Latin America in times of lumpencapitalism

Progressive illusions devoured by the crisis

[Jorge Beinstein, ALAI AMLAT-en, 01/04/2016]

The global situation is characterized by a deflationary crisis driven by the great powers. The fall of commodity prices, whose most signal effect, as of mid-2014, was that of oil, reveals deflated international demand, while the financial upsurge, that has been a strategic prop of the system over the past four decades, has stagnated. The crisis of financialization of the world economy is zigzagging into a zone of depression, as the main traditional capitalist economies are showing little or no growth [1] and China is rapidly slowing down.  In the face of this, the West is unleashing its last resort: the apparatus of military intervention combining elements of professional and mercenary armed forces, the media and the mafia integrated as a “Fourth Generation War” destined to destroy peripheral societies in order to turn them into pillage zones. This is the radicalization of a long term phenomenon of systemic decadence where military and financial parasitism is becoming the hegemonic centre of the West.

This is not the political-military-economic “re-composition” of the system, as was the (militarized) Keynesian reconversion of the 1940s and 1950s, but rather its general degradation. The parasitic mutation of capitalism has turned it into a system of destruction of productive forces, of the environment and of institutional structures, where the old bourgeoisies are becoming circles of bandits, in the new planetary ascent of a central and peripheral lumpenbourgeoisie.

The decline of progressivism

Immersed in this world, the Latin American situation unfolds around two notable occurrences: the decline of progressive experiences and the prolonged degradation of neoliberalism which preceded them and continued in countries that did not enter into this current, of which this present degraded neoliberalism appears as the successor.

Latin American progressive trends emerged out of the fatigue and, in some cases, crises of the neoliberal regimes, and when they came to government, benefitted from favorable international commodity prices which, added to expansionist policies in internal markets, allowed them to reestablish governability.

The progressive assent was abutted by two impotencies: that of the right-wing that could not ensure governability and in some cases led to collapse (Bolivia in 2005, Argentina in 2001-2002, Ecuador in 2006, Venezuela in 1998) or was highly deteriorated in others (Brazil, Uruguay, Paraguay) and the impotence of the popular bases that overthrew governments or wore down regimes but that, even in the most radical processes, were not able to impose revolutions, transformations that went beyond the reproduction of the existing structures of domination.

In the cases of Bolivia and Venezuela, revolutionary discourse accompanied reformist practices plagued with contradictions; great transformations were announced, but the initiatives became embroiled in unending comings and goings, feints, “realistic” deceleration and other astute moves that expressed a profound fear of jumping the fences beyond capitalism.  This not only made way for the restoration of the right-wing, but also led to the proliferation of all kinds of rottenness at the state level, from large-scale to petty corruption.

Venezuela appears as the most evident case of the mixture of revolutionary discourse, operational disorder, mid-road changes and conservative ideological self-blockages. Unable to achieve the proclaimed revolutionary transition (rather the contrary, in fact), they did manage to introduce chaos into a capitalism that was stigmatized, although still on its feet; obviously the United States is promoting and taking advantage of this situation to advance in their strategy to reconquer the country. The result is an increasingly serious recession, uncontrolled inflation, massive fraudulent imports that exacerbate the shortage of goods and the currency evasion, all of which point to an economy in acute crisis [2].

In Brazil the zigzagging between “social” neoliberalism and light –almost unrecognizable- Keynesianism, reduced the margin of power of a progressivism that profusely boasted of being “realist” (including its astute acceptation of the hegemony of the dominant economic groups). The dependence on exports of commodities and the subjection to a transnationalized local financial system ended up blocking economic expansion; and finally, the falling international commodity prices, alongside increasing financial pillage, sparked a recession that led to a political crisis, that was seized on by the promoters of a “soft coup” executed by the local right-wing and monitored by the United States.

In Argentina the “soft coup” was produced under the cover of an electoral mask forged by inordinate media manipulation; Kirchnerist progressivism, in its most recent stage, had managed to avoid a recession, albeit with anemic economic growth sustained by the promotion of the internal market, respecting economic power. The judicial mafia was also respected, and together with the media mafia, harassed them to the point of displacing them politically in the midst of a wave of reactionary hysteria from the upper classes and a large part of the middle classes.

In Bolivia, Evo Morales suffered his first significant political defeat in the referendum on the presidential re-election.  His arrival to the presidency had marked the ascension of the social groups suppressed by the old racist colonial system. But the hybrid mix of anti-imperialist, post-capitalist and indigenous proclamations, with the persistence of the extractive mining model that meant environmental deterioration and affectation of rural communities, alongside state bureaucratese that generates corruption and authoritarianism ended up diluting the discourse of “communitarian socialism”.  The way was thus opened up for the re-composition of the economic elites and the revanchist mobilization of the upper classes and their middle class followers, penetrating a vast range of disconcerted social sectors.

Now, the Latin American right-wing are occupying the positions they had lost and consolidating those they preserved; but these are no longer the old gang of optimist neoliberals of the 1990s; they have been transmuted, through a complex economic, social and cultural process, into components of a nihilist lumpenbourgeoisie riding on the global wave of parasitic capitalism.

