"Latin America has become the most exciting region of the world"
VII Social Summit for the Latin American & Caribbean Unity
By Noam Chomsky, CARACAS *
During the past decade, Latin America has become the
most exciting region of the world. The dynamic has very
largely flowed from right where you are meeting, in
Caracas, with the election of a leftist president
dedicated to using Venezuela's rich resources for the
benefit of the population rather than for wealth and
privilege at home and abroad, and to promote the
regional integration that is so desperately needed as a
prerequisite for independence, for democracy, and for
meaningful development. The initiatives taken in
Venezuela have had a significant impact throughout the
subcontinent, what has now come to be called "the pink
tide." The impact is revealed within the individual
countries, most recently Paraguay, and in the regional
institutions that are in the process of formation.
Among these are the Banco del Sur, an initiative that
was endorsed here in Caracas a year ago by Nobel
laureate in economics Joseph Stiglitz; and the ALBA,
the Bolivarian Alternative for Latin America and the
Caribbean, which might prove to be a true dawn if its
initial promise can be realized.
The ALBA is often described as an alternative to the
US-sponsored "Free Trade Area of the Americas," though
the terms are misleading. It should be understood to be
an independent development, not an alternative. And,
furthermore, the so-called "free trade agreements" have
only a limited relation to free trade, or even to trade
in any serious sense of that term; and they are
certainly not agreements, at least if people are part
of their countries. A more accurate term would be
"investor-rights arrangements," designed by
multinational corporations and banks and the powerful
states that cater to their interests, established
mostly in secret, without public participation or
awareness. That is why the US executive regularly calls
for "fast-track authority" for these agreements -
essentially, Kremlin-style authority.
Another regional organization that is beginning to take
shape is UNASUR, the Union of South American Nations.
This continental bloc, modeled on the European Union,
aims to establish a South American parliament in
Cochabamba, a fitting site for the UNASUR parliament.
Cochabamba was not well known internationally before
the water wars of 2000. But in that year events in
Cochabamba became an inspiration for people throughout
the world who are concerned with freedom and justice,
as a result of the courageous and successful struggle
against privatization of water, which awakened
international solidarity and was a fine and encouraging
demonstration of what can be achieved by committed
activism.
The aftermath has been even more remarkable. Inspired
in part by developments in Venezuela, Bolivia has
forged an impressive path to true democratization in
the hemisphere, with large-scale popular initiatives
and meaningful participation of the organized majority
of the population in establishing a government and
shaping its programs on issues of great importance and
popular concern, an ideal that is rarely approached
elsewhere, surely not in the Colossus of the North,
despite much inflated rhetoric by doctrinal managers.
Much the same had been true 15 years earlier in Haiti,
the only country in the hemisphere that surpasses
Bolivia in poverty - and like Bolivia, was the source
of much of the wealth of Europe, later the United
States. In 1990, Haiti's first free election took
place. It was taken for granted in the West that the US
candidate, a former World Bank official who monopolized
resources, would easily win. No one was paying
attention to the extensive grass-roots organizing in
the slums and hills, which swept into power the
populist priest Jean-Bertrand Aristide. Washington
turned at once to undermining the feared and hated
democratic government. It took only a few months for a
US-backed military coup to reverse this stunning
victory for democracy, and to place in power a regime
that terrorized the population with the direct support
of the US government, first under president Bush I,
then Clinton. Washington finally permitted the elected
president to return, but only on the condition that he
adhere to harsh neoliberal rules that were guaranteed
to crush what remained of the economy, as they did. And
in 2004, the traditional torturers of Haiti, France and
the US, joined to remove the elected president from
office once again, launching a new regime of terror,
though the people remain unvanquished, and the popular
struggle continues despite extreme adversity.
