Bolivarian Republic of Venezuela’ stressing Bolívar’s legacy, and

Bolivia re-founded itself as the ‘Plurinational State of Bolivia’, emphasising the co-existence

of indigenous and criollo peoples.

A manifestation of this new attention for the establishment of a new and just society, and

the promotion of values such as national identity and Latin American dignity, is the political,

77

economic and social empowerment of historically marginalised ethnic minorities in several

left-oriented countries. It seems that the left turn in Latin America is characterised by a

tendency to put an end to the sentiment of inferiority to the West, which has developed

historically as a result of the economic gap between Latin America and the core of the world-

system together with notions of racial inferiority on the part of Latin Americans (see sections

2.3 and 3.5). The New Left claims to represent the interests of the Latin American nation, as

opposed to the external or elitist interests that have historically determined the development

of the region, to the detriment of the living conditions of the local population. Part of the New

Left project is to bring the marginalised Latin American nation to the centre-stage of politics

(Lomnitz 2006; see also Buxton 2009:57).

Several New Left governments have implemented measures directed at improving human

rights in general, and the rights of ethnic minorities in particular. The new Venezuelan

constitution recognises collective land rights and official languages for indigenous peoples,

and pledges to consult indigenous leaders prior to the extraction of natural resources in their

territories (Asamblea Nacional Constituyente 2000: section 4.8; Kozloff 2006:136). In

Ecuador, the new constitution officially recognises indigenous languages and also their

customs, such as the practice of certain communities within the national boundaries to live in

voluntary isolation, without interference from the state (Primera 2008). The most far-

reaching example, however, is Bolivia, which in its 2009 constitution established the primacy

of collective over individual interests (Calzadilla 2009), recognised the right to drinking

water and sewerage as human rights (Asamblea Constituyente 2008: art. 20-III); as well as

the recognition of the autonomy and the rights of indigenous groups, the protection of

indigenous languages and provisions regarding a quota for indigenous parliamentarians

(Asamblea Constituyente 2008: art. 147-II/III).

Challenging the status quo: increasing the influence of the state

Arditi defines ‘left politics’ as applying to ‘collective actions that aim to change the status quo

because another, less oppressive and more just and egalitarian, world is deemed possible and

necessary’ (2008:67). Left politics is therefore associated with a focus on alternative rather

than mainstream politics (Arditi 2008:72). Rodríguez-Garavito et al. (2008:5) distinguish

between right and left with the notion that the first supports existing social hierarchies in

order to defend the virtues of inequality, while the latter is concerned with promoting

equality between individuals and groups. Castañeda (2006), arguing from a right-wing

perspective, contends that the left ‘stresses social improvements over macro-economic

orthodoxy, egalitarian distribution of wealth over its creation, sovereignty over international

78

cooperation, [and] democracy … over governmental effectiveness’ (Castañeda 2006).

Lomnitz (2006) argues that Latin America’s New Left appeals to a collective popular

sentiment, which has emerged as a result of neo-liberal measures, that the state should

intervene to stop deregulation and the pauperisation of the working classes.

All these authors agree that the political left is concerned with issues of inequality and

discrimination, is critical and suspicious towards the free market and believes that only the

state, and not the market, can provide lasting solutions to the problems of society (Arditi

2008:71). All left-oriented governments in Latin America can to a certain extent be

characterised in terms like these. They can be distinguished by their policies aimed at

strengthening the position of the state vis-à-vis the market, increasing social expenditure and

reducing income inequality.

On the international scene, some left governments, most notably Brazil and Venezuela,

have an activist foreign policy aimed at altering the historic status quo in which Latin

America finds itself vis-à-vis the core of the world-system. Lula’s Brazil is making attempts to

achieve regional leadership and establish itself as a Latin American hegemon, and also

positions itself as a defender of the interests of the global South, in economic negotiations

with the North (Lomnitz 2006). Although it is too early to evaluate this tendency, this new

international assertiveness of left governments may be conceived as an attempt at

constructing a new Latin American ‘regional power bloc’ (Dieterich 2006).

Nationalism, critique of neo-liberalism, struggle against exploitation

An important factor that provides a strong identity-marker for New Left governments of

different orientations throughout the region is a critique of the negative consequences of the

dominant neo-liberal model, or market fundamentalism, which has been imposed upon Latin

America and which has not brought the benefits its proponents had promised. With the

exception of Chile, New Left governments throughout Latin America are characterised by a

critical stance, at least rhetorically, towards neo-liberalism and consequently also towards the

US, the country that is perceived as the cradle of the neo-liberal model. Several Latin

American countries are explicit in asserting their macro-economic autonomy vis-à-vis the

core of the world-system, especially the IMF.

A corollary of this is economic nationalism, aimed at reducing the influence of foreign

companies in the economy. Economic nationalism manifests itself in the policies of

nationalisation of natural resources and strategic economic sectors by leftist governments in

Latin America, or in the refusal to further liberalise the economy in order to allow more

foreign takeovers. The most well-known examples are the nationalisation of oil exploitation

79

in Venezuela and that of natural gas in Bolivia, but other examples abound. The fact that

Chile has until now declined to privatise the exploitation of copper (initially nationalised by

the Allende government in 1970), and the intention of the Lula administration to retain a

strong influence in the exploitation of the recently discovered oil fields off the coast through

majority participation of the state oil company Petrobras (Duffy 2007), can be seen in the

same regard. Economic nationalism is the answer of leftist governments to the historical

experience of structural subordination of the Latin American periphery by the wealthy core of

the capitalist world-system, the marginalisation of Latin American peoples and the plunder

of the continent’s natural wealth, first by colonial and imperial powers, and more recently by

multinational companies.

Playing by the rules of democracy and the market environment

A last element worth noting is that in contrast to some revolutionary left-oriented

movements witnessed before in Latin America and still being practiced in Cuba, the current

Latin American New Left is characterised by its principal adherence to the rules and

institutions of democracy (Vargas Llosa 2005). Leftist presidents in Latin America are not the

leaders of armed revolutionary movements but have all come to power in relatively clean

elections (see Buxton 2009:67). Indeed, the broadening and deepening of democracy by

including people from all social strata and stimulating their participation in decision-making

is one of the core objectives of New Left governments throughout the continent (Arditi

2008:67). According to Dieterich (2006), an important part of the New Left’s ideology is the

desire to provide the majorities (the poor) with ‘historically unprecedented decision-making

power in economic, political, cultural and military affairs of the country’. This is especially

true in the more radical leftist countries, some of which have organised constituent

assemblies to draft a new constitution. These constitutions (Venezuela 1999, Bolivia and

Ecuador 2007), in line with the aspiration of re-asserting Latin American identity and dignity

and re-establishing the nation, feature provisions aimed at the political emancipation of the

poor and marginalised minorities. Also, they stipulate enhanced powers, and the possibility

for re-election, for the president.

One event that recently attracted much attention in the West was the referendum held in

Venezuela in February 2009 on a revision of the constitution, which would enable the

incumbent president to stand for re-election for more than two terms. The approval of this

revision by the Venezuelans (with 55 per cent of the vote; see Consejo Nacional Electoral de

Venezuela N.d.) was met with general criticism in the Western press and led to accusations of

Chávez trying to transform Venezuela into a personalistic populist dictatorship. These

80

accusations, however, seem premature and tendentious, and should be put into a broader

perspective. First of all, the constitutional revision does not mean that Chávez will be

president for life; it merely stipulates that he will be allowed to participate in the next

presidential election, along with other parties and candidates. The principle of democratic

election of executive power is not compromised by this measure. Second, it should be noted

that even in many Western countries, which are routinely considered by many as the highest

possible form of representative democracy, there is no limit to the number of times a person

can stand for election. And third, a constitutional provision to allow the incumbent president

to stand for re-election is not something typical for radically leftist countries, given the fact

that this measure has recently also been implemented in Brazil under the centre-right

president Cardoso (Sader 2005:67), and in Colombia under the right-wing president Uribe

(Lievesley 2009:23).

With regard to the economic realm, in contrast to radical Marxism, Latin America’s New

Left cannot be considered hostile towards private property and the market. The New Left no

longer advocates class warfare, internationalism or state ownership of all means of

production, but in general has a relatively market-friendly outlook (Arditi 2008:59). Even the

most radical leftist leaders of the moment, president Chávez of Venezuela and Morales of

Bolivia, have not sought to abolish principal elements of capitalist production, such as private

profits, foreign ownership and profit repatriation (Lievesley 2009:24). Economic freedom

and private property are explicitly recognised in the new constitutions of both countries

(Asamblea Nacional Constituyente 2000; Asamblea Constituyente 2008; Lander 2008:84).

Instead, with the possible partial exception of Hugo Chávez’s Venezuela, the New Left accepts

the reality of a market environment and aims at regulating and optimising market processes

rather than abolishing them altogether (Arditi 2008:67). Most of the left-oriented

governments in Latin America, while rejecting the neo-liberal orthodoxy embedded in the

Washington Consensus, do not categorically reject capitalism or market economics (Lomnitz

2006; Phillips 2006:333). Rather, they aim to compensate for the increased exposure of their

economies to the world market by increasing social spending, such as spending on health and

education (Stokes 2009). Since the New Left aims to address social deficits within the

constraints of the globally integrated market economy, it could be regarded as being not anti-

liberal, but ‘post-liberal’ (Arditi 2008:73).

4.7 Different strands of New Left politics

Analysts of the current left turn in Latin American politics have suggested various ways of

categorising different types of left governments (Castañeda 2006; Schamis 2006; Blanco

81

2009; Motta 2009). A consensus about the criteria against which leftist governments can be

put into a number of different categories, has not yet emerged. This is understandable, given

the fact that this phenomenon is currently unfolding and occurs simultaneously in many

countries, with their own histories, social problems and policy issues. Also, there is no central

supra-national coordination of policies in the movement that we like to refer to as ‘the’ New

Left in Latin America. In this section, I present some models that have been proposed to

classify different strands of New Left politics, and I present my own categorisation, upon

which the analysis in the next chapter will be based.

Schamis (2006) distinguishes two types of left-oriented governments in Latin America,

based on the criterion of the maturity of the system of party politics. According to his

classification, a first category of New Left politics exists in countries that have stable

democratic systems and effective and institutionalised political parties, such as Brazil, Chile

and Uruguay. A second category occurs in countries with disjointed, or immature, party

politics such as Argentina and Peru (which according to my definition of ‘left government’,

outlined in section 1.2, does not qualify as such). In these countries, party politics is poorly

institutionalised, giving the executive branch more room for manoeuvre, and implying the

possibility of a ‘super-presidency’ (Schamis 2006:26-29). And just as one is tempted to think

of Chávez and Morales as the current embodiments of this concept, Schamis introduces a

third category, that of the so-called ‘Petro-left’, which exists in countries that have petrol (or

natural gas) as their main source of revenue. Venezuela and Bolivia, both of which,

interestingly, are regarded among the most radical left-oriented countries in the hemisphere,

fall into this category of ‘Petro-left’ (Schamis 2006:29-32).

However convincing this classification may be, it seems to be too much focused on the style

of governance and leadership, rather than on the content of it. In a research into the degree

to which leftist governments in Latin America are able to address social issues such as

poverty and inequality, as well as the policy initiatives that are taken to correct structural

constraints to development on the international scene, a more ideologically and content-

motivated classification is required.

Using such a content-based criterion, Castañeda (2006; see also Blanco 2009)

distinguishes two strands of New Left governments in Latin America. The distinction is being

made between the ‘modern, open-minded, reformist, and internationalist’ left of Chile,

Uruguay and (to a lesser extent) Brazil, and a residual, called ‘populist, nationalist, strident,

and closed-minded’ left, occurring in, for example, Bolivia, Nicaragua, and Venezuela.

However, Castañeda’s classification is in fact merely based on the external behaviour of a

government, or in other words the extent to which a government adheres to and operates

within the confines of the international neo-liberal paradigm. Domestic policy initiatives

taken to tackle social problems are left out of consideration. In addition, the adjectives used

82

to define both categories seem too normative and too Eurocentric to constitute a workable

classification. The left in Brazil, Chile and Uruguay is termed ‘modern’ because it does not

seriously challenge the existing paradigm, while the more radical left in Bolivia and

Venezuela, and to a lesser extent Ecuador and Nicaragua, is implicitly called ‘backward’, since

it challenges the existing framework and aims at replacing it by something else which is not

necessarily in the interest of the core of the world-system. Conceptualisations on bases like

these ‘help to construct an academic and political discourse that de-legitimises any political

experiment that presents a … challenge to the primacy of liberal democracy and the market

economy’ (Motta 2009:76; see also section 2.2). Categorising the Latin American left merely

on the basis of compliance with an externally imposed system does not do justice to the

essential characteristics of the New Left movement and to its ideological positions and policy

objectives.

Type of New Left Radical Pragmatic Cooperative

Prime example Venezuela Brazil Chile

Other countries Bolivia, Ecuador,

Nicaragua Argentina, Paraguay Uruguay

Domestic

focus

Radical

Radical social

policies,

collectivisation of

economy,

dramatically

reducing social and

economic inequality,

constituent

assemblies

Progressive

Social policies aimed

at the poorest

segments of the

population

Progressive

Social policies within

existing international

framework, focus on

equal opportunities

and fighting extreme

poverty

International

focus

Radical

Radical positioning,

aiming at the

abolishment of neo-

liberalism and its

replacement by an

alternative model for

a more just

international

economy

Moderate

Accepting existing

liberal framework,

aiming to correct

structural constraints

of international

economy, asserting

Third World as a

power bloc

Conservative

Promoting

international free

trade, adhering to

neo-liberal

framework

Table 2. Proposed model for categorisation of New Left governments in Latin America, on

the basis of domestic and international behaviour. Different shades of red indicate different

degrees of ‘left-ness’.

83

Taking into consideration not only the external behaviour of a government, but also the

degree to which it develops policy initiatives aimed at restructuring the domestic scene, I

propose a model to categorise New Left governments on the basis of the extent to which they

are challenging the status quo, domestically and internationally, or in other words, their

degree of ‘left-ness’. The proposed model is outlined in table 2 above.

The challenge to the status quo is not only measured against the question whether a

government does or does not work within the exogenously given framework of neo-

liberalism, but also against the extent to which it offers viable alternatives to this framework,

on the national and international level. Based on these two criteria, I distinguish three

different strands of New Left governments, all extending over a specific part of the left half of

the left-right continuum: the ‘radical’ left, which develops far-reaching leftist policies on the

domestic as well as the international scene; the ‘cooperative’ left, which internationally

cooperates with and promotes the neo-liberal framework but at home pursues progressive

and left-inspired social policies; and between these two the ‘pragmatic’ left, which has

ambitious social policies at home but also an activist, although moderate, foreign policy (see

table 2).

The Radical Left

The first category is the most obvious embodiment and the first association of most people

with ‘the’ Latin American New Left. This type could be called ‘radical’ left, and it has

Venezuela of president Hugo Chávez as its principal example. This type of New Left does not

stop at denouncing the negative consequences of the retreat of the state from the economy,

but to a certain extent, at least rhetorically, aims to alter the market system altogether. Not

only the neo-liberal model is targeted, but more generally the structure of systematic

exploitation to which Latin America has been subjected since the colonial encounter. The

radical left pursues a dramatic re-constitution of society and the replacement of existing

political and economic inequalities by a more just and equitable model. The drive for

fundamental and far-reaching change manifests itself in the drafting and implementation of

new political constitutions.

This is the category that Castañeda (2006) defines as the ‘populist’ left, and which

according to him has an ‘approach to power that depends on giving away money, a deep

attachment to the nationalist fervour of another era, and no real domestic agenda’. As we

have seen, however, Castañeda’s characterisation rests primarily on exogenous criteria; the

bigger a challenge to the status quo a government poses, the more negative his judgement.

Conversely, it could quite as well be argued (see Dieterich 2006) that these ‘radical’ left

84

governments aim to decouple their countries from an international system of exploitation

and try to improve the lives of their people by increased social spending (‘giving away

money’), claiming the benefits of their natural resources for their own people instead of

practically giving them away to foreign companies (‘deep attachment to nationalist fervour’)

and searching for alternative ways to organise politics, economy and society (‘no real

domestic agenda’). Again, Castañeda’s characterisation, based on politically charged

judgments, seems to obstruct an objective review and judgement of this type of left

governments.

Apart from Venezuela, the presidents of Bolivia (Evo Morales), Ecuador (Rafael Correa) and

Nicaragua (Daniel Ortega) fit into this ‘radical’ group. They maintain close contact with each

other and also with the Cuban leader Fidel Castro, who is seen as an example of successful

resistance to external oppression.

The Pragmatic Left

The second category of New Left politics finds itself to the right of the radical left of Chávez

and Morales, but could still be regarded as distinctively leftist. This is a category of left

politics that could be termed ‘pragmatic’ and is led by the Brazil of Luiz Inácio ‘Lula’ da Silva.

Apart from Brazil, the pragmatic left label could be assigned to Argentina (Néstor Kirchner

and Cristina Fernández de Kirchner) and Paraguay (Fernando Lugo).

The pragmatic left does not denounce neo-liberalism and the market model, but tries to

regulate the negative consequences of the neo-liberal model by taking direct measures aimed

at the poorest people. Leaders of the radical as well as the pragmatic left express their

ideological differences with the United States, but at the same time have a strong desire for a

good working relationship with Washington (Castañeda 2009). By increasing the regulatory

role of the state and by expanding social policies, it is hoped that the benefits of the market

model can be retained, whilst the downsides for the poorest groups are mitigated. The

pragmatic left aims to improve conditions of living without decoupling from the market-

based world economy. In Brazil, Lula has continued the macro-economic policies of his right-

of-centre predecessor Cardoso, but he has also implemented innovative social policies and

initiated a land reform (Castañeda 2006, Sánchez et al. 2008:53-54).

At the same time, the pragmatic left characterises itself by a foreign policy that is relatively

active and assertive. While accepting the reality of the neo-liberal international framework,

the pragmatic left affirms itself internationally and aims to correct the structural constraints

of the world-system, in an attempt to improve the conditions under which it participates in

the world economy. In the WTO, Brazil has attempted to position itself as the leader of a

85

power bloc of developing countries, challenging the advanced economies’ protectionist

agricultural policies. Although Brazil has not yet achieved palpable successes as the leader of

the global South (Brigagão 2009), this is indeed an interesting development, given the fact

that Latin American countries have historically been disciplined pupils of externally imposed

ideals and prescriptions. Internationally, the objectives of the pragmatic left are more in

agreement with those of the radical left, although its positioning is more moderate and more

constructive.

The Cooperative Left

The last category of left occupies a position further to the right, near the centre of the left-

right continuum. I refer to it as ‘cooperative’ left, as this category of left politics is least

challenging the status quo and is more cooperative with the existing international model of

laissez-faire capitalism. This is the category that Castañeda refers to as the ‘modern, open-

minded, reformist, and internationalist’ left. The government of Michelle Bachelet (and her

predecessor Ricardo Lagos) in Chile is the best example of this strand of New Left politics,

but Uruguay under Tabaré Vásquez also fits into this category. Although these presidents call

themselves left, in comparison to the radical left described above they could also be

characterised as being centre or even somewhat right-of-centre, and economically orthodox,

at least in their international behaviour. They accept neo-liberalism as a given and aim to

maximise their benefits within the existing framework.

