COHA Report: The Rebirth of Populism in Latin America Poses A Powerful Challenge to the Neoliberal Order

History may never repeat itself, but some patterns have a tenacious staying power. Latin America’s populist political movements, as today’s genera represented by Hugo Chávez in Venezuela would exemplify, display a recurring vigor which is not all that mysterious. On the one hand, powerful elites continue to dominate the region’s economic and political structures. In the context of more than two decades of recent neoliberal economic initiatives, the rich have become much richer, and everyone else has tended to fall steadily behind. Social justice throughout the region is at best spotty, and often tends to be little more than an elusive fantasy or the prospected gift of blowhards. On the other hand, Latin America’s less-favored inhabitants remain decidedly unsatisfied with the status quo, and indeed, see it as a noxious growth that must be cut at the root. The above are textbook conditions for the rise of populism.

Defining Populism

At times Latin Americans have sought change through violent and revolutionary means. Throughout the twentieth century, however, they have demonstrated a historical predilection for a certain kind of mass political mobilization, to which they have often been called with a vengeance. Populism is the personalist style of politics that oversaw the rise of mass movements in many Latin American nations. It is generally characterized by a charismatic leader, a multi-class social base, and an urban setting (though there have been important rural exceptions.) Populism invariably exhibits an eclectic and ambiguous ideology usually redolent with a tinge of nationalism. Such nationalism usually defines itself against “another”: the gringos, the world market, multinational corporations, and neoliberalism all work well, either independently or together, to fill that role. Populist movements flourished in Latin America between the 1930s and the 1960s, in the so-called “golden age,” associated with “men of the people” such as Juan Perón in Argentina, Getúlio Vargas in Brazil, Lázaro Cárdenas in Mexico, Jorge Eliécer Gaitán in Colombia, Víctor Raúl Haya de la Torre in Peru, and José María Velasco Ibarra in Ecuador.

The most illustrious members of the “golden age of populism” differ from most nineteenth-century caudillos, in that they usually were not military men, and all could claim to be actually more representative of the people. In the years after 1930, populist movements began to appear as Latin American countries initiated their economic peregrinations beyond a near total reliance on agricultural commodities, petroleum and mining, and commenced to experiment with industrial development. Populism’s link to industrialization, however, was in no way absolute or essential.

By definition, all populist leaders understood the fundamental need to open Latin American politics up to a wider participation. Yet most also shared the at times cynical conviction that by professing an active interest in their countries’ growing working classes, this would facilitate the government’s firm control of society, including the economy. Consequently, some scholars have often looked upon Latin American populism primarily as a vehicle through which ruling elites, or sections of them, continued to dominate their mass followings, as was seen in the various dictatorial faces of European Fascism. From this perspective, Machiavellian populist leaders mouthed progressive rhetoric while subverting the fundamental interests of those who cheered their balcony rhetoric.

Reviving the Populace

Populist movements, nevertheless, could also be active mobilizers of popular discontent, which could be clearly dangerous to the social elite and the tranquility of economic structures. So while some contemporary observers, especially on the left, called populist leaders “fascistas,” others on the right called them dangerous “leftist demagogues.” Populism in Latin America demonstrated the clear capacity, as well as autonomy, whereby “common” men and women independently pursued bottom-up struggles on behalf of their own interests. Given this pressure, it is not surprising that populists were more likely than not to support increased public spending on the “popular sectors,” as well as more radical initiatives focused on redistribution. Moreover, though populist leaders were often given to authoritarian tendencies and less-than-democratic practices, populist movements undeniably injected a significant quantity of democracy into the quality of Latin American politics.

Populists have never constructed a single ideology (while most are on the left, many are on the right), but rather a parallel approach to working through questions of elite power and popular demands. And in every case, one of the keys to a successful populist movement has been at least the partial incorporation of populist notions and discourse, especially when it comes to concepts of social justice and democracy being fused with local structural frameworks. These populist concerns invariably display a powerful moral sensibility and feelings of outrage that hover close to open class struggle. Some scholars have recognized that elites aspiring to hegemonic rule must legitimize their regime by responding to the vital interests of the people, the nation, and the lower classes themselves. Though necessary for elite dominance, such ideological incorporations are often volatile and can pose lethal dangers to the hegemonic project, and to the ambivalent core of populism. But regardless of the final verdict, repressive regimes across Latin America displaced the majority of populist movements in the 1960s, 70s, and 80s. Many populist leaders were murdered, removed by coups or driven into exile.

Populism’s dramatic resurgence in Latin America comes amidst the general collapse of the so-called “Washington Consensus.” The term was coined in 1990 by John Williamson, an economist based at the Institute for International Economics in Washington, D.C. It refers to a list of policies prescribed in response to the Latin American economic maladies of the 1980s, the so-called “lost decade.” Williamson’s advice, aimed at developing countries around the globe, embodied ideas long favored by neoliberal economists that emphasized “free market” solutions. Generally these included a high regard for fiscal discipline, redirected (and reduced) public spending, and a flattened tax structure that dropped the higher brackets while raising the lower. Governments were advised by Washington to eliminate tariffs and encourage greater hospitality to direct foreign investment. However, without question, the most important of these “reforms” was the deregulation of the business environment and privatization of state-owned enterprises.