All of this is familiar in Latin America, not least in
Bolivia, the scene of today's most intense and
dangerous confrontation between popular democracy and
traditional US-backed elites. Archaeologists are now
discovering that before the European conquest, Bolivia
had a wealthy, sophisticated and complex society - to
quote their words, "one of the largest, strangest, and
most ecologically rich artificial environments on the
face of the planet, with causeways and canals, spacious
and formal towns and considerable wealth," creating a
landscape that was "one of humankind's greatest works
of art, a masterpiece." And of course Bolivia's vast
mineral wealth enriched Spain and indirectly northern
Europe, contributing massively to its economic and
cultural development, including the industrial and
scientific revolutions. Then followed a bitter history
of imperial savagery with the crucial connivance of
rapacious domestic elites, factors that are very much
alive today.
Sixty years ago, US planners regarded Bolivia and
Guatemala as the greatest threats to its domination of
the hemisphere. In both cases, Washington succeeded in
overthrowing the popular governments, but in different
ways. In Guatemala, Washington resorted to the standard
technique of violence, installing one of the world's
most brutal and vicious regimes, which extended its
criminality to virtual genocide in the highlands during
Reagan's murderous terrorist wars of the 1980s - and we
might bear in mind that these horrendous atrocities
were carried out under the guise of a "war on terror,"
a war that was re-declared by George Bush in September
2001, not declared, a revealing distinction when we
recall the implementation of Reagan's "war on terror"
and its grim human consequences.
In Guatemala, the Eisenhower administration overcame
the threat of democracy and independent development by
violence. In Bolivia, it achieved much the same
results by exploiting Bolivia's economic dependence on
the US, particularly for processing Bolivia's tin
exports. Latin America scholar Stephen Zunes points out
that "At a critical point in the nation's effort to
become more self-sufficient [in the early 1950s], the
U.S. government forced Bolivia to use its scarce
capital not for its own development, but to compensate
the former mine owners and repay its foreign debts."
The economic policies forced on Bolivia in those years
were a precursor of the structural adjustment programs
imposed on the continent thirty years later, under the
terms of the neoliberal "Washington consensus," which
has generally had disastrous effects wherever its
strictures have been observed. By now, the victims of
neoliberal market fundamentalism are coming to include
the rich countries, where the curse of financial
liberalization is bringing about the worst financial
crisis since the Great Depression of the 1930s and
leading to massive state intervention in a desperate
effort to rescue collapsing financial institutions.
We should note that this is a regular feature of
contemporary state capitalism, though the scale today
is unprecedented. A study by two well-known
international economists 15 years ago found that at
least twenty companies in the top Fortune 100 would not
have survived if they had not been saved by their
respective governments, and that many of the rest
gained substantially by demanding that governments
"socialise their losses." Such government intervention
"has been the rule rather than the exception over the
past two centuries," they conclude from a detailed
analysis. [Ruigrok and von Tulder]
We might also take note of the striking similarity
between the structural adjustment programs imposed on
the weak by the International Monetary Fund, and the
huge financial bailout that is on the front pages today
in the North. The US executive-director of the IMF,
adopt ing an image from the Mafia, described the
institution as "the credit community's enforcer."
Under the rules of the Western-run international
economy, investors make loans to third world tyrannies,
and since the loans carry considerable risk, make
enormous profits. Suppose the borrower defaults. In a
capitalist economy, the lenders would incur the loss.
But really existing capitalism functions quite
differently. If the borrowers cannot pay the debts,
then the IMF steps in to guarantee that lenders and
investors are protected. The debt is transferred to the
poor population of the debtor country, who never
borrowed the money in the first place and gained little
if anything from it. That is called "structural
adjustment." And taxpayers in the rich country, who
also gained nothing from the loans, sustain the IMF
through their taxes. These doctrines do not derive from
economic theory; they merely reflect the distribution
of decision-making power.
The designers of the international economy sternly
demand that the poor accept market discipline, but they
ensure that they themselves are protected from its
ravages, a useful arrangement that goes back to the
origins of modern industrial capitalism, and played a
large role in dividing the world into rich and poor
societies, the first and third worlds.
