By James Petras

Critique of the Ecuadorian Practice of 21cs

The most striking departure of any credible claim to socialism is the persistence and expansion of foreign private capitalist ownership of the strategic mining and energy resources: fifty-seven percent of petrol is produced by overseas petroleum multi-nationals. Large scale, long term mining contracts have been signed and renewed giving foreign owned mineral companies’ majority control over the principal foreign exchange and export earning sectors. What is worse, Correa has violently repressed and rejected the long-standing claims of the Amazonian and Andean Indian communities living and working on the lands signed off to the mineral multi-nationals. In rejecting negotiations, Correa has dismissed the 4 major Indian movements and their allies in the ecology movements as little more than a “handful of backward elements” or worse. The contamination of waters, air and land leading to serious illnesses and deaths by the foreign oil companies has been demonstrated in US courts where Texaco faces a billion dollar law suit. Despite adverse court rulings, Correa has vigorously pursued his push to make foreign led mineral exploitation the centerpiece of his “development strategy”.

While Correa has vigorously attacked the coastal financial agro-commercial capitalist class, centered in Guayaquil, he has vigorously supported and subsidized the Quito (Andean based) capitalist class. His “anti-oligarchy” rhetoric is certainly not anti-capitalist – as his embrace of 21cs would imply.

President Correa’s success in building a mass citizen electoral movement is measured by his impressive electoral victories, securing presidential majorities under multi-party competition, and over seventy percent in the constitutional elections. Despite his popularity, Correa’s popular backing is largely based on short term concessions, in the form of wage and salary increases and credit concessions to small business, measures which are not sustainable with the onset of the world recession. His granting of telecommunication monopolies to private firms, his opposition to land reform, and the restrictions of trade union strikes, while not provoking systemic challenges have led to a increasing number of strikes and protests. More important, the strengthening of capitalist, especially foreign ownership, control of strategic banking, commercial export and mineral sectors, reduces the claims of 21cs to a merely symbolic, rhetorical exercise. What is apparent is that the basis for 21cs is rooted in foreign policy pronouncements (which are subject to reversal) rather than changes in class relations, property ownership and popular power. “21cs socialism”, in the case of Ecuador, appears as a convenient way of combining innovative foreign policy measures with neo-liberal ‘modernization’ development strategies. Moreover, initial radical measures do not preclude subsequent conservative backsliding as is evidenced in the questioning of the foreign debt (which caused premature leftist ejaculations of glee) and subsequent return to full debt payments.

Bolivian Socialism White Capital, Indian Labor

The greatest contrast between 20th and 21st century “:socialism” is found between the current regime of Evo Morales (2005 - ) and the short lived Presidency of J. J. Torres (1970-1971).

While the former has openly and publicly invited mineral and extractive multi-national companies from 5 continents to exploit gas, oil, copper, iron, lithium, zinc, tin, gold, silver and a long list of other minerals, under the 20th century Torres regime, foreign and local capitalist firms were nationalized, expropriated. While billions of profits are currently repatriated both during and after the commodity boon; under Torres, state control over capital flows and foreign trade limited the de-capitalization of the country. While Evo Morales provides hundreds of millions in loans, export subsidies and tax incentives to the wealthiest agro exporters and expels landless Indian squatters from large estates, under President Torres land takeovers were encouraged as furthering the regimes agrarian reform policies. There is an abundance of socio-economic data demonstrating that the socialist polices undertaken during President Torres term of office stand in polar opposition to the social liberal policies practiced by the Morales regime. In the following sections we will outline the major social and liberal policies of the Morales regime in order to assess the true meaning of the self-declared 21cs politics in Bolivia.

The Social Changes

Numerous social changes have been implemented by the Morales regime during its first 5 years in power (2005 – 2009). The question is whether these changes add up to any of the most generous definitions of socialism or even to transitional measures pointing to socialism in the near or even distant future, given the scope and depth of the liberal economic policies adopted.

Morales has implemented socio-political changes in nine policy areas. The most significant domestic change is in the area political – cultural – legal rights of the indigenous people. The regime has granted local governance rights for Indian municipalities, recognized and promoted by-lingualism for carrying out local affairs and education, given national importance to Indian religious and holiday celebrations and promoted prosecution of those who violate or persecute Indian civil rights.

