- Sean Purdy (SP)
- Mike Gonzalez (MG)
- Kristin Ciupa (KC)
- Benjamin Fogel (BF)
When the Pink Tide emerged the Left was done with governing. Reconciled to neoliberalism, reformist social democracy wasn’t doing much reforming any more. “Actually existing socialism” in the Eastern Bloc suffered an even more disastrous fate and Third World national liberation movements learned to make peace with international capitalism.
We were taught to look for spaces of resistance outside of capital’s control rather than challenging it head on — cracks and margins and urban food co-ops. The Pink Tide was a confident call back to the old-time religion, a return to not ceding state power to the Right, but wielding it to improve lives in the here and now.
And, on the whole, its record was impressive. Much of this issue is a testament to the successes of left government after left government in Latin America. It appears, however, that this wave of struggle may be entering its final act. It is too easy to blame the Pink Tide’s decline on the shortcomings of its leaders. These governments faced pressures beyond their control — powerful elites yearning to restore their old privileges, pressure from outside powers, economies dependent on raw material exports, mass poverty and underdevelopment.
It’s easy to criticize, harder to say what could have been done differently. Here we offer the sketches of an alternative — of what governments aiming to not just capture, but transform the state in the interests of the oppressed could actually do. Whatever its failings, the Pink Tide offers us no shortage of lessons.
Lesson: Left parties must take measures to stay connected to their base.
“The branches are the veins through which the life of the party flows.”
This was the proud headline in a bulletin of a local branch of the Brazilian Workers’ Party (PT) in 1983. Never revolutionary, the PT nevertheless arose in the late 1970s in the thick of the struggle against the military dictatorship as a radical working-class party with a highly organized grassroots structure.
By 1982, the PT had more than a thousand branches around the country, largely organized by neighborhood but also with dozens of workplace, university, and sectoral branches based on specific social-movement struggles such as LGBT rights, decent housing, and antiracism.
Overall, the branches only congregated a minority of party members, but they were the lifeblood of the party’s militancy. It was this highly democratic grassroots base that animated the party’s central and radical role in the successful struggle against the dictatorship and the 1980s strike waves against neoliberalism. Through their study groups, debates, publications, and local organization and mobilization, the branches sustained the radical politics of the PT in the 1980s.
Yet by the late 1990s, the party had been dramatically transformed from a radical advocate for workers to a business-as-usual political machine that sought alliances with corrupt centrist and right-wing parties to advance a purely electoral strategy. How was such a shift possible?
In the 1980s, grassroots PT branches were not only the decision-making bodies in the party; there were also city, state, and national directories with recognized leaders who were ultimately responsible for the organization’s political decisions. Due to electoral legislation, for example, delegates for party congresses and conventions were selected exclusively from the municipal directories. But this structural split hadn’t posed a problem — the branches still congregated the bulk of the party’s active militants, including activists in the social movements and the various socialist currents, who exerted decisive pressure on the higher party organs.
Party leaders were forced to listen to branch activists in plenary meetings and votes, receive their innumerous bulletins, flyers, pamphlets, and complaints, and court their support for internal and external electoral campaigns.
It was this grassroots base that sustained the PT as a party of struggle in its first decade. PT parliamentarians at the local, state, and national levels expressed the desires of the most mobilized sectors of the working class. The PT was thus central in denouncing key elements of the conservative transition from dictatorship to democracy as the generals were forced to relinquish military rule. The branches were also key in constructing the radical Unified Workers’ Central (CUT) trade-union federation and the massive strike mobilizations of the 1980s, including national general strikes in 1983, 1986, 1987, and 1989.
While the Workers’ Party actively participated in social movements and workplace mobilizations, it simultaneously gradually elected more mayors, city councilors, and state and federal deputies. These developments shifted the balance of power in the party away from workers.
As early as 1984, at a national party meeting, moderate PT leaders such as Lula and his allies in the trade-union movement defeated a motion to extend the decision-making powers of the branches. Throughout the 1980s, the dominant faction in the party, led by Lula and former trade-union militants, gradually increased the power of the national executive, elected officials, and the union bureaucracy within the party.