This wonderful anti-market system designed by self-
proclaimed market enthusiasts is now being implemented
in the United States, to deal with the very ominous
crisis of financial markets. In general, markets have
well-known inefficiencies. One is that transactions do
not take into account the effect on others who are not
party to the transaction. These so-called
"externalities" can be huge. That is particularly so in
the case of financial institutions. Their task is to
take risks, and if well-managed, to ensure that
potential losses to themselves will be covered. To
themselves. Under capitalist rules, it is not their
business to consider the cost to others if their
practices lead to financial crisis, as they regularly
do. In economists' terms, risk is underpriced, because
systemic risk is not priced into decisions. That leads
to repeated crisis, naturally. At that point, we turn
to the IMF solution. The costs are transferred to the
public, which had nothing to do with the risky choices
but is now compelled to pay the costs - in the US,
perhaps mounting to about $1 trillion right now. And
of course the public has no voice in determining these
outcomes, any more than poor peasants have a voice in
being subjected to cruel structural adjustment
programs.
A basic principle of modern state capitalism is that
cost and risk are socialized, while profit is
privatized. That principle extends far beyond financial
institutions. Much the same is true for the entire
advanced economy, which relies extensively on the
dynamic state sector for innovation, for basic research
and development, for procurement when purchasers are
unavailable, for direct bail-outs, and in numerous
other ways. These mechanisms are the domestic
counterpart of imperial and neocolonial hegemony,
formalized in World Trade Organization rules and the
misleadingly named "free trade agreements."
Financial liberalization has effects well beyond the
economy. It has long been understood that it is a
powerful weapon against democracy Free capital movement
creates what some international economists have called
a "virtual parliament" of investors and lenders, who
can closely monitor government programs and "vote"
against them if they are considered irrational: for the
benefit of people, rather than concentrated private
power. They can "vote" by capital flight, attacks on
currencies, and other devices offered by financial
liberalization. That is one reason why the Bretton
Woods system established by the US and UK after World
War II instituted capital controls and regulated
currencies. The Great Depression and the war had
aroused powerful radical democratic currents, taking
many forms, from the anti-fascist resistance to working
class organization. These pressures made it necessary
to permit social democratic policies. The Bretton Woods
system was designed in part to create a space for
government action responding to public will - for some
measure of democracy, that is. John Maynard Keynes, the
British negotiator, considered the most important
achievement of Bretton Woods to be establishment of the
right of governments to restrict capital movement. In
dramatic contrast, in the neoliberal phase after the
breakdown of the Bretton Woods system, the US Treasury
now regards free capital mobility as a "fundamental
right," unlike such alleged "rights" as those
guaranteed by the Universal Declaration of Human
Rights: health, education, decent employment, security,
and other rights that the Reagan and Bush
administrations have dismissed as "letters to Santa
Claus," "preposterous," mere "myths."
In earlier years the public had not been much of a
problem. The reasons are reviewed by Barry Eichengreen
in his standard scholarly history of the international
monetary system. He explains that in the 19th
century, governments had not yet been "politicized by
universal male suffrage and the rise of trade unionism
and parliamentary labor parties." Therefore the severe
costs imposed by the virtual parliament could be
transferred to the general population. But with the
radicalization of the general public during the Great
Depression and the anti-fascist war, that luxury was no
longer available to private power and wealth. Hence in
the Bretton Woods system, "limits on capital mobility
substituted for limits on democracy as a source of
insulation from market pressures." It is only necessary
to add the obvious corollary: with the dismantling of
the system from the 1970s, functioning democracy is
restricted. It has therefore become necessary to
control and marginalize the public in some fashion,
processes that are particularly evident in the more
business-run societies like the United States. The
management of electoral extravaganzas by the Public
Relations industry is one illustration.
The primary victims of military terror and economic
strangulation are the poor and weak, within the rich
countries themselves and far more brutally in the
South. But times are changing. In Venezuela, in
Bolivia, and elsewhere there are promising efforts to
bring about desperately needed structural and
institutional changes. And not surprisingly, these
efforts to promote democracy, social justice, and
cultural rights are facing harsh challenges from the
traditional rulers, at home and internationally.
