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The Market in our Heads

"Disastrous consequences of enforcing neoliberal principles are clear in many country reports. The division of society into a minority that shamelessly enriches itself with the best conscience and a minority sinking into ever deeper misery is an inevitable consequence of deregulation and privatization." This article translated from the German focuses on the neoliberal model of Chile under Pinochet and the obsequiousness of Latin American intellectuals.
The Market in our Heads

LAI Editors at the Free University of Berlin

[This editorial originally published in: Lateinamerika Analyses und Berichte is translated from the German on the World Wide Web,

The concrete market economy in Latin America is the focus in this volume. Enforcement of neoliberal economic policy in all parts of the sub-continent is not central but rather the ideologies preparing, accompanying and justifying these changes. That the measures decreed by the International Monetary Fund (IMF) reach the last corner of Latin America seems to need less explanation than that many of its former critics including some of the most prominent minds of the left-wing intelligentsia accept and propagate today the "world market as a practical necessity/constraint."

Ideologies and ideological battles appear in the studies. The changes in the economy, society and politics are analyzed in country reports. The effects of neoliberal policy in important social areas are described in exemplary countries.

Our country reports and analyses oppose the superficial optimism in the press recently regarding Latin America's total development. If one believes the publications of the economic commission of the United Nations (CEPAL) or the Latin American Development Bank, the worst seems over today. After the lost decade of the eighties, there are again positive growth rates of the gross domestic product for the subcontinent (1991 3.5 percent; 1992 2.4 percent). The positive economic development according to this standard is judged as a first result of successful structural adjustment measures. Stabilization of the democratic regime should correspond to economic recovery brought about by the turn to the market economy. The return to democracy appears irreversible because the economy prospers.

Such optimism cannot be confirmed by the reports in this volume about individual countries. South America's largest country with nearly half the subcontinent according to land surface and population size is mired in the deepest economic crisis of its recent history. Brazil represents an example of neoliberal policy without stabilization success. In the country report, we read: "Neoliberalism owes us evidence that its simple prescriptions can actually transform complex societies like Brazil with its diversified production structure. A mere unfettering of the market without industrial- and sector-policies can only tear down and can hardly build anything."

Disastrous consequences of enforcing neoliberal principles are clear in many other country reports. The division of society into a minority that shamelessly enriches itself with the best conscience and a minority sinking into deeper misery is an inevitable consequence of deregulation and privatization. Sometimes this policy was proclaimed by former advocates of economic independence. Michael Manley's changes are described in the Jamaica report. Manley is not an isolated case. "The world market as practical necessity" has also reconfigured other political forces who in the past were bearers of economic- and social alternatives. Thus the loss of power of the Sandinistas whose new role seems problematic in this year's Nicaragua report already began long before their electoral defeat with acceptance of elements of neoliberal economic policy.

The ecological side-effects of neoliberal policy are often described in our volume. The "exploitation of nature as an economic perspective" is demonstrated in the report on Ecuador. Destruction of the forest and structural adjustment are connected in the Honduras report.

The events of the last year in Venezuela and Peru show that the consequences of brutally enforced structural adjustment measures undermine the foundations of a political democracy. In Venezuela, long regarded as a stable democratic regime, the economic shock policy of President Carlos Andres Perez triggered his own political defeat and the putsch attempts by parts of the army supported by large segments of the population. (In his analysis, Enzo del Bufalo explains that incompetent and inconsistent implementation led to the catastrophe of the ruling regime, not the structural adjustment policy itself. In the case of Peru, the connection between the economic policy of President Fujimori and the abolition of a pluralist democracy was clear.

Other country reports are indirectly joined to our overarching theme. In Guatemala, the contempt of human rights still dominates the politics of the country. The drug trade in Colombia and special Canal Zone conditions in Panama prevent a simple application of IMF prescriptions.

Cuba represents a special case since its entrance in the world market is hindered by the economic boycott of the United States. Cuba's problematic is shown in its development of the tourism sector.

