While Europe’s centre-left digs its own grave, ideas of socialism are back in vogue elsewhere, says Enrico Tortolano
Large parts of the world are moving away from the kind of unaccountable laissez-faire economic model that has led to one of the worst financial crises in history. However, the centre-left across Europe appears unmoved by public anger at the greed and arrogance of big business and the hard data that reveal its catastrophic failure.
European centre-left parties continue to advocate the same old corporate-friendly policies that fed the crisis: mass privatisations, deep cuts to public spending and multi-million pound bailouts for failed financial corporations. Ironically, the centre-right has stolen the left’s interventionist language and is winning elections by talking about market regulation and government welfare support.
If it is to become a force again, Europe’s left needs to examine the significance of the radical social democratic politics currently sweeping across Latin America.
The seeds of the new Latin American socialism were actually sown more than 50 years ago in Cuba. But it is more deeply rooted in the region’s disastrous experience of neo-liberalism. This was first adopted in the 1970s by the regime of Chilean dictator Augusto Pinochet under the guidance of economist Milton Friedman and his pioneers of market fundamentalism, the Chicago Boys. Subsequently, “free” market economics were adopted in Britain and the United States by Margaret Thatcher and Ronald Reagan. Thereafter, they were force-fed across the globe.
Pinochet’s aggressive brand of state-free economics did not go smoothly. By 1974, inflation in Chile was a staggering 375 per cent – the highest in the world. Friedman went to Chile to urge Pinochet to address this – by pushing neo-liberal policies even more vigorously. Pinochet cut public spending by 72 per cent and 500 companies and banks were privatised. The Chilean economy was opened up to the world and imports flooded in. Unemployment rose to more than 20 per cent. By 1988, almost 50 per cent of the population lived below the poverty line. The richest 10 per cent saw their incomes rise by 85 per cent. This became the model for the whole of Latin America – a model implemented under dictatorial regimes that used torture and disappearances to crush dissent. A similar process was under way in Uruguay, Venezuela and Brazil, also with the help of the Chicago Boys. A few years later, Argentina followed suit.
This wave of privatisation, deregulation and unemployment led to mass unrest in Venezuela. In 1989, more than 2000 activists were murdered in what became known as the Caracazo massacre. And ever since the Argentine financial collapse in 2001, opposition to privatisation has become the defining issue of the continent – able to make or break governments. Lula da Silva was re-elected as president of Brazil largely because he turned the vote into a referendum on privatisation.
Bolivia has also played an integral role in the struggle against neo-liberal privatisations. Images from the Cochabamba water war in April 2000 – the popular insurrection of indigenous groups and trade unionists against the multinational water company run by American construction giant Bechtel – were beamed around the world. Bechtel’s defeat is widely regarded as the first great victory against corporate globalisation in Latin America.
The socialist dream that Salvador Allende represented in Latin America was never really defeated. It was temporarily silenced, pushed into hiding by fear. But now, as Latin America emerges from its decades of oppression, ideas of social and economic justice are again brewing, along with the “imitative spread” so feared by the corporate barons and financial oligarchy.
In the mid-1970s, Argentina’s dictatorship eliminated almost every trace of civil resistance and pushed through a series of measures that initiated a cycle of neo-liberalism. More than 30,000 trade unionists, activists, students and intellectuals were victims of a terrifying form of repression – forced disappearance.
The psychopathic tactics of terror used by the military to pursue its economic agenda induced fear and paralysis into Argentina’s people. However, by 2001 that fear had receded and the country erupted in protest against austerity measures of privatisation and welfare cuts administered by the International Monetary Fund. Millions of Argentines were without pay, jobs or pensions. They organised themselves into barrio-based unions and committees. Roads and bridges were blocked. Abandoned buildings were taken over to supply homes and soup kitchens. Disused factories were taken over by their employees and put back to work. Direct action became the solution to a government that was obsequious to global financial institutions. Five presidents were kicked out of office in three weeks.
Since 1998, the fiercest opponents of privatisation have been winning election after election in Latin America. Venezuelan president Hugo Chávez, running on a platform of “21st century socialism”, was re-elected for a third term in 2006 with 65 per cent of the vote. Despite attempts by the United States to portray Venezuela as a totalitarian state, a Latinobarómetro survey that year found 60 per cent of Venezuelans were happy with the state of their democracy.
That approval rating has been beaten only by Uruguay, where the left-wing Frente Amplio party has been elected to government and where a series of referendums has blocked major privatisations.
In two Latin American states where voting has resulted in real challenges to the neo-liberal model, people have renewed their faith in the power of radical social democracy to improve their lives.
The events of the past year have exposed regulation-light capitalism as bankrupt and its ruling elites as greedy and incompetent. In refusing to renounce the dogma of privatisation and free-market capitalism, the centre-left across Europe is digging its own grave.
In Britain, the Labour Government has bailed out the banks, yet failed to control the exorbitant pay of senior bankers and their scandalous bonus culture. Labour has announced massive spending cuts after 2010. It has extended its privatisation programme into the Royal Mail, the Royal Mint, the Met Office, Ordnance Survey, and the Land Registry.
Ordinary people feel betrayed, as the reaction to Total’s mass sacking of workers at the Lindsey oil refinery demonstrated. But people are opening their eyes and beginning to organise to defend their living conditions.
In Latin America, indigenous people, trade unionists and other social activists have shown that it is possible to defeat the champions of neo-liberalism and the representatives of the multinationals. This is encouraging and inspiring, because it shows organisation and mobilisation can move us towards democracy with social and economic justice.
American Nobel-winning economist Paul Krugman is right that the British Labour Government is now paying for buying into “free-market fundamentalism”. With the old business model bust and the reputation of the City in tatters, the time has never been more propitious for changing course to a more egalitarian social model.
What makes developments in Latin America unique is that campaigns are not directed at a particular political party or even at bureaucratic corruption. The target is the dominant neo-liberal economic agenda. The trend is clear: governments that respond to the crisis created by casino capitalism with more of the same will not survive to tell the tale.