This is especially true for Chile (Silva 2009:189), which is the Latin American country that

has the most bilateral free trade agreements with other countries; it now trades freely with 57

economies including the US, the European Union, China, Latin American and Pacific

countries, covering 90 per cent of its foreign trade (Croucher 2009). The acceptance of the

international neo-liberal framework is also visible in Uruguay, which under President Tabaré

Vásquez was one of the first countries in the region to take the initiative to conduct trade

negotiations with the US, in spite of the fact that as a member of MERCOSUR, Uruguay is not

allowed to conclude bilateral trade agreements (Bilaterals.org 2009). It could be argued,

therefore, that the cooperative left does not challenge but accepts, and to a certain extent

even defends and promotes, the international neo-liberal order. The fact that Vásquez

refused to attend the inauguration of his Bolivian colleague Evo Morales, whom he

considered too radical (Castañeda 2006), leads to the impression that he represents a

significantly different and more moderate type of New Left politics.

At the same time, while adhering to and even promoting the existing international neo-

liberal framework, in their domestic policies these ‘cooperative’ governments do address

86

issues that are associated with a leftist political orientation. In Uruguay, Vásquez’s

administration has implemented the ambitious Plan of National Emergency and the

subsequent Plan of Equity to alleviate poverty, reduce social and economic inequality and to

promote social justice and equal opportunities (Presidencia de la República Oriental del

Uruguay 2009). In Chile, the Bachelet government has taken measures to promote gender

equality, extend free health care and social housing, promote democratic participation of

poor Chileans, and more generally has made social protection and equal opportunities its

main priority (Economist 2009a, 2009b). In sum, although these ‘cooperative’ left

governments do not challenge the structure of the world-system that is exogenously imposed

upon them, they can be considered left because of their ambitious domestic policies that

revolve around typical leftist political and social issues.

4.8 Conclusion

In this chapter, I have described and analysed the rise of the New Left in contemporary Latin

America. First, I have noted that Latin America’s left turn came as a surprise to many

scholars, who assumed that the end of the Cold War and the ‘unipolar moment’ would ensure

that the Latin American ‘backyard’ would become ever more loyal to the US hegemon in the

world-system. Nevertheless, following spontaneous and organised popular uprisings such as

the Caracazo in 1989 and the Zapatista rebellion in 1994, from the end of the 1990s the

popular shift towards the left gained momentum and started to manifest itself in the election

of left-oriented presidents throughout the region. Beginning with the election of Hugo Chávez

in 1998, by the end of the first decade of the twenty-first century thirteen out of seventeen

Latin American countries were governed by left-of-centre presidents. Two-thirds of these ‘left

turns’ occurred in a time span of only five years, between 2003 and 2008.

Second, I have suggested some factors that may have contributed to the occurrence of the

left turn in Latin America. The most important factor seems to have been the historical legacy

of structural subordination and exploitation that has characterised Latin American relations

with the core of the world-system since the colonial encounter, and which became all the

more evident with the implementation of neo-liberal structural adjustment policies following

the Latin American debt crisis of the 1980s. Nevertheless, the shift towards the political left

has been significantly facilitated by the return, more or less simultaneously with the

beginning of structural adjustment policies, of civilian and democratic rule throughout the

continent. Democracy compelled leaders to be more sensitive to the demands of the people

and enabled popular leftist sentiments to be translated into political programmes by leftist

parties and leaders, claiming national government. It seems that the return of democracy and

87

its development to maturity, in combination with the deterioration of conditions of living as a

result of neo-liberal restructuring in the 1980s and 1990s, were the crucial factors that

explain the current shift to the left in Latin American politics (Arditi 2008:65). This process

has been facilitated by the changing geo-political environment, in which the core of the

world-system is less determined and attaches relatively little importance to the state of Latin

American democracies, and possibly also by the foreign diffusion and ‘contagion effect’ of the

election of the first New Left president in the region, Hugo Chávez.

Third, I have outlined the ideological basis of New Left politics by suggesting a number of

characteristics that left governments in Latin America seem to share to a certain degree. The

New Left is the expression of a historical project aimed at establishing a just and equitable

society and re-asserting the identity and dignity of the nation; it is characterised by its

progressive policies and its challenge to the status quo; it is economically nationalist and

critical towards neo-liberalism, and aims to struggle against the structural exploitation to

which Latin America has historically been subjected. Lastly, it differs from the ‘old’ left in

that it adheres to the rules and regulations of democracy and is generally not opposed to the

principle of the market.

And finally, I have elaborated a model that can be used to distinguish different strands of

New Left politics in Latin America, taking into account the degree of progressiveness of

domestic and international behaviour. Using this model, I have suggested three different

types of left governments: the radical left, the pragmatic left, and the cooperative left. These

categories are exemplified by Venezuela, Brazil, and Chile, respectively.

This chapter has attempted to provide an insight into two questions that are part of the

central question of this research. It has suggested some of the principal factors that have

contributed to the emergence and rise of New Left politics in Latin America, and has outlined

some central characteristics of this New Left movement. In the next chapter, I analyse the

policies and achievements of New Left governments in Venezuela, Brazil, and Chile, in terms

of reducing poverty and inequality. This analysis will contribute to answering the last part of

the research question, the evaluative question into the potential of Latin America’s New Left

movement in terms of structurally improving standards of living for Latin Americans.

88

5. Socio-economic achievements of the New Left: the cases of

Venezuela, Brazil, and Chile

5.1 Introduction

In the previous chapter, I have sketched the contours of the New Left movement in

contemporary Latin America. The perspective used to describe and analyse this phenomenon

has been continental, treating ‘the’ New Left in Latin America as one single unit of analysis.

The advantage of this approach is that it helps to determine the historical background,

motives and central characteristics of this development currently taking place in a majority of

Latin American countries. A continental perspective is useful for observing the general

appearance of this phenomenon, which could be called truly continental. In order to analyse

the specific policy outcomes and achievements of left-of-centre governments in Latin

America, however, it is necessary to move to a lower level of analysis and examine the actual

performance of national governments. After all, national states are the principal and highest

sovereign entities in the political reality of Latin America.

In this chapter, therefore, I engage in an analysis of the socio-economic achievements of

left-of-centre governments in three countries that, according to my proposed classification

outlined in the previous chapter, represent the three different types of New Left politics

currently observable in Latin America. I consider the radical left of Venezuela, the pragmatic

left of Brazil and the cooperative left of Chile, in order to provide an answer to the question

which type of New Left politics appears to have the greatest potential in terms of achieving an

improvement in two indicators that are crucial for the socio-economic well-being of Latin

Americans: poverty and inequality.

First, I present a brief overview of the arguments presented by different scholars on the

theoretical potential and successes of New Left politics in Latin America. Then, I propose an

outline of political developments and domestic social policies in the three countries under

consideration: Venezuela, Brazil, and Chile. Finally, based on statistical data from ECLAC, I

quantitatively assess the achievements of these countries with regard to the typically leftist

topics of poverty and inequality, in an attempt to determine which of the three strands of

New Left politics in Latin America can be considered the most successful in achieving the

political objective of providing for a fair and equitable income distribution.

89

5.2 The potential of the New Left

To what extent can we expect direct accomplishments and successes upon the accession of a

New Left president in a certain country? Several authors have made observations about the

potential of different degrees of leftist governments in Latin America for reducing poverty

and improving the income distribution. In this context it should first be remarked that the

ability of a state to immediately achieve structural societal changes is limited, especially for

peripheral states in Latin America, the size of which has been significantly reduced during the

neo-liberal reforms of the last two decades of the twentieth century (see chapter 3).

According to Skocpol (1985:16-17), the capacity of a state to implement policies and achieve

its formulated goals depends on (i) sovereign integrity and the stable administrative-military

control of the national territory, (ii) loyal and skilled officials and (iii) plentiful financial

resources. As has been argued in chapters 2 and 3, in Latin America there appears to be a

structural problem with the first condition, because the history of the region has since the

colonial encounter to an important extent been determined and influenced by external

factors and actors, undermining sovereign state control over its territory. The third condition

has recently been increasingly compromised as a result of the neo-liberal restructuring of the

state. Latin American governments have been forced to cut their budgets, and had to submit

to the demands of IFI’s, favouring private investments and restricting domestic policy

options (see Abu-El-Haj 2007:109), resulting in reduced financial resources to pursue

autonomous (social) policies. Historically, the autonomy of Latin American states to develop

and implement their own autonomous policies has been limited, a tendency that was

reinforced to unprecedented levels during the last two decades of the twentieth century (see

chapter 3). According to Stolowicz (2004:5), the possible impact of left-oriented governments

in Latin America on reducing ‘internal and external pillage’ is therefore limited, as national

governments (especially peripheral ones) are now ‘at the mercy of the vagaries of local and

international capital’. In the circumstances in which Latin American governments have

historically found themselves and continue to find themselves, it should be emphasised that

progressive governments cannot magically solve structural problems such as poverty and

inequality overnight (Stolowicz 2004:16).

Thus, the historical and institutional background against which the rise of Latin America’s

New Left is taking place, presents a serious challenge in terms of delivering on formulated

leftist policy goals. It also means that any New Left government will be under high pressure,

from its constituents and from the electorate, to fulfil its redistributive objectives, but at the

same time limited in its autonomy and ability to do so. This has led to a situation in which the

New Left is criticised, also from within the left itself, for not achieving palpable results in

terms of poverty and inequality reduction. According to Arditi, for example, the results of the

90

New Left are ‘fuzzy’ everywhere, except in Venezuela and Bolivia. He attributes this to the

fact that these countries have huge oil and gas reserves, by which Skocpol’s third condition

for a state to be able to achieve its formulated policy goals, the availability of plentiful

financial resources, is fulfilled. The current high prices of these resources on the world

market generate an additional income for the Venezuelan and Bolivian governments,

enabling them to achieve successes in their social policies (Arditi 2008:67).

This reasoning, however, appears to be too much driven by Eurocentric views on the

capabilities of the state. What Arditi seems to forget, is that the extraction of natural

resources in Latin America has historically been the domain of foreign states or companies

and that the state, let alone the people, have hardly benefited from its own material riches.

The Bolivian state hardly generated any substantial income from natural gas extraction, until

president Morales decided, in May 2006, to raise tax for foreign oil companies from 18 to 82

per cent, reversing the distribution of benefits for the state vis-à-vis the MNC’s and

amounting to a de facto nationalisation of the country’s natural gas reserves (Tapia

2008:225). It seems, therefore, that Bolivia’s success is not just a consequence of the high

price of natural gas, but principally a result of a genuinely ‘left’ government intervention in

the economy. The same argument could be made about Venezuela, where the exploitation of

the oil reserves was, until the arrival of Chávez, firmly in the hands of ConocoPhillips,

Chevron, ExxonMobil (all US), BP (United Kingdom), Statoil (Norway) and Total (France)

(Elliott 2007), and has recently been progressively put under the majority control of the state

oil company PdVSA, providing the government with new resources for implementing its

social and redistributive policies.

Stolowicz (2004:14-15) argues that the autonomy, and therewith the potential of any

progressive government, depends on the commitments made to non-progressive forces

during elections. The fact that in countries such as Brazil and Chile, the presidential

candidates representing the left had to rely on a coalition with centre and even centre-right

parties in order to attain victory, implied conditions on the freedom of their government to

pursue truly leftist policies. On the other hand, the Venezuelan president Chávez was elected

with the support of a purely leftist coalition of Chávez’s socialist Movimiento Quinta

República (Fifth Republic Movement, MVR), together with the socialist PPT and the

communist PCV, providing him with more freedom to pursue a leftist political course and

explaining to an important extent the radical nature of his government vis-à-vis the coalition

governments in Brazil and Chile. This suggests that the prospects for a truly autonomous

leftist government policy are greatest if the left candidate succeeds in winning presidential

elections without having to make concessions to parties to his right. This hypothesis will be

addressed in the following sections.

91

Countering the legitimate doubts that may be raised on the potential of the New Left to

actually deliver on its redistributive promises, Arditi makes a very appropriate point. He

remarks that although the New Left may fail to achieve structural improvements in the socio-

economic well-being of the poor and excluded, it will at least have re-introduced issues of

equality, income distribution, and political inclusion into the political agenda (Arditi

2008:72). This is an important observation, by which the specific performance and

achievements of the current New Left governments in Latin America are put in a broader

perspective. After two decades of dominance of neo-liberalism in Latin American politics,

New Left leaders have drawn popular attention back to issues such as exploitation, poverty,

distribution and representation, causing a shift of political preferences towards the left. The

attention and electoral achievements of the New Left have changed the broad political

landscape in Latin America, and even right-of-centre parties can no longer ignore the issues

of poverty and income distribution, which continue to affect hundreds of millions of Latin

Americans and which are topical and ever urgent as Latin America moves into the twenty-

first century.

5.3 Venezuela: towards ‘Socialism of the Twenty-first Century’

President Chávez of Venezuela is not only the first exponent of Latin America’s New Left and

the president with the longest term of office, he can also be considered by far the most radical

New Left president in the region. As noted in chapter 4, Heath and Avellaneda (2007)

suggest that Chávez has had a significant influence in the election of other left-oriented

presidents in the region. Chávez himself likes to be seen throughout the region as the

ideological leader of Latin American ‘Twenty-first Century Socialism’ (Dieterich 2006;

Buxton 2009; Dominguez 2009:37), and the project on which he has embarked involves a

historic reclaiming of society, implying a transfer of power from the traditional elite to the

traditionally excluded, a reorganisation of the state, a fiercely anti-imperialist positioning and

rhetoric, and a programme of state-led development.

The election of Hugo Chávez Frías to the presidency in November 1998 brought an end to

thirty years of power sharing between only two parties, the Acción Democrática (Democratic

Action, AD) and the Partido Social Cristiano de Venezuela (Social Christian Party, COPEI),

in accordance with the Punto Fijo (Fixed Point) pact of 1958. The system of puntofijismo had

facilitated a prolonged period of civil democratic rule in Venezuela, as opposed to several

other countries in the region, but had been unable to prevent the country from entering into a

serious economic crisis, roughly simultaneously with the debt crisis that swept the continent

in the 1980s. In February 1989, matters had come to a head with the eruption of popular

92

discontent of the Caracazo (see section 4.3), and throughout the 1990s the loss of legitimacy

of puntofijismo had only accelerated, as a result of the implementation by consecutive

governments of neo-liberal structural adjustment packages (SAPs), to the detriment of the

socio-economic situation of a majority of Venezuelans (Lander 2008:71-74). The deep-rooted

popular hostility to AD and COPEI provided the political climate in which an ‘anti-party’

outsider without a clear programme and supported by a leftist coalition, could be elected to

the presidency. Chávez won in the first round, with 56,20 per cent of the votes cast.

The first priority of the new Chávez government, which took office in February 1999, was

constitutional reform (Dominguez 2009:52). This was important for two reasons. First, all

parties in the coalition had an interest in ending the institutional dominance of AD and

COPEI, and second, the aim was to create a form of ‘protagonistic democracy’ in order to

improve the quality of democracy and to bring political power to the people instead of

sharing it between traditional elites (Buxton 2009:59-61). In the April 1999 referendum on

constitutional reform, an overwhelming majority of almost 90 per cent of Venezuelans

endorsed Chávez’s intention to convene a constituent assembly, and when the new

constitution was drafted, almost three-quarters of the people approved it in another

referendum in December, creating legitimacy and momentum for Chávez’s Bolivarian reform

project (Consejo Nacional Electoral de Venezuela N.d.).

Buxton (2009:57-58) contends that, paradoxically, the radical socialist identity of the

Bolivarian project in Venezuela has not been manifest from the moment Chávez came to

power but has evolved and became more radical over time, partly due to external factors such

as the continental popular leftward shift and opposition and characterisation from the US.

This process resembles the first years of the revolutionary government in Cuba, where Fidel

Castro only came to define himself as a socialist after US sanctions against his government

and an attempted US invasion compelled him to turn to the Soviet Union (see Gott 2005:12;

Van Engelen 2005:8-11). Similarly, Chávez’s internationally renowned anti-American and

anti-neo-liberal rhetoric only developed from 2000 onwards, when he was re-elected under

the new constitution; ironically, back in January 1999, Chávez had made the US one of his

first foreign destinations and had privately met with president Clinton (Buxton 2009:60; US

Department of State N.d.). It was only after the new constitution had been approved by the

electorate that Chávez embarked on a more radical course, declaring that the informal sector

and the poor should be the only focus of state support (Buxton 2009:65). This can be

regarded as a significant break with the past of AD/COPEI governments which, in line with a

historical pattern prominent throughout Latin America (see chapter 3), had principally

subordinated to the interests of the business and political elite and international capital.

93

Misiones Bolivarianas and Consejos Comunales

The creation and promotion of a new, participatory democracy, theoretically in opposition

but in practice complementary to the existing structure of liberal and representative

democracy (Lander 2008:79), is one of the central elements of the Bolivarian project. Since

the popular endorsement of the 1999 constitution, the Chávez government has taken various

steps geared to the inclusion and political participation of the formerly excluded poor

Venezuelans. It has done so, among other things, by creating Bolivarian missions (Misiones

Bolivarianas) and communal councils (Consejos Comunales), which play important roles in

the redistribution of economic and political power from the elite minority to the politically

excluded and economically marginalised majority (Buxton 2009:57). According to Roberts,

‘Chávez … has supported a multi-tiered and decentralised network of grass-roots

organisations, many of them outside the ranks of his “official” national party organisation.

Neighbourhood committees …, partisan cadres, election campaign teams, economic

cooperatives, and networks organised around different social “missions” have all played vital

and constantly evolving roles in the popular organisation of chavismo’ (2007:7; see also

Lander 2008:82). The system of Consejos Comunales in Venezuela perhaps bears some

resemblance to the first soviets in late imperial Russia, especially before radical Marxists

transformed them into instruments for attacking state power; these soviets were originally

also intended as grass-roots organisations to practice a direct form of democracy.

The Misiones Bolivarianas, a total of 27 social programmes (Gobierno en Línea N.d.) that

operate in a wide range of policy areas, clearly demonstrate the government’s prioritisation of

the poor and socially and economically excluded, and give a good summary of the specific

policy objectives of the Chávez government. The Misiones were created from 2001 onwards

and were to an important extent financed by the revenues of the state oil company PdVSA

(Buxton 2009:63-64). The overall objective of the Misiones is to ‘provide social and economic

rights to excluded communities and individuals in a localised and participatory manner’. In

the Misiones system, communities are not only the recipients of government support, but are

also involved in the structuring, organisation and realisation of social policy through direct

influence on decisions affecting them (Motta 2009:79-80). Some of the most important

Misiones are outlined in table 3.

The Consejos Comunales are another central element of the Bolivarian project of the

Chávez government. Created from January 2005, these Consejos are a new set, or a new

layer, of governance institutions, alongside the ‘traditional’ liberal state, that suggests a top-

down redistribution of power, in a direct democratic and participatory way. The Consejos

enable people to directly influence public policy geared to the promotion of equality and

social justice (Motta 2009:84).