The objection could be raised that this negative picture of the effects of neoliberalism in Latin America arises because the positive examples of successful stabilization policy are suppressed: Chile, Bolivia, Mexico and Argentina. In fact, the positive average growth rates for Latin America are not conceivable without these countries. Still our omissions have reasons. The new Argentinian boom was intimated through its economic policy described a year before, the shameless enrichment of a minority, Peronist kleptocrats under a neoliberal flag, is hardly a model for the continent. Bolivia could hardly have been a better example for the blessings of neoliberalism on account of the misery of its population and the stabilization of its currency inconceivable without the well-known export good absent in official statistics, coca.

Finally Chile, the model country of all apologists of neoliberal blessings. With all fascination through the economic boom of the last years, the advocates of the "special" Chilean way can hardly deny that the whole export model rests on a ruthless plundering of the natural resources of the land and over-exploitation of new sectors of workers, for example seasonal workers in the fruit industry.
Two articles focus on the concrete conditions of certain countries. Wolfgang Gabbert asks whether the relatively successful neoliberal economic policy in Mexico involves a certain social policy and corresponding ideology. The Mexican case shows impressively how a very consistent forced policy of privatization and state cuts can go along with targeted socio-political measures to help the poorest of the poor and political stabilization of t6he regime for certain sectors.

After many years of research, Rainer Dombois summarized the effects of neoliberal policy in Colombia on industrial relations. Colombia shows that the enforcement of neoliberal policy coheres with the disempowerment of the unions, not with their integration in a social pact often promoted by well-meaning intellectuals.

These two articles clear away two basic misunderstandings about neoliberal policy, first that neoliberal policy in every case leads to an abolition of social policy and second that the forced market economy inevitably involves a concert between the social partners in the sense of a social market economy.

Let us return to the central theme of our volume, the battles in the kingdom of ideas. The "metamorphosis of Latin American intellectuals" was discussed years ago by James Petras (Lateinamerika Analysen und Berichte 13, 1989). His description of the phenomenon is still correct. His explanation of the new orientation of Latin American sociologists from their bond in a foreign-financed economism could not be more convincing. The recent debate between Carlos Vilas and James Petras (in: Nueva Sociedad, Nr.123, January/February 1993) reveals much about the mentalities of the two rivals without a deepened analysis of the change of heart of the once critical intelligentsia. Some authors show how the consciousness of the rulers could become the dominant consciousness among intellectuals today.

The plane of conscious enforcement of a certain ideology stressed by James Petras should not be ignored. We reprint a chapter from the remarkable book by Juan Gabriel Valdes ("La Escuela de Chicago: Operacion Chile", Buenos Aires, 1989). The mentality of neoliberalism only rejected by a few outsiders succeeds today in Chile in the form of a targeted "idea transfer" that helped make the conditions created by the military putsch into the ideological superstructure. The analysis of Valdes is exemplary because conspiracy theories are not used to demonstrate the systematic introduction of certain concepts in the Chilean "market of ideologies".

This historical retrospect does not explain why former critics of a neoliberalism imported by the right-wing in Chile have become implicitly or explicitly promoters of neoliberal policy. Urs Mueller-Plantenburg touches this theme in his analysis of the "turn" in the thinking of CEPAL whose most recent programmatic writings praised by many as an alternative end up adopting basic neoliberal positions.

One important article on the sociology of intellectuals comes from the pen of a Mexican sociologist. Sergio Zermeno describes the way of a critical intelligentsia in Mexico in the last decade. His analysis of a society divided in "integrated" and "excluded" offers a framework for explaining the inconsistent conduct of the majority of the Mexican socioeconomic intelligentsia up to their recent refusal to identify with the neo-Cardenist opposition and their renewed approach to the dominant regime. Zermano offers perspectives for an ideology criticism when he concisely characterizes "dependent neoliberalism". This ideology-critical dimension of our theme is deepened by Franz Hinkelammert. Hinkelammert examines the implications of the assertion that there is no alternative to adaptation to the laws of the world market. Hinkelammert describes the structural similarity of this orientation with Stalinism that also allowed no alternatives to its "reality" and shows the self-destructive consequences of this supposedly realistic position.