This was aided by two developments. First, the PT was increasingly politically successful; it won thirty-eight cities in the 1988 mayoral elections, including three state capitals and the largest city in the country, São Paulo. The party also elected hundreds of city councilors. For the first time in its almost-ten-year history, literally thousands of PT members entered the National Congress as elected officials, staffers for councilors, and state and federal deputies. This trend would continue throughout the 1990s and 2000s, creating a veritable political machine with vast numbers of party functionaries who controlled all-important decisions.
The second development weakening the voice of workers in the PT was the fall of the Eastern Bloc. Party leaders interpreted this as a sign that they should back away from left-wing politics.
From a party of militants based in the branches, the PT was thus gradually transformed into a party of professionals with interests linked more to electoral politics and the party bureaucracy than to grassroots struggle. During this period, it began to forge alliances with other centrist parties, to accept corporate donations, and — in some PT-ruled municipalities — even to privatize certain municipal services before the wave of privatizations under the neoliberal governments of Fernando Henrique Cardoso (1994–2002).
As the PT recruited more and more from the middle class, celebrities, and businesspeople, the branches became moribund. By the end of the 1990s, there were no longer workplace-based branches and most of the few hundred that still existed were effectively electoral conduits for the dominant faction in the party, controlled by Lula.
Small wonder that, throughout the 1990s, the PT shifted its radical critique of capitalism in favor of a reformist program focused on institutionalization. It still used its position in the National Congress to fight neoliberalism and support social movements such as the Rural Landless Workers’ Movement (MST) — but it began to tone down the radicalism of these mobilizations and channel them into pure parliamentary politics.
With Lula’s election in 2002, the PT effectively ditched its radical program and accepted the main tenets of neoliberalism. During a decade-long economic boom, the PT government advanced modest social reforms while maintaining an orthodox financial policy that benefited financial and agro-industrial capital. A robust world climate for an economy based on agricultural and mineral exports allowed the government to pay off most of its international debt and modestly increase living standards for the poorest Brazilians through focused assistance programs, even while the rich benefited disproportionately.
Alliances with a range of centrist and right-wing parties, many of them with links to the military dictatorship that ruled from 1964 to 1985, allowed the PT to advance part of its agenda despite the opposition’s control of the National Congress. Despite a founding platform that emphasizes ethics in politics, it engaged in the same appalling behavior as the country’s capitalist parties.
The PT’s tradition of being the “ethical” party that favored working people has been forever tarnished by the involvement of key leaders in bribery and influence-peddling schemes. The Petrobras scandal comes on the heels of the 2005 Mensalão scandal (in which deputies from other parties accepted bribes to vote for S legislation), which landed several leading PT members in prison. That former government ministers and founding party members have left politics to become multimillionaire political consultants has only deepened the sense that the Workers’ Party is no longer a workers’ party.
Even recently, during the process of the parliamentary coup that ousted President Dilma in 2016, the PT dampened its militancy and continued to court alliances with the very center and right forces that organized the coup. In the October 2016 municipal elections, the PT formed coalitions with pro-impeachment parties in more than 1,400 cities. And in elections for president of the city councils in early 2017, the PT mobilized to support pro-impeachment parties in dozens of municipalities in sordid horse-trading negotiations.
Throughout the 1980s and 1990s, left-wing militants and factions within the PT attempted to increase the branches’ influence in the party but were unable to overcome the increasingly consolidated power of the moderate party leaders, who pursued an exclusively electoral strategy with toned-down politics. The most left-wing tendencies were either expelled or left the party. By the 1990s, the PT was controlled by professional bureaucrats who relied on a wide but largely passive voting base.
The question of grassroots democracy in radical left politics is thus not simply a theoretical issue. The PT’s shift from a party of militants to a party of professionals facilitated its transformation from a radical working-class party into a timid reformist force that embraced neoliberalism and the corruption of its dubious new allies.
Lesson: The “patriotic bourgeoisie” is a myth.
It seems that the wheel has come full circle. The Pink Tide has receded, and the promise of a Latin America in control of its own resources appears to have been abandoned. Today the governments of Bolivia, Ecuador, and Venezuela are once again under the thumb of the global market, delivering their minerals, oil, and gas to big capital, whether US, Canadian, Chinese, or Russian.