94

Category Name of Misión Description / Targeted sector

Robinson I/II Campaign against illiteracy

Ribas Enable adults to complete their secondary education

Education

Sucre Promote universal access to university studies

Barrio Adentro I/II/III Universal basic health care, with help of Cuban doctors

Milagro Care for visually disabled poor

Sonrisa Dental care for poor

Health

José Gregorio

Hernández

Care for physically disabled poor and their families

Mercal / Alimentación Provision of subsidised food for the poor through state shops

Hábitat Public housing for poor

Negra Hipólita Support for homeless people

Niños y Niñas del

Barrio

Support for homeless children

Basic

needs

Madres del Barrio Support for house-keeping mothers in poor areas

Vuelta al Campo Promote agriculture, resettlement of urban population in

countryside

Villanueva Resettle and spread population over national territory

Guaicaipuro Improve awareness of indigenous rights and conditions

Árbol Promote ecological equilibrium, programme of reforestation

Other

Revolución Energética Promote rational use of energy

Table 3. Selected Misiones Bolivarianas, by category (Source: Motta 2009; Gobierno en

Línea N.d.).

At first sight, the creation of the Consejos suggests a far-reaching measure, aimed at the

eventual abolition of the traditional, liberal representative democracy altogether, to replace it

by participatory democracy. Nevertheless, this new layer of ‘quasi-state’ institutions is still

being kept under the control of traditional state institutions, such as mayors or governors.

Moreover, Motta (2009:86) contends that the top-down creation of the Consejos, which came

into being after a presidential decree, theoretically contradicts the idea of popular self-

government, which would necessarily require a bottom-up process. However, the creation of

such new forms, albeit provisory and tentative, of participatory decision-making and popular

democracy, seems a significant and progressive step that many other governments are not

prepared to take. It means a shift of power away from traditional elites and into the hands of

the lower classes. In spite of the control that traditional state institutions retain over

decision-making in the Consejos, and by means of which the government continues to dictate

the mode and course of popular participation, it indicates the desire, on the part of the

95

government, to include and involve the formerly excluded in the political process. This desire

is probably partly motivated by pragmatic and electoral considerations, but the extent to

which these plans are taken and implemented does signal not only a pragmatic stance on the

part of the Chávez government, but also appears to reflect an authentic wish to reclaim

national politics to the benefit of the historically excluded majority of the people. According

to Motta (2009:86-87) the Consejos potentially contain ‘the seeds of a counter-hegemonic

practice of democracy’, and create forms of governance and development that ‘go beyond the

liberal state and market economy’.

Financial resources for Chávez’s ambitious social policies have been secured through re-

asserting state control over the exploitation of Venezuela’s oil reserves, which are the largest

in Latin America and the sixth largest in the world, estimated at 99 billion barrels (US Energy

Information Administration 2009). Historically, the distribution of benefits from oil

extraction in Venezuela has followed the tragic pattern of exploitation of natural wealth in

Latin America in general since the colonial era: nearly all gains were transferred through

MNC’s to the core of the world-system or to the local business and power elite, and did not

benefit the majority of the population. Since Chávez’s accession to power, however, he has

moved to undo the Apertura, the opening of the Venezuelan oil sector to private investment,

which had been implemented in the 1990s (Wilpert 2007); this began with mandating

majority PdVSA ownership of oil projects, but in May 2009 the Venezuelan parliament

passed a law allowing PdVSA to fully expropriate oil and gas assets from foreign companies

(Green 2009), effectively bringing the state back in control of the oil sector. The progressive

nationalisation of the oil sector occurred roughly simultaneously with a significant rise of

world oil prices. In 1999, the price of a barrel of Venezuelan crude oil was around $8, in 2004

it had risen to $33, in 2006 it had risen to $56 and by mid-2008 it averaged $90 (Buxton

2009:71). In a situation of privatised oil exploitation, rising oil prices would not significantly

benefit the population, but in combination with the progressive nationalisation of the oil

sector, it provides the state with an enormous flow of revenue to redirect to social programs

through the Misiones Bolivarianas, and renders the country less vulnerable to economic

sanctions from outside, such as financial embargoes and the withdrawal of foreign

investments. Although it could be argued that Chávez’s ambitious social programs rely to an

important extent on oil revenues and are thus vulnerable to fluctuations in the world oil

price, the fact that the gains from a principal economic activity such as oil exploitation (which

accounts for one-third of Venezuela’s GDP; see US Energy Information Administration 2009)

are no longer transferred out of the country but are instead invested domestically to directly

benefit the poorer sectors of the population, could be considered something truly new in the

Latin American peripheral context (see chapter 3).

96

Opposition

Since his accession to the presidency, Chávez has had to deal with fierce internal opposition.

In the first two years, when his socialist identity was not yet outspoken and his rhetoric not

yet radically anti-neo-liberal and anti-US, opposition came from the AD and COPEI parties,

who saw their power position compromised by the end of Punto Fijo rule and by Chávez’s

attempts to draft a new constitution and reorganise the political organisation of the state by

enabling political participation of the poor. Later, opposition came from the previously

privileged sectors of society, who still wielded considerable economic power and who felt

politically, culturally and economically excluded from the Bolivarian project (Lander

2008:83).

In April 2002, after months of social and political tension that according to some observers

resembled the atmosphere in Santiago de Chile prior to general Pinochet’s coup against the

Allende government in September 1973 (Gott 2005:223), opposition to Chávez’s Bolivarian

project led to a coup attempt, which was undertaken with CIA knowledge and possibly also

US financial support through USAID (Gott 2005:223-224; Golinger N.d.), as well as

endorsed by the IMF (Elliott 2007). In the evening of 11 April, an irregular coalition of anti-

government military officers occupied the Miraflores presidential palace, evacuated the

president and installed Pedro Carmona, the head of the national chamber of commerce, as

interim president. The coup was met with massive popular protests, organised by the

Círculos Bolivarianos (Chaves 2003), and a march of hundreds of thousands of people on the

Miraflores palace, compelling the new civil-military junta to relinquish power and return

Chávez to his office (Buxton 2009:67). This failed attempt to remove Chávez from power

would mark the beginning of a more radical phase in his ideology, in which he would become

fiercely anti-neo-liberal and anti-US, routinely accusing the Bush government of trying to

sabotage his policies and even preparing to intervene militarily to topple his government, and

move even more to the political left.

Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

GDP

growth (%) 0,3 -6,0 3,7 3,4 -8,9 -7,8 18,3 10,3 10,3 8,4a 4,8a

Table 4. Economic growth in Venezuela, 1998-2006 (Sources: Weisbrot and Sandoval

2008:10; (a) Daniel 2009).

Opposition from the private sector has booked some success, in the sense that through

general strikes a serious economic downturn was caused during 2002 and 2003 (see table 4).

The organisation of chambers of commerce organised a general strike in December 2001 in

97

protest of Chávez’s economic policies, and another strike that lasted from December 2002

until February 2003, which involved almost half of the employees of PdVSA (Gott 2005:251-

253). Venezuelan GDP suffered significantly from these strikes and actually declined in these

years, although it significantly increased again in the next years (Weisbrot and Sandoval

2008:9-10).

Apart from the economic realm, the opposition has also attempted to challenge Chávez on

the politico-institutional level. In August 2004, the opposition took advantage of a

constitutional mechanism, providing for a referendum to recall the incumbent president if a

petition gathers the support of 20 per cent of the electorate. In the recall referendum, which

was monitored by OAS observers, the opposition suffered a significant defeat: 59,3 per cent

of the electorate voted in favour of the continuation of the Chávez government, providing the

president with unprecedented legitimacy and political leverage (Gott 2005: 260-264; Buxton

2009:67). Politically, the opposition forces can look back on only one significant victory in

the years since Chávez’s accession to the presidency. In December 2007, Chávez proposed a

revision of 69 articles of the 1999 constitution, involving an extension of the presidential

period from six to seven years as well as the removal of barriers for incumbent presidents to

stand for re-election (Agencia Bolivariana de Noticias 2007), and took a plebiscite to ask for

popular endorsement of his proposal. This was the only referendum in which a majority of

Venezuelans voted against the proposal made by Chávez, albeit by a narrow margin of only 1

per cent (Consejo Nacional Electoral de Venezuela N.d.; see also figure 3). This gave the

opposition movement a short boost, but in February 2009 a new proposal to reform the

constitution, containing provisions similar to those from the 2007 referendum, was approved

by 55 per cent the Venezuelan electorate.

Domestic and international opposition to the Bolivarian project in Venezuela dictates the

perception of the Chávez government by many people in the West. Among Westerners,

suspicion and resistance to what is sometimes referred to as illiberal populism, or

dictatorship, is commonplace. The external image of Chávez’s government is moulded and

reinforced by the private media in Venezuela, which are mostly owned by opposition forces,

and transmitted internationally by US and other Western press agencies, who have an

interest in depicting a negative, or dangerous, picture of the situation in Venezuela.

According to Lander (2008:83), most of the private sector media ‘have abandoned their role

as information providers in order to become instruments of systemic denunciation of the

government’, in response of which the public (state) media have begun to act as government

media. This has contributed to a climate of enormous political and social polarisation, which

constitutes a major problem for contemporary Venezuela and the Chávez government. Apart

from complicating, or even rendering impossible, constructive debates on government

98

policies (Lander 2008:83), the polarisation in the country also obstructs objective analysis of

the specific achievements of the Chávez government.

However, in spite of fierce and significant opposition from certain sectors of society, the

chavista project still seems to enjoy the support of a majority of Venezuelans. The popularity

and approval of the Chávez government can be traced reasonably well through an analysis of

the results of the different presidential elections and national referenda that have been

organised to endorse various measures, reforms and policies of the government. The results,

outlined in figure 3 below, indicate that with the exception of the narrow defeat of the Chávez

option in the December 2007 referendum on constitutional reforms (including the possibility

for an incumbent president to run for re-election), the policies of the Chávez government

have continuously been endorsed by a majority of Venezuelans.

Popular Support for Chávez

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Chávez option Opposition option

Figure 3. Results of presidential elections and national referenda in Venezuela, 1998-2009

(Source: Consejo Nacional Electoral de Venezuela N.d.).

One reason for the continued support of the Chávez government is the extent of exclusion

that was suffered by a majority of Venezuelans during the Punto Fijo period (1958-1998), in

which AD and COPEI principally catered to the interests of the rich and wealthy and

disregarded the needs of the poor. Any project that would bring an end to this exclusion, one

way or the other, was bound to gain a lot of support from the people. However, it also seems

that the popular shift towards the political left that is characteristic of contemporary Latin

America (for reasons outlined in chapter 4), applies to an important degree to the Venezuelan

99

electorate as well. While it has been observed that Chávez’s socialist identity only became

evident when he had already been in power for some two years, it is illustrating that in 2006,

almost two-thirds of Venezuelans voted for Chávez while knowing about his intention to

construct a ‘Socialism of the Twenty-first Century’ (Consejo Nacional Electoral de Venezuela

N.d.).

Socio-economic achievements of the Bolivarian project

The above outline of social policies of the Chávez government suggests a far-reaching,

ambitious and progressive reformist project that is taking place in Venezuela. Through an

appreciation of the different Misiones Bolivarianas and also the Consejos Comunales, it is

convincingly demonstrated that the reduction of inequality of all sorts is the paramount aim

of the Bolivarian government. But what are the concrete effects of all these progressive

policies? It is possible to distinguish any results of the Bolivarian project so far, since the

accession of president Hugo Chávez?

Several authors observe significant improvements of socio-economic indicators that are

typical targets of Chávez’s leftist policies. According to Dominguez (2009:53), after one

decade of Chávez rule, multinational capital in the oil industry and private capital in the

electricity sector have been almost completely expropriated, massive amounts of land have

been redistributed, social spending on health and education has been increased, indigenous,

women’s and gay rights have been improved, and political power has shifted from the state to

the Consejos Comunales. Weisbrot and Sandoval (2008) have elaborated an extensive

analysis of the socio-economic performance of the first decade of Chávez’s government in

Venezuela. They observe a period of economic downturn as a result of political instability in

the years 1999-2003, when opposition to Chávez was fiercest and booked results through

general strikes affecting the economy, but in general they conclude that in spite of the

negative focus of many, mostly US analysts, there have been significant improvements in

socio-economic conditions of ordinary Venezuelans under Chávez. Some of their findings are

presented in table 5 below.

From this table it clearly follows that the Chávez government has made significant and

successful effort to improve conditions of living of the Venezuelan people. The radicalism of

Chávez, his bold anti-Western rhetoric and the fact that his government implemented some

measures that have been explained as compromising the democratic process in Venezuela,

appear to divert the attention away from the real accomplishments of his progressive

government and from the real improvements in the lives of ordinary Venezuelans.

100

Indicator 1998 (a) / 1999 (b) 2006 (a) / 2007 (b)

Total public spending (% of GDP) 23,7%a 31,0%a

Social spending (% of GDP) 8,2%a 13,6%a

Social spending (% of total public spending) 34,7%a 44,0%a

Social spending of PdVSA (% of GDP) n/a 7,3%a

Social spending per person (1998=100) 100a 270a

Social spending per person (incl. PdVSA) (1998=100) 100a 414a

Poverty 43,9%a 27,5%b

Unemployment (formal sector) 15,3%a 9,3%b

Number of primary doctors active in the country 1628a 19571b

Number of public schools 17122b 20873a

Table 5. Development of selected socio-economic indicators in Venezuela, 1998/1999-

2006/2007. (Source: Weisbrot and Sandoval 2008).

The Bolivarian project in Venezuela seems to demonstrate that social welfare, economic

nationalism and political independence are a real possibility, even in a peripheral country in

the Western Hemisphere (Petras 2006). From the analysis of the achievements of Chávez’s

Bolivarian project in Venezuela, it appears that the radical strand of New Left politics has

great potential in terms of structurally improving socio-economic conditions of the majority

of the population, which has been historically excluded from political power and economic

wealth.

5.4 Brazil: a missed opportunity for structural reform

It has been observed that the Venezuelan president Chávez likes to be seen throughout the

region as the ideological leader of a new phase in Latin American history, a phase in which

Latin Americans reclaim their autonomous destinies by being enabled to harvest the fruits of

their own natural resources, and turn away from the dominance of neo-liberal market

fundamentalism. However, if only because of the sheer size of its population and its economy,

by far the largest in the region, Brazil necessarily presents a challenge to Chávez’s aspirations

of regional leadership of the New Left movement. Although Brazil and Venezuela maintain

generally cordial relations, not least because Lula and Chávez are united in their critical

stance towards US dominance in the region, it could be argued that the Brazilian and

Venezuelan models for an alternative, more autonomous and equitable society are engaged in

some kind of competition for being regarded the most successful and efficacious example to

be followed by other New Left governments in the region. It is therefore interesting to

101

compare the performance of Chávez’s radical left to that of the more pragmatic left strand in

Lula’s Brazil, in order to determine which of the two models has the greatest potential to

improve the socio-economic conditions of Latin Americans.

Whereas the election of Chávez in Venezuela represented the first time that a New Left

leader appeared at the highest political level, the election of Luiz Inácio ‘Lula’ da Silva,

representing the Partido dos Trabalhadores (Workers’ Party, PT), to the presidency of Brazil

in October 2002, was seen as the ‘high point’ of the New Left wave in Latin America. No less

than three times earlier (1989, 1994 and 1998) had Lula run as a presidential candidate, and

only this fourth time he was successful, defeating his PSDB opponent in the second round.

Lula’s election was described at the time as ‘the most exciting political development in Latin

America since the election of the Marxist Salvador Allende in Chile in 1970’ (Branford

2009:154). First, because Brazil represents nearly half of Latin America’s total population,

but also because the PT had already made name as an active opponent of free market

fundamentalism and the hegemony of neo-liberalism, and had promised far-reaching,

structural reforms (Gott 2005:5; Branford 2009:153). Expectations were high: ‘[t]he

direction taken by the Lula government would inevitably have a significant impact on the

dynamics of Latin American politics. Brazil’s weight could add critical mass to a continental

programme for socially redistributive policies, similar to those undertaken by Chávez in

Venezuela’ (Sader 2005:60-61).

The country that Lula found upon assuming power was exemplary for the legacy of

structural adjustment in Latin America. Brazil had firmly embraced neo-liberalism during

the presidency of Lula’s predecessor Fernando Henrique Cardoso (1995-2003) who,

ironically, in the 1970s had been one of the founding fathers of dependency theory (see

chapter 2). Contrary to Cardoso’s initial beliefs about the structural exploitation of the

periphery by the capitalist core and the need for strengthening regional integration to create

a counterweight to the dominance of the core (Cardoso and Magnani 1974:30-32), his

government significantly accelerated the privatisation of the Brazilian economy, which until

the 1990s had been one of the world’s most closed economies (Fernandes 1996:112-113).

There was an aggressive pursuit of FDI, most of which in practice came from the West, state-

owned enterprises were privatised, and protectionism and ISI were renounced. In line with

the observations made on structural adjustment in section 3.8, Abu-El-Haj (2007:93)

remarks that the transfer of control over public affairs to external actors (in this case,

international capital) taking place during this phase was unseen since colonial times. It was

expected that the new Lula government would embark on a significantly different course.

However, the excitement and optimism about Lula’s election were short-lived. In section

5.2, it has been suggested that the autonomy of a New Left government depends to some

extent on the commitments made during elections to political factions from the political

102

centre and the right. Whereas Chávez in Venezuela was elected on a platform of only leftist

parties, Lula depended on a coalition that included the centrist PSDB and the right-wing PP

(Sader 2005:70). Only with this broad alliance, which had been explicitly requested by Lula

as a condition for standing for a fourth time as presidential candidate, had the PT been able

to secure victory in the elections (Branford 2009:155-156). This circumstance compelled Lula

and the PT to compromise on the degree of ‘left-ness’ of their intended policies. This can be

observed in the ‘Letter to the Brazilian People’, which Lula issued prior to the presidential

elections of October 2002 and which probably contributed to his election victory later that

year. In his letter – which was formally addressed to the people but implicitly also to external

actors such as international creditors and investors – in response to widespread domestic

and international fear for economic instability, excessive public spending and capital flight

under a too radically leftist PT government, Lula accepted a neo-liberal macro-economic

course and assured that Brazil’s foreign debt would be paid and that his possible government

would try to maintain budget surpluses and macro-economic stability (Sader 2005:69; Petras

2006; Sánchez et al. 2008: 46-47; Branford 2009:156-157).

Focus on growth and macro-economic stability

To many leftists, who had been enthusiastic about the prospects of a PT leader in the

presidential palace, the course adopted by the Lula government was disappointing. The

radically left programme with which the PT had supported Lula’s bid for the presidency was

soon toned down, to make way for moderation and submission to international capital.

Compared to the Cardoso administration, there was a significant degree of continuity in

government policy. The government argued that the Cardoso legacy made it impossible to

immediately change the general course of the economy (Sader 2005:70), but even after the

initial years of the Lula administration, the general policy direction was not changed and the

orthodox economic course of the previous government was continued (Sánchez et al.

2008:49). ‘The “priority of the social” promised during Lula’s electoral campaign was …

foreclosed by the priority given to financial targets—the public deficit and inflation’ (Sader

2005:74).

The prioritisation of Brazil’s international obligations and economic and monetary stability

over improvements of living conditions for the poor was expressed in one of Lula’s first

decisions, to cut the government budget by 45 per cent (Branford 2009:157) and by the

decision to reduce spending in social programmes and health care with 5 per cent, while at

the same time being very punctual with debt repayments to foreign creditors (Petras 2006).

These decisions were part of a strategy to counter falling international confidence in Brazilian

103

creditworthiness as a result of Lula’s election (Branford 2009:157), but at the same time

undermined public confidence in the leftist commitment of the Lula government. During the

first year of the Lula government, this was referred to as a transitory phase, but by 2005 it

seemed that the macro-economic course initiated by the Cardoso government would remain

in place. The Finance Ministry remained the government’s centre of gravity, meaning that

social programmes were kept subordinated to the objectives of macro-economic stability and

international financial credibility (Sader 2005:73-72).