Industrial or agribusiness groups combined their traditional investments with others, more profitable but also more volatile: speculative adventures, all kinds of illegal business dealings (from drugs to opaque real estate transactions, and including tax and trade fraud and other murky undertakings), and converging with overseas “investments” in looting, such as mega-mining or financial trickery.

These mutations have a distant local and global background, with national variations and specific dynamics; but they all tend toward a configuration based on the predominance of economic elites marked by the “depredatory finance culture” (short-term investments, territorial rootlessness, the elimination of the frontiers between legality and illegality, the manipulation of business networks with a vision closer to video games than to productive management and other characteristics typical of mafia globalism), that hold media control as an essential instrument of domination, and surround themselves by satellites from the political, judicial, trade-union, police-military and other circles.

Conservative restorations or the instatement of colonial neo-fascism?

In general progressivism qualifies its defeats or threats of defeats as victories or the danger of a return to the neoliberalism of the past; they also use the term “conservative restoration”, but in fact these phenomena are extremely innovative, they have very little of “conservativism”. When we evaluate figures such as Aecio Neves, Mauricio Macri or Henrique Capriles, we do not see authoritarian heads of stable oligarchic elites, but rather completely unscrupulous characters, who are highly ignorant of the bourgeois traditions of their countries (even in some cases viewing them disparagingly), they appear as a kind of mafia among the primitive and postmodernist, as political leaders of business groups whose main norm is not to respect any norm (insofar as possible).

Another important feature of this picture is the irruption of enormous ultra-reactionary mobilizations, where the middle classes occupy a central place. Progressive governments supposed that the economic bonanza would facilitate the political capture of these social sectors but the opposite occurred: the middle class sectors have turned right as they ascend economically, despising those below them and assuming as their own the neofascist deliria of those above. The phenomenon synchronizes with neofascist tendencies in the West, from the Ukraine to the United States passing through Germany, France, Hungary, etc., as a cultural expression of decadent pessimistic neoliberalism, of a nihilist capitalism entering a stage of amplified negative reproduction where apartheid appears as the life-saver.

But this Latin American neofascism also includes the re-apparition of old racist and segregationist roots that had been occluded by the crises of governability of the neoliberal governments, the irruption of popular protests and the progressive spring. They survived the tempest and in some cases recovered even before the beginning of the decline of progressivism as happened in Argentina, with the social egoism of Menem or the racist “gorilla” militarism that preceded it; in Bolivia the disdain towards Indians and in almost all cases retrieving the anticommunism of the Cold War. This survival of the past presents sinister latencies, now mixed with new trends.

One important observation is that the phenomenon assumes characteristics of a “counterrevolution”, aiming at a policy of burnt ground, of an extirpation of the progressive enemy, something that we are seeing right now in Argentina or what the right promises in Venezuela or Brazil, where the weakness of the opponent, their fears and vacillations excite reactionary ferocity. Referring to the victory of fascism in Italy, Ignazio Silone defined it as a counterrevolution that had operated to prevent the non-existent threat of a revolution [3]. This non-existence of a real threat or revolutionary process underway, of a popular avalanche against decisive structures of the system that are broken or failing, give strength (and a sensation of impunity) to the elites and their social base.

The counterrevolutionary wave is one of the possible results of the decomposition of the system, successfully imposing in some cases in the past projects of elitist recomposition; in the Latin American case it expresses a capitalist decomposition without any recomposition in sight.

If progressivism was the failed overcoming of neoliberal failure, this underdeveloped neofascism exacerbates both failures, inaugurating an era of uncertain duration of economic contraction and social disintegration. It is enough to see what happened in Argentina with the arrival of Macri to the presidency: in a few weeks the country moved from weak growth to a recession that is rapidly getting worse due to gigantic pillage. It is not difficult to imagine what would happen in Brazil or Venezuela that are already in a recession, if the right were able to seize political power.

Falling commodity prices and their growing volatility, that are likely to intensify with the prolongation of the global crisis, have been important causes of the progressive failure and appear as irreversible blockages to relatively stable projects of elitist export reconversion. The rightwing victories tend to install economies that function at low intensity, with contracted and unstable internal markets; this means that the survival of these systems of power will depend on factors that the governing mafias will try to control. In the first place the discontent of the greater part of the population by applying variable doses of repression, both legal and illegal, media imbecility, corruption of leaders and moral degradation of the lower classes. These are instruments that the crisis and popular combativeness could render useless, in which case the phantasm of social revolt could become a real threat.

The Imperial strategy

The United States are unfolding a strategy of reconquest of Latin America, applied in a systematic and flexible way. The soft coup in Honduras was the initial strike followed by the coup in Paraguay and a set of destabilizing actions, some of them highly aggressive, with varying success, that have advanced in time with imperial urgencies and the burnout of the progressive governments. In various cases, more or less open or intense aggression was combined with good manners, in an attempt to triumph without military or economic violence, or adding minor doses of these with taming operations. When aggression did not work efficaciously, they turned to moral persuasion, implementing persuasive packets of variable configurations, combining penetration, co-optation, pressure, rewards and other convoluted forms of psychological and political attack.