Global capital’s dominance of the region wreaked havoc during the 1990s: globalization left a devastated public sector, states were virtually dismantled, and land was pillaged or transferred to export agriculture. Social welfare programs, where they existed, were privatized while public companies were sold to the highest bidder. Millions were driven from the countryside into crowded shantytowns around the region’s major cities.
The World Trade Organization’s rules for the new global market were clear: national frontiers could not be crossed by human beings, but capital had free rein to move across the region. Local agents and collaborators — the Latin American bourgeoisie — enforced these rules
The bourgeoisies of Latin America were the subalterns of the global market. They supplied consumer goods to the lower end of the market — textiles, food and drink, tobacco — produced by cheap local labor or imported from East Asia, then dumped their profits into big global corporations or imported luxury goods.
The Pink Tide governments came to power promising to change this arrangement. Their economic strategies were often unclear, but the assumption was that they would appropriate the vast profits from oil, gas, mining, and export agriculture and invest them in the national economy. Social provisions would be restored and public services like education, health, and transport reinvigorated by increasing the royalties paid by the transnational corporations to the local state (royalties in Bolivia and Venezuela increased from less than 3 percent to 50 percent).
The boom in oil prices allowed increased spending on social programs; but it also, paradoxically perhaps, reinforced the “metabolic relationship” between the new state and the global market. The increased income was spent on consumer goods, to the benefit of the commercial class, and by the state in infrastructure projects that were largely financed by foreign banks and international agencies or by external loans paid for in part or in total with oil or gas exports. In most cases, however, the companies were not taken into public ownership.
These shortcomings were clear to many observers. National sovereignty and breaking the hold of the global market would require more than simply improving the relationship between states and global capital: it would require a transformation. Some argued that the key to this transformation was a renewed alliance with the “patriotic bourgeoisie” to foster a “progressive national capitalist stage as a necessary precursor to socialism.” In Venezuela, Bolivia, Ecuador and Nicaragua, Pink Tide governments worked hard to foster an alliance between the state and sympathetic capitalist sectors. Unfortunately, the “patriotic bourgeoisie” was anything but.
This wasn’t hard to anticipate. The experience of industrialization in Latin America in the 1940s and ’50s demonstrated some key truths. First, that the bourgeoisie invests for short-term profit, not in the long-term interests of a growing nation, which would involve sacrificing its earnings for a significant period. Diversification and the production of capital goods — of technology and machinery — do not yield immediate benefits. Then, as now, capitalists invest for profit and only for profit. In the context of globalization, that means focusing on the growth industries of the developed world or the banks that fund them.
Second, the development of an independent industrial sector in the modern age demands levels of technology and know-how that are largely sourced from big capital (and protected by World Trade Organization rules). Finally, experience shows — and is showing us again today — that by allying with the bourgeoisie new state leaders, whatever their origins, will be absorbed into the capitalist class whose role they are sharing.
Some have tried to paint this as a good thing. Bolivian vice president Garcia Linera argued that in Bolivia a new, better kind of capitalism — “Andean-Amazonian capitalism” — was being formed, led by a new ruling class recruited from indigenous intellectuals. It might have been a new bourgeoisie, but it was a bourgeoisie nonetheless — a capitalist class driven by the laws of motion of the market.
Venezuela’s Arco Minero project puts this fact in stark relief. The project delivers 12 percent of the country’s national territory to foreign multinational companies. Operating together with elements of the state, these corporations are developing a mining industry that will destroy the environment and displace indigenous communities, all of which are protected by the Bolivarian Constitution. The companies will enjoy years of tax-free exploration, use infrastructures bought and paid for by the Venezuelan state (at the expense of the majority of the population), and return the bulk of their profits abroad.
Ultimately, these “patriotic alliances” have forgotten a key lesson of the past hundred years — in Latin America, the bourgeoisie has not worked in concert with progressive forces but has thwarted them at every turn.
In December 2002, having failed to remove Chávez with a coup, the Venezuelan elite and its international allies set out to destroy the economy with a bosses’ strike. In Bolivia, the capitalists of the Media Luna attacked the newly elected government of Evo Morales and gave no quarter. In both cases, it was only collective resistance that drove back their attempts.