Longstanding critics of the Washington Consensus, such as Noam Chomsky and the Council on Hemispheric Affairs, contend that such liberalization policies (imposed by the muscle of the World Bank and the IMF) primarily have exploited the cheap labor markets of developing countries to increase profit margins, and have done little to raise the general standard of living. Keynesian (and post-Keynesian) economists also point out that neoliberal policies tend to be imposed in an unyielding and heavy-handed fashion, and anyway, will only succeed if an economy is already experiencing strong growth. To impose these policies on a weak and unstable economy would amount to quick economic suicide.

Nevertheless, neoliberal cheerleaders insist that their project simply needs more time to raise all boats; however, the evidence from the last two decades does not bear out their nautical predictions. These policies have yet to pay big dividends, and not only for Latin America. Countries of the former Soviet bloc have experienced similar economic conclusions. Moreover, India, despite being called a “roaring capitalist success story” in Foreign Affairs, still sports a per capita GDP comparable to sub-Saharan Africa. A fundamental issue (though seldom addressed by true believers of the neoliberal creed) is that the majority of the billions of people in the “developing” world represent, from a functional perspective, unneeded surplus labor from the point of view of the hard edges of capitalism. Furthermore, as production of goods and services becomes evermore streamlined and mechanized, this fundamental problem will only increase in its severity.

If these neoliberal-sponsored free markets continue to ignore the important poor and underclass of the population, it is extremely unlikely that any amount of growth in the “free market” economy, as it now constituted, can absorb the billions of people who live on a dollar or two a day; but they are not likely to disappear or quietly accept their dismal fate. Their labor may not be needed, and they cannot participate as consumers in any meaningful way, which renders them a portentous global factor. (It is also largely ignored that economic inequality is on the rise even in the core capitalist economies, where more surplus labor can be found, but that is another story.)

The failures of neoliberal policy in Latin America have now acquired a critical political mass. Especially telling was its catastrophic breakdown in Argentina between 1999 and 2002. Along with Chile, Argentina had been upheld as a poster student for the successful implementation of a neoliberal regime. The implosion of Argentina’s economy, and the resulting political chaos, finally brought to the surface many of the criticisms that had been gaining strength. The sins of neoliberal policy also came home to roost in the recent Mexican presidential election. Commentators there pointed out that the good life is clearly not trickling down to the blue collar worker and campesinos. Neoliberal measures first instituted by the PRI and then continued after 2000 by the PAN, have concentrated income and assets to the point that 17 percent of the Mexican population control 80 percent of the country’s wealth. Job creation in the “formal” economy has rapidly lost ground to precarious forms of marginal “informal” employment. The countryside has been ignored and continues to generate high rates of internal migration to over-crowded urban centers, while the cost of financing the Mexican debt dramatically outstrips the amount spent on education and health care. Even though PAN’s neoliberal true believer Felipe Calderón seems to have edged out the PRD’s populist neoliberal critic Andrés Manuel López Obrador by the most razor thin of margins, the election demonstrated that such market-access policies are being rejected in Mexico’s urban streets and gritty villages.

Although the failure of the Washington Consensus is not readily admitted in the U.S., many Latin American leaders are cautiously moving on. This is especially true now that populist movements fundamentally critical of neoliberal policies are supplanting many of the region’s most enduring political parties (some of which had populist origins). As Juan Forero recently reported in the New York Times, political analysts in Latin America perceive a crisis in the region’s political system as traditional parties that had evolved as bulwarks of patronage and stability are pushed aside. In Peru, for example, 36 parties now vie for power and voters. In Venezuela, Hugo Chávez and his “Bolivarian Revolution” have utterly displaced the old Acción Democrática and Copei parties. And in Mexico, even if López Obrador loses his campaign for a recount, his style of populist politics is unlikely to soon disappear in Mexico. This conclusion is so apparent that important elements of the former ruling PRI are proposing a “grand party of the left” uniting the PRI and the PRD in a populist/leftist anti-neoliberal coalition.