Under Morales the state has slightly increased its share of revenues in its joint ventures with multi-national corporations, increased the price of gas sold to Brazil and Argentina, while increasing the share going to the national government over and against provincial governments. Given the record prices received by Bolivia’s agro-mineral exports between 2005 – 2008, the local municipalities increased their revenue flow, though actually investments in productive and service sectors lagged because of bureaucratic bottlenecks.

Morales allowed for incremental increases in the minimum wage, salaries and wages, thus marginally improving living conditions. The increases, however, were far below Morales electoral promise to double the minimum wage and certainly not comenserate with the large scale windfall profits resulting from the commodity boom.

Morales prosecution of local officials and the provincial governor of Pando province and rightist terrorists for the assault and murder of Indian activists put an end to impunity of white assaults on Indian citizens.

The regime’s biggest boast was the accumulation of foreign reserves from $2 billion to $6 billion dollars, fiscal discipline and strict control over social spending and the favorable balance of payments. In this regard Morales’ practices were more in line with the IMF than anything remotely resembling the expansive economic practices of socialist and social democratic regimes.

Tripling reserves in the face of continued 60% poverty levels for the mostly rural Indian population is a novel policy for any regime claiming socialist credentials. Even contemporary capitalist, North American and EU regimes have not been as orthodox as the Morales’ political cultural revolutionary regime.

Morales has promoted trade union organizations and mostly avoided repression of miners and peasant movements, but at the same time has co-opted their leaders, thus lessening the number of strikes and independent class action, despite the continued inequalities in the society. De facto greater tolerance is matched by the increased ‘corporatist’ relation between regime and the popular sectors of civil society.

Morales economic strategy is based on a triple alliance between agro-mineral multi-nationals, small and medium size capitalists and the Indian and trade union movements. Morales has poured millions in subsidies to so-called “cooperatives” which are in reality private small and medium size mine owners who exploit wage labor at or below standard wages of miners in larger operations.

The principle changes under the Morales regime are in its foreign policy and rhetoric. Morales has aligned with Venezuela in supporting Cuba, joining ALBA, developing ties with Iran, and above all, opposing US policy in several important areas. Bolivia opposes the US embargo against Cuba, the seven military bases in Columbia, the coup in Honduras and its lifting of tariff preferences. Equally important Bolivia has terminated the presence of the US DEA and curtailed some of the activities of AID for subsidizing right wing socio-political organizations and destabilization activity. Morales has spoken out forcefully against the US wars in Afghanistan, and Iraq, condemned Israel’s assaults against the Palestinians and has been a consistent supporter of non-intervention, except in the case of Haiti, where Morales continues to dispatch troops.

Critique of Bolivia’s Version of 21cs

The most striking aspect of Bolivia’s economic policy is the increased size and scope of foreign owned multinational corporate (MNC) extractive capital investments. Close to a hundred MNC are currently exploiting Bolivia’s mineral and energy resources, under very lucrative conditions, including low wages, and weak environmental regulations. Moreover, in a speech in Madrid (September 2009) Morales told an audience of elite bankers and investors that they were welcome to invest as long as they didn’t intervene in politics and agreed to joint ownership. Whatever the merits of Bolivia’s foreign capital driven mineral export strategies, (and the historical record is not encouraging), it puts a peculiar twist on “21cs”: replacing proletarian and peasants with overseas CEO’s and local technocrats: a novel way to practice “socialism” in any century but more fittingly associated with free market capitalism.

In line with Morales “open door” policy toward extractive capital, he has strengthened and provided generous subsidies and low interest loans to the agro-business sector, even in those provinces like the “media luna” where ‘big agro’ has backed extreme rightist politicians destabilizing his regime. Morales willingness to overlook the political hostility of the agro-business elite and to finance their expansion is a clear indication of the high priority which he gives to orthodox capitalist growth over and above any concern with developing an alternative development pole built around peasants and landless rural workers.

On site visits to rural areas and urban slums, reinforce published reports about the unchanged nature of class inequalities. The super rich 100 families of Santa Cruz continue to own over 80% of the fertile lands and over 80% of the peasants and rural Indians are below the poverty line. Mine ownership, retail and wholesale trade, banking and credit continues concentrated in an oligarchy which has in recent years diversified its portfolio across economic sectors, creating a more integrated ruling class with greater links with global capitalist actors.

Morales has fulfilled his promise to protect and secure the traditional multi-sector economic elite, but he has also added and promoted new private and bureaucratic entrants, to the ruling class, mainly foreign CEO’s and high paid functionaries directing public private partnership.