Economic growth was made the centre-piece of Lula’s government policies. The

government devised a big investment project called Projeto de Acceleraçao do Crescimento

(Project of Accelerated Growth), involving substantial government infra-structural

investments in transport, energy, and communication, with the objective of transforming

Brazil (and eventually other parts of Latin America) into a well-equipped export platform for

raw materials and agricultural goods (Branford 2009:158). Although this programme created

employment opportunities and as such benefited the people, the investment priorities in this

scheme strongly resemble the period of British economic hegemony in Latin America, around

the second half of the nineteenth century (see section 3.5). Back then, investments in

infrastructure (for example, railroads) were made to enable smooth transportation of natural

resources to the coasts, for shipment to Britain or elsewhere. The current Brazilian focus on

investments in transport, energy and communication seems to boil down to the same

objective, that of providing the adequate infrastructure in order to be able to optimise the

extraction of the country’s material wealth to other parts of the world. The government’s

focus on growth may be served by this investment scheme, as high world market prices make

extraction of primary goods currently attractive, but the long-term objective of sustained

economic development, for example by processing the raw materials in Brazilian industries

instead of shipping them out of the country, is compromised. It appears that the factors that

have historically undermined development in Latin America still apply to the contemporary

situation in Brazil.

Lula’s focus on growth, finance and stability has caused many leftist analysts to criticise his

policies and to accuse him of submitting the country once again to the dominance of

international capital. Brazil’s history, like that of Latin America in general (see chapter 3), of

increasing concentration of capital in the hands of private enterprise and a small elite

continued under Lula: whereas in 1993 the employees and self-employed had generated 51,4

per cent of GDP, in 2003 this proportion was only 40,1 per cent (Sader 2005:74). Brazil has

remained the country with one of the greatest income inequalities in Latin America (Petras

2006).

In sum, the policy direction taken by the Lula government, prioritising international capital

and economic stability over leftist topics such as redistribution of income and social well-

104

being, dealt a severe blow to the initial enthusiasm about his election in 2002. Lula and the

PT seemed to have capitulated to the dictates of global capitalism, and the president and his

government were criticised for having surrendered to neo-liberalism and having joined the

enemy’s camp, to the detriment of the conditions of living for the poor majority of Brazilians

(Lievesley 2009:31).

Socio-economic programmes under Lula

It would, however, be an exaggeration to argue, as Sader (2005:76) does, that the Lula

government is in fact not a government of the left. In my proposed categorisation of Latin

America’s New Left, outlined in section 4.7, I have suggested that the pragmatic left of Brazil

is characterised by a general acceptance of the international liberal capitalist economic

framework, but at the same time by a progressive domestic social policy aimed at reducing

inequalities and improving conditions of living for the poor and excluded (Sánchez et al.

2008:64). Lula, himself coming from a poor family, did not abandon his desire to improve

living conditions for Brazil’s many poor; however, he did abandon his promise to achieve this

improvement through structural change and instead opted to address the issues of the poor

within the existing international economic system (Branford 2009:158). In spite of the

obvious focus on macro-economic and monetary stability, the Lula government has, and

more than the previous Cardoso administration, embarked on ambitious domestic social

policies specifically aimed at the poor, who in 2005 represented 31 per cent of the population

(CIA 2009).

Brazil’s focus on macro-economic stability meant that inflation was brought under control,

as a result of which the purchasing power of the minimum wage, which had been declining

since 1996, was stabilised in 2004. Furthermore, the distribution of income improved

somewhat, the real income of the poorest half of the population increasing by 3,2 per cent

and that of the richest half declining. These were substantial advances for the poor, although

the increase in their income had occurred only because of a rise in allowances from the

government, not because their economic opportunities had improved. However it may be, the

slight improvement in socio-economic conditions of poor Brazilians seems to have been

important in securing Lula’s re-election, in October 2006 (Sánchez et al. 2008:64; Branford

2009:161).

In 2003, Lula introduced the Fome Zero (Zero Hunger) programme, with the objective to

eradicate the most extreme forms of hunger and poverty in the country (Lindert et al.

2007:13). Similar to the Venezuelan Misiones Bolivarianas, but somewhat less all-

encompassing, the Fome Zero program consists of various social programs in different

105

ministries, all dealing with one or more aspects of hunger and poverty (Lindert et al.

2007:13). Part of the Fome Zero programme is the Bolsa Família (Family Grant) project,

which provides direct financial aid to poor families, under the condition that they comply

with key human development conditionalities on education and health, such as sending their

children to school and having them vaccinated (Lindert el. al. 2007:18).

Bolsa Família is currently the largest conditional cash transfer programme in the

developing world (Lindert et al. 2007:6). The program targets all of Brazil’s poor and

extremely poor people (officially 11,1 million families or 46 million individuals in June 2006,

almost a quarter of the Brazilian population), and provides them with a basic benefit and a

variable allowance, based on the number of children in the family, amounting in total to

US$7 to US$45 monthly. Given the fact that in extremely poor families monthly income per

capita is below US$30, the Bolsa Família means a significant contribution to their income,

sometimes amounting to an increase of family income of up to 40 per cent (Lindert et al.

2007:16-18; Sánchez et al. 2008:54-55). In terms of poverty reduction, the Bolsa Família

programme seems to have been quite successful. During Lula’s first term in office (2003-

2007), poverty in Brazil fell by 27,7 per cent, an achievement superior to that of his

predecessor Cardoso (a smaller reduction of 24,3 per cent over a longer period, 1993-2002)

(Farid 2007).

Whereas the macro-economic policies of the Lula government provoked opposition from

the political left, Lula’s extensive social programs, although subordinated to the prime

objective of maintaining economic and monetary stability, led to criticism from the right

(Sader 2005:75-76). The cash transfers envisaged in the Bolsa Família program have been

criticised for being too expensive and for discouraging poor people to take care of themselves

(see Doria 2007). Moreover, although the programme could be characterised as leftist, since

it specifically targets the poor and thus aims to arrive at a more equal distribution of income,

it could be argued that simply by providing the poor with extra money, the state does address

the issue of poverty but does so in an ad hoc manner, leaving in place the economic and

power structures that created and keep creating conditions of inequality and poverty. Also,

Sánchez et al. (2008:55) argue that since the Bolsa Família is not a legal right but a social

programme initiated by the government, it could be terminated at any moment and therefore

constitutes no structural contribution to the improvement of socio-economic conditions of

the poor. In fact, reversing the argument, the possible abolition of the programme by any

future government bears the risk of plunging millions of people back into poverty.

In sum, although the Lula government has taken some steps to improve socio-economic

conditions of poor Brazilians, it has principally sought to appease international capital by

pursuing economic and monetary stability. The impact of the Fome Zero and Bolsa Família

programmes have been substantial (see section 5.6), but Lula’s social policies have been

106

subordinated to strict monetarist budgetary constraints, maintained to retain international

confidence in Brazil’s economy (Lievesley 2009:32). Internationally, this strategy has been

successful: representatives of the core of the world-system, such as the president of the World

Bank, have praised the Bolsa Família as a highly effective instrument of social policy, which

should serve as an example for other developing countries (World Bank 2005). The positive

judgement of Lula’s social policies by core countries and IFI’s is understandable; first,

because the programmes have been relatively successful in a relatively short time, but also

because under Lula, the internationally feared ambitious and costly social project, which

could potentially be harmful for core interests in Brazil, has not materialised. Lula has

remained loyal to Brazil’s international obligations and has made his country’s international

credibility his government’s prime objective, which is of course well-received by the

defenders of the international status quo.

While reviewing the achievements of Brazil under Lula in the spheres of poverty and

inequality reduction, the thought of a missed opportunity for structural reform forces itself

upon the observer. The initial enthusiasm among Brazil’s many poor and the worries of

international capital from the core of the world-system about the election of Lula have given

way to disappointment among the poor about Lula’s commitment to structurally address the

urgent social issues in his country, and to international relief about his moderate and

cooperative macro-economic policies. Sader (2005:76-78) observes that when Lula came to

power, he enjoyed sufficient support and legitimacy to attempt to break his country free from

neo-liberalism and prioritise socio-economic well-being, just as Chávez has done in

Venezuela. But, due to internal as well as external constraints, he failed to fulfil his

aspirations and the expectations of the people who had voted for him. Lula remained loyal to

the existing international macro-economic order and has, just as his predecessors, failed to

address the fundamental causes of poverty (Sánchez et al. 2008:55). The continued reliance

on the dominance of international capital implies that the ‘PT government has not had the

courage to end the plundering of the Brazilian economy … [and] the age-old pillaging of

Brazilian resources by a small elite of rich foreigners and Brazilians’ (Branford 2009:161). In

these circumstances and under the present government prioritisation, Brazil’s social and

redistributive policies, so urgently needed in one of the most unequal countries in the world,

have been unable to reach their full potential.

5.5 Chile: leftist policies in a neo-liberal straitjacket

As I observed in the previous chapter, a characteristic of Latin America’s New Left is that it

profiles itself as the continuation of a just and right historical project that has been

107

interrupted by unwelcome and damaging external factors. This appeal to some sort of historic

sentiment is also evident in Chile, where the Concertación coalitions, and especially the latest

government of the socialist Michelle Bachelet, want to profile themselves as the continuation

of the historical project of Salvador Allende to establish socialism by explicitly democratic

means, which was brutally interrupted in 1973 by the junta of general Pinochet. However,

although this could possibly seem true if the Concertación is compared to the Pinochet era,

this image seems a bit exaggerated. In fact, to the outside world, Chile has been and remains

a champion of neo-liberalism, a ‘show-case of market-driven economic growth in the region’

(Arditi 2008:65). The image of Chile as one of neo-liberalism’s ‘star pupils’ makes it difficult

to believe that Chile could indeed be called a New Left country. Chile loyally adheres to

principles that are categorically rejected by the more radical exponents of Latin America’s

New Left: neo-liberalism, the attraction of FDI and MNC’s, excellent relations with the US,

and a positive attitude towards globalisation (Silva 2009:197). In December 2002, Chile was

among the first Latin American countries to sign a free trade agreement with the United

States. With 52 per cent, Chile’s growth to GDP ratio is considerably higher than that of

neighbouring countries, and in the 1990s the government’s strategy was to reduce Chile’s

dependence on the Western Hemisphere and position the country as a ‘global trader’

(Phillips 2006:334).

The legacy of the Chicago Boys’ ‘proto-neo-liberal’ economic measures of the 1970s, the

historical legacy of the Chilean left, the dynamics of coalition government, and factors such as

the persistent influence of the military in political affairs even after the return of democratic

rule, influence Chile’s macro-economic orientation and seem to limit the degree of ‘left-ness’

of policies that any Chilean government can and aims to pursue. As a consequence, the

Chilean case constitutes, in several aspects, an exception to the dominant pattern of the New

Left in Latin America.

The unique trajectory of Chile’s New Left

In contrast to Venezuela and Brazil, where the arrival to power of the New Left can be traced

back to a specific election (1998 and 2002, respectively), in Chile the rise of the New Left has

proceeded more gradually, due to the specific circumstances in which the Chilean left has

found itself since the return of democracy. In section 4.4, I have taken the moment of Lagos’

inauguration as president (March 2000) as the beginning of the Chilean New Left turn. Given

Lagos’ history as one of the leaders of the Chilean Socialist Party PS (until 1987) and as the

founder of the fiercely anti-dictatorial PPD prior to Pinochet’s recall referendum of 1988, it

seems justified to qualify him as a leftist leader. In 2005, the New Left in Chile consolidated

108

itself with the election of the socialist Michelle Bachelet to the presidency. The gradual

character of Chile’s New Left’s accession to national executive power is complemented by a

fairly moderate leftist stance, especially if compared to the more principally leftist ideology of

Brazil’s PT, let alone that of Venezuela’s radically leftist president Chávez.

The relative moderateness of the New Left in Chile can be explained in several ways. First,

as Silva (2009:183) rightly argues, the factors that have elsewhere in the region contributed

to the rise of the New Left, such as the failure of neo-liberalism, leading to increased poverty,

politico-institutional crises and the emergence of anti-Americanism in various countries (see

section 4.5), have been almost entirely absent in Chile. Since the Chilean experience is quite

different, being one of the most politically stable and economically wealthy countries in the

region, the trajectory of the Chilean left also differs from that of the left in other countries.

Second, the legacy of Chile’s socialist experiment under Salvador Allende and the ensuing

military dictatorship of general Pinochet has an important influence on the positioning of the

Chilean New Left. The failure of Allende’s attempt to establish socialism by democratic

means has led many Chileans to feel that the experiment was too radical to be successful, and

that only a less ideologically harsh and more practical stance towards socialism or social

democracy is viable in the long run (Silva 2009:185-186). This is complemented by the third

factor, namely the relative success, in contrast to other Latin American countries, of neo-

liberal reforms undertaken in Chile by the Chicago Boys in the 1970s. Neo-liberalism in Chile

was not forced upon the country by IFI’s, but was introduced more or less endogenously,

although with external advice, and as such enjoyed the support of large sections of the

population and the business community (Silva 2009:189). The success of neo-liberalism in

Chile, combined with the memory of the failed radical Allende project, has led the Chilean left

to accept neo-liberalism and the importance of free market policies as part of its own political

discourse. In the 1990s, the Socialist Party (PS), of which both Lagos and Bachelet are

members, embraced the prescriptions of neo-liberalism, implying a move towards the

political centre, away from traditional leftist positions (Sader 2005:65-66). The presidency of

the Christian Democrat Frei Ruiz-Tagle (1994-2000), who was supported by the socialist and

social democratic parties, saw the privatisation of the country’s main ports, sanitation

services and electricity, and an unprecedented opening up of the economy, involving the

conclusion of free trade agreements with various countries.

Fourth, the Chilean New Left is necessarily more moderate than the New Left in more

radical countries such as Venezuela and Bolivia, because the Concertación coalition, which

has been in power from the end of the Pinochet era in 1990 until the election of the right-

wing candidate Piñera in January 2010, includes not only socialists (PS), social democrats

(PPD) and radical social democrats (PRSD), but also more centrist Christian democrats

(PDC) (Lievesley 2009:29). Although this broad coalition has succeeded in ensuring the

109

continuity of centre or left-of-centre governments in Chile and has for two decades been able

to avoid a return to right-wing rule, this circumstance has inevitably compromised the

autonomy of a socialist president such as Lagos or Bachelet to pursue truly leftist policies. In

order to obtain the support of all coalition parties, a Concertación presidential candidate

must place him of herself in a moderate position. The Christian Democratic Party (PDC),

being the biggest party in the Concertación (Servicio Electoral de Chile 2005), has a relatively

strong influence in the coalition. As the Christian Democrats would never accept a candidate

who is considered too far to the left, a Concertación presidential candidate can never be too

radical. This same mechanism probably applies to the political right in Chile; at the end of

this section I briefly elaborate on the possible consequences of the election of the right-wing

candidate Piñera in January 2010, which in spite of their symbolic value will most likely not

cause a major shift in the overall course of Chilean politics.

Fifth, the moderateness of the Chilean New Left can be explained by the continued

influence of the armed forces in Chilean politics. According to Pinochet’s 1980 constitution,

which is only in the process of gradually being altered by successive Concertación

governments, the military retains a significant weight in civilian decision-making. The

constitution stipulated that the president of the republic, for example, could not dismiss the

military commanders-in-chief, ensuring the armed forces’ relative autonomy vis-à-vis

civilian rule; that a part of the Chilean Senate was not eligible for election but appointed by

the armed forces, and the autonomy of the president as the head of state was subordinated to

assessment of the military-dominated Council of National Security (Carrillo 2002; Silva

2009). The relative power position of the armed forces was especially visible during the first

years after the return of democratic rule. In 1990, Karl warned for the ‘omnipresent spectre

of a military coup’ in Chile, possibly provoked by uncertainty among parties and interest

groups over the rules of the new democratic game (Karl 1990:12). This compelled successive

civilian governments to pursue strategies of compromise and accommodation of different

interests among all sectors of society. In 2005, the constitution was amended in order to re-

affirm the primacy of civil politics over the armed forces. The military appointment of a part

of the Senate was abolished, and the influence of the Council of National Security was further

limited (Van Engelen 2006b). However, the autonomy of elected civilian leaders in Chile to

pursue too radical courses contrary to the interests of the conservative armed forces still

remains limited, and left-oriented politicians have been compelled to remain moderate in

their proposals.

This contributes to a sixth factor moderating the Chilean New Left, namely the fact that in

order to avoid a possible power shift back to the conservative armed forces, left and centre

parties are compelled to unite their positions by seeking consensus and compromise among

each other. The first civilian president after Pinochet, the Christian Democrat Aylwin (1990-

110

1994), introduced the política de acuerdos (politics of agreement), the practice of regular

consultations with opposition parties, business and trade unions, in order to secure the

support of a broad majority of the electorate and avoid polarisation or even military

retaliation (Silva 2009:193). This practice, which somewhat resembles the ‘Polder model’

practiced in the Netherlands and Belgium, has been continued by subsequent Concertación

administrations, necessarily reducing the degree of ‘left-ness’ of the government.

Furthermore, the leftist parties within the Concertación, in order to avoid suspicions of

trying to implement radically leftist policies similar to those of the Allende government,

allowed the PDC to provide the first two civilian presidents (Aylwin and Frei Ruiz-Tagle)

(Silva 2009:191). As a result, it could be argued that in the 1990s there was no real ‘left’

option for Chilean voters, who were forced to have themselves represented by leaders of the

centrist Concertación parties.

A final factor that explains the moderateness of the Chilean New Left, according to Silva

(2009:186-187) is the phenomenon of exile. During the Pinochet era, many leaders of the

contemporary left in Chile, including the current president Bachelet, spent years in exile,

mostly in Europe, where they became influenced by two things: first, the disappointing

performance, economically as well as politically, of ‘really existing socialism’ in Eastern

Europe, and second, the virtues of the political customs of Western European democracies,

involving consensual cooperation between coalition and opposition in arriving at political

agreement. As a result, the Chilean New Left is suspicious of the more radical strands of New

Left throughout the continent and stresses the importance of political dialogue, consensus

and stability. This further reinforces and consolidates a preference for a política de acuerdos

among leftist politicians.

Taken together, it could be argued that these factors ensure a continuity of the general

policy direction, irrespective of the party of which the president is a member. The

institutionalisation of continuous consultations and consensus-building among Concertación

parties cushions the possible effect of the election of a new president that is supported by the

coalition. Therefore, it seems justified to contend that in Chile, the accession to power of New

Left presidents such as Lagos and Bachelet, has not led to dramatic changes in the overall

policy orientation of the government, and has not constituted a break with the past like it has

in many other countries in the region that experienced a New Left turn. In the words of

Schamis, ‘progressive politics in Chile is a matter not of sweeping transformations but of

piecemeal reforms’ (2006:24).

111

Growth with equity

The relative moderateness of Chile’s New Left does not imply that successive Concertación

governments have not made advances with regard to traditional leftist topics such as poverty

and inequality. There have been important achievements in the 1990s as well as under the

New Left presidents, who held the presidency between 2000 and 2010. It is difficult to

qualitatively differentiate between the socio-economic policies of the Concertación

governments under the Christian democratic presidents Aylwin and Frei (1990-2000) and

those under the socialist presidents Lagos and Bachelet. In this sub-section, while trying to

identify any slight or gradual socio-economic policy changes since the accession of the New

Left, I treat the period from the restoration of democratic rule until the election of the right-

wing candidate Piñera in January 2010 as a whole.

