Neoliberal Hegemony and the Pink Tide in Latin America

Breaking Up With TINA?

Tom Chodor

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137444684
• Topic: Volkswirtschaftslehre
• Subtopic: Wirtschaftspolitik

The book examines the 'Pink Tide' of leftist governments in Latin America struggling against neoliberal hegemony from a critical International Political Economy perspective. Focusing particularly on Venezuela and Brazil, it evaluates the transformative and emancipatory potentials of their political projects domestically, regionally and globally.

1

Orthodox IPE, Globalisation, and the Need for a Critical Alternative

In the Introduction, I indicated that mainstream analysis of the Pink Tide – underpinned by orthodox International Political Economy (IPE) understandings of neoliberal globalisation – offers at best a simplistic and superficial understanding of the phenomenon, primarily because it lacks an adequate appreciation of the social and historical context within which it has emerged. Instead, this analysis is best understood in ideological terms – as the scholarly dimension of the attempts to defuse the Pink Tide’s counter-hegemonic potential. In this sense, it can be understood – in Gramscian terms – as creating a ‘common sense’ understanding of the current world order as natural and immutable and, therefore, beyond challenge (the TINA principle). Accordingly, I proposed that before a more profound analysis of the Pink Tide can be undertaken, there is a need to critically re-examine orthodox IPE accounts of globalisation – both in their realist and liberal guises – and the assumptions which underpin them and drive their ‘naturalistic’ conclusions. Such an examination is undertaken here, illuminating the shortcomings of orthodox analysis and its ideological function, highlighting the need for a more comprehensive and critical approach to the current world order.

Such an approach – based on the historical materialism (HM) of Karl Marx and Antonio Gramsci – is then introduced in the second half of the chapter and serves as the analytical framework for the rest of the book. Marx’s insights on capitalism, I suggest, enable an understanding of contemporary globalisation as part of the voracious nature of the capitalist mode of production, and in Marxian terms, I focus on the tensions and contradictions of the neoliberal project as a source of transformative and perhaps emancipatory change in the contemporary world order. However, I also suggest that a traditional Marxist approach to this task is, in itself, not sufficient because it is not precise enough in explaining how the tensions intrinsic to capitalism can actually lead to emancipatory theory and practice – particularly in a non-Western, non-industrial contexts beset with issues of race and culture. In this regard, I suggest, Gramsci provides a much more specific set of analytical tools.

Consequently, I introduce Gramsci’s concepts of ‘hegemony’ and ‘historic bloc,’ in order to illuminate the consensual nature of contemporary class rule, enabling a more substantial understanding of neoliberal globalisation as not only a projection of capitalist productive forces but also a sophisticated and largely effective politico-ideological project designed to win consent for its global expansionism. Recognition of its consensual nature is crucial to any attempt to construct alternatives to neoliberal globalisation, and with the later discussion of Latin America in mind I explore Gramsci’s notion of ‘war of position’ as a way of illuminating the processes of ideological struggle intrinsic to the gaining of ruling class consent. Here, a distinction is drawn between the strategies of ‘passive revolution’ and ‘counter-hegemony,’ undertaken by the dominant and subordinate classes, respectively, in a war of position, with Brazil engaged in the former while Venezuela’s Bolivarian Revolution represents the latter. I maintain, however, that despite these differences these two projects have a lot in common. These commonalities, I suggest cautiously, represent a common ground on which a regional war of position might be possible against global neoliberalism. I explore this prospect in more detail in Chapter 6. Here, the focus is on establishing the theoretical frame of analysis.

Realist IPE and globalisation: The timeless struggle for power and influence

The realist literature within the orthodox IPE spectrum generally argues that the new global economy is primarily enabled by the activities of the most powerful states, seeking to protect and enhance their own systemic interests in a minimally reconfigured global order (Grieco & Ikenberry 2003: 2). This basic and highly influential position is as integral to the neorealism of Robert Gilpin (1987) as it is to the more traditional historically based realism of Ian Clark (1999). In general, the breakdown of the Bretton Woods regime in the 1970s that weakened the economies of the United States and its major allies is seen by realists as the catalyst for a reformulated power drive by the major states (Hirst & Thompson 1996: 5–6). The deregulation of global markets was thus enthusiastically adopted by major states as they adapted their power politics strategies to take advantage of the changing global environment – as facilitators of multinational capital and competitors in the struggle to penetrate and dominate foreign economies and societies around the world (Krasner 1994; Clark 1999).

