Latin America in the New World Order

Abstract

Abstract. This paper argues that capitalism in its neoliberal form has begun to generate social forces of its own demise. The argument is constructed with reference to dynamics of adjustment and resulting conditions of social inequality and poverty in Latin America. Here it is argued that major means of internal adjustment involves restructuring of capital-labour relation. Parts four and five examine efforts in region to contain social discontent and forces of resistance and opposition to policies of structural adjustment, with particular reference to Mexico. These efforts are shown to be ineffective. Resume. Cet article avance que le capitalisme dans sa forme neoliberale engendre les forces de sa propre destruction. Ce raisonnement se fonde sur la reference aux dynamiques de l'ajustement structurel et les conditions sociales resultant de l'inegalite et de la pauvrete en Amerique Latine. On discuie du fait que les principaux moyens d'ajustement interne impliquent un changement radical dans la relation du capital et de la main d'oeuvre. Les parties IV et V examinent les efforts gouvernementaux dans la region pour enrayer le mecontentement social et les forces de resistance (et l'opposition aux politiques neoliberales d'ajustement) en tenant particulierement compte du Mexique. On en arrive a la conclusion que ces efforts sont vains. Introduction The collapse in 1989 of socialism in former USSR and Eastern Europe formed final chapter in what Francis Fukyama and some others view as the end of history, with reference to idea of freedom, instituted in political terms as liberal democracy and in economic terms as free market. (1) In Latin American context, this struggle for political and economic freedom has been associated with a neoliberal agenda of market-oriented economic reforms -- liberalisation of trade and capital flows, privatisation of public enterprises, deregulation of private activity, and a diminution if not end of state intervention in economy, with a cut-back in expenditures and other measures of fiscal austerity. (2) In 1970s, experiments with neoliberal reforms were instituted by several military regimes in Southern Cone (Chile, Argentina, Uruguay) in context of what later emerged as a dirty war against subversives, supporters of a process several decades in making -- incorporation of working class into national process of economic development. (3) All of these experiments were short-lived and failed. But in 1980s, in a very different context of a region-wide debt crisis, neoliberal policies of stabilisation and structural adjustment were reinstituted by a newly formed class of transnational capitalists and an intelligentsia of economic technocrats, under direction of International Monetary Fund, World Bank, and other organisations of international financial capital. (4) In this context, neoliberal agenda of structural adjustment and associated market reforms were imposed on country after country, and by end of decade only four countries in region had not opened up their economies to world economy -- liberalising imports and removing restrictions on movement of capital. And by early 1990s, despite apparent failure of Structural Adjustment Program (SAP) to place regional economy on a sustainable growth-path and clear evidence of its extraordinarily severe social costs (to quote from an Inter-American bank study), these countries (with exception of Cuba) jumped on neoliberal bandwagon. Even Brazil did so in 1995, under Presidency of Fernando Cardoso, a well-known sociologist who in years past had been a major exponent of a Marxist-oriented theory of Latin American dependency. In policy-making and intellectual circles, in both politics and academia all over world, there has emerged what Williamson (1990) has termed a Washington-Consensus on necessity of free market reforms, viz. …