The result of this complex deployment is a paradoxical situation: while the United States recedes at a global level on the economic and geopolitical plane, they are reconquering step by step their Latin American backyard. The fall of Argentina has been a great victory for the empire, worked on over a long time, to which it is necessary to add three decisive manoeuvers that are part of their regional game: the subjection of Brazil, the end of the Chavist government in Venezuela and the negotiated surrender of the Colombian insurgency. Each of these objectives has a special meaning.

An imperialist victory in Brazil would dramatically change the regional scenario and would produce a huge negative impact on the BRICS block, affecting its two strategic global enemies: China and Russia. A victory in Venezuela would not only give them control of 20% of the petroleum reserves of the planet (the biggest world reserve) but would also have a domino effect on other governments in the region, such as those of Bolivia, Ecuador and Nicaragua, and would harm Cuba, which the United States is enfolding with a big bear-hug.

Finally, the extinction of the Colombian insurgence, in addition to clearing the principal obstacle to the looting of this country, would leave the hands of the armed forces free for eventual interventions in Venezuela. From a regional strategic point of view, the end of the Colombian guerrilla would remove from the scene a strong combat force that might operate as a mega-multiplier of insurgency in a region in crisis, where the generalization of rightwing mafiosos would magnify the decomposition of these societies. This could be the greatest strategic threat to imperial domination, of an enormous continental revolutionary danger; it is precisely this Latin American dimension of the issue that the mainstream media attempt to hide.

Systemic decadence and popular perspectives

Beyond the curious paradox of a decadent empire reconquering its territorial back yard, from the point of view of the global situation, of the systemic decadence of capitalism, the generalization of pro-US governments in Latin America could be interpreted superficially as a great geopolitical victory of the United States, although if we deepen our analysis and introduce, for example, the issue of the intensification of the crisis driven by these governments, we would tend to interpret the phenomenon as a specific regional expression of the decadence of the global system.

The removal of the progressive obstacle could generate greater problems for imperial domination. Even though the social inclusion and economic changes undertaken by progressives were insufficient, confused, impregnated with bourgeois limitations, and while their autonomy in international policy was of limited audacity, it is certain that their track-record has left footprints, social experiences, greater dignity (suppressed by the right) that will be very difficult to extirpate and that in consequence could become significant contributions to future (and not too far away) popular and radical upheavals.

The progressive illusion of humanization of the system, of carrying out “sensible” reforms within the existing institutional framework, can go from an initial disappointment to a profound social reflection, critical of the mafioso institutional set-up, of media oppression and parasitic business groups. This includes the democratic farce that legitimizes them. In this case, the progressive frustration could become, sooner or later, a revolutionary hurricane, not because progressivism as such evolves towards an anti-systemic radicalism, but because a more far-looking popular culture might emerge in the struggle against regimes condemned to continual degradation.

In this sense we might understand one of the meanings of the Cuban revolution, that later spread as an anti-capitalist wave through Latin America, as a critical overcoming of the failed rationalist democracies (such as Vargism in Brazil, revolutionary nationalism in Bolivia, the first Peronism in Argentina or the Arbenz government in Guatemala). Popular memory cannot be uprooted; it can be buried under a kind of cultural clandestinity, or in a subterranean latency that is mysteriously digested and thought through by those from below, underestimated by those on top, to reappear renewed and relentless when the circumstances demand it.

(Translated by Jordan Bishop for ALAI)

Jorge Beinstein, an Argentina economist, teaches at the Universidad de Buenos Aires

[1]  If we look at the last five years (2010-2014) average real growth of the Japanese economy has been about 1.5%, that of the US 2.2%, and that of Germany 2%. (Source: World Bank).

[2]  A good example is that of the “importation” of medicines where multinational companies such as Pfizer, Merck and P&G make fabulous illegal business deals under a “socialist” government that gives them dollars at preferential prices. Through a game of over-invoicing, over-pricing and non-existent imports, the pharmaceutic companies, in 2003, imported around 222 thousand tonnes of products for which they paid 434 million dollars (some two thousand dollars per tonne); in 2010, imports fell to 56 thousand tonnes and they paid 3410 billion dollars (60 thousand dollars per tonne); and in 2014 imports fell to 28 thousand tonnes and they paid 2400 billion dollars (almost 87 thousand dollars per tonne). As Manuel Sutherland points out in his study from which I have taken this information: “far from proposing the creation of a large state company for pharmaceutical production, the government prefers to provide preferential exchange rates to fraudulent importers or confide in bureaucrats who undertake imports with total opacity”, Manuel Sutherland: “2016: La peor de las crisis económicas, causas, medidas y crónica de una ruina anunciada” (2016: The worst of economic crises, causes, measures and chronical of an announced ruin). CIFO, Caracas, 2016.

[3]  Ignazio Silone, “L’École des dictateurs”, Collection Du monde entier, Gallimard, París 1964.
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