Since the return of democracy, Chile has embraced the goals of poverty alleviation and

equal opportunities for all, along with neo-liberal objectives such as macro-economic

discipline and export orientation (Palma and Urzúa 2005:14; Schamis 2006:23). The strategy

adopted by the Concertación was called ‘growth with equity’ (Foxley 2004:1) and constituted

a significant break with the Pinochet era, in which only growth had been the prime policy

objective. The government, complementary to the strategy of achieving growth and stability

through a continued adherence to neo-liberalism, embarked on an active redistributive

course. While remaining loyal to the basic premises of neo-liberalism, Chile’s interventionist

development strategies clearly deviated from the provisions of the Washington Consensus

(Phillips 2006:333). In 1990, president Aylwin proposed a general raise in taxes, which

featured not only a substantial raise in corporate income tax and an increase of value-added

tax (VAT) from 16 to 18 per cent, but also a progressive increase of consumer income tax. In

line with the government’s focus on solidarity, the highest income groups were taxed up to 50

per cent, three middle groups were taxed 35, 20, and 5 per cent, respectively, whereas the

lowest groups were completely exempt from income taxes (Boylan 1996:12-13). The

government committed itself to spending all the additional tax revenue raised (about 3 per

cent of GDP) on social policies, thereby affirming its determination to redistribute income

from the richer to the poorer sectors of society. As a result, public spending in health,

housing, social security, and education could be dramatically increased, most areas receiving

a more than 100 per cent increase in allocated funds (Foxley 2004:6-8).

The Chilean ‘growth with equity’ strategy wielded considerable results. In the period 1986-

2006, which was for the most part covered by Concertación rule, the poverty rate in Chile fell

from 45 per cent to only 13,7 per cent (Economist 2009b; ECLAC). In the first decade after

the return of democracy, the income disparity between the first and last quintiles of the

112

population was reduced by almost 50 per cent (Foxley 2004:9). These achievements were

facilitated by the robust economic performance of the Chilean economy in the 1990s, which

increased wages and employment, but depended to an important extent on the government’s

‘aggressive’ social policies to improve the well-being of the poor (Foxley 2004). The success of

Chile’s redistributive policies was also made possible because of the high level of

institutionalisation in the Chilean state and government apparatus; this enabled the

government to accurately determine which families needed help and provide it to them with

little corruption (New York Times 2005).

Following the election of the New Left president Lagos in 2000, the government retained its

‘growth with equity’ strategy. In 2002, president Lagos announced Chile Solidario (Solidary

Chile), a system of social protection aimed at families living in extreme poverty. In contrast to

Brazil, where the Fome Zero and Bolsa Família programmes are executed by the government

and could be terminated at any moment, the Chile Solidario programme is sustained by a law

(Biblioteca del Congreso Nacional de Chile 2004) and therefore provides a more structural

and continuous contribution to social well-being of the country’s poor.

Chile Solidario, which came into force in 2004, intends to provide poor families with a

protection bonus (which is handed out to the mother in the family), as well as subsidies

covering the consumption of drinking water and the use of sewerage, access to basic

government pensions, subsidies for keeping poor children in school, and preferential access

to skills development, work and social security programmes. Also, participating families

receive psycho-social support in the form of regular assessment and coaching by

government-appointed ‘family support staff’. The families participating in the programme

receive the benefits for a period of two years, on the condition that they sign a contract in

which they agree to fulfil a number of minimum conditions in the fields of health, education,

family dynamic, housing conditions, work, and income, that are seen by the government as

necessary for overcoming extreme poverty. By making the benefits of the programme

conditional, the government aims to improve the social and economic participation of poor

Chileans and transform them into active citizens instead of passive recipients of state aid. The

goal is to empower poor families to enable them to break away from the vicious circle than

keeps them in dependent conditions and to sustain themselves after the duration of the

programme (Biblioteca del Congreso Nacional de Chile 2004; Foxley 2004:13; Palma and

Urzúa 2005).

With the election of Michelle Bachelet to the presidency (2006-2010), the ‘equity’

component of the ‘growth with equity’ strategy seems to have attained slightly more weight in

the government’s policy orientation. The Bachelet government has taken new measures to

promote gender equality, extend free health care and social housing, promote democratic

participation of poor Chileans, and more generally made social protection and equal

113

opportunities its main priority (Economist 2009a, 2009b). Under Bachelet, the results of

Chile’s social policies continued to be very satisfactory; however, the Bachelet period has also

been characterised by growing social unrest. Secondary school students regularly protested to

demand improvements in the quality and funding for education, copper miners in the north

of the country demanded a greater share in the enormous profits earned by the Chilean state

through the state mining company CODELCO, and Mapuche Indians demanded that the

state return their ancestral territory, recognise cultural rights, and release imprisoned

Mapuche leaders. This presents a new challenge to the state, but according to Silva, the fact

that various sectors of society now appear confident enough to take to the streets to demand

improvements in their situation also indicates that Chile has finally left behind its sad legacy

of state repression and is now a free and open society (2009:196).

Chile’s 2009-2010 presidential elections: a political discontinuity?

On January 17, 2010, the second round of the Chilean presidential elections was won by the

conservative right-wing candidate Sebastián Piñera, who defeated the Concertación

candidate Eduardo Frei with a small majority of 51,87 per cent of the vote. The candidacy of

Piñera, a member of the conservative RN (Renovación Nacional, National Renewal Party),

was supported by a coalition of centre-right and right-wing parties called the Coalición por el

Cambio (Coalition for Change), which was formed as an opposition bloc during the

successive Concertación governments.

Piñera’s victory effectively brings an end to two decades of uninterrupted centre-left

Concertación rule and for this reason seems to constitute a significant break with the past. It

also means that Chile from March 2010 onwards can no longer be considered a New Left

country. On the other hand, strictly speaking even a Frei victory would have brought an end

to the New Left phase in Chile, because Frei is a member of the centrist Christian Democratic

party PDC.

However, significant changes in the overall policy direction of the new centre-right Piñera

government are not to be expected. First, although Piñera during his election campaign

appeared to attach greater importance to the ‘growth’ component of the ‘growth with equity’

strategy, at the expense of ‘equity’, he also stressed the need for a lasting strong and solidary

Chilean state that maintains an extensive network of social protection for the poor and

excluded. The emphasis might therefore be different, but the broad acceptance, even by the

political right, of the ‘growth with equity’ strategy, which has achieved impressive results

during the past two decades, remains in place. Second, as has been outlined above, the

historical background and institutional nature of Chilean politics have created a sort of buffer

114

against too radical policy swings, and this applies to policies towards the right as well as

towards the left. In the same way as the Concertación was compelled to seek compromise and

agreement, among its different constituents and with opposition parties from the centre-

right, Piñera’s Coalición por el Cambio will need to work together with the political centre

and even the left, in order to achieve its objectives. These objectives will therefore necessarily

be moderate in character, buffering possible radical right-wing policies by the same

mechanism that has avoided a too radical leftist course during the mandates of two

successive socialist presidents. In his acceptance speech of January 17th, Piñera declared that

he is determined to continue this politica de acuerdos and to seek compromise with the

Concertación parties, which in turn have affirmed their determination to work together with

the new president and to practice an honest and constructive opposition (Lagos 2010; Piñera

2010).

In sum, in spite of the different ideological label that will from now on be attached to Chile,

changing from a New Left country into a centre-right country and tilting the continental

balance slightly back in favour of the political right, Piñera’s accession to the presidency will

probably not cause any sudden reversal of the course that the country has embarked upon

since the return to democracy, even before the rise of the New Left. Chile is a sound and

mature democracy, in which political institutions compel the executive power to be

constructive and moderate towards all sectors of politics and society, guaranteeing the

continuity of policies that have proven effective.

5.6 Impact of the New Left on poverty and inequality

After having provided an – albeit incomplete – overview of government dynamics and social

policies in each of the three New Left countries that are the subject of this analysis, I now

turn to the quantitative evaluation of the performance of each of these countries, with regard

to the issues of poverty and inequality. Hypothetically, the radical Venezuelan model of

reorganisation of the state to the benefit of the poor and socially excluded should render the

most significant results in terms of poverty reduction and regulation of income inequality.

More than in Brazil and Chile, and more than anywhere else on the continent, Chávez has

vowed to put the Venezuelan state entirely at the service of the country’s poor; the reduction

of inequality and the eradication of poverty (the central goal of Misión Cristo, for example, is

‘zero poverty’ by the year 2021; see Gobierno en Línea N.d.) are central and crucial objectives

of the Chávez government, and it should be expected that both indicators show a significant

improvement as a result of Chávez’s radical social policies. However, opposition of

economically influential sectors of society to Chávez’s Bolivarian project can obstruct and

115

undermine the achievements of the redistributive policies of the government aimed at

reducing poverty and inequality.

The pragmatic left of Brazil and the cooperative left of Chile, due to their continued

adherence to international structures that are in their essence exploitative for poor countries

(see chapters 2 and 3), are expected to perform less well than the radical left of Venezuela on

the typically leftist issues of poverty and inequality. It is difficult to hypothesise on the

question whether the pragmatic left of Brazil or the cooperative left in Chile would yield the

best performance on these indicators. On the one hand, the pragmatic strand of New Left

finds itself to the left of the cooperative strand, and should therefore be more committed to

leftist issues such as poverty and income distribution. The clearly leftist orientation of Lula

and the PT vis-à-vis the continued adherence to and even active promotion of the

international neo-liberal framework of the successive Concertación governments in Chile,

suggests that better results are to be expected in Brazil. On the other hand, however, the fact

that the Lula government seems to have subordinated its social policies to the overall

objective of sustaining macro-economic stability, together with the impression that Chile, in

its overall strategy of ‘growth with equity’, has gradually put more emphasis on equity than

on growth, especially after the accession of Lagos and Bachelet to the presidency, would

suggest better results for Chile. In the following sub-sections, I attempt to answer this

theoretical question by comparing the socio-economic achievements of Venezuela, Brazil and

Chile, on the figures for poverty and inequality.

Poverty

In chapters 3 and 4 (see figure 1) it has been argued that the 1980s, which are regularly

referred to as a ‘lost decade’ for Latin America, were characterised by a significant increase in

poverty in most Latin American countries. In figure 4, the development of poverty in Latin

America for the period 1990-2008 is presented.5

It can be observed that throughout the region, poverty has significantly decreased over the

past two decades, from 48,6 per cent in 1990 to 33,0 per cent in 2008. From 2003 onwards,

the line becomes somewhat steeper, indicating a faster decrease in the number of poor people

in the continent. The beginning of this period coincides with the moment when the rise of

Latin America’s New Left began to gain momentum, with big countries such as Brazil and

5 In this sub-section, the term ‘poverty’ is used to refer to conditions of individuals living below the

national poverty line in their countries. The poverty line varies according to the country, and according

to whether the individual is living in an urban or a rural area. For national poverty lines in Latin

America in 2006, see ECLAC 2006:305).

116

Argentina electing left-wing presidents. It appears that there is a correlation between the

accession of New Left presidents and the decline rate of poverty in the region. This is not to

infer that there is a proven causal relationship between both phenomena; the poverty rate

appears to depend on more variables than government policy alone, but it is interesting to

further elaborate on this observation.

Development of Poverty in Latin America

0

10

20

30

40

50

60

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Perc

enta

ge o

f poor people

Figure 4. Development of poverty in Latin America, 1990-2008 (Source: ECLAC)

In figures 5, 6 and 7, the development of poverty rates in Venezuela, Brazil, and Chile, is

summarised. All three countries follow the continental pattern of declining poverty rates,

although it is noteworthy that the decline in Venezuela only starts from 2002 and does not

accelerate before 2004. It seems that the first three years of the New Left in power have not

led to a reduction of poverty in Venezuela, but that from 2002, when Chávez’s legitimacy and

determination increased as a result of the failed coup against him, his redistributive policies

began to take hold, and to wield results. The decrease in poverty rates that Venezuela has

shown since then is superior to that in Brazil and Chile, and also to the regional average, as

will be demonstrated below.

117

Development of Poverty in Venezuela

0

10

20

30

40

50

60

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Perc

enta

ge o

f poor people

Figure 5. Development of poverty in Venezuela, 1990-2008 (Source: ECLAC).

Development of Poverty in Brazil

0

10

20

30

40

50

60

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Perc

enta

ge o

f poor people

Figure 6. Development of poverty in Brazil, 1990-2008 (Source: ECLAC).

118

Development of Poverty in Chile

0

5

10

15

20

25

30

35

40

45

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Perc

enta

ge o

f poor people

Figure 7. Development of poverty in Chile, 1990-2006 (Source: ECLAC).

Brazil and Chile also show significant, and arguably more stable, declines in poverty rates

during the past two decades. In Brazil, the graph becomes steeper, indicating a faster

reduction of poverty, from 2003, the moment that president Lula came to power. Again, at

this stage a causal relationship between the ideological orientation of the president and the

decline rate of poverty should not be inferred: as becomes clear from the graph, the decline

rates under Lula are comparable to those of the period 1993-1996, under presidents Franco

and Cardoso, who were considerably less left-leaning than the current president Lula.

In Chile, the steady reduction in poverty rates is impressive, amounting to a 65 per cent

decline in sixteen years. The poverty rate in Chile is now comparable to that of the US (13,2

per cent in 2008; see DeNavas-Walt, Proctor and Smith 2009:13). From the available ECLAC

data on Chile, which unfortunately do not cover the Bachelet period from 2006, it is not

possible to detect any significant acceleration of the pace of declining poverty since the

accession of the New Left president Ricardo Lagos in 2000. This can be explained by the

nature of the successive governments, placing the development of a new society with equal

opportunities for all at the centre of government attention from the moment the

Concertación coalition came to power in 1990, and the importance of consensus between the

constituent parties in the Concertación forestalling any sudden change in government

policies after the accession of a new president.

In order to compare the performance of the three countries with regard to poverty

reduction, I have calculated the relative development of the poverty rate for each year,

interpolating the values that are not available in the data. With this calculation, the increase

or decline in the poverty rate over time for each country becomes visible. The results are

119

shown in figure 8. Negative values indicate a reduction of poverty, whereas positive values

imply rising poverty.

Relative Development of Poverty

-25

-20

-15

-10

-5

0

5

10

15

201990-1991

1991-1992

1992-1993

1993-1994

1994-1995

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008

Develo

pm

ent of perc

enta

ge o

f poor people

rela

tive to p

revio

us y

ear, in p

er cent

VenezuelaBrazilChileLatin America

Figure 8. Relative development of poverty rates in Venezuela, Brazil, Chile and Latin

America (average), 1990-2008 (Source: ECLAC and own calculations; data on Chile

available only until 2006).

The fact that most of the dots in this figure are at values below zero confirms the earlier

observation that poverty rates in the three countries, as well as the regional rate, have

declined over the past two decades. It appears that most of the negative values are to be

found in the last five years (2003-2008), coinciding with the rise of the New Left in many

Latin American countries. This tendency is demonstrated more clearly if, for all three

countries, the period 1990-2008 is split up in a period before the rise of the New Left and the

period after the accession of a New Left president. The figures are presented in table 6. For

the Latin American average, the year used to mark the beginning of the New Left phase is

2003, based on the fact that in eleven out of thirteen countries currently under New Left

governments, the ‘left turn’ took place from this year (see section 4.4 and figure 2).

120

Poverty reduction

(1990-2008)

Before New Left (years) New Left phase (years)

Brazil -46 % -19 % (1990-2003) -33 % (2003-2008)

Chile -65 % -48 % (1990-2000) -32 % (2000-2006)

Venezuela -31 % +34 % (1990-1999) -44 % (1999-2008)

Latin America -32 % -8 % (1990-2003) -26 % (2003-2008)

Table 6. Decline of poverty rates in Brazil, Chile and Venezuela (1990-2008), by type of

government orientation (Source: ECLAC and own calculations; data on Chile available

only until 2006).

From this table it becomes clear that with the exception of Chile, the decline in poverty rates

significantly accelerated after the New Left came to power. Especially in Venezuela the

picture is very clear, with poverty dramatically increasing prior to the accession of president

Chávez, and steadily declining under the current New Left government. Also in Brazil, the

decline in the poverty rate has become significantly steeper since president Lula came to

power. In Brazil and Chile, the decline of poverty is significantly bigger than the continental

average, although in Chile it is not possible to observe a significant change after the accession

of the New Left president Lagos. Considering the period 1990-2006 as a whole, Chile is the

country that has made the most significant steps in reducing poverty, suggesting that Chile’s

political and economic stability, and its continuous commitment to an open economy and

international free trade is not harmful, or indeed even beneficial, to national poverty rates. If

the achievements of the different New Left governments are considered, however, Brazil and

especially Venezuela show impressive results with regard to poverty reduction. Therefore, it

is also suggested that the New Left can have a significant impact on national poverty rates.

Inequality

With regard to the issue of income inequality, it should be noted that Latin America in

general has made considerable advances during the past decade. Figure 9 shows the

development of the Gini coefficient for the region.

121

Development of Inequality in Latin America

0,49

0,5

0,51

0,52

0,53

0,54

0,55

0,56

0,57

0,58

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Gin

i Coeffic

ient

Figure 9. Development of Gini coefficient in Latin America, 1990-2008. Note: regional

values have been calculated using the non-weighted mean of the Gini coefficients of at least

five Latin American countries (Source: ECLAC).

Generally, an improvement in the Gini index of almost 10 per cent can be observed through

the last two decades, but if the graph is divided in two parts, it should be noted that after a

period of cautious improvement and deterioration, the most significant decrease in the value

of the Gini coefficient has taken place from about 2002, indicating that from that moment

onwards the region has moved steadily towards a more equal income distribution. The line

becomes steepest from about 2006 onwards, which more or less coincides with the period

that many Latin American countries elected a leftist president (see figure 2). As with poverty,

it would be premature to conclude that the improvement of the regional Gini coefficient can

be attributed to the rise of the New Left. In order to investigate this contention, a closer look

into the three countries that are the subject of this research is necessary.

Figures 10, 11 and 12 show the development of the Gini index in Venezuela, Brazil and

Chile, respectively. It is made clear that the continental pattern of decreasing (and thus

improving) Gini coefficients from 2001 onwards is also visible in all these countries.

However, in order to test the hypothesis that New Left governments have an impact on

income inequality, it is necessary to determine whether inequality in these countries has

decreased faster or slower than the continental average. It could be expected that the

improvement of inequality figures is most significant in the more radical leftist strand

(Venezuela), and least significant in the cooperative leftist strand (Chile).

122

Development of Inequality in Venezuela

0,4

0,42

0,44

0,46

0,48

0,5

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Gin

i Coeffic

ient

Figure 10. Development of Gini coefficient in Venezuela, 1990-2008 (Source: ECLAC).

Development of Inequality in Brazil

0,58

0,59

0,6

0,61

0,62

0,63

0,64

0,65

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Gin

i Coeffic

ient

Figure 11. Development of Gini coefficient in Brazil, 1990-2008 (Source: ECLAC).

123

Development of Inequality in Chile

0,51

0,52

0,53

0,54

0,55

0,56

0,57

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Gin

i Coeffic

ient

Figure 12. Development of Gini coefficient in Chile, 1990-2006 (Source: ECLAC).