Populism and Reform

The populist renaissance, however, is not universally applauded among Latin America’s progressives. While populists are routinely portrayed by the right in the U.S. media as demagogues, such criticism often originates from within the Latin American left itself. In a recent essay (different versions of which appeared in Foreign Affairs and Newsweek), Mexican political scientist, noted author, former Foreign Minister, and would-be leftist presidential candidate, Jorge G. Castañeda (who many Mexicans see today as an arch traitor to traditional left-leaning thought and as a shill for Washington) provides an excellent example. He points out that there are two sub-species on the Latin American left, which he characterizes as a “right left” and a “wrong left.” The first comprises sober, former radical leftists who exhibit a high degree of “realism,” and are resigned to the inevitability of a strong dose of orthodox economic policy (that is, people much like today’s version of himself.) They pursue an incrementalist, patient, reformist path. In this group he places Ricardo Lagos and Michelle Bachelet of Chile, Tabaré Vázquez of Uruguay, and (with some reservations) Luis Inácio ‘Lula’ da Silva of Brazil. The other left, the irresponsible, less-than-modern, authoritarian left, hails from the populist camp of yore. These neopopulists, he insists, have no interest in ideological coherence, solid economic diversification, democracy, or amicable relations with the United States. Their only interest is popularity, which they plan to maintain by handing out cash to their loyal supporters, money squeezed from state-owned enterprises and taxes on traditional agricultural and mineral exports. At the top of this list of undesirables is, of course, Venezuela’s Hugo Chávez, who Castañeda calls “Perón with oil.” After him, in rapid and disapproving succession, come Evo Morales in Bolivia, Ollanta Humala in Peru, López Obrador in Mexico, and Néstor Kirchner in Argentina, who despite some laudable accomplishments, is “at his core a die-hard Peronist.”

Castañeda’s analysis of neopopulism, taken against his remarkable transformation from being Washington’s bete noir to today’s favorite Mexican at the White House, brings to mind the critiques that have traditionally been directed against the classic populists. Much of it is sound, but as in the past, it does not offer much in the way of explanation for populism’s enduring strength. Casteñeda’s somewhat condescending version of the facts seems to view the millions of Chávez, López Obrador, Kirchner, and Morales supporters as mindless dupes, carried away by short-sighted greed and emotion. The emotion is there for sure, but it is not mindless. It grows from a powerful moral indignation. And we should remember that Castañeda was a well-situated member himself of a leadership that had no problem in using such a strata before his personal political setbacks had transpired and a newly discovered penchant for the double-cross became manifest and had him paddle in another direction. Castañeda also cavalierly blames populism for Latin America’s recent history of rampant inflation, wrenching poverty, and worsening inequality, though their causes may be more profitably sought in the decades of reaction and savage repression that cut short populism’s earlier manifestations. Indeed, he and other critics of populism fixate on populism’s old economic sins, though it is principally a political style, not an economic doctrine. Can we be so sure that the new populist regimes will necessarily be able to return to unsustainable levels of public spending and inflationary practices, even if they want to?

Populism Is What You Make Of It

The new populist wave may prove to be even more momentous than its predecessor. Over the last twenty years, Latin America’s economic growth as a whole has lagged far behind other parts of the developing world, particularly China and India, but even places like Poland. And what growth there has been has largely benefited the upper classes. Therefore, it is hardly a surprise today’s leftward tilt of Latin American politics has taken a populist character. Yet this time around, there are reasons to expect less resilient cults of personality. Populist movements may mature more quickly, and move beyond the ken of their leaders. We should consider that what gives these movements their dynamism is their powerful critique of social and economic injustice, which in combination with a firmly established taste for democratic structures, is not to be denied. Populist politics can certainly be messy and darkly amusing, and it is true that many of its practitioners can be given to authoritarian practices. A jocose Chávez could be seen as an example of the old populist mold– a leader who duplicates many of the stranger and more peculiar populist elements. But he also reflects the source of its moral power, espousing “distributive” justice, democracy, progress, and nationalism. And at their worst, populists really cannot be compared, nor should they be, with the military governments that replaced an earlier generation’s golden age. Populism, at its root, is democratic in nature, even if many populist leaders (once they reach power) may not be democratically inclined.

Latin America is poised for long-term change, in a completely new context. With the communist bloc gone, Cold War concerns can no longer poison the political well. Anti-globalism feelings are surging against the declining authority of the Washington Consensus, and its neoliberal orthodoxy and moral technocracy, while the United States pursues a set of spectacularly unpopular policies in the international arena. Whatever the theoretical possibilities inherent to neoliberal policies, they have not particularly, and certainly not in Latin America, paid off, and this failure has helped drive the populist wave. Democracy without economic possibilities seems to be a sham to many Latin Americans, and their patience could be coming to an end. Most Latin Americans believe that current “free” markets only benefit the few (both in Latin America and U.S.), especially those who strategically captain the multinationals, and few have faith that market mechanisms alone will ever deliver social justice. Yes, the old socialist critique of the market economy has long since lost its force, to say nothing of the belief that capitalism will “inevitably” collapse. Capitalism has proven its tenacious power of survival. It is also clear, however, that given the region-wide nature of the populist tsunami, new ideas may have a chance to flourish. Currently, populist prescriptions are mostly negative, but that could change. Orthodox market approaches are simply not working and are out of date for the majority of people in the developing world. Expect more experimentation. Expect more populism.