Yet the Pink Tide governments clung to the fantasy of an alliance. In Bolivia, events at the TIPNIS National Park brought the new state into direct confrontation with the forces that had carried it to power, in defense of a project whose beneficiaries were Brazilian multinationals. In Ecuador, after delivering the entire Amazon region to multinational capital, Correa criminalized the very indigenous resistance that had propelled him into the presidency. In Nicaragua, Daniel Ortega has used his ownership of the Sandinista label to negotiate away Nicaragua’s water and territorial rights to a Chinese multinational. And in Venezuela, the Maduro government set out to resolve the conflicts of 2013 by a series of “dialogues” with the country’s major capitalists with Arco Minero the result.
The bourgeoisie has no country, only interests. Whatever the language of power may be, those who lead a capitalist state act as a capitalist class. The Pink Tide’s ebb has left stranded and disoriented those millions who fought for a different world — for a world in which economic strategy is grounded in the same profoundly democratic concerns that led them to build the anticapitalist movements.
The future will emerge from a deep and rigorously honest assessment of the Pink Tide, its advances, and its ultimate failure. The questions will be posed by reality itself as those whom the social movements brought to power lead those movements back into a subordinate relationship to a global market.
Lesson: Challenging the dominance of foreign capital requires far stronger regional integration.
Foreign capital has always had an outsized influence on Latin America, hindering countries’ ability to shape their own destinies. But by the mid-2000s, after decades of neoliberal devastation, the region had had enough — Pink Tide governments took concrete steps to pursue new forms of regional integration.
To increase their autonomy and undo neoliberal reforms, Pink Tide leaders used ample state revenues from the commodity boom to pay off loans owed to International Financial Institutions (IFIs). They also created new agreements prioritizing regional trade and development to benefit national economies and improve social conditions across Latin America.
Undoing centuries of domination by foreign capital is no small task, however. Today, Pink Tide governments are in decline. The election of center-right candidate Mauricio Macri in Argentina, Dilma Rousseff’s impeachment and removal in Brazil, and increasing economic and political instability in Venezuela signal the potential unraveling of the regional political alignment that enabled Pink Tide integration. These developments call into question the role of regional and international trade agreements in pursuing leftist government programs.
The decline of the Pink Tide at the regional level can be explained in part by the discord that exists between national interests. While Pink Tide leaders have united around the issue of regional sovereignty, the wave of integration associated with the Pink Tide has never represented one set of unified interests. Rather, regional integration has been a site of contestation and contradiction. Governments and popular movements negotiate the conditions of integration according to what they hope to gain from building closer ties with their neighbors.
Often described as the motors of regional integration, Brazil and Venezuela represent these divergent forms of regionalism most clearly. Venezuela adopted a strong anti-imperial rhetoric and advanced the principles of the Bolivarian project, including regional cooperation and mutual development, while Brazil has taken a more moderate approach, favoring free trade and global diplomacy, and limiting its regional participation to institution-building.
Venezuela’s interest in cooperation and mutual development is clear in the projects it has spearheaded. Petrocaribe and the Bolivarian Alliance for the Peoples of Our America (ALBA) both include preferential trade arrangements for regional partners, and are designed to reduce the region’s dependence on outside imports and to support social development and infrastructure projects within member countries. The Bank of the South is another example — it was created as an alternative lending institution to provide loans without the strings attached to World Bank loans. A regional trading currency, the SUCRE, was created to replace the US dollar as a medium for exchange to increase economic stability and decrease US influence.
Brazil, on the other hand, has sought to maintain free trade agreements with partners both within and outside of the region. The Common Market of the South (MERCOSUR), dominated by Brazil and Argentina, functions as a common free trade market, though there were some modest initiatives taken in the direction of integration in the mid-2000s. To the extent that Brazil has embarked on regional projects, its energies have focused on increasing political autonomy through regional institution building. The Brazilian-led Union of South American Nations (UNASUR) establishes South American Councils for education, defense, health, social development, and crime, among others; UNASUR’s goal is to increase the ability of the region to resolve problems without United States or European Union interference.