Because of the great variation in the absolute values of the Gini coefficients in the three

countries (for example, Venezuela has the lowest index, hovering at around 0,40 while the

Gini index for in Brazil is significantly higher at about 0,60), the information rendered by a

mere comparison of absolute values is not very useful for comparing the specific performance

of the individual countries relative to each other and to the continental average. Therefore,

using the same method as in the above sub-section on poverty, I have calculated the

proportional change in the Gini indices for the three countries for each year. The values for

the years that were not included in the data set have been interpolated. The results are shown

in figure 13. In this graph, positive values indicate that the Gini index has increased during

the past year, while negative values point to a decrease of the index and thus to an

improvement of the income distribution.

From an analysis of this graph, moving roughly from the upper left to the lower right

corner, it becomes clear that since about 2002, there is a tendency towards negative growth

of the Gini index, confirming the regional trend of declining income inequality. It is

noteworthy that the downward trend of the lines representing the different countries does

not begin before well into the second half of the period, again coinciding with the rise of the

New Left.

In the Venezuelan case, the graph indicates that the country performed under the regional

average until 1997, with increasing income inequality (positive values) year after year. Also, it

can be observed that during the first Chávez years there has been a deterioration of the Gini

index, but since 2002, possibly owing to Chávez’s government’s increased commitment to

redistribution after the failed coup, there is a steady improvement of the country’s

performance, which then becomes significantly better than the Latin American average.

124

From 2002 to 2008, in four out of six years, the line representing Venezuela has the lowest

values of all units of analysis in the graph, indicating that during this period Venezuela had

the best performance of all New Left governments in the analysis.

Relative Development of Inequality

-6

-5

-4

-3

-2

-1

0

1

2

3

1990-1991

1991-1992

1992-1993

1993-1994

1994-1995

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008D

evelo

pm

ent of Gin

i coefficie

nt re

lative to p

revio

us y

ear,

in p

er cent

VenezuelaBrazil

ChileLatin America

Figure 13. Relative development of Gini coefficient in Venezuela, Brazil, Chile and Latin

America (average), 1990-2008 (Source: ECLAC and own calculations; data on Chile

available only until 2006).

For Brazil, apart from the fact that the absolute values are the highest of the three countries

in the comparison and also among the highest in the world, the development of inequality

figures is somewhat disappointing since the accession of president Lula. This can be

explained by the structural subordination of social programmes to the prime objective of

macro-economic stability practiced by the Lula government. From 2001 to 2007 there has

been a steady improvement of the Gini index, but this development remains close to and does

not significantly deviate from the movement of the regional coefficient, and can therefore not

be attributed to specific government policies. From 2007 to 2008, Brazil was the only

country in the analysis that actually experienced an increase in income inequality. In sum,

with regard to the issue of inequality, there is no significant ‘Lula effect’ visible in the data.

The ECLAC data on Chile, disappointingly, do not show the development of the Gini

coefficient after 2006, which is the period of the Bachelet government. From the available

data, however, it is possible to infer that the elasticity of the Gini index is smallest in Chile,

indicating a high degree of stability in the income inequality in this country. As in the section

125

on poverty above, this can be most plausibly attributed to the nature of the Concertación

coalition, in which the general policy direction has not significantly changed since the return

of democracy in 1990. The possible effects of the accession of a New Left president in Chile

are buffered by the institutionalisation of the política de acuerdos (politics of agreement),

practiced by the coalition as well as the opposition. The movement of the Chilean line is

comparable to that of the region as a whole, and no clear ‘New Left’ effect can be observed.

On the other hand, from 2003 to 2006 Chile performed relatively well, achieving a reduction

of the Gini value of about 2 per cent each year, which might be attributed to the first effects of

the Chile Solidario programme.

In sum, with regard to the reduction of inequality, the only New Left country that has

performed significantly better than the regional average appears to be Chávez’s Venezuela.

Whereas in Brazil as well as in Chile, the development of inequality figures is more or less in

line with the Latin American trend, in Venezuela there seems to be a positive deviation of the

regional pattern, improvements in income distribution being achieved year after year.

Therefore, from this analysis it is suggested that the radical strand of New Left politics has

the greatest potential to significantly improve the income distribution, whereas the

improvements realized by the pragmatic and cooperative strands do not clearly deviate from

the continental pattern.

5.7 Conclusion

Without pretending to provide an all-encompassing picture of a phenomenon that is both too

broad and too complex to comprehensively analyse in the limited scope of an MA thesis, this

chapter has attempted to provide a judgement of the performance of three Latin American

countries that are currently governed by New Left presidents, with regard to the reduction of

poverty and inequality. The analysis has proceeded in two ways. First, I have tried to

qualitatively describe and assess the specific social programmes of the governments in

Venezuela, Brazil, and Chile, aimed at reducing poverty and inequality. Then, I have

quantitatively compared the results that these three countries have booked in these areas.

From the qualitative description and comparison of social programmes in Venezuela,

Brazil, and Chile, several things are worth noting. One important observation is that out of

these three countries, Venezuela appears to have the most genuine commitment to put

redistributive policies aimed at the poor at the centre of government attention. By

nationalising oil assets and redirecting part of the generated income to social programmes of

all sorts, regulated by progressive and ambitious mechanisms in which the population is

explicitly invited to participate, the Chávez government has created a new institutionalised

126

process of channelling the gains of economic activity, and the funds from the exploitation of

the country’s prime natural resource, directly to the benefit of the people. This is a step that

could be called truly revolutionary, especially given the fact that historically, the gains of

economic activity in the Latin American periphery of the world-system have to an important

extent either been externalised, or remained in the hands of a small local elite, without

benefiting the majority of the people (see chapters 2 and 3).

The New Left in Brazil, in spite of a relatively successful social programme such as the Bolsa

Família, has kept redistribution of income and the promotion of social well-being

consistently subordinated to the broader political goal of maintaining macro-economic and

monetary stability. In this sense, the general policy direction of the Lula government is

characterised by an important degree of continuity vis-à-vis the previous neo-liberal Cardoso

government. The rationale behind this was that in achieving economic stability, the

continued confidence of international investors in the Brazilian economy would be

safeguarded and with it, a continued inflow of capital to support the economy and generate

employment would be guaranteed. On the other hand, the preference of the Lula government

to appeasing international capital over committing itself to supporting Brazil’s millions of

poor people, appears to undermine its credibility as regards its determination to seriously

and structurally address the issues of poverty and inequality. It could be argued that due to

Brazil’s continued commitment to the existing international framework, its social policies

have been unable to reach their full potential.

In Chile, the legacy of a failed attempt at constructing socialism, followed by a period of

repressive dictatorship, the relative success of ‘proto-neo-liberal’ restructuring during the

Pinochet era, and the specific institutional and consensus-based character of Chilean politics

in general and successive Concertación governments in particular, seem to contribute to a

climate of continued political stability. As a result, the accession of the first New Left

president Ricardo Lagos in 2000 did not significantly change the overall policy direction and

preferences of the government, which have remained basically constant since the return of

democracy. Chile, due to its unique history in the Latin American context, has remained and

remains loyal to the premises of neo-liberalism, even under two consecutive presidents that

are members of the socialist party. However, in spite of its adherence to neo-liberalism, Chile

has pursued active and interventionist socio-economic policies, expanding the size and social

responsibilities of the state, in defiance of the neo-liberal dogma that the state should be as

small as possible. It has, in other words, pursued leftist policies in a neo-liberal straitjacket.

The quantitative comparison of the three countries only partially confirms the hypothesis

that the impact of New Left politics on poverty and inequality should be greatest in the

country that seems most genuinely committed to these topic, Venezuela, and smallest in the

country that has remained most loyal to the neo-liberal framework and has not changed its

127

overall policy direction upon the accession of New Left presidents, Chile. It has been

observed that the region as a whole has shown accelerated improvements in poverty and

inequality figures from the moment that many Latin American countries experienced a shift

towards the New Left. The suggestion that from the three countries in the analysis, Venezuela

has indeed achieved the best results in reducing poverty and inequality, is confirmed by the

data, although the results of the neo-liberally committed Concertación governments in Chile,

before and after the rise of the New Left, are equally impressive. Less satisfactory results are

only shown by the pragmatic left: the specific performance of Brazil, showing no clear

deviation from the continental pattern of gradual improvement of poverty and inequality

indicators, confirms the impression that Lula's preference for macro-economic stability leads

to disappointing results with regard to poverty and inequality reduction.

In sum, the pictures sketched in the descriptive sections on Venezuela, Brazil and Chile and

their respective social programmes, are confirmed by the analysis of data on poverty and

inequality. First, the potential of Latin America’s New Left of seriously applying the power of

the state to bring about structural changes in the distribution of national income and to

tackle the historically imposed and reinforced phenomena of poverty and inequality, seems

greatest for the radical left of Venezuela, which is the country that has shown the best results

in these areas. Second, Brazil’s New Left rhetoric combined with the reality of the persistence

of and preference for neo-liberal ideas, has led to disappointing results that do not

significantly differ from regional averages. And third, Chile’s continued commitment to a

neo-liberal course in combination with its distinctively leftist social policies, has wielded

impressive achievements in poverty and inequality reduction. It is suggested that success or

failure of redistributive policies depends first and foremost not on political orientation, nor

on the concessions made to non-leftist forces during elections, but rather and quite simply on

the genuine commitment and determination on the part of the government, to employ the

power of the state to address poverty and inequality, in order to create a stable and equitable

society.

128

6. Conclusions: a new phase in Latin American history?

6.1 Introduction

This study has analysed the rise of the New Left in contemporary Latin America, in terms of

its potential to address two of the most persistent and most urgent socio-economic issues of

the region, poverty and inequality. The goal of the research has been to determine to what

extent the New Left movement, in the different forms in which it currently manifests itself

throughout the region, could contain the seeds of change in the historical pattern of

structural subordination, exploitation and inequality that has plagued Latin America and its

inhabitants since the colonial encounter. In other words, although the left is not new to the

region and neither are attempts to tackle the problems of poverty and inequality, can the rise

of Latin America’s New Left be regarded as ushering in a new chapter in Latin American

history, the beginning of structural change in the situation of the tens of millions poor and

excluded Latin Americans?

The previous chapters have elaborated, from different perspectives, on different parts of the

central research question, posited in the introduction. The theoretical perspective in chapter

2, the historical background in chapter 3, the description and analysis of the continental

phenomenon referred to as Latin America’s New Left in chapter 4, and the qualitative and

quantitative analysis of the socio-economic performance of the New Left in Venezuela, Brazil

and Chile in chapter 5, are now to be combined in order to arrive at a conclusion. In this

concluding chapter, I attempt to provide an, albeit provisory, answer to the central question

of this research, posited in the introduction:

How can the historical pattern of structural inequality and exploitation of Latin

America since the colonial encounter be explained, which factors have

contributed to the emergence and the rise of New Left politics in contemporary

Latin America, what are the central characteristics and objectives of this

movement, and what is the real potential of this development in terms of

improving standards of living for the poor and excluded population?

129

6.2 A history of structural exploitation, poverty and inequality

The first part of the question is about the historical pattern of structural inequality and

exploitation of Latin America. This topic has been addressed in chapters 2 and 3. In chapter

2, after an observation about the importance of employing a broad and open perspective

while studying events that are taking place outside a Western context, I have argued that

conventional Western theories of international relations and economic development do not

offer convincing accounts for the historical development of Latin America since the colonial

encounter. In order to arrive at an explanation for the persistent structural inequalities in the

region, domestically as well as internationally vis-à-vis the advanced economies, a supra-

state perspective, which focuses not on the nature of individual political entities but rather at

the nature of the connection between the different entities in the international system, is

necessary. In order to describe and analyse the historical background of the present Latin

American reality, I have proposed a model that is based on insights from dependency theory

and World-Systems theory. A central feature of this model is the unequal and exploitative

nature of the connection between the Latin American periphery and the core of the world-

system. Discarding erroneous notions of plain sovereignty and participation in the world

economy on equal terms, I have stressed the importance of external factors for the economic

and political development of the Latin American periphery, and the structural problems

peripheral countries face when they attempt to pursue autonomous paths of development

that are contrary to the interests of the core.

In chapter 3, I have applied this theoretical model to the historical development of Latin

America since the colonial encounter. From this analysis, three central observations have

been made regarding the circumstances in which Latin American countries have historically

found themselves. First, throughout history there has been a significant amount of external

control over political and economic affairs in the region, compromising the autonomy of

Latin American governments to pursue independent development strategies. Second, there

has been an important degree of externalisation of gains from economic activity. The

enormous material wealth of the region has principally served external actors and countries,

and has historically hardly benefited the majority of Latin Americans themselves. It appears

that from the colonial encounter until our days, there has been a great degree of continuity

between the ‘formal colonialism’ of the Spanish and Portuguese empires, the ‘informal

colonialism’ of British merchants in the nineteenth century and the de facto ‘neo-colonial’

practices of the period after the Latin American debt crisis. And finally, the expropriation of

natural resources by external actors, in collusion with a small local elite, has created and

reinforced a notoriously unequal income distribution. All these things were most visible

130

during the colonial era, but have remained central, although in a more subtle and informal

way, after the decolonisation of the region. Especially during the last two decades of the

twentieth century, the imposition of structural economic reforms prescribed by the

Washington Consensus brought the region ever more under the umbrella of an international

neo-liberal economic system. In a process that could be called neo-colonial, the peripheral

economies of Latin America were organised and moulded to serve the interests of the core of

the world-system.

6.3 Tracing the origins of Latin America’s New Left

The second part of the research question, which has been addressed in chapter 4, concerns

the origins of Latin America’s New Left movement, which began with popular discontent and

large-scale uprisings in many countries against the disappointing results of neo-liberal

reforms, and culminated in the accession of several left-of-centre presidents in a majority of

Latin American countries. In 1998, Venezuela elected the first New Left president in the

region; by 2009, thirteen out of seventeen Latin American countries were governed by

presidents that considered themselves left-of-centre. The analysis of the factors that have

contributed to the rise of the New Left takes as its point of departure the historically

persistent external control over Latin American politics and economic activity, and the

enormous gap between rich and poor, which became deeper towards the end of the century

as a result of the implementation of the prescriptions of the Washington Consensus in several

Latin American countries. I have argued that the legacy of neo-liberalism, the period during

which the structural constraints to autonomous development that have plagued the region

throughout history suddenly became more pervasive and more evident, could be regarded as

one of the principal factors that have contributed to the rise of the New Left movement in

Latin America. The rise of the New Left began with large-scale popular uprisings in many

countries protesting the disappointing results of neo-liberal reforms. However, the popular

shift towards the political left could only be translated into a political shift thanks to another

crucial event, the return of democratic rule to the continent. After a long period that was

characterised by repressive military dictatorships in several countries, politicians became

compelled to be more sensitive to the feelings and desires of the population, which

culminated in a political shift towards the left, bringing notions of solidarity and equity back

to the centre of political attention. The current shift to the left in Latin American politics

seems to have been greatly facilitated by these two parallel transitions, structural adjustment

and its legacy on the one hand, and the return of democracy on the other.

131

Apart from these parallel transitions, the changed geo-political environment since the end

of the Cold War has also contributed to the rise of Latin America’s New Left. The US,

traditionally the gardener of its self-appropriated Latin American ‘backyard’, is no longer in a

position to dictate the course of events in the Western Hemisphere, and no longer regards

leftist politics as a threat to its national security. Consequently, it seems that Latin America’s

New Left is able to develop because the core of the world-system, especially the US, allows it

to develop. The relationship between the core and Latin America, traditionally in the

periphery of the world-system, seems to have changed: the core is no longer strong enough to

dictate development in Latin America; the periphery appears to be re-asserting itself more

and more.

A final factor that appears to be playing a role in the rise of New Left politics in Latin

America is the so-called ‘contagion effect’. The election of Hugo Chávez in Venezuela, the first

New Left president of the region, created a political momentum for the election of more New

Left leaders throughout the continent, in many cases openly supported by Chávez and his

Bolivarian and anti-imperial rhetoric. However, the ‘contagion effect’ does not limit itself to

Chávez’s personality only; throughout the region, people appear to realise that their

continent is involved in a momentous shift away from the structural constraints that have

historically hindered autonomous development, and it is this realisation that provides New

Left leaders with increased legitimacy and reinforces the energy and impetus of the

movement.

6.4 Central characteristics of the New Left

In addressing the third part of the research question, in chapter 4, I have employed an

explicitly continental perspective, in an attempt to emphasise the truly continental character

of the New Left movement in Latin America. I have argued that the various forms of New Left

politics currently active in the region have four characteristics in common, although there are

great variations in the extent to which these characteristics apply to the various government

that are characterised as part of the New Left. First, the New Left movement proposes a new

phase in Latin American history, in which the identity and dignity of the Latin American

people are re-asserted and in which the externally imposed factors that have historically

impeded autonomous and equitable development are being challenged. This is manifested in

the political, economic and social empowerment of historically marginalised groups and in a

desire to challenge and alter the historically evolved sentiment of Latin American social,

political and ideological inferiority vis-à-vis the West.

132

Second, the New Left movement, true to its leftist political ideology, emphasises the

importance of an influential and interventionist state to provide for an equitable and solidary

income distribution. The New Left is critical and suspicious towards the free market and

recognises that the process of decreasing the size, importance and influence of the state vis-

à-vis the market, implemented especially during the structural reforms of the 1980s and

1990s, has not been beneficial, and indeed detrimental, for the socio-economic circumstances

in which a majority of Latin Americans live. Therefore, the New Left aims to re-assert the

regulatory role of the state in the market.

Third, the New Left is characterised by a general critique of the dominant neo-liberal

international framework, in which peripheral countries are compelled to participate on

unequal terms. Although several governments that characterise themselves as left-of-centre

do not aim to structurally change the international framework – especially Chile could in its

international behaviour be seen as a ‘champion of neo-liberalism’ –, they do develop and

implement domestic social policies aimed at mitigating the negative consequences of neo-

liberalism for the population. The New Left, especially in the more radical countries, is

characterised by economic nationalism and a general critique of the exploitative character of

the Latin American connection to the world-system.

Finally, Latin America’s New Left, when compared to the more revolutionary lefts that

earlier attempted to gain influence in the region, is characterised by relative moderation in its

ideology, proposals and objectives. The New Left characterises itself by acceptance and

promotion of a democratic system, and respect for private property and the economic virtues

of the market. It is probably also partly thanks to its moderate positioning that until now, the

New Left has not encountered serious opposition or resistance from the core of the world-

system. The policies of the more radical New Left countries such as Venezuela and Bolivia

have been harshly criticised in Western media and in the rhetoric of Western leaders, but

apart from this rhetorical offensive, New Left countries have not had to deal with severe

economic sanctions, the significant withdrawal of foreign capital, or other forms of external

intervention. All New Left leaders in the region have come to power in relatively clean

elections, and they principally adhere to the rules and institutions of democracy. In some

New Left countries, attempts at reforming democracy to make it more representative and

participatory are being made, thereby proposing a revision of Western-inspired notions of

what democracy entails.

133

6.5 The New Left’s socio-economic performance

In order to provide an answer to the final part of the research question, chapter 5 has been

dedicated to a qualitative and quantitative assessment of the socio-economic performance of

three New Left countries, that according to my proposed categorisation (see chapter 4)

represent the three different strands of New Left politics currently active in Latin America:

the radical left of Venezuela, the pragmatic left of Brazil, and the cooperative left of Chile. A

qualitative and anecdotal comparison of social programmes aimed at reducing poverty and

inequality in each of these countries leads to the hypothesis that the radical left of Chávez’s

Venezuela is the most successful in providing sustainable solutions to these urgent social

problems, while the cooperative left of Chile should perform less well on these indicators,

since it principally remains loyal to the international neo-liberal framework, thereby

compromising its commitment to improve living conditions for the poor and marginalised.

