Twenty-first century capitalism has embraced the “open market” policies of the late 20th century neo-liberal model; that is: it has, promoted agro-mineral exports and importation of finished goods similar to the early 20th century colonial division of labor.
Over the better part of the present decade, Latin American stock markets have boomed. Overseas investors have reaped and repatriated billions in dividends, profits and interest payments. Multi-national corporations have piled into mining, agro-business and related sectors, without hindrance and with virtually no demands by local regions for ‘technological transfers’ and environmental constraints.
Latin American governments, have accumulated unprecedented foreign currency reserves to ensure that foreign investors have unlimited access to hard currencies to remit profits. The decade has witnessed unprecedented political and social demobilization of radical social movements. They have provided political and social protection for foreign and national investors as well as long term guarantees of private property rights.
Nary a single government in the region, with the unique exception of Venezuela , has reverted the large scale privatizations of strategic economic sectors implemented by previous neo-liberal governments in the 1990’s.
In fact, the concentration and centralization of fertile lands has continued with no pretense of land or income redistribution on the policy agenda.
Investors, speculators, multinational corporations and trading companies from Asia, Europe, North America and the Middle East have, in recent years found virtue and value in the economic development policies pursued by recent Latin American leaders. In particular, they applaud the new found political stability and economic opportunities for long term, high rates of profits. In fact, Latin America is looked at as an outlet for profitable investments surpassing those found in the unstable and volatile markets of the US and EU.
Twenty-first century capitalism as we know its operations in Latin America overlaps in some of its major features with the multiple variants of 20th century capitalism. Twenty-first century capitalism has embraced the “open market” policies of the late 20th century neo-liberal model; it has, promoted agro-mineral exports and importation of finished goods similar to the early 20th century colonial division of labor. It has borrowed from the nationalist developmental strategy, policies of state intervention to ameliorate poverty, bailout banks, promote exporters and foreign investors.
As in most ‘late’ and ‘later’ developing capitalist countries, the state plays an important role in mediating between agro-mineral exporters and industrial capitalists in some of the larger countries like Brazil and Argentina.
Unlike earlier versions of liberal and neo-liberal capitalists which, in the first instance dissolved pre-capitalist constraints on capital flows and later labor and welfare demands constraining capitalist exploitation, current heterodox liberal (or “post-neo-liberal”) regimes attempt to harness and co-opt labor and the poor to the new export strategy. In part, 21st capitalism can pursue “free market” and welfare/poverty policies because of the favorable world market conjuncture of high commodity prices and expanding markets in Asia.
Increased activity by the state in regulating capital flows and “picking winners and losers”, promoting agro business over small farmers, exporters and large retail importers over small and medium producers and retailers – highlights the compatibility, indeed the importance, of state interventionism in sustaining the “free market” agro-mineral export model.
While some sectors of capital complained about potential deficits and rising public debts resulting from increased state spending on poverty programs and in raising the minimum wage, in general most capitalist view the current version of “statism” as complementary and not in conflict with the larger goals of expanding investment opportunities and capital accumulation.
The ideologues of Twenty-first century capitalism have played a significant role in securing the legitimacy of the system, especially in its initial period, by projecting images and narratives of “anti-imperialism”, “twenty-first century socialism” and in the Andean countries a new “indigenous” variant of a “democratic and cultural revolution”. Given the heavy reliance on the extractive development strategies and the strong presence of foreign corporations in strategic economic sectors and on lands, in or proximate Indian territorial claims, traditional Indian rituals and symbolic representations, anti-imperialist slogans and charisma plays a key role in greasing the wheels of Twenty-first century capitalism, in the face of rebellious popular constituencies (especially in Peru, Ecuador and Bolivia.(
The paradox of alleged “center left” regimes embracing the liberal ‘colonial division of labor’ in relation to the world market is to some degree obfuscated by the greater diversification of markets. “Coloniality” is identified with economic relations with the US while the new economic ties with Asia are presented as expressions of south-south solidarity and other such euphemisms, even as the latter mirrors the former in economic essentials. Nevertheless there are important political differences between the US and China, insofar as the latter does not engage in coups and secret operations and military interventions (at least in Latin America.)
Key to the Twenty-first century capitalism model is social stability, preservation of the liberal democratic political framework and civil supremacy – all of which pits these governments against the US backed coups in the continent, including failed coups in Venezuela (2002) and Bolivia (2008) and a somehow successful coup in Honduras (2009.)
If US style militarism is a potential external destabilizing factor, the growth of narco-capitalism in the economy and state is a major domestic threat, now mostly concentrated in North America e.g. (Mexico), Central America and the Andean countries e.g. (Colombia).
(By James Petras, who is a former Professor of Sociology at Binghamton University, New York; Veterans Today)