For the first time in half a millennium, South America
is beginning to take its fate into its own hands. There
have been attempts before, but they have been crushed
by outside force, as in the cases I just mentioned and
other hideous ones too numerous and too familiar to
review. But there are now significant departures from a
long and shameful history. The departures are
symbolized by the UNASUR crisis summit in Santiago just
a few days ago. At the summit, the presidents of the
South American countries issued a strong statement of
support for the elected Morales government, which as
you know is under attack by the traditional rulers:
privileged Europeanized elites who bitterly oppose
Bolivian democracy and social justice and, routinely,
enjoy the firm backing of the master of the hemisphere.
The South American leaders gathering at the UNASUR
summit in Santiago declared "their full and firm
support for the constitutional government of President
Evo Morales, whose mandate was ratified by a big
majority" -- referring, of course, to his overwhelming
victory in the recent referendum. Morales thanked
UNASUR for its support, observing that "For the first
time in South America's history, the countries of our
region are deciding how to resolve our problems,
without the presence of the United States."
A matter of no slight significance.
The significance of the UNASUR support for democracy in
Bolivia is underscored by the fact that the leading
media in the US refused to report it, though editors
and correspondents surely knew all about it. Ample
information was available to them on wire services.
That has been a familiar pattern. To cite just one of
many examples, the Cochabamba declaration of South
American leaders in December 2006, calling for moves
towards integration on the model of the European Union,
was barred from the Free Press in the traditional ruler
of the hemisphere. There are many other cases, all
illustrating the same fear among the political class
and economic centers in the US that the hemisphere is
slipping from their control.
Current developments in South America are of historic
significance for the continent and its people. It is
well understood in Washington that these developments
threaten not only its domination of the hemisphere, but
also its global dominance. Control of Latin America was
the earliest goal of US foreign policy, tracing back to
the earliest days of the Republic. The United States
is, I suppose, the only country that was founded as a
"nascent empire," in George Washington's words. The
most libertarian of the Founding Fathers, Thomas
Jefferson, predicted that the newly liberated colonies
would drive the indigenous population "with the beasts
of the forests into the Stony Mountains," and the
country will ultimately be "free of blot or mixture,"
red or black (with the return of slaves to Africa after
eventual ending of slavery). And furthermore, it "will
be the nest, from which all America, North and South,
is to be peopled," displacing not only the red men but
the Latin population of the South.
These aspirations were not achieved, but control of
Latin America remains a central policy goal, partly for
resources and markets, but also for broader ideological
and geostrategic reasons. If the US cannot control
Latin America, it cannot expect "to achieve a
successful order elsewhere in the world," Nixon's
National Security Council concluded in 1971 while
considering the paramount importance of destroying
Chilean democracy. Historian David Schmitz observes
that Allende "threatened American global interests by
challenging the whole ideological basis of American
Cold War policy. It was the threat of a successful
socialist state in Chile that could provide a model for
other nations that caused concern and led to American
opposition," in fact direct participation in
establishing and maintaining the terrorist
dictatorship. Henry Kissinger warned that success for
democratic socialism in Chile might have reverberations
as far as southern Europe - not because Chilean hordes
would descend on Madrid and Rome, but because success
might inspire popular movements to achieve their goals
by means of parliamentary democracy, which is upheld as
an abstract value in the West, but with crucial
reservations.
Even mainstream scholarship recognizes that Washington
has supported democracy if and only if it contributes
to strategic and economic interests, a policy that
continues without change through all administrations,
to the present.
These pervasive concerns are the rational form of the
domino theory, sometimes more accurately called "the
threat of a good example." For such reasons, even the
tiniest departure from strict obedience is regarded as
an existential threat that calls for a harsh response:
peasant organizing in remote communities of northern
Laos, fishing cooperatives in Grenada, and so on
throughout the world. It is necessary to ensure that
the "virus" of successful independent development does
not "spread contagion" elsewhere, in the terminology of
the highest level planners.
Such concerns have motivated US military intervention,
terrorism, and economic warfare throughout the post-
World War II era, in Latin America and throughout much
of the world. These are leading features of the Cold
War. The superpower confrontation regularly provided
pretexts, mostly fraudulent, much as the junior partner
in world control appealed to the threat of the West
when it crushed popular uprisings in its much narrower
Eastern European domains.