The question remains how the neoliberal ideology reached so many minds, even those who set out for a society without exploitation. The answer may not be made easy. A crude derivation of ideology production from the immediate interests of ideology producers as Petras proposes is too simplistic. There are many reasons for hearing the neoliberal denunciation of state regimentation with open ears. The collapse of Eastern European systems that presumptuously called themselves "socialist" plays an important part. We in Europe have not made clear... that Latin American intellectuals refused to be led by the nose of Moscow or Peking. We often ignored the different perspective. Latin Americans had good reasons to approve the existence of regimes that put limits on the omnipotence of the North American oppressor and mobilized practical assistance in certain situations. Speaking of the "collapse of socialism" is easier for many Latin American leftists than for Europeans since potential allies simply disappeared. Joining the neoliberal victors seemed to many a logical consequence from the total defeat,

Reasons for susceptibility to neoliberal ideologies also lie in the legitimate criticism of the concrete state in Latin America. Who would deny that states - apart from their repressive functions - hardly help the weak? Who is not outraged about the excesses of a parasitic state machine whose representatives embody nothing but arbitrariness, incompetence and inefficiency for the population? Many leftists seem to welcome neoliberal structural adjustment measures "shattering the state machine" which revolutionaries couldn't accomplish with their attempts.

If ideology production must be tied to undeniable moments of reality to be effective, other moments of social reality must be distorted or ignored. Apologists of neoliberalism like to speak of democracy (in the normative sense) but seldom of democracy in the economy whose real functioning they fade out. Thus questions systematically explored for many years by Latin American sociologists are simply not raised any more. What has actually resulted from transnational capital dominating whole economic sectors of dependent countries? Is it completely obvious that foreign capital must be enticed with all means and that all limitation and control must be rejected because otherwise a country falls behind in the race for the favor of the multinationals? Has the foundation of economic power groups (including native or indigenous capital) become insignificant? Can one ignore that the market economy in reality is annulled by monopolies? Are these all questions of yesterday or does the systematic fading out of the analysis of important areas of economic life have a method so the question of alternatives cannot even arise?

Fading out succeeds more easily when development of Latin American social sciences is subject to fashions. This is not different from the intellectual fashions to which we are all handed over in post-modern times. Distinctions only occur with the nearly compulsive foreign orientation, particularly in the French model and in the speed with which certain problems are quickly discussed and then abandoned to forgetfulness. This obviously involves the production conditions underlined by Petras. If the majority of Latin American social researchers in private institutes depend on outside-financed projects, they turn to what is "in". Social movements, for example, were only central for a certain time. Then they are simply no longer analyzed and disappear from view. The next fashion object appears, democracy, civil society, ecological sensitiveness, everything no longer than eight months. The social and political contexts that could disturb the ideal picture of a stable democracy with the free market economy are not investigated. Whoever is occupied with them is stylized as an outsider or stone age socialist. (Not accidentally, the real problems of functioning democracy, the inner life of the parties with their lack of inner party democracy, can hardly be analyzed.)

One misunderstanding of this sharp criticism should be overcome. We speak of Latin American intellectuals because this is a Latin American yearbook, not to point fingers at disloyal Latin Americans. We are amazed or disappointed when we meet again companeros, colleagues, or research partners unexpectedly in neoliberal garments similar to times of the Gulf war when proven spokespersons of an independent left in Germany suddenly appeared as supporters of the war policy of a George Bush. We don't speak here of all or most Latin American intellectuals. We all know and treasure friends who seek another solidarian society and work stubbornly at its realization.

Without these kindred spirits in Latin America, we could not continue the yearbook. We will continue raising questions pushed aside by the apologists of the status quo and work out problems that are not fashionable. Our yearbook will not be a box-office hit. We are very thankful to LIT publishers for guaranteeing the continuity of a series of books since 1977 with the publication of the last two volumes... From now on, our yearbook will be published by the Jurgen Horlemann publisher. We hope to take a new step with this volume in a new/old garment.

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