The discord between national interests has limited the scope of region-building in agreements like UNASUR and MERCOSUR, whose membership includes both Brazil and Venezuela. It has also meant that members of a particular agreement are not necessarily politically aligned beyond the current moment of trade.
Despite these differences, Pink Tide governments have collaborated on mutually beneficial regional initiatives. A recent example is the Community of Latin American and Caribbean States (CELAC) formed in 2011. CELAC comprises thirty-three countries across the region, and was created to provide a collective voice for the region in the international sphere, as an alternative to the US-dominated Organization of American States.
While Pink Tide integration has improved social conditions and provided a forum to promote development, it has had less success in dispelling the influence of foreign capital in the region. This is due partly to the diverse interests that constitute the Pink Tide, but also to the multitude of active agreements that fall outside of this framework. New agreements associated with the Pink Tide have joined an already complex web of bilateral and multilateral regional and global trade agreements and organizations operating in Latin America. Countries are members of many agreements at once, some with competing ideologies and rules. Thus, rather than supplanting old forms of regionalism and extra-regional trade, Pink Tide agreements have simply been added to them. This explains why, despite the fact that many Pink Tide agreements adopt anti-US rhetoric, the United States continues to be the largest export destination for Latin American goods.
Further, cooperation between Pink Tide governments may be easily undone with the election of new leadership. While Venezuela was a member of MERCOSUR from 2012–16, its membership was a contested issue for members engaged in free trade with the European Union, particularly when Venezuela was set to assume MERCOSUR’s rotating presidency in July 2016. Venezuela was not permitted to assume the presidency, and was temporarily suspended from MERCOSUR in December 2016, for its “failure to fulfill its membership obligations,” including economic and human rights agreements. Led by center and right-wing governments in Brazil, Argentina, and Paraguay, this suspension is indicative of the tenuous link between certain Pink Tide countries, which may be broken by a resurgence of the Right.
What’s more, the current geopolitical moment in Latin America cannot be understood without taking into account the role of China in the region. Alongside the proliferation of inwardly focused regional agreements, trade and lending from China have increased rapidly over the past decade and a half. The relationship between Latin American countries and China is the result of Chinese expansion and growing demand for raw materials. At the same time, high state revenues in Latin American countries have increased demand for manufactured goods that are not produced within the region. Bilateral agreements with China fulfill demand on both sides, with Latin American countries exporting soybeans, iron ore, copper, and oil in exchange for manufactured goods and electronics.
So while the region has successfully reduced its dependence on the IFIs, as well as on trade with the US and EU, Latin American trade with China has grown exponentially. According to the Economic Commission for Latin America and the Caribbean (ECLAC), as of 2015, China was the region’s second largest import source and third largest export destination (only slightly behind the EU, and the US and EU, respectively). Between 2000 and 2014, China’s contribution to the region’s imports grew from 2 percent to 16 percent, while its export share rose from 1 percent to 10 percent.
In addition to its role as a trading partner, China has become a major source of credit and development funding in Latin America. Lending reached its highest levels when commodity prices first declined in 2009–10, and again in 2014–present. As a result, the region is once again accumulating foreign debt. But instead of debt to IFIs, Latin American countries are now in debt to the China Development Bank and Chinese state enterprises for projects in energy, infrastructure, and mining. The Venezuelan government has by far the largest debt with China — $62.2 billion at the end of 2016 — demonstrating the cumulative effect of low oil prices and numerous spending commitments (Brazil has the second largest at $36.8 billion).
Granted, terms of trade and loan conditions with China are currently more favorable for Latin American countries than they were with US and European banks during the neoliberal period. But closer ties to China have also frozen Latin American economies in the role they were hoping to escape — as primary commodity exporters in the global capitalist system — reinforcing primarization and resource dependency. This means that Latin American economies remain vulnerable to the cyclicality of global commodity prices, a dependence which led to conditions of economic crisis in the 1980s and 1990s, and to borrowing from the IFIs conditional on neoliberal reform.
The news is not all bad. Despite a resurgence of the Right in some countries, many Pink Tide governments and popular movements remain committed to agreements like ALBA and CELAC. Both organizations remain active in facilitating regional projects and in responding to internal and external threats to the Left.