A useful insight into the neorealist mindset is offered by Lamy (2005), who suggests that orthodox IPE represents less a spectrum of ideas and more a narrow integration of fundamental assumptions drawn from traditional IR. The result is a narrow orthodoxy, which asks restricted questions of the world and produces restricted answers. In Lamy’s terms, it ‘focus[es] on similar questions, and agree[s] on a number of assumptions about man, the state, and the international system’ (Lamy 2005: 215). The result is ‘a narrowing of choices and a narrowing of the issues and ideas that define our study of international politics’ (Lamy 2005: 221). Realist IPE is particularly vulnerable to this criticism, with some arguing that realists are more concerned with the welfare of the state and the state system than of the citizens within it (Long 1995: 495). Certainly, the power politics framing of the systemic whole has led to the criticism that issues of poverty, for example, intrinsic to the credibility of the globalisation project are largely ignored by realists, particularly those ascribing such problems to the ‘domestic’ sphere (Gilpin 2001: 21; Keohane 2002: 30). Gilpin (2002) puts it succinctly enough, proposing that in a power politics world the systemic competition between states means that international inequalities will never be eradicated. This is a view also held by those who consider an emphasis on poverty eradication and deep political change as ‘utopian’ (Keohane 2002: 25).

Much of this realist analysis remains explicitly focused on the hegemonic role of the United States, insisting that it was always crucial to the process of neoliberal globalisation, to the extent that it can be equated with ‘Americanisation’ (Waltz 2000; Gilpin 2001). In this sense, the United States – as the hegemonic power – has acted entirely rationally in facilitating neoliberal globalisation, not only to promote its own national/global interests but also to ensure that a market-based world order remains politically and strategically stable. Indeed, without the ‘hegemonic stability’ provided by the United States, the global success story that is neoliberal globalisation could no longer continue (Gilpin 2000). Other realists take a slightly different position, maintaining that while the United States may have been crucial to the establishment of the current globalised order, a less-committed United States would not necessarily entail the reversal of the current status quo, because it works to the great advantage of the other major states who would work to sustain it (Ikenberry 2001; 2007). The point, in either case, is that the spectrum of realist analysis accepts that, from its beginnings, neoliberal globalisation has been a political and strategic project dominated by the United States and its major allies and that it will remain so in any foreseeable future.

Reinforcing this point, there is a significant realist literature that contests liberal arguments about the extent of contemporary ‘economic’ globalisation and the degree to which it is a novel development. Indeed, the tendency here is to speak of ‘internationalisation’ of economic activity, rather than of a unique ‘globalisation’ phenomenon (Hirst & Thompson 1996). To illustrate this, some realists point out that the most powerful states remain oriented towards domestic production and that genuine transnational corporations (TNCs) are rare, with most companies more accurately described as multinational corporations (MNCs) (McBride 2000: 27–8). While MNCs trade across the globe, they do so from a national base and frequently rely on their home governments to protect their activities in existing markets and to open new ones. Likewise, this realist literature maintains that claims concerning a new global division of labour are overblown and overemphasise the experience of a small number of countries in East Asia which have managed to industrialise and switch their export profiles to manufacturing (Hirst & Thompson 1996). Most of the remaining economies in the periphery continue to export primary products, while the core still dominates the trade in manufactured goods.

Consequently, a number of realists contend that the main tendency in the new international economy is ‘triadisation’ in which the ‘core’ – Western Europe, East Asia, and North America – continues to receive the great majority of foreign direct investment and the major rewards of the global free market (Rugman 2001; Grieco & Ikenberry 2003). From this perspective, the current era represents a return to a natural trajectory in the international economy following a hiatus due to two world wars and the Cold War, with today’s international economy less open and integrated than the belle époque period of the late 19th century (Waltz 2000; Hoffmann 2002). In this sense, globalisation represents not a unique phenomenon, but a new chapter in the timeless realist narrative concerning the pursuit of power and influence by the most powerful states in the international system.

On this basis, realist analysis does not contemplate radical change for the system. Globalisation, it argues, does not ‘threaten’ the state system because it serves the interest of states – at least those of the major powers – who will continue to act rationally to ensure systemic survival and prosperity. While there has been some necessary adaptation to policy frameworks and some systemic constraints, among the major states there is a functioning, if not always harmonious, acceptance of the rules of the globalisation game – which sees the European ‘social democratic’ model and its East Asian counterpart coexisting and competing with the more explicit American ‘neoliberal’ model for power, influence, and prosperity (Weiss 1998). Indeed, for realists, this is what TINA really means.