While most socialists (of any century) would agree that big landowners are hardly the building blocks to a socialist transition, Morales has in fact depended upon and promoted agro-export production over family farming for local food production. Even worse the conditions of farm workers has barely improved; in extreme cases several thousand Indians were still exploited via slave labor, into and beyond the third year of Morales administration. The harsh exploitation of farm laborers is far lessar concern than the increase of productivity, exports, and state revenues to the regime. While labor legislation facilitating labor activity has been approved, it has not been enforced in the countryside especially in the ‘media luna’ provinces, where labor inspectors avoid any confrontations with well entrenched landowner associations. The few land occupations by the landless rural workers have been denounced by the government. Any grass roots movements pressing for land reform in extensive under cultivated estates have been strongly opposed by the government, violating its own norms that only cultivated farms would not be expropriated.

Given the regimes emphasis on the “cultural and political” aspects of its version of 21cs it is not surprising that it has spent more time and funds celebrating Indian fiestas, song and dances, than it has in expropriating and distributing fertile lands to the malnourished mass of Indians.

The regime’s effort to deflect attention from agrarian reform, by settling landless Indians on public lands in distant tropics was a disaster. This “colonization plan” organized by the so-called agrarian reform institute, dumped highland Indians in disease ridden lands which were not cleared, without farm tools, seeds, fertilizers and even living quarters. Needless to say in less than two weeks the Indians demanded bus transportation back to their impoverished villages, an improvement over these remote malaria ridden ill planned settlements. To compensate for the lack of any comprehensive land redistribution program, Evo Morales occasionally organizes, with pomp, ceremony and much publicity, “gifts” of tractors to middle and small scale farmers, more a political patronage opportunity rather than an integral part of a social transformation.

The two most striking aspects of Morales economic and political strategies is the emphasis on the traditional extractive mineral exports and the construction of a typical corporatist-patronage based electoral machine.

Into the fifth year of his regime the joint ventures signed with foreign MNC have extracted and exported raw materials with a little of value added. To an astonishing degree there has been a minimal degree of industrialization and final product manufacture which would generate greater industrial employment. The same story is true of agricultural exports – most grains and other agricultural products are not processed in Bolivia, which would provide thousands of jobs for the poverty stricken mass of landless Indians. The regime has accumulated huge reserves, but has failed to finance or foment local industry to substitute for imports of capital, intermediate and durable consumer imports.

Morales political strategy closely resembles that adopted by the Nationalist Revolutionary Movement (MNR) a half century ago, in which trade unions and especially peasant movements were incorporated to the dominant party – state. In the absence of significant socio-economic changes, the government has relied on public patronage, channeled through trade union and peasant and Indian leaders, which trickles down in the form of local favors for party loyalists. Morales style clientelism is constantly reinforced by the symbolic gestures re-affirming the “Indian” ethnic identity and “solidarity” between the giver and recipient of political patronage.

The 21cs of Morales’ political practice is far less innovative and ’socialist’ and far closer in political style to 20th century corporatist predecessors. Observers with little knowledge of Bolivia’s past, impressionistic journalists enamored with symbolic politics and financial writers who pin the “socialist label” indiscriminately on politicians who even rhetorically question the free market doctrine, have reinforced the ‘radical’ or 21cs image of the Morales regime. Given what we have described about the real practices of the 21cs regimes it is useful to place them in a broader historical-comparative framework to make some sense of their possible impact on Latin American society.

Comparative-Historical Analyses of 3 Cases of 21 Century Socialism:

Despite claims by regime publicists, the most striking aspect of 21cs regimes is what is not novel or special about their policies. Their adoption of a mixed economy and playing politics according to the institutional rules of a liberal capitalist state, differs little from the practices of European Social Democratic parties of the late 1940’s to the mid 1970’s. To the degree that the 21cs pursue nationalist politics (and we should note that nationalization means expropriatism and public ownership) they are a pale reflection of the measures taken between the 1930’s – mid 1970’s. With the exception of the Chavez regime, the rest of what passes as 21cs has at best nationalized bankrupt private firms, increased shares in joint ventures and raised taxes on agro-mineral exporters.

