Vol 4 No 2 Summer 2020

The End of Progressive Neoliberalism

COVID-19’s battering of Latin America overshadows regional turmoil underway long before the pandemic. The health disaster is exacerbating an economic and political crisis for which governing classes have no answers. Populists have upturned governments in Mexico and Brazil, while rebellion has shaken the foundations of Chile’s regime, leaving this exemplary liberalizer in an uneasy political stalemate. Activists, analysts, and elites all hope to grasp where the instability is headed. Getting a handle on how these crises will unfold, and the direction of Latin American politics more generally, requires an examination of the ruling strategies that led to this situation.

Since its 2010 rebound from global recession, Latin America had been engulfed in a deepening economic contraction, even before the pandemic hit. After posting 6.3 percent growth in 2010, the region’s economic expansion had slowed by more than half by 2013 and has flatlined since 2016. Following the post-recession ricochet effect, Latin America’s top ten economies have expanded at an anemic rate of 1.5 percent. Even excluding Venezuela, whose double-digit contractions since 2015 amplify the depth of economic woes, the region was performing worse than during the 1990s, roundly considered a lost decade.

For those in power, nothing has worked. The first major crisis of neoliberalism in Latin America produced a wave of reform governments known as the Pink Tide. The question confronting the region today is: Will this crisis also have dramatic reverberations, as its predecessor did? Some optimistic observers see the rise of a “Latin Spring.” Others contend that the crisis is pushing Latin America onto a reactionary course with a resurgent neo-authoritarian right asserting itself throughout. But is it possible that the crisis of neoliberalism might steer Latin American countries in multiple and unpredictable directions?

This essay contends that Latin America’s second major neoliberal crisis is advancing along two paths: one characterized by relative continuity, the other by volatile uncertainty. Inverting the region’s trajectory of two decades ago, former Pink Tide countries can be expected to follow a path of general, if harshly contested, equilibrium, while those that were consolidating democratic transitions and escaped turmoil during the 2000s have entered a period of deep instability. Whereas the Pink Tide settlement, a stalemate of sorts, reflects the failure of both the governing lefts and traditional ruling classes to offer solutions to the current impasse, the volatility in the remaining countries expresses a collapse in elite strategy. This disintegration of what I call “progressive neoliberal” rule and its divergent outcomes are illustrated by developments in Brazil, Chile, and Mexico.

To make sense of looming turmoil and anticipate how the Left might most effectively intervene, it is important to understand how the political crisis today differs from the one that took down the Pink Tide. Toward this end, this essay first describes the distinctiveness of post-1980s neoliberalism in Brazil, Chile, and Mexico (hereafter BCM) in comparison to the Pink Tide, and then explains how these features steered their regimes toward collapse. In a previous Catalyst essay, I argued that the Pink Tide governments floundered when left governments failed to carry out the promises they had made to their base.1 Despite powerful mobilizations that brought them to power, the progressive administrations in Argentina, Bolivia, Ecuador, and Venezuela discovered that structural constraints closed off the possibilities for systemic change. Two decades of neoliberalism had so transformed the class structure of these countries that the social base of Pink Tide governments, while militant, had little economic leverage against capital. Backed primarily by workers in the informal economy and marginalized communities, left-wing governments simply lacked the leverage to challenge ruling classes.

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