There is, nevertheless, acknowledgement that among weaker states in the periphery there will be social and cultural instability as they follow neoliberal dictates in the struggle to survive in a market environment. But here, as in the past, it is assumed that ruling elites will seek accommodation with the major states and international institutions in order to retain their power and status. In this regard, of course, realist analysis has much in common with its critics, especially on the left. But whereas there is outrage and demands for radical change from these quarters, for realists the shared concern of economic and political actors in the system to maintain the status quo is simply the way things are in a power politics context. As long as such a status quo provides the most precious of public goods in an anarchical system – order and stability – it is a status quo worth preserving, and no more theorising is necessary on the subject.

Liberal IPE and globalisation: Realising the ‘Promise of Modernity’

Most liberals are more aware of the symbiotic character of contemporary globalisation than most realists, but their emphasis is on the power of market forces upon the sovereign state and the state system. Liberal approaches vary: from the hyperglobalist (Ohmae 1995), which argue that the state has been rendered effectively irrelevant by the neoliberal global economy, to liberal institutionalist approaches (Keohane & Nye 2000), which hold that the interdependence of the neoliberal global marketplace requires more sophisticated understandings of institutionalist protocols and management techniques, to ‘transformationalist’ positions (Falk 1999; Held & McGrew 2007) that do articulate humanist concerns about the role of markets and international institutions in increasing global inequality and the ‘democratic deficit’ in the neoliberal era.

In general, if realists consider globalisation as essentially a contemporary reiteration of traditional power politics, liberals consider it a significant new development with potentially new implications for the global community. Globalisation in this analysis is understood as the result of a confluence of market, technological, and cultural developments, which in combination are making the world a more integrated and interdependent place – a more likely site for political harmony and prosperity (Held et al. 1999). Those most explicitly wedded to a neoliberal worldview promote the current globalisation era as the springboard to a brave new frontier in which the culture, technologies, and democratic traditions of the modern Western experience might be transposed upon the world in general. Globalisation, in other words, is seen as offering ‘the prospect of at last fully realising the promise of modernity,’ in that it offers the whole world the benefits and opportunities until now reserved for modern Westernised peoples (Scholte 1996: 50–1). In this sense, rather than the result of power politics logics, globalisation is seen an expression of the natural progression of human development set free by the end of the Cold War – from feudal and utopian thinking to market inspired rationalism and from collectivist and socialist anachronism to a competitive individualist culture in which entrepreneurial and consumerist imperatives can be liberated (Friedman 2000).

Thus, liberal approaches are positive about the political and social consequences of a free market–based world order. The free movement of capital and goods across borders is seen as leading to gains in efficiency and growth, as the globalisation of production increases customer satisfaction in the capitalist core and creates jobs in the periphery (Bryan & Farrell 1996; Bhagwati 1998; Friedman 2000). And while much liberal analysis acknowledges the role of the state in facilitating this process, the significance of this role is reduced. Instead, it is the mobility of capital, the development of global markets, and the reach and technological expertise of global corporations that are perceived as the dominant factors in the attempt by states to adjust to a changing reality (Held & McGrew 2007: 111). In the desire to maintain sovereign control and status, therefore, states must adopt ‘market-friendly’ orientations in order to avoid capital flight, economic decline, and isolation (Bryan & Farrell 1996; Yergin & Stanislaw 1998). Opening up to the global economy, liberals maintain, brings development and prosperity, as evidenced by the fortunes of the Newly Industrialised Countries (NICs) in East Asia and the rise of the BRICs (Brazil, Russia, India, and China) (Scholte 2005: 31). Thus, according to this liberal narrative, globalisation is seen as reducing inequalities between states and extending the benefits of capitalist development to those previously left out of the global economy (Krueger 1992).

There is, moreover, general agreement amongst liberal analysts that with the diffusion of information and closer integration of societies, globalisation promotes convergence around the values of democracy and human rights, values regarded as integral to the Western developmental model and free-market capitalism (Friedman 2000). Liberals argue that this benefits not only individual societies but also the international system as a whole, by increasing international cooperation and decreasing the likelihood of war (Doyle 1983; Keohane 1984). As a result, liberals predict that future global peace and security will be more likely derived from the impact of the capitalist market upon the traditional system, rather than power politics principles (Fukuyama 1992). There is of course a range of opinion on this within the liberal IPE spectrum, with the hyperglobalist analyses arguing that the new globalised system entails the ‘end of the nation-state,’ while the institutionalists contend that it remains the central actor in the international system (Ohmae 1995; Keohane 2002: 30). Nevertheless, even the institutionalists acknowledge that the ‘complex interdependence’ brought about by globalising markets makes traditional power politics and unilateral behaviour more costly and less legitimate and that the interstate use and threat of military force has ‘virtually disappeared in certain areas of the world,’ especially amongst those Western states which have embraced globalisation (Keohane & Nye 2000: 116). In this sense, the TINA principle is accepted and applauded as for the common good.

