Latin America: Growth, Stability and Inequalities: Lessons for the US and EU

By James Petras

"Introduction: Images of the Past The image of Latin America portrayed by the mass media and held by the educated public is a region of frequent coups, periodical revolutions, perpetual military dictatorships, alternating boom and bust economies and an ever-present International Monetary Fund (IMF) dictating economic policy.

In contrast the same opinion makers plus their academic counterparts project images of the United States and the European Union as stable societies, with steady economic growth, incremental expansion of social welfare programs, resolving issues via consensual compromises and practicing sound fiscal policies.

In recent times, the better part of the current decade, these images have taken on the character of ideological dogmas – they no longer correspond to reality. In fact a good argument can be made that the roles have been reversed: the US and EU are in perpetual crises and Latin America, at least most of the major countries, have experienced stability and growth which is the envy (or should be) of Washington pundits and financial commentators.....

Lessons Latin America: Listen Yankees and Eurocrats

Can the positive lessons of the dynamic Latin American experience provide a ‘model’ for the US and Europe? Is the “model”, in whole or part, transferable to the North or are the two regions so different that the lessons are not applicable?

Granted there are vast historical, cultural, economic and political differences between the regions yet some lessons from the Latin America’s decade of dynamic growth, provides new ideas to counter the negative, self-defeating economic formulas put forth and practiced by US and EU experts, economists and policymakers.

Let us start from the beginning. The rise of Latin America was precipitated by a deep economic crises, the breakdown of the economy, large scale unemployment and the impoverishment of the middle class. The crises led to the total discrediting of what has been called alternately the “free market”, “neo-liberal” and “de-regulated” capitalist model. So far so good: the US and EU likewise are experiencing a prolonged and deepening economic crises which has bankrupted Southern Europe, plunged the US into a double dip recession and led to a 20% un and underemployment rate. The entire “political class” in the US and Europe is largely discredited. From there forward the regions diverge.

In Latin America, the crises led to mass protests, popular uprisings and regime changes. Post neo-liberal center-left regimes, under mass pressure, subsequently launched employment generating investments and aid poverty reducing public works programs. Argentina facing a financial crises similar to Greece, Portugal and Spain today, defaulted on its foreign debt – channeling public revenues into reviving the economy. Because financial speculation linked to Wall Street and the City of London precipitated the crises, the Latin regimes instituted financial controls and regulations which limited financial volatility. The new regimes, influenced by the commodity boom, diversified their trading partners, entering dynamic Asian markets, reaping high returns and stimulating local consumption and public investments. What lessons can the crises ridden US and EU learn from the Latin America’s successful recovery and expansion?

First, the beginning of a successful response depends on a political transformation. Regime change a complete break with the ‘neo-liberal’ free market, and the political leaders and parties who are totally embedded in failed institutions and policies. Regime change presupposes the eruption of dynamic mass organizations, new, old, improvised and organized, capably of moving from protest and resistance to political power.
The object is to rebalance the US and EU economies from ‘financialization’ and “militarism” to large scale, long term investments in manufacturing, applied technology, civilian infrastructure and social services. Direct public investments and loans applied to concrete employment generating projects; total rejection of trickle down, monetary policies which never move from private banks to public works.

The entire militarist- Zionist-permanent war mentality is entirely vulnerable to change: doing so, will create jobs, the top priority for over two-thirds of the US public. The “war on terrorism”, the banner of the warlords in office, is considered a priority by only 3% of Americans. Once again the shift from ‘militarism’ to the civilian economy in Latin America was a result of popular civilian upheavals, via the street and the ballot box...... "