It is uncertain, however, if these agreements will have a lasting impact beyond the leadership period of the governments that created them. The diverse interests of Pink Tide governments, and their continued reliance on foreign imports and export markets, have meant that foreign capital never lost its grip on the region. Instead, the origins of foreign investment have shifted, with China capturing a much greater share of the Latin American market. Low primary commodity prices and increasing dependence on China once again place Latin American countries in a vulnerable position vis-à-vis foreign capital.
Challenging the dominance of foreign capital requires stronger regional integration, far beyond what’s been accomplished in the past decade. To strengthen integration, Latin America needs a regionally based productive model that promotes local production beyond natural resource extraction, satisfies demand for goods via trade within the region, and solidifies agreements through formal processes and frameworks. To fund this model, local development banks, like the Bank of the South, need to be significantly expanded.
Granted, an integration project like this would depend upon deeper ideological alignment between governments, a formidable task in itself.But achieving it would combat the cyclicality that plagues Latin American economies, and reduce the region’s reliance on foreign imports and lending.
Lesson: Left governments need to pursue long-term programs of economic diversification.
If history repeats itself, first as tragedy and then as farce, what is the third time? Brazil — the country known as “the land of the future” — is amid its third great economic collapse since 1945. After years of strong growth — when that elusive economic transformation from “developing” to “developed” seemed within reach — Latin America’s largest and most diversified economy has reversed course, shrinking for eight straight quarters. These days it is common to hear talk of a lost decade in Brazil.
The decline is being overseen by the unelected right-wing government of Michel Temer and his Brazilian Democratic Movement Party (PMDB) after a judicial coup ousted President Dilma Rousseff and the Workers’ Party (PT). The new government came to power promising that only it could reverse the country’s economic fortunes and passed a bill that commits the country to two decades of austerity, but Brazil’s crisis has continued with no end in sight.
But the rise of Temer was only possible due to the mistakes of the PT administrations — mistakes mirrored in other Pink Tide countries. Perhaps the greatest of these errors has been the failure of governments to diversify their economies. After sixty years of industrial experiments, failed revolutions, boom-and-bust cycles, and military dictatorships, Latin America seems to be back where it started — mostly dependent on primary commodity exports.
For instance, Brazil saw its export sector grow from 6.5 percent of GDP in 1996 to 14 percent in 2015. Out of this, mining, agriculture, and other primary exports together make up over 50 percent of Brazilian exports, while exports of primary goods rose by 525 percent between 1999 and 2009. Chinese demand was central: Brazilian trade with China quadrupled over the same period, 83 percent of which consisted of primary commodity exports.
As primary products went up, Brazil’s manufacturing went down. In the decade between 1999 and 2009 it declined from 19 percent to 10.91 percent of GDP, bringing a $90 billion trade deficit. This marks a steep departure from 1985, when manufacturing was 35 percent of the country’s exports and yielded a trade surplus of $8 billion.
Brazil’s decision to double down on primary commodities was part of the PT’s “neo-developmentalist” economic model — a model that demanded hefty public-account surpluses before the state would step in and regulate the market to ensure growth with equity. Primary commodities were the fastest way to generate this surplus in the context of soaring growth in China and India.
When Lula came to power in 2002, he pledged to break with the policies of the outgoing president, ex-Marxist turned Third Way acolyte Fernando Henrique Cardoso. However, soon after the PT victory, Lula appeared to mirror Cardoso’s economic policies: an inflation-targeting monetary policy framework, floating exchange rates, and tight fiscal policies to secure a primary surplus sufficient to compensate for the nominal deficit of the public sector. Lula finally began introducing “neo-developmentalist” policies around 2005, but these policies did not displace the established neoliberal policies of the government; they were introduced in conjunction with them, resulting in an uneasy compromise only sustained by the commodity export boom.
The economic model also created a PT power bloc that relegated the movements that had birthed the party to the margins and enriched Brazilian firms that had made millions from the PT’s reduced capital-gains taxes and other capital-friendly policies. Instead of recognizing that this unsteady alliance rested on the rivers of cash flowing from primary-product exports, however, party elites believed that they had finally formed a working relationship with capital. For a while it seemed as if they had — Lula left office in 2010 with an approval rating over 80 percent and a growing economy that seemed as if it had escaped the ravages of the global recession.