But times are changing. In Latin America, the source is
primarily in moves towards integration, which has
several dimensions. One dimension of integration is
regional: moves to strengthen ties among the South
American countries of the kind I mentioned. These are
now just beginning to reach to Central America, which
was so utterly devastated by Reagan's terror wars that
it had mostly stayed on the sidelines since, but is now
beginning to move. Of particular significance are
recent developments in Honduras, the classic "banana
republic" and Washington's major base for its terrorist
wars in the region in the 1980s. Washington's
Ambassador to Honduras, John Negroponte, was one of the
leading terrorist commanders of the period, and
accordingly was appointed head of counter-terrorist
operations by the Bush administration, a choice
eliciting no comment. But here too times are changing.
President Zelaya declared that US aid does not "make us
vassals" or give Washington the right to humiliate the
nation, and has improved ties with Venezuela, joining
Petrocaribe, and in July, joining the Alba as well.
Regional integration of the kind that has been slowly
proceeding for several years is a crucial prerequisite
for independence, making it more difficult for the
master of the hemisphere to pick off countries one by
one. For that reason it is causing considerable
distress in Washington, and is either ignored or
regularly distorted in the media and other elite
commentary.
A second form of integration is global: the
establishment of South-South relations, and the
diversification of markets and investment, with China a
growing and particularly significant participant in
hemispheric affairs. Again, these developments undercut
Washington's ability to control what Secretary of War
Henry Stimson called "our little region over here" at
the end of World War II, when he was explaining that
other regional systems must be dismantled, while our
own must be strengthened.
The third and in many ways most vital form of
integration is internal. Latin America is notorious for
its extreme concentration of wealth and power, and the
lack of responsibility of privileged elites for the
welfare of the nation. It is instructive to compare
Latin America with East Asia. Half a century ago, South
Korea was at the level of a poor African country. Today
it is an industrial powerhouse. And much the same is
true throughout East Asia. The contrast to Latin
America is dramatic, particularly so because Latin
America has far superior natural advantages. The
reasons for the dramatic contrast are not hard to
identify. For 30 years Latin America has rigorously
observed the rules of the Washington consensus, while
East Asia has largely ignored them. Latin American
elites separated themselves from the fate of their
countries, while their East Asian counterparts were
compelled to assume responsibilities. One measure is
capital flight: in Latin America, it is on the scale of
the crushing debt, while in South Korea it was so
carefully controlled that it could bring the death
penalty. More generally, East Asia adopted the modes of
development that had enabled the wealthy countries to
reach their current state, while Latin America adhered
to the market principles that were imposed on the
colonies and largely created the third world, blocking
development.
Furthermore, needless to say, development of the East
Asian style is hardly a model to which Latin America,
or any other region, should aspire. The serious
problems of developing truly democratic societies,
based on popular control of all social, economic,
political and cultural institutions, and overturning
structures of hierarchy and domination in all aspects
of life, are barely even on the horizon, posing
formidable and essential tasks for the future.
These are huge problems within Latin America. They are
beginning to be addressed, though haltingly, with many
internal difficulties. And they are, of course,
arousing bitter antagonism on the part of traditional
sectors of power and privilege, again backed by the
traditional master of "our little region over here."
The struggle is particularly intense and significant
right now in Bolivia, but in fact is constant in one or
another form throughout the hemisphere.
The problems of Latin America and the Caribbean have
global roots, and have to be addressed by regional and
global solidarity along with internal struggle. The
growth of the social forums, first in South America,
now elsewhere, has been one of the most encouraging
steps forward in recent years. These developments may
bear the seeds of the first authentic international,
heralding an era of true globalization - international
integration in the interests of people, not investors
and other concentrations of power. You are right at the
heart of these dramatic developments, an exciting
opportunity, a difficult challenge, a responsibility of
historic proportions.
* Source: ZMagazine, Septmber 30, 2008; www.zmag.org
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