The pragmatic left of Brazil hypothetically occupies a middle position.

From the quantitative analysis in chapter 5, in which I compared poverty and inequality

rates for these three countries as well as relative development of these indicators over time, it

has become clear that of the three countries, Venezuela indeed appears to show the best

performance. Since the accession of Hugo Chávez in 1999, and especially from 2002-2003

onwards, Venezuela has shown impressive results in poverty and inequality reduction,

leading to the conclusion that the social programmes of the Chávez government are indeed

effective in fighting structural poverty and inequality among poor Venezuelans.

What is happening in Venezuela appears to be something truly new in Latin American

politics and constitutes a genuine break with the historical tradition of subordination to

external interests and exploitation that all Latin American countries have experienced.

President Chávez aims at nothing less than a complete reorganisation of the state, its

institutions and its financial and budgetary architecture, a reclaiming of the national wealth

for the formerly excluded people, and the creation of an interventionist state oriented to serve

the needs not of the affluent but of the poor. The fact that Chávez has explicitly declared that

the poor and marginalised should be the only focus of state attention and support, points to a

significant political shift away from a the traditional practice of statecraft in Latin America,

catering mostly to the interests of the national elite and foreign investors and companies.

For Brazil, the socio-economic picture is somewhat less promising. Upon assuming power,

the Lula government made a surprising move away from the anti-neo-liberal tradition and

ideology of the PT and towards increased loyalty to the international neo-liberal framework.

This focus on stability and external credibility may have stabilised the Brazilian economy,

tackled inflation and created economic growth, but has also compromised the ability of the

134

state to develop and implement lasting solutions to the structural problems of poverty and

inequality. Although Lula’s Brazil might perform well on traditional economic indicators such

as GDP growth, social programmes of the Brazilian government have been made subject to

the overall political objective of maintaining macro-economic stability and have therefore

been unable to reach their full potential.

The Brazilian model has remained loyal to the existing international status quo, which is

dominated by international capital from the core. Although Brazil pursues a relatively activist

foreign policy and aims and claims to represent the interests of the global South in

international trade issues with the West, in reality it has not significantly decoupled from the

existing world-system, which has historically been characterised by dominance of the core

over the periphery. From a World-Systems theoretical perspective, Brazil could perhaps be

viewed as being involved in a movement from the periphery to the semi-periphery, assuming

the function of a buffer between the core and the periphery. It remains loyal to the ideology

and the prescriptions of the core and seizes some benefits from this, but at the same time

refrains from siding unconditionally with the periphery in an attempt to structurally improve

the lot of the developing world. Thus, in terms of positioning the Latin American, or global,

periphery in a more autonomous way on the international scene, Brazil does not appear to

present a viable alternative. If one is convinced that the existing system of capitalist

domination and free market fundamentalism has to be altered in order to provide for a fairer

and more equitable division of power and wealth among the nations and peoples of the

world, one is tempted to look more at the radical alternative that is presented by radical left

governments such as Venezuela.

In Chile, the successive Concertación governments, first under the leadership of Christian

Democratic presidents and later under the Socialists Lagos and Bachelet, have followed a

different course, and have made no secret of their adherence to the principles of neo-

liberalism. Whereas in Brazil, the macro-economic policies of the Lula government came as a

surprise, given the history and ideology of the PT, Chile’s particular history implies that its

governments’ adherence to the international neo-liberal framework is not being questioned.

The dramatic failure of the Allende experiment, in combination with the stabilising effects of

the ‘proto-neo-liberalism’ of the 1970s under general Pinochet, the need for compromise

among the broad coalition that is the Concertación, and the institutionalised and consensus-

based nature of Chilean politics, have produced an important degree of continuity in the

macro-economic policies of Chile’s civilian governments. This does not imply, however, that

since the return of democracy in 1990, successive Chilean governments have not pursued

ambitious social policies aimed at eradicating poverty and reducing inequality. Chile has

pursued the parallel strategies of ‘growth with equity’, and it seems that under the

presidencies of the socialists Lagos and Bachelet, the ‘equity’ component has gained in

135

importance, at the expense of the objective of ‘growth’. Employing this ‘growth with equity’

model, Chile has achieved remarkably good results with regard to the reduction of poverty

and inequality. It remains to be seen to what extent this will change under the new centre-

right president Piñera who will take office in March 2010, but sudden great changes in the

overall policy direction of the Chilean government are not to be expected.

Based on the analysis provided in chapters 4 and 5, it appears that the radical left strand

appears to have the greatest potential in terms of tackling the socio-economic issues of

poverty and inequality, and has booked the most significant successes, in terms of

redistribution of economic wealth and reduction of poverty. The other two strands of New

Left politics, the pragmatic left of Brazil and the cooperative left of Chile, are characterised by

a principal adherence to the primacy of the framework of global neo-liberal hegemony and as

such do not structurally challenge this framework that has historically been beneficial to a

few, but detrimental to many.

Apart from Venezuela, Chile’s socio-economic performance under an explicit adherence to

the neo-liberal framework is equally impressive, suggesting that in order to fight poverty and

inequality, a peripheral country does not necessarily need to denounce neo-liberalism and

laissez-faire capitalism. Chile’s achievements seem to confirm the neo-liberal and classical

economic assertion, that by emulating a Western model of economic development, a

developing country can indeed arrive at an economic ‘take-off’ and realise sustained

development and increase wealth and well-being for its inhabitants. However, since Chile

continues to work within a system that is theoretically exploitative and has historically

proven to be detrimental for peripheral countries, the socio-economic achievements of the

country can theoretically not be structural and therefore, according to arguments proposed in

this thesis, not sustainable. How this works out in practice remains to be seen. In any case,

the similarity in the achievements of the Venezuelan and the Chilean development models,

which are fundamentally opposed to each other as for the extent to which they accept the

given international framework, is remarkable and calls for further research.

6.6 A break with the past?

Having argued that the New Left in Latin America appears, at least in some cases and to

some extent, to have real potential in terms of tackling urgent socio-economic issues such as

poverty and inequality, it is interesting to determine whether and to what extent this

phenomenon constitutes a break with the past. On the one hand, one could argue that the

emergence and the rise of Latin America’s New Left is indeed something new. Especially in

the more radical New Left countries, it appears that for the first time in history, political

136

leaders put the state principally at the service of the people and no longer at the service of

domestic and especially external business interests. In many Latin American countries,

political and economic power has traditionally been shared among conservatives and liberals.

Today, the prospect of a third, socialist or social democratic political strand consolidating

itself among the traditionally dominant strands, seems genuine. It is too early to tell whether

the New Left will indeed succeed in assuring its continuity, not only in power but also in

opposition, but the power of the present movement, that occurs in a majority of countries

throughout the region, seems to create a certain momentum that provides it with the

opportunity to remain an important political factor into the future.

On the other hand, it could be argued that attempts at reconstructing the state in order to

better serve the interests of the people instead of those of external powers and business, have

already been made earlier in Latin American history. The emancipation and independence

movement that emerged around the end of the eighteenth century, for example, could also

bee seen in this regard, as it envisioned to break free from the Spanish and Portuguese

colonial yoke and to liberate the Latin American people, in order to create new political

entities on the basis of individual freedom and equality and to provide well-being for all. The

fact that this process ultimately did not change the fate of the poor and excluded and in fact

only changed the positions at the very top of the hierarchy, seems to obscure the initial

intention of the emancipation movement, which was indeed based on Enlightenment ideals

such as a free and fair life for everyone.

Other attempts at re-founding society to make it more equal and equitable have been made

roughly during the third quarter of the twentieth century, when leftist or left-of-centre

movements and parties came to power in Guatemala, Bolivia, Chile, and Nicaragua, among

other countries. They advocated policies of redistribution of land and income, nationalisation

of natural resources and re-dignifying the Latin American people. Thus, the emergence and

rise of a movement that promotes dignity and inequality is not new in Latin America.

However, in the geo-political environment of that time, with the Cold War producing and

reinforcing wide-spread fear for anything that appeared to be only slightly left-of-centre,

these left turns in Latin America were regarded with great suspicion by the core of the world-

system, especially the US. The ideological unity and determination of the core then proceeded

to determine the fate of these leftist movements, and by a series of boycotts, blockades,

sabotage and interventions it was made sure that they were not given a fair chance to

implement their ideologies. What is new at the beginning of the twenty-first century is that

the geo-political environment has changed and that the core of the world-system is less

suspicious towards emerging leftist politics, and at the same time less powerful, less united

and less determined to dictate the course of Latin American events. The New Left seems

therefore to be acquiring the space and autonomy to develop itself without much external

137

meddling, or at least without significant and coordinated attempts by the core to undermine

its efforts to re-found their societies and render them more equitable for their people. The

circumstances in our days are more favourable to the development of the New Left, enabling

it to move more freely to reach its full potential.

When speculating on a possible break with the past, however, one should bear in mind that

the argument of a historical ‘break’ may hold true from a Western perspective, but may be

judged in a different way by Latin Americans. As has been observed in chapter 4, many New

Left governments in Latin America portray their political project not as a break with the past,

but in effect as a continuation of a just and right ideological project that has been ever

existent, but has been interrupted by external forces. Seen from a Latin American

perspective, the New Left project is therefore not a break, but in fact a continuity. In this

view, the real break has been the frustration of autonomous development by actors and

interests from the core of the world-system, and according to (especially the radical) New

Left leaders, this break has now come to and end, as Latin Americans again take command

over their own destinies.

However provisional and incomplete the present description and analysis of the socio-

economic performance of New Left governments may be, regardless of the palpable results

that are currently being achieved in Latin America, the New Left appears to have achieved at

least one thing: it has made political leaders in the region feel more responsible for their

people. After half a millennium of structural subordination, exploitation, poverty and

inequality, poor and marginalised Latin Americans are once again coming to understand that

politics in fact can and should do something to improve their situation, that their leaders

should be held accountable for the consequences of their policies, and that their governments

should principally cater to their interests and needs, and not to those of external actors and

local elites. This constitutes the true break with the past that has been caused by the New

Left: throughout Latin America, people and politicians alike are again realising that politics is

the science not of living off the people, but of serving the people.

138

References

(Web links were verified and stable on January 24, 2010, unless indicated otherwise.)

Abel, Christopher and Colin M. Lewis. 1985. Latin America, Economic Imperialism and the

State: The Political Economy of the External Connection from Independence to the

Present. London: Athlone Press.

Abu-El-Haj, Jawdat. 2007. “From Interdependence to Neo-mercantilism: Brazilian

Capitalism in the Age of Globalization.” Latin American Perspectives 34:92-114.

Agencia Bolivariana de Noticias. 2007. “Chávez propone aumentar período presidencial a 7

años y reelección inmediata.” August 15. Available at:

http://www.abn.info.ve/go_news5.php?articulo=100562&lee=4.

Altimir, Oscar. 1997. “Desigualdad, empleo y pobreza en América Latina: Efectos del ajuste y

del cambio en el estilo de desarrollo.” Desarrollo Económico 37(145):3-30.

Amin, Samir, 1974. “Accumulation and Development: A Theoretical Model.” Review of

African Political Economy 1:9-26.

Anderson, Benedict. 1991 [1983]. Imagined Communities. Reflections on the Origin and

Spread of Nationalism. Reprint; London/New York: Verso.

Andreski, Stanislav. 1966. Parasitism and Subversion. The Case of Latin America. New

York: Pantheon/Random House.

Arditi, Benjamin. 2008. “Arguments about the Left Turns in Latin America.” Latin American

Research Review 43(3):59-81.

Arrighi, Giovanni. 1999. “The Global Market.” Journal of World-Systems Research 5(2):217-

251.

Asamblea Nacional Constituyente de Venezuela. 2000. “Exposición de Motivos de la

Constitución de la República Bolivariana de Venezuela.” March. Available at:

http://www.gobiernoenlinea.ve/docMgr/sharedfiles/059.pdf.

139

Asamblea Constituyente de Bolivia. 2008. “Nueva Constitución Política del Estado.” October.

Available at: http://www.presidencia.gob.bo/download/constitucion.pdf.

Baud, Michiel. 2004. “Area studies and academic colonialism: Latin America thirty years

later.” State and Development: Essays in honour of Menno Vellinga. Rozenberg

Publishers. Available at:

http://www.cedla.uva.nl/10_about/PDF_files_about/baud/State_And_Development.

pdf.

Beasly-Murray, Jon. 2007. “Insurgent Movements.” May 28. Available at:

http://weblogs.elearning.ubc.ca/leftturns/2007/05/insurgent_movements.php.

Bernstein, Henry. 1971. “Modernization theory and the sociological study of development.”

Journal of Development Studies 7(2):141-160.

Biblioteca del Congreso Nacional de Chile. 2004. “Ley 19949. Establece un sistema de

protección social para familias en situación de extrema pobreza denominado ‘Chile

Solidario’.” June 5. Available at: http://www.leychile.cl/Consulta.

Bilaterals.org. 2009. “Uruguay.” April. Available at:

http://www.bilaterals.org/rubrique.php3?id_rubrique=136&lang=en.

Blanco, Luisa. 2009. “The Rise of the Left in Latin America.” Lecture given at School of

Public Policy, Pepperdine University, Malibu, CA. Available at:

http://www.youtube.com/watch?v=i4HDZrmafsE.

Bornschier, Volker. 1999. “The Civilizational Project and its Discontents.” Journal of World-

Systems Research 5(2):165-186.

Boron, Atilio A. 2008. “Promises and challenges. The Latin American left at the start of the

twenty-first century.” Pp. 232-254 in The New Latin American Left. Utopia Reborn,

edited by Patrick Barrett, Patrick, Daniel Chavez and César Rodríguez-Garavito.

London: Pluto Press.

Boylan, Delia. 1996. “Taxation and Transition: The Politics of the 1990 Chilean Tax Reform.”

Latin American Research Review 31(1):7-31.

140

Bradshaw, York W. and Jie Huang. 1991. “Intensifying Global Dependency: Foreign Debt,

Structural Adjustment, and Third World Development.” The Sociological Quarterly

32(3):321-342.

Branford, Sue. 2009. “Brazil: has the dream ended?” Pp. 153-169 in Reclaiming Latin

America: experiments in radical social democracy, edited by Geraldine Lievesley and

Steve Ludlam. London/New York: Zed Books.

Brigagão, Clóvis. 2009. “The Strategic Lines of Brazilian Foreign Policy.” Noref Guest Article,

Norwegian Peacebuilding Centre; May 26. Available at:

http://www.peacebuilding.no/eng/Guest-Writers/2009/The-Strategic-Lines-of-

Brazilian-Foreign-Policy.

Buxton, Julia. 2009. “Venezuela: the political evolution of Bolivarianism.” Pp. 57-74 in

Reclaiming Latin America: experiments in radical social democracy, edited by

Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

Calzadilla Sarmiento, Roberto. 2009. “Balance of Power in Latin America: Sovereignty,

Democracy And Regional Integration.” Presentation given at the Graduate School of

Social Sciences, University of Amsterdam. 22 October.

Cardoso, Fernando Henrique. 1974. “O Inimigo de Papel (The Paper Enemy).” Latin

American Perspectives 1(1):66-74.

Cardoso, Fernando Henrique and Enzo Faletto Verné. 1979. Dependency and Development

in Latin America. Expanded and emended translation of Dependencia y desarrollo en

América Latina (1971). Berkeley, CA: University of California Press.

Cardoso, Fernando Henrique and Jose Guilherme C. Magnani. 1974. “Las contradicciones del

desarrollo asociado.” Desarrollo Económico 14(53):3-32.

Carrillo, Marc. 2002. “Las hipotecas de la Constitución de Chile.” Revista de Estudios

Políticos 115:81-98.

Castañeda, Jorge G. 2006. “Latin America's Left Turn.” Foreign Affairs 85(3):28-43.

------. 2009. “Adios, Monroe Doctrine. When the Yanquis go home.” The New Republic,

December 28. Available at: http://www.tnr.com/article/world/adios-monroe-doctrine.

141

Chase-Dunn, Christopher. 1999. “Globalization: A World-Systems Perspective.” Journal of

World-Systems Research 5(2):187-216.

Chaves, Rodrigo. 2003. “The Bolivarian Circles.” July 30. Available at:

http://www.zmag.org/znet/viewArticle/10076.

Chávez, Hugo. 2009. “Hugo Chávez writes on ‘The battle of Copenhagen’.” Links:

International Journal on Socialist Renewal, December 20. Available at:

http://links.org.au/node/1419.

CIA. 1990. The World Factbook 1990. Available at: http://www.gutenberg.org/etext/14.

------. 2000. “CIA Activities in Chile.” Available at:

https://www.cia.gov/library/reports/general-reports-1/chile/index.html.

------. 2009. The World Factbook 2009. Available at:

https://www.cia.gov/library/publications/the-world-factbook/.

Consejo Nacional Electoral de Venezuela. N.d. “Resultados Electorales.” Available at:

http://www.cne.gov.ve/.

Croucher, Martin. 2009. “Chile Aims to Sign Free Trade Deal with GCC.” Khaleej Times,

October 13. Available at:

http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/business/2009/October/bus

iness_October274.xml&section=business&col=.

Daniel, Frank Jack. 2009. “Venezuela economy shrinks for first time in 5 years.” Reuters,

August 20. Available at: http://www.reuters.com/article/idUSN2052572820090821.

Davies, Arthur. 1967. “Columbus Divides the World.” The Geographical Journal 133(3):337-

344.

DeNavas-Walt, Carmen, Bernadette D. Proctor, and Jessica C. Smith. 2009. “Income,

Poverty, and Health Insurance Coverage in the United States: 2008.” US Census

Bureau, US Department of Commerce, September. Available at:

http://www.census.gov/prod/2009pubs/p60-236.pdf.

142

Dieterich, Heinz. 2006. “Evo Morales, Communitarian Socialism and the Regional Power

Bloc.” Available at: http://mrzine.monthlyreview.org/dieterich070106.html (accessed

on November 16, 2009).

Dominguez, Francisco. 2009. “The Latin Americanization of the politics of emancipation.”

Pp. 37-56 in Reclaiming Latin America: experiments in radical social democracy,

edited by Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

Doria, Pedro. 2007. “O tamanho do Brasil pobre.” Estadão (São Paulo), August 26. Available

at: http://www.estadao.com.br/suplementos/not_sup40930,0.htm.

Duffy, Gary. 2007. “Brazil announces new oil reserves.” BBC News, November 9. Available

at: http://news.bbc.co.uk/2/hi/business/7086264.stm.

Dunne, Tim and Brian C. Smith. 2008. “Realism.” Pp. 90-106 in The Globalization of World

Politics. An introduction to international relations, edited by John Baylis, Steve Smith

and Patricia Owens. 4th ed. Oxford: Oxford University Press.

Economist, the. 2009a. “The Bachelet Model. Chile’s surprising president.” September 17.

Available at:

http://www.economist.com/world/americas/displaystory.cfm?story_id=14460079

(accessed on December 11, 2009).

------. 2009b. “The strange chill in Chile. Chile’s presidential election.” September 17.

Available at:

http://www.economist.com/world/americas/displaystory.cfm?story_id=14456913

(accessed on December 11, 2009).