Nevertheless, not all liberal accounts are quite this enthusiastic about the promise of modernity. The transformationalist accounts of globalisation worry that its progressive potential is being undermined by the forms it is taking and that gains in efficiency and growth are too often skewed towards the powerful, both within and amongst states, exacerbating inequalities rather than leading to a new era of global prosperity (Held 2004: 34–5). Moreover, while transformationalists acknowledge the growing number of issues that cannot be dealt with domestically, they stress that the emerging global governance architecture continues to be distorted in favour of the dominant states and vested interests, and in the hands of unelected and unaccountable bodies like the WTO, the IMF, or the World Bank (Ruggie 2003: 96–7). As a result, an increasing number of decisions are taken at the global level out of reach of ordinary citizens, creating a ‘democratic deficit’ and undermining the very core of democracy – the idea of a community which governs itself and determines its own future (Held 1995b: 100). For transformationalists, therefore, globalisation may hold the potential for a more just and democratic world order, but such a potential is in danger of being subverted by the interests of the powerful.

In order to realise this potential, transformationalists propose a cosmopolitan form of governance centred on a plethora of new global institutions – from regional parliaments to a second chamber in the UN General Assembly – that would represent global civil society. This reconfigured system, it is argued, would challenge the vested interests in the current status quo and guide it in a more social democratic direction by strengthening international law in favour of individuals and groups, reforming the UN, and capturing some of the profits of the rich world to address global poverty and welfare (Held & McGrew 2007: 195–7). Transformationalist liberals thus envisage an international system in which states share authority with cosmopolitan citizens in order to transform liberal-capitalism into a more just and democratic system (Held 2004; Held & McGrew 2007).

The cosmopolitanism of transformationalist liberalism appears thus to recognise the shortcomings of neoliberal globalisation, and understandably it has drawn positive responses from within the Western ‘critical’ press and analytical communities. But for all the success of the transformationalists – and their liberal and realist counterparts – in persuading significant sectors of the global community that neoliberal globalisation is a positive and inevitable development in human society, there are many fundamental questions left begging concerning these orthodox accounts of the contemporary world order.

The shortcomings of the realist and liberal orthodoxy

At the core of this scepticism is an incredulity about orthodox claims – both in realist and liberal articulations – regarding the achievements of the neoliberal project. In economic terms, claims regarding the need to unshackle markets in order to ensure global economic growth and prosperity contrast sharply with actual economic performance during the neoliberal era. For example, between 1979 and 2000, the average annual global per capita GDP growth rate was 1.5 per cent, just under half the 2.7 per cent rate achieved between 1960 and 1978, when markets were much more tightly regulated by states (Milanovic 2005: 34). While this rate increased to 2.3 per cent during the 2000s, the 2008 Global Financial Crisis (GFC) indicated, much of this growth was based on unsustainable levels of debt and financial speculation, which artificially inflated asset values (Wade 2011: 380). Following a 2.2 per cent contraction in 2009, the global economy rebounded, but this growth remains driven by the very state-driven stimulus spending that is anathema to neoliberalism. As this stimulus is beginning to be wound back, fears about the sustainability of global growth persist (World Bank 2014a).

Moreover, this growth has been distributed disproportionally towards the powerful, both amongst and within states. Indeed, 56 per cent of states experienced negative per capita GDP growth during the period 1980–1998, and income inequality has been increasing (Wade 20011: 380). The income gap between the richest tenth of the world’s countries and the poorest tenth has almost doubled since the 1960s – from 19:1 to 37:1 (Milanovic 2005: 53). A 2014 report found that the 85 richest individuals in the world owned as much wealth as the poorest 50 per cent of the global population, and seven out of ten people lived in countries where inequality had increase...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• Acknowledgements
• Introduction
• 1. Orthodox IPE, Globalisation, and the Need for a Critical Alternative
• 2. The Neoliberal World Order
• 3. Neoliberalism and Organic Crisis in Latin America
• 4. The Bolivarian Revolution as a Counter-Hegemonic Project
• 5. Lula’s Passive Revolution
• 6. The Pink Tide: Counter-Hegemonic Potentials
• 7. American Hegemony Under Challenge
• Conclusion: Learning from the Pink Tide
• Bibliography
• Index