Believing it had tamed capital, the PT financed its developmental projects through state-owned companies and channeled only a small amount of the profits reaped during the commodity boom toward long-term growth. Much of Brazil’s public spending was channeled into servicing public debt and white-elephant projects like the Olympics and World Cup, too little was done to reverse the decline in manufacturing that Cardoso had set in motion. The rest of the profits were handed to capital in the form of tax rebates and other gifts, hoping to stimulate private investment.
Instead of grappling with the ideological hegemony of neoliberalism or reforming the country’s constitution and corrupt political system, the state, and the overwhelmingly right-wing media landscape, the PT squandered the cash bonanza. Looking back, it is clear that only Brazil’s primary-commodity and financial sectors benefited from this period of economic growth, which Gabriel Palma describes as “the most overrated boom in recent history.”
It has been sixty-seven years since the Argentine economist Raúl Prebisch published The Economic Development of Latin America and Its Principal Problems. In that classic work, Prebisch highlighted Latin America’s reliance on primary-commodity exports as a central barrier to development. He argued that the terms of trade between resource-exporting economies on global capitalism’s periphery and countries in the core tended to deteriorate over time. Prebisch saw industrialization as the remedy for this chronic ailment, promoted through state intervention and protectionist policies.
This analysis was flawed — as Latin American economies faced slow growth, military coups, and economic crisis in the 1960s, Prebisch and his successors found themselves forced to revaluate their models to understand the unsustainability of economic growth. Marxists critics began to argue that fostering a national bourgeoisie would not prove to be the magical key to development and that capital needed to be confronted rather than simply placated. Nonetheless, his emphasis on the dangers of relying on primary commodities, and the importance of taking a different developmental road, is worth highlighting. The PT could have done things differently, transforming commodity-driven growth into real economic and social transformation.
Granted, the question of transforming primary-commodity-driven growth into a stable growth capable of generating a progressive economic transformation is easier to ask than to answer. The limitations placed on “left” governments are very real. But the PT had alternatives: it could have focused on reforming a political system designed to limit the autonomy of a left government and force it into the grubby exchange of favors for policy; it could have directed media reforms against the right-wing Globo corporation and its domination of Brazilian media; it could have actually taxed corporate profits during the commodity boom and reinvested them into more productive sectors of the Brazilian economy, instead of trying to stimulate private investment through tax rebates. The challenge is that these paths would have required the PT to discipline Brazilian capitalists rather than attempting to seduce them through handouts.
This kind of discipline requires a strong state — one that can rein in the rapacious instincts of capital and underperforming subsidized companies. The only way a state could be strong enough to achieve this difficult task is through forging — and maintaining — an alliance with a vibrant extraparliamentary left and a powerful union movement capable of wielding the disruptive power needed to put the fear of God in capital.
While such things are easier said than done, the Workers’ Party chose to ally itself with capital ahead of its allies in the trade-union movement and Brazil’s powerful social movements; it thought it had finally won the cooperation of capital. This proved to be a tragic delusion. Brazilian capitalists preferred to keep their handouts rather than reinvest them to create good jobs. When the commodity boom ended, elites supported a coup that has brought the most reactionary and corrupt sectors of the country’s political class to power, hellbent on crushing the Left.
Brazilians are facing dire attacks on their quality of life alongside the legacy of vast PT-enabled environmental devastation wrought upon the Amazon and other parts of Brazil by agricultural corporations, which have used illegal — and at times murderous — methods to carve out space for cattle grazing and soy farming at the expense of the poorest and most vulnerable.
Even after losing power the PT has failed to take the fight to Brazil’s new government and has persisted in its electoral alliance with the traitorous PMDB in local elections. But the Brazilian Left, including its still-powerful social movements, has been fighting back. It’s strategically reflecting on how to defend the Pink Tide’s gains and forge a new project capable of overcoming its limitations. It is clear once again that the choice in Latin America is between forging a socialist struggle for the future or surrendering to the barbarism of the president — in the case of Brazil, the agenda of Temer and his allies.