ECLAC. 2006. “Anexo Estadístico.” Available at:

http://www.eclac.cl/publicaciones/xml/0/27480/PSE2006_AnexoEstadistico.pdf.

Elliott, Larry. 2007. “Venezuela seizes foreign oil fields.” The Guardian, May 2. Available at:

http://www.guardian.co.uk/business/2007/may/02/oilandpetrol.venezuela.

Farid, Jacqueline. 2007. “Miséria no País caiu 27,7% no 1º mandato de Lula.” Agência

Estado, September 9. Available at: http://www3.fgv.br/ibrecps/RET3/Midia/jc877.pdf.

143

Ferguson, Niall. 2009 [2008]. The Ascent of Money. A Financial History of the World.

London: Penguin Books.

Fernandes, Ana Maria. 1996. “Neoliberalism and Economic Uncertainty in Brazil.” Pp. 96-121

in Liberalization in the Developing World: Institutional and economic changes in

Latin America, Africa and Asia, edited by Alex. E. Fernández Jilberto and André

Mommen. London/New York: Routledge.

Fernández Jilberto, Alex E. 1991a. “Introduction. Latin American Development: Rethinking

Social Theory.” International Journal of Political Economy 21(1):3-9.

------. 1991b. “Social Democracy in Latin America. Rethinking Political Movements in Chile.”

International Journal of Political Economy 21(1):66-90.

Fernández Jilberto, Alex E. and André Mommen. 1996. “Setting the Neoliberal Development

Agenda.” Pp. 1-27 in Liberalization in the Developing World: Institutional and

economic changes in Latin America, Africa and Asia, edited by Alex. E. Fernández

Jilberto and André Mommen. London/New York: Routledge.

Foxley, Alejandro. 2004. “Successes and Failures in Poverty Eradication: Chile.” A case study

from Scaling Up Poverty Reduction: A Global Learning Process and Conference,

Shanghai, May 25-27, 2004. Available at:

http://info.worldbank.org/etools/docs/reducingpoverty/case/24/fullcase/Chile%20Fu

ll%20Case.pdf.

Frank, Andre G. 1970. “Dependencia económica, estructura de clases y politica del

subdesarrollo en Latinoamérica.” Revista Mexicana de Sociología 32(2):229-282.

------. 1975. On Capitalist Underdevelopment. Bombay (Mumbai): Oxford University Press.

------. 1978. World Accumulation, 1492-1789. New York/London: Monthly Review Press.

Fukuyama, Francis. 1989. “The End of History?” National Interest 16:3-18. Available at:

http://www.wesjones.com/eoh.htm.

Furtado, Celso. 1966. “Desarrollo y estancamiento en America Latina (Enfoque

estructuralista).” Desarrollo Económico 6(22/23):191-225.

144

Ghatak, Subrata. 1995. Introduction to Development Economics. New York/London:

Routledge.

Gobierno en Línea. N.d. “Misiones.” Available at:

http://www.gobiernoenlinea.ve/miscelaneas/misiones.html.

Golinger, Eva. N.d. “The proof is in the documents: The CIA was involved in the coup against

Venezuelan president Chávez.” VenezuelaFoia.info. Available at:

http://venezuelafoia.info/english.html.

Gott, Richard. 2005. Hugo Chávez and the Bolivarian Revolution. London/New York: Verso.

Grant, Will. 2009. “Former Venezuela Minister Charged.” BBC News, July 18. Available at:

http://news.bbc.co.uk/2/hi/americas/8157088.stm.

Green, Adam. 2009. “Oil Nationalism in Latin America.” Foreign Policy in Focus, September

21. Available at: http://www.fpif.org/fpiftxt/6429.

Gupta, Joydeep. 2009. “Four countries hold up Copenhagen accord.” Science News,

December 19. Available at: http://blog.taragana.com/science/2009/12/19/four-

countries-hold-up-copenhagen-accord-fourth-lead-1397/.

Hayes, Margaret Daly. 1990. “The U.S. and Latin America: A Lost Decade?” Foreign Affairs

68:180-198.

Heath, Roseanna Michelle and Claudia Avellaneda. 2007. "The Emerging Latin American

Left: Inequality, Foreign Leftist Support, and Political Discontent." Paper presented at

the annual meeting of the Midwest Political Science Association, Palmer House Hotel,

Chicago, IL. Available at: http://www.allacademic.com/meta/p198277_index.html.

Ikenberry, G. John. 1992. “A World Economy Restored: Expert Consensus and the Anglo-

American Postwar Settlement.” International Organization 46(1):289-321.

Inter-American Court of Human Rights. 1999. “Del Caracazo Case.” Judgment of 11

November. Available at: http://www.worldlii.org/int/cases/IACHR/1999/12.html.

Karl, Terry L. 1990. “Dilemmas of Democratization in Latin America.” Comparative Politics

23(1):1-21.

145

------. 2000. “Economic Inequality and Democratic Instability.” Journal of Democracy

11(1):149-156.

------. 2002. “The vicious cycle of inequality in Latin America.” Estudio/Working Paper

2002/177; October. Published in 2003 in Pp. 133-157 in What Justice? Whose Justice?

Fighting for Fairness in Latin America, edited by Susan Eckstein and Timothy

Wickham-Crawley. Berkeley: University of California. Available at:

http://march.es/ceacs/Ingles/publicaciones/working/archivos/2002_177.pdf.

Keen, Benjamin. 1992. A History of Latin America. 4th ed. Boston, MA/Toronto: Houghton

Mifflin Company.

------. (ed.). 1996 [1991]. Latin American Civilization. History & Society, 1492 to the Present.

6th ed. Boulder, CO: Westview Press.

Kennedy, Dane. 2003. “Imperial History and Postcolonial Theory.” Pp. 10-22 in The

Decolonization Reader, edited by James D. Le Sueur. London: Routledge.

Kennedy, Paul. 1987. The Rise and Fall of the Great Powers. Economic Change and Military

Conflict from 1500 to 2000. New York: Random House.

Kozloff, Nikolas. 2006. Hugo Chávez. Oil, Politics, and the Challenge to the United States.

Houndmills, UK/New York: Palgrave Macmillan.

Krasner, Stephen D. 1999. Sovereignty: Organized Hypocrisy. Princeton, NJ: Princeton

University Press.

Krauthammer, Charles. 1990. “The Unipolar Moment.” Foreign Affairs 70:23-33.

Lagos, Ricardo. 2010. “Discurso de Ex Presidente Ricardo Lagos luego de derrota de Frei en

Chile.” January 17. Available at: http://www.youtube.com/watch?v=xaiEmQgYFDw.

Lamy, Steven L. 2008. “Contemporary mainstream approaches: neo-realism and neo-

liberalism.” Pp. 124-141 in The Globalization of World Politics. An introduction to

international relations, edited by John Baylis, Steve Smith and Patricia Owens. 4th ed.

Oxford: Oxford University Press.

146

Lander, Edgardo. 2008. “Venezuela. Populism and the Left: Alternatives to Neo-Liberalism.”

Pp. 69-98 in The New Latin American Left: Utopia Reborn, edited by Patrick Barrett,

Daniel Chavez and César Rodríguez-Garavito. London: Pluto Press.

Louis, William Roger and Ronald Robinson. 2003. “The imperialism of decolonization.” Pp.

49-79 in The Decolonization Reader, edited by James D. Le Sueur. London: Routledge.

Mearsheimer, John J. 1995. “A Realist Reply.” International Security 20(1):82-93.

New York Times. 2005. “Latin American Poverty.” 2005. Opinion section, May 26. Available

at: http://www.nytimes.com/2005/05/25/opinion/25iht-edlatin.html.

Lievesley, Geraldine. 2009. “Is Latin America moving leftwards? Problems and prospects.”

Pp. 21-36 in Reclaiming Latin America: experiments in radical social democracy,

edited by Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

Lievesley, Geraldine and Steve Ludlam. 2009a. “Introduction: a ‘pink tide’?” Pp. 1-18 in

Reclaiming Latin America: experiments in radical social democracy, edited by

Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

------. 2009b. “Conclusion: Nuestra América – the spectre haunting Washington.” Pp. 217-

229 in Reclaiming Latin America: experiments in radical social democracy, edited by

Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

Lindert, Kathy, Anja Linder, Jason Hobbs, and Bénedicte de la Brière. 2007. “The Nuts and

Bolts of Brazil’s Bolsa Família Program: Implementing Conditional Cash Transfers in a

Decentralized Context.” SP Discussion Paper, The World Bank; May. Available at:

http://siteresources.worldbank.org/INTLACREGTOPLABSOCPRO/Resources/BRBols

aFamiliaDiscussionPaper.pdf.

Links: International Journal on Socialist Renewal. 2009. “Copenhagen: ‘Imperial' climate

deal rejected by poor-country delegates.” December 18. Available at:

http://links.org.au/node/1418.

Lomnitz, Claudio. 2006. “Latin America’s Rebellion. Will the new left set a new agenda?”

Boston Review, September/October. Available at:

http://bostonreview.net/BR31.5/lomnitz.php.

147

Londoño, Juan Luis and Miguel Székely. 1997. “Persistent Poverty and Excess Inequality:

Latin America, 1970-1995.” Working Paper 357, Inter-American Development Bank.

López Maya, Margarita. 2003. “The Venezuelan ‘Caracazo’ of 1989: Popular Protest and

Institutional Weakness.” Journal of Latin American Studies 35(1):117-137.

Lundestad, Geir. 1986. “Empire by Invitation? The United States and Western Europe, 1945-

1952.” Journal of Peace Research 23(3):263-277.

Moniz Bandeira, Luiz. 2005. “¿América latina o Sudamérica?” Clarín (Buenos Aires), May 16.

Motta, Sara C. 2009. “Venezuela: reinventing social democracy from below?” Pp. 75-90 in

Reclaiming Latin America: experiments in radical social democracy, edited by

Geraldine Lievesley and Steve Ludlam. London/New York: Zed Books.

O’Brien, Robert and Marc Williams. 2007 [2004]. Global Political Economy. Evolution and

Dynamics. 2nd ed. Houndmills, UK: Palgrave Macmillan.

O’Donnell, Guillermo. 1978. “Reflections on the Patterns of Change in the Bureaucratic-

Authoritarian State.” Latin American Research Review 13(1):3-38.

Palma, Julieta and Raúl Urzúa. 2005. “Anti-poverty Policies and Citizenry: The ‘Chile

Solidario’ Experience.” Management of Social Transformations (MOST) Policy Paper

12. Paris: UNESCO. Available at: http://portal.unesco.org/shs/en/ev.php-

URL_ID=8403&URL_DO=DO_PRINTPAGE&URL_SECTION=201.html.

Pearsall, J. (ed.). 2001. The New Oxford Dictionary of English. Oxford: Oxford University

Press.

Pendle, George. 1976 [1963]. A History of Latin America. 4th ed. Harmondsworth, UK:

Penguin Books.

Petras, James. 2006. “‘Centre-Left’ Regimes In Latin America.” CounterCurrents.org, April

8. Available at: http://www.countercurrents.org/petras080406.htm.

Phillips, Nicola. 2006. “Latin America in the Global Political Economy.” Pp. 332-343 in

Political Economy and the Changing Global Order, edited by Richard Stubbs and

Geoffrey R.D. Underhill. 3rd ed. Oxford: Oxford University Press.

148

Piñera, Sebastián. 2010. “Discurso de Piñera tras ser electo presidente.” January 17. Available

at: http://www.emol.com/documentos/archivos/2010/01/17/20100117215031.doc.

Prebisch, Raúl. 1986 [1950]. “El desarrollo económico de la América Latina y algunos de sus

principales problemas.” Spanish translation of original article of 1950; Desarollo

Económico 26(103):479-502.

Presidencia de la República Oriental del Uruguay. 2009. “Plan de Equidad.” Available at:

http://www.mides.gub.uy/innovaportal/types/file/downloadfilecontent.jsp?contentid=

913&site=1&channel=mides.

Primera, Maye. 2008. “La nueva Constitución de Ecuador refuerza los poderes de Correa.” El

País (Madrid), July 26. Available at:

http://www.elpais.com/articulo/internacional/nueva/Constitucion/Ecuador/refuerza/

poderes/Correa/elpepiint/20080726elpepiint_5/Tes.

Roberts, Kenneth M. 2007. “Latin America’s Populist Revival.” SAIS Review 27(1):3-15.

Rodríguez-Garavito, César, Patrick Barrett, and Daniel Chavez. 2008. “Utopia Reborn?

Introduction to the Study of the New Latin American Left.” Pp. 1-41 in The New Latin

American Left. Utopia Reborn, edited by Patrick Barrett, Patrick, Daniel Chavez and

César Rodríguez-Garavito. London: Pluto Press.

Romero, Simon. 2009a. “Ecuador Re-elects President, Preliminary Results Show.” The New

York Times, April 26. Available at:

http://www.nytimes.com/2009/04/27/world/americas/27ecuador.html?scp=1&sq=co

rrea&st=cse.

------. 2009b. “Morales headed for Re-election in Bolivia.” The New York Times, December 6.

Available at:

http://www.nytimes.com/2009/12/07/world/americas/07bolivia.html?_r=1&scp=2&s

q=morales&st=cse.

Rostow, W. W. 1960. The Stages of Economic Growth: A non-Communist Manifesto.

Cambridge: Cambridge University Press.

Sader, Emir. 2005. “Taking Lula’s Measure.” New Left Review 33:59-80.

149

Said, Edward W. 1978. Orientalism. New York: Random House.

Sánchez, Félix, João Machado Borges, and Rosa Maria Marques. 2008. “Brazil. Lula’s

government: a critical appraisal.” Pp. 42-68 in The New Latin American Left: Utopia

Reborn, edited by Patrick Barrett, Daniel Chavez and César Rodríguez-Garavito.

London: Pluto Press.

Sauvant, Karl P. 1977. “Toward the New International Economic Order.” Pp. 3-19 in The New

International Economic Order: Confrontation or Cooperation between North and

South?, edited by Karl P. Sauvant and Hajo Hasenpflug. London: Wilton House

Publications.

Schamis, Hector E. 2006. “A ‘left turn’ in Latin America? Populism, Socialism, and

Democratic Institutions.” Journal of Democracy 17(4):20-34.

Skocpol, Theda. 1985. “Bringing the State Back In: Strategies of Analysis in Current

Research.” Pp. 3-37 in Bringing the State Back In, edited by Peter B. Evans, Dietrich

Rueschemeyer and Theda Skocpol. Cambridge: Cambridge University Press.

Servicio Electoral de Chile. 2005. “Elecciones parlamentarias 2005. Escrutinios generales,

diputados.” Available at:

http://www.servel.cl/servel/Controls/Neochannels/Neo_CH315/Deploy/ResuDipPais.

pdf.

Shannon, Thomas R. 1989. An Introduction to the World-System Perspective. Boulder, CO:

Westview Press.

Silva, Patricio. 2009. “Chile: swimming against the tide?” Pp. 183-198 in Reclaiming Latin

America: experiments in radical social democracy, edited by Geraldine Lievesley and

Steve Ludlam. London/New York: Zed Books.

Skidmore, Thomas E. and Peter Smith. 2001. Modern Latin America. 5th ed. New York:

Oxford University Press.

Slater, David. 1991. “New Social Movements and Old Political Questions: Rethinking State-

Society Relations in Latin American Development.” International Journal of Political

Economy 21(1):32-65.

150

Soares, Luís Carlos. 1991. “From Slavery to Dependence: A Historiographical Perspective.”

Pp. 89-108 in Brazil and the World System, edited by Richard Graham. Austin, TX:

University of Texas Press.

Stokes, Susan. 2009. “Globalization and the Left in Latin America.” Pp. 1-42; Unpublished

manuscript, Yale University. Available at:

http://www.yale.edu/macmillanreport/resources/Stokes_GlobalizationLeft.pdf.

Stolowicz, Beatriz. 2004. “The Latin American Left: Between Governability and Change.” TNI

Briefing Series 2004/1, Amsterdam: Transnational Institute. Available at:

http://www.tni.org/archives/reports/newpol/left.pdf.

Tapia, Luis. 2008. “Bolivia. The Left and the Social Movements.” Pp. 215-231 in The New

Latin American Left: Utopia Reborn, edited by Patrick Barrett, Daniel Chavez and

César Rodríguez-Garavito. London: Pluto Press.

US Department of State. N.d. “Visits to the U.S. by Foreign Heads of State and Government—

1999.” Available at: http://www.state.gov/r/pa/ho/15730.htm.

US Energy Information Administration. 2009. “Country Analysis Briefs / Venezuela Oil.”

January. Available at: http://www.eia.doe.gov/emeu/cabs/Venezuela/Oil.html.

Van Engelen, Roel. 2005. “De radicale weg naar het socialisme. Cuba’s internationale

revolutionaire politiek van de jaren zestig in de context van de Koude Oorlog.”

Unpublished BA thesis, BA Language and Culture Studies, History of International

Relations, Department of Humanities, University of Utrecht, Netherlands.

------. 2006a. “Basisinformatie Chili.” Unpublished policy paper, prepared for the Defence

Department of the Embassy of the Netherlands, Santiago de Chile.

------. 2006b. “Een gemiste kans op een rechtvaardiger wereld. De opkomst en plotselinge

ondergang van de Nieuwe Internationale Economische Orde in de jaren zeventig.”

Unpublished paper, MA International Relations, Department of Humanities, University

of Utrecht, Netherlands.

Vargas Llosa, Álvaro. 2005. “The Return of Latin America’s Left.” The New York Times, 22

March. Available at:

151

http://query.nytimes.com/gst/fullpage.html?res=9501E0DD1F3CF931A15750C0A963

9C8B63.

Wallerstein, Immanuel. 2000a. “The Rise and Future Demise of the World Capitalist System:

Concepts for Comparative Analysis.” Pp. 71-105 in The Essential Wallerstein by

Immanuel Wallerstein. New York: The New Press.

------. 2000b. “World-Systems Analysis.” Pp. 129-148 in The Essential Wallerstein by

Immanuel Wallerstein. New York: The New Press.

Weisbrot, Mark and Luis Sandoval. 2008. “Actualización: La economía venezolana en

tiempos de Chávez.” Washington: Center for Economic and Policy Research; February.

Available at: http://www.scribd.com/doc/2273768/Actualizacion-La-economia-

venezolana-en-tiempos-de-Chavez.

Williamson, John. 1990. “What Washington Means by Policy Reform.” Chapter 2 from Latin

American Adjustment: How Much Has Happened? edited by John Williamson.

Available at: http://www.iie.com/publications/papers/paper.cfm?researchid=486.

Wilpert, Gregory. 2007. “Venezuela Decrees Nationalization of Last Foreign Controlled Oil

Fields.” Venezuelanalysis.com, 27 February. Available at:

http://www.venezuelanalysis.com/news/2245.

World Bank. 2005. “Brazil’s Bolsa Familia Program Celebrates Progress in Lifting Families

out of Poverty.” December 19. Available at:

http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:20702063~p

agePK:64257043~piPK:437376~theSitePK:4607,00.html.

------. 2007. “Data Profile: Latin America and Caribbean.” Available at:

http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/LACEXT/0,,contentM

DK:22117191~pagePK:146736~piPK:146830~theSitePK:258554,00.html.

Data set

ECLAC, Economic Commission for Latin America and the Caribbean. Database and

Statistical Publications. Available at: http://www.cepal.org/estadisticas/bases/

(Estadísticas sociales > Pobreza y distribución del ingreso).