What's up, Comrade Bush?

Cajoled for years to take on Western-style economic liberalism there's more than a wry smile on the

The irony has not been lost on the political leaders of Latin America’s insurgent left movements that the governments of Europe and the US are now taking measures that involve far deeper state intervention in the economy than actions they themselves used to harshly criticize when attempted in other regions.

Venezuelan President Hugo Chavez joked that George Bush “is finally beginning to understand the road to socialism” and notes that “he isn’t criticized for nationalizing the largest bank in the world.”

“What’s up, Comrade Bush,”* he said.

Jabs coming from the leaders of left-leaning governments, which now run the vast majority of the countries of Latin America, have flowed freely as they feel vindicated in their criticisms of neoliberal policy prescriptions and as some of their interventions into their economies have sheltered them to some extent from the colossal global crisis.

But they are coupled with a deepening of resentment over the vigour and force with which certain forms of free-market policies were proposed to them in the last thirty years, often imposed as the necessary conditions for crucial loans from international organizations such as the IMF.

Their anger at opposition coming from the north to their recent attempts to re-introduce elements of regulation and protection into their economies has only intensified as global market forces and unrestricted capitalism brought even the most powerful states in the world to their knees.

Soon after important election victories for the left in Ecuador and Paraguay, the influence of neoliberal economic and ideas and of the United States, already by all accounts at an all-time low, have taken another hit in the region with the economic crisis.

John Ross, who along with Ken Livingstone is providing advice to the Venezuelan government, said that “they have abandoned every policy that they've advocated that other governments should follow over the past 20 years. And they've adopted the measures that they've condemned other governments for taking.”*

These sentiments are echoed by even the most centrist of the region’s left-of-centre governments, such as Brazil’s Luiz Inacio Lula de Silva. "We did our homework — and they didn't, they who've been telling us for three decades what to do,” he complained.

And the normally reserved Chilean president Michele Bachelet felt secure enough in the changed political climate to make the following joke, in the US, about the country’s history of intervention in the region.

“Why has there never been a coup in the United States?” she asked a group of investors.
“Because there is no U.S. embassy in the United States.”

Bachelet, the country’s first female president and member of the Socialist Party, was imprisoned and tortured by the government of Augusto Pinochet who took power in a US-supported military coup in 1973.

She was forced into exile as the government killed thousands of supporters of the democratically elected socialist Salvador Allende. The Pinochet government ruthlessly imposed neoliberal prescriptions and counted on Milton Friedman as an economic consultant.

But in the case of Chile at least the country did experience strong economic growth during the dictatorship. However, the movement of left leaders elected in the last ten years in the region was a self-conscious movement against neoliberalism, which in most cases led to unprecedented levels of inequality and historically low rates of economic growth in Latin America.

In many cases these polices were imposed under duress when these countries had their own crises. In 1982 when many Latin American countries defaulted on their huge debts to the developed world, rescue packages from international organizations influenced by the governments of Reagan and Thatcher were conditional on the acceptance of austere structural adjustment programs.

In theaftermath of the Asian financial crisis of 1997, the response from the IMF caused many commentators, especially in Asia, to complain that the measures imposed would never be so harsh if something similar happened in the West. Now that it has, leaders of the Latin American left are seeing it this way and many are disgusted at how easily the banks and rich are getting off.

Nicaraguan Congressman Edwin Castro said that "We think the Bush administration should follow the same policies that they and the International Monetary Fund have always told us to follow when we have economic problems.

"One of our economists was telling us that Bush has just implemented communism for the rich."

The Nicaraguan party to which Castro belongs is the Sandinistas, the leftist party violently opposed by the Reagan-backed Contras in the 1980s and which returned to power in 2006.

Hugo Chavez, elected in Venezuela in 1998, was the first of these left-leaning leaders to come to the fore and receives the lion’s share of attention due to his country’s oil money and his unique and controversial approach to public speaking. But since then, left-of-centre governments have also come to power in Argentina, Brazil, Chile, Bolivia, Ecuador, Nicaragua, Uruguay, and most recently, Paraguay.

Though the region will certainly be hurt by depressed commodity prices, to the extent that these governments have been able to push reforms past local and international opposition, taking forms ranging from political opposition, military coups to threats of capital flight, they have ironically served to insulate them somewhat from the current crisis.

For example, the FT’s Benedict Mander called the Caracas stock exchange an “oasis of calm” due to the country’s currency controls, implemented in 2003.

Reuters pointed out that: “Venezuela has suffered little direct effect from the market chaos because Chavez nationalised the most important companies that once traded on the minuscule Caracas stock exchange and because its currency is fixed by exchange controls.”

These kinds of economic policies, like those of Ecuador’s recently approved new constitution which allows greater government control over banks, are the exact opposite of the unregulated free-market policies promoted quite powerfully by international organizations and institutions influenced by the U.S., Europe and Japan. And pushing them through required facing stiff international opposition.

