It is vital that in Latin America two urgent and interwoven matters are considered. The first is the crisis of global capitalism, which provides the indispensable framework for understanding the present situation in Latin America. The second is a fraternal criticism of weaknesses in the Left project.
Global capitalism is facing a worldwide crisis. This crisis is both structural and a matter of the legitimacy of the system. This may seem counterintuitive as the transnational capitalist class and its agents have been on the offensive against the popular classes everywhere. But the aggressive resurgence of the Right is in fact a response to the crisis.
The structural dimension of the crisis is rooted in overaccumulation and prolonged stagnation. Capitalism has an inherent tendency to bring about a polarisation of income, that is, for the rich to become richer and the poor poorer. Historically, within the nation-state, this social polarisation was somewhat offset by social and class struggles from below, that managed to pressure capital and the state to undertake some redistribution of wealth and to impose some regulation on the market.
But capitalism went global starting in the 1980s. Since then, we have witnessed the rise of truly transnational capital, a transnational capitalist class, and a globally integrated production and financial system. By going global, capital freed itself from the constraints imposed on it by the nation-state by popular struggles from below, and with it, unleashed the tendency towards polarisation in full force. The popular classes lost the ability to force the state to constrain capital.
Capital in crisis
States lost the ability to capture and redistribute surpluses. The result has been an unprecedented escalation of global inequalities. The data is now well known: 1% of humanity controls more than 50% of the planet’s wealth; 20% controls 95% of the world’s wealth; and the remaining 80% – the great mass of humanity – must make due with barely 5% of this wealth.
Given this inequality, the global market cannot absorb the output of the global economy. Transnational capital cannot find outlets to profitably invest the enormous surplus it has accumulated. In the US, for example, according to data from 2017, corporations were sitting on $1.8 trillion dollars in uninvested cash. At the global level, the giant capitalist conglomerates have reported record profits at the same time as their investment has decreased. This is what we call idle capital. But capital cannot remain idle. It must find outlets to continue investing and making profit.
In this regard, in capitalism, crisis refers precisely to the existence of obstacles to the ongoing accumulation of capital, and therefore to the tendency towards stagnation. These crisis conditions generate fierce social, political, ideological and military conflicts. This is what we are currently experiencing. This is the larger backdrop to the dangerous escalation of international tensions.
Structurally, what is going on is that opportunities for profitable investment are drying up. In the face of this situation, capital and its political agents and capitalist states seek to open up new opportunities for accumulation typically through violence, whether structural or direct.
Examples of direct violence to open up profit-making opportunities for the transnational class are the invasion of Iraq, the so-called “war on drugs”, the farce of the “war on terror”, the war against immigrants, and so on. Examples of structural violence are neoliberal policies including strangulation through indebtedness, such as in Greece, and so on.
In recent years, the system has turned to three mechanisms to sustain accumulation in the face of stagnation:
1. The expansion of credit to consumers and to the state. But this credit mechanism is reaching its limits. In the US, which has functioned as the “market of last resort”, consumer debt surpassed $13 trillion dollars last year – higher than it was on the eve of the financial collapse of 2008. In Europe and other regions, the economic data also shows record levels of consumer debt.
2. A complete reconfiguration of public finances. There has been a transfer of wealth from the popular classes to the transnational capitalist class via state-orchestrated privatisations, deregulation, cuts in social spending, the expansion of subsidies to capital, regressive tax reform, and so on.
3. Hyper financial speculation in the global casino. The gap between the real economy and what is known as fictitious capital has grown exponentially and is reaching levels that threaten to destabilise the system. In 2015, gross world product (that is, the total value of all the goods and services produced in the world) stood at $75 trillion, whereas in that same year the global derivatives market – which is simply a speculative market – reached a mind-boggling $1.2 quadrillion.
These three mechanisms are reaching their limits. Over the long term, they end up aggravating the problem of overaccumulation. There is, therefore, an underlying structural instability in the global economy. The global economy is extremely fragile. Another collapse is all but inevitable.
A global police state
The great challenge now for the system is how to find profitable outlets to invest the accumulated surplus. Currently, the system is seeking a new wave of expansion, but it has not been easy to undertake this expansion. The system is now pushing towards expansion through: 1) wars, conflicts and militarisation; 2) a new round of violent dispossession (as is taking place throughout Latin America); and 3) further plunder of the state.
International tensions are rising. We are seeing the rise of a global police state and in escalating moves towards political systems that can be characterised as 21st-century fascism.
There has been a rapid political polarisation in global society in the face of the crisis. In response, there has been an upsurge of resistance and popular struggles around the world, but also a resurgence of the far right. This far right is an insurgent force in many countries (for instance, Honduras, Colombia, Brazil, Israel, Europe, the US, Turkey, India, the Philippines), and we face the spectre of 21st-century fascism, which involves a particular triangulation, a coming together of transnational capital, reactionary and repressive political power in the state, and a mobilisation of fascist forces in civil society.
In Latin America, the transnational capitalist class is seeking a violent expansion of the transnational corporate seizure of lands and resources in collusion with a resurgent and extreme Right. The explosive inequalities and contradictions of global capitalism in the region cannot be contained any longer through consensual mechanisms of domination.
A number of countries are slipping towards authoritarian and dictatorial regimes, such as in Honduras, Brazil and Guatemala. In Colombia, there is a clear situation of 21st-century fascism.