The ‘indigenismo’ most forcefully expressed by two Andean regimes, Bolivia and Ecuador, resonated with the rhetoric of the ‘indo-americanismo’ of the 1930’s. This was forcefully pronounced by Peruvian Marxist writer Mariatagui and APRA political leader Haya de la Torre, as well as the Chilean Socialist Party, a number of Bolivian and Mexican writers, Augusto Sandino the Nicaraguan guerilla leader, and the revolutionary El Salvadorean leader Farabundo Marti. In striking contrast to the 21cs indigenistas, their predecessors in Central America, pursued profound agrarian reforms, including the restoration of millions of acres of confiscated fertile lands and a profound rejection of the agro-business export model. The earlier version of indigenismo combined symbolic identification with deep substantive changes in contrast to the contemporary indigenistas who rely mostly on symbolic gestures and identity politics.

The current policies relying on joint ventures resonates with the reformist alternatives to the Cuban revolution, which found expression in JF Kennedy’s Alliance for Progress, which was taken up by the Christian and Social Democratic counter-insurgency regimes of the 1960’s. In opposition to the 20th century socialists and communists who favored the socialization of the economy, the Chilean Christian Democratic government (1964-70) promoted an alternative “Chileanization”, which resembles Evo Morales and Correa’s “joint ventures”. In other words the economic model of 21cs is far closer to the anti-socialist US backed reformist model of the 1960’s than to any socialist variant of the past.
21cs and 20th Century Social Democracy

While the scope and depth of socio-economic changes pursued by 21cs does not approximate the structural changes of 20cs regime, how does it measure up to the reformist or social democratic variant?

Three cases of social democratic regimes based on electoral politics come to mind: the Arbenz regime in Guatemala (1952-4); the Goulart regime in Brazil (1962-64) and the Allende regime in Chile (1970-73). All 3 past social democratic regimes pursued agrarcan reforms of greater impact, with thousands of peasant beneficiaries, than the contemporary 21cs. More substantial real nationalizations of foreign firms took place than in two of the - three contemporary 21cs social democratic regimes (Venezuela has expropriated a comparable number of firms).

In terms of foreign policy pronouncements and practices the anti-imperialist political rhetoric is similar, but the earlier social democrats were more likely to expropriate foreign capital. For example Arbenz expropriated land from United Fruit, Goulart nationalised ITT and Allende expropriated Anaconda copper. In contrast our 21cs have promoted and invited foreign agro-businesses and MNC mining corporations to exploit land and mineral resources. The different foreign economic policies correspond to the different internal class composition and economic alignments between 20th and 21st century social democracy. In contrast to conventional misconceptions, the 21cs have consummated pacts between regime technocrats, the multi-nationals, and domestic agro-mineral elites which weigh far heavier in decision making centers, than the mass electoral base of Indians and workers. In contrast the peasant and worker movements had greater representation and independence of action within and without the 20th century social democratic regimes.

21cs Defining a New Historical Configuration or a Cyclical Political Process?

An examination of Latin American’s past 60 years of history reveals a consistent cyclical pattern of alternating left and right ‘waves’ of political regimes. The underlying ‘constant’ has been the struggle between, on the one hand US imperialist projections of power either through direction intervention, military dictatorships and client civillians regimes and on the other hand, popular democratic and socialist movements and regimes. The question of whether the latest wave of “center-left” regimes is simply the latest expression of this cyclical pattern or whether basic alterations in the underlying internal and external structural relations are operating to provide a more sustainable process? We will proceed to outline the past cyclical pattern of left/right politics in the past and follow with a discussion of some key contemporary global and regional changes which might lead to greater sustainability for left political hegemony.

Post WWII Latin American history has experienced roughly 5 cycles of left/right predominance. The immediate period after WW II, following the defeat of fascism, witnessed the world wide advance of democracy, anti-colonialism and socialist revolutions. Latin America was no exception. Center-left social democratic, nationalist populist, popular front governments took power in Chile, Argentina, Venezuela, Costa Rica, Guatemala, Brazil and Bolivia between 1945-52. Juan and Eva Peron nationalized the railroads, legislated one of the most advanced welfare programs and elaborated a regional “third way” foreign policy, independent of the US. A coalition of socialists, communists and radicals won the 1947 election in Chile on the promise of extensive labor and social reforms. In Costa Rica a political upheaval dismantled the national army. In Venezuela a social democratic party (Accion Democratica) promised to extend public control over petroleum resources and increase tax revenues. In Guatemala, newly elected President Arbenz expropriated uncultivated fields of the United Fruit Company, implemented far reaching labor legislation promoting the growth of unionization and ended debt peonage of Indians.

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