Eric Wingerter of left-leaning Latin America blog borev.net raised a comparison between the financial sector’s treatment praise of the U.S.’s recent forced nationalization of major banks and its reaction to Hugo Chavez’s decision two months ago to purchase a single and profitable bank on the open market.

The Wall Street Journal then claimed that move could lead to “mass withdrawls” that could “snowball into a systemic bank run that puts the economy and political system at play.”

Policymakers and analysts in the US and Europe will probably be concentrating on their own countries for the next weeks, or perhaps months. But if they ever turn back to Latin America, they will find they face a very difficult task if they would like to restore their credibility.

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The New Times: Brexit, globalisation, the crisis in Labour and the future of the left

With essays by David Miliband, Paul Mason, John Harris, Lisa Nandy, Vince Cable and more.

Once again the “new times” are associated with the ascendancy of the right. The financial crash of 2007-2008 – and the Great Recession and sovereign debt crises that were a consequence of it – were meant to have marked the end of an era of runaway “turbocapitalism”. It never came close to happening. The crash was a crisis of capitalism but not the crisis of capitalism. As Lenin observed, there is “no such thing as an absolutely hopeless situation” for capitalism, and so we discovered again. Instead, the greatest burden of the period of fiscal retrenchment that followed the crash was carried by the poorest in society, those most directly affected by austerity, and this in turn has contributed to a deepening distrust of elites and a wider crisis of governance.

Where are we now and in which direction are we heading?

Some of the contributors to this special issue believe that we have reached the end of the “neoliberal” era. I am more sceptical. In any event, the end of neoliberalism, however you define it, will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.

Certainly the British Labour Party, riven by a war between its parliamentary representatives and much of its membership, is in a critical condition. At the same time, Jeremy Corbyn’s leadership has inspired a remarkable re-engagement with left-wing politics, even as his party slumps in the polls. His own views may seem frozen in time, but hundreds of thousands of people, many of them young graduates, have responded to his anti-austerity rhetoric, his candour and his shambolic, unspun style.

The EU referendum, in which as much as one-third of Labour supporters voted for Brexit, exposed another chasm in Labour – this time between educated metropolitan liberals and the more socially conservative white working class on whose loyalty the party has long depended. This no longer looks like a viable election-winning coalition, especially after the collapse of Labour in Scotland and the concomitant rise of nationalism in England.

In Marxism Today’s “New Times” issue of October 1988, Stuart Hall wrote: “The left seems not just displaced by Thatcherism, but disabled, flattened, becalmed by the very prospect of change; afraid of rooting itself in ‘the new’ and unable to make the leap of imagination required to engage the future.” Something similar could be said of the left today as it confronts Brexit, the disunities within the United Kingdom, and, in Theresa May, a prime minister who has indicated that she might be prepared to break with the orthodoxies of the past three decades.

The Labour leadership contest between Corbyn and Owen Smith was largely an exercise in nostalgia, both candidates seeking to revive policies that defined an era of mass production and working-class solidarity when Labour was strong. On matters such as immigration, digital disruption, the new gig economy or the power of networks, they had little to say. They proposed a politics of opposition – against austerity, against grammar schools. But what were they for? Neither man seemed capable of embracing the “leading edge of change” or of making the imaginative leap necessary to engage the future.

So is there a politics of the left that will allow us to ride with the currents of these turbulent “new times” and thus shape rather than be flattened by them? Over the next 34 pages 18 writers, offering many perspectives, attempt to answer this and related questions as they analyse the forces shaping a world in which power is shifting to the East, wars rage unchecked in the Middle East, refugees drown en masse in the Mediterranean, technology is outstripping our capacity to understand it, and globalisation begins to fragment.

— Jason Cowley, Editor 

Tom Kibasi on what the left fails to see

Philip Collins on why it's time for Labour to end its crisis

John Harris on why Labour is losing its heartland

Lisa Nandy on how Labour has been halted and hollowed out

David Runciman on networks and the digital revolution

John Gray on why the right, not the left, has grasped the new times

Mariana Mazzucato on why it's time for progressives to rethink capitalism

Robert Ford on why the left must reckon with the anger of those left behind

Ros Wynne-Jones on the people who need a Labour government most

Gary Gerstle on Corbyn, Sanders and the populist surge

Nick Pearce on why the left is haunted by the ghosts of the 1930s

Paul Mason on why the left must be ready to cause a commotion

Neal Lawson on what the new, 21st-century left needs now

Charles Leadbeater explains why we are all existentialists now

John Bew mourns the lost left

Marc Stears on why democracy is a long, hard, slow business

Vince Cable on how a financial crisis empowered the right

David Miliband on why the left needs to move forward, not back

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times