In the past few decades, there has been a major expansion of global capitalism in Latin America. There are very few spaces left in the region that enjoy any sort of autonomy from the global capitalist market and transnational corporate domination.
Transnational capital has conquered and commodified rural areas that until recently still enjoyed some measure of local autonomy, such as the highlands of Guatemala, where the discovery of gold deposits and oil and gas has led to a veritable invasion of indigenous lands and the reappearance of death squads to violently dislodge indigenous communities.
In Honduras, the Afro-Honduran population and indigenous communities have been thrust into life-and-death battles against mega infrastructure projects financed by the World Bank, and against transnational tourism that is stealing their land and turning it into vacation attractions for wealthy tourists. The same goes for Mexico, Colombia, Brazil, Peru and other countries.
At the same time, spaces that had still remained outside of the logic of the market have been commodified and subject to the logic of capital accumulation – such as health, education, water and other public services and utilities, culture. The region has been under siege by a new and intensified round of neoliberalism.
A resurgent right in Latin America
The Bolivarian Alliance for the Peoples of Our America (Alba) was formed early this century under the leadership of Venezuela as a project to break the region’s subordination to global capitalism. It brought together countries that had elected Left and progressive governments in the first decade of the 21st century – a phenomenon sometimes referred to as the “pink tide”).
But in recent years, a number of countries that participated in Alba have been taken over by a resurgent Right. What remains of Alba is facing a renewed assault by the transnational capitalist class, the international Right, and the US. The Right has returned to power with a vengeance in Brazil, Argentina, Honduras and Paraguay, and it is making major headway in Bolivia, Ecuador and Central America. The Venezuelan revolution has been facing a destabilisation campaign led by Washington for nearly two decades, and Cuba continues to face US blockade and destabilisation plots.
But if we are to understand this assault against Alba and popular struggles and social movements throughout Latin America, we must discuss the weaknesses and mistakes of the Left. Our most urgent task is to combat the avenging return of the Right. But we cannot undertake this task without fraternal criticism and self-criticism of the Left and its practices over the past two decades.
The mass struggles against neoliberalism ruptured neoliberal hegemony in the final years of the 20th century and the Left was propelled to power by the mass anti-neoliberal struggles. But the Left has now lost the hegemony it had conquered. This hegemony is now being disputed by the return of a violently retaliatory Right. We cannot simply pin the blame on the Empire. We cannot exonerate ourselves from any responsibility. We need to see how the mistakes and limitations of the Left opened space for the assault of the Right.
We cannot turn a blind eye to how leftist governments have tolerated alarming levels of corruption and licit and illicit accumulation of capital. Even state and party officials in leftist governments have participated in this accumulation. The popular classes have seen this corruption and it has caused the Left project to lose legitimacy in their eyes.
Extractivism and social assistance
But the crisis of the left is not solely a matter of corruption. The prevailing model of the Left over the past two decades has been focused on social assistance programmes based on capturing and redistributing surplus generated by an expansion of the export of raw materials to the world market, in close partnership with the transnational capitalist class.
This model – with the exception of Venezuela – did not involve challenging the prerogatives of transnational capital. In fact, the leftist governments supervised a vast expansion of what has been called “extractivism” – an expansion of mining, carbon-based energy resources, and large-scale agribusiness. The Left’s project for transformation centred on this extractivism.
Left governments in Brazil, Uruguay, Paraguay, Argentina and Bolivia facilitated a vast expansion of soy production by transnational agribusiness even as small scale and peasant producers were marginalised and dispossessed. The spread of transnational corporate agroindustry brought about a greater concentration of lands and capital, and heightened the structural power of the transnational capitalist class over leftist states. In Venezuela, dependence on oil exports actually increased under the revolution, which left the country at the mercy of the global oil and financial markets controlled by the transnational capitalist class.
The Left in state power – with the exception of Venezuela and, to a lesser extent, Bolivia – did not undertake structural transformations; they did not challenge the prevailing property relations and class structure. Social assistance programmes depended on the whims of the global market controlled by the transnational capitalist class. When the price of the region’s commodities exports collapsed, starting in 2011, the Left lost the very basis for its mildly reformist project.
The popular masses were clamouring for more substantial transformations. But under the pretext of attracting transnational corporate investment to bring about development, the demands from below for deeper transformation were often suppressed. Social movements were demobilised, their leaders absorbed by the institutional Left in government and the capitalist state, and their mass bases subordinated to the Left parties’ electoralism.
If we are to face the onslaught of the Right, the Left must urgently renovate a revolutionary project and a plan for refounding the state. If the Left attempts to control or place brakes on mass mobilisation and on autonomous social movements from below, if it suppresses the demands of the popular masses in the name of “governance” or electoral strategies, it will be betraying what it means to be Left.
It is only such mobilisation from below that can impose a counterweight to the control that transnational capital and the global market exercise from above over capitalist states in Latin America. There is an evident disjuncture here throughout Latin America between the mass social movements that are at this time resurgent, and the institutional and party Left that is losing power and influence by the day.
As the economic crisis deepens, economic and political polarisation will escalate. If the Left is not able to confront its weakness openly and honestly, the Right will be able to take advantage of these upheavals to push forward its own neofascist project.
This article is an edited version of a speech given in July before the Sao Paulo Forum of leftist parties in Latin America. It was translated for New Frame by the author.