[News] Chomsky: Latin American Unity
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Wed Oct 1 17:11:43 EDT 2008
Chomsky: Latin American Unity
Written by Noam Chomsky
http://upsidedownworld.org/main/content/view/1503/68/
Wednesday, 01 October 2008
VII Social Summit for the Latin American and Caribbean Unity
(Caracas 9-24-08) During the past decade, Latin America has become
the most exciting region of the world. The dynamic has very largely
flowed from right where you are meeting, in Caracas, with the
election of a leftist president dedicated to using Venezuela's rich
resources for the benefit of the population rather than for wealth
and privilege at home and abroad, and to promote the regional
integration that is so desperately needed as a prerequisite for
independence, for democracy, and for meaningful development. The
initiatives taken in Venezuela have had a significant impact
throughout the subcontinent, what has now come to be called "the pink
tide." The impact is revealed within the individual countries, most
recently Paraguay, and in the regional institutions that are in the
process of formation. Among these are the Banco del Sur, an
initiative that was endorsed here in Caracas a year ago by Nobel
laureate in economics Joseph Stiglitz; and the ALBA, the Bolivarian
Alternative for Latin America and the Caribbean, which might prove to
be a true dawn if its initial promise can be realized.
The ALBA is often described as an alternative to the US-sponsored
"Free Trade Area of the Americas," though the terms are misleading.
It should be understood to be an independent development, not an
alternative. And, furthermore, the so-called "free trade agreements"
have only a limited relation to free trade, or even to trade in any
serious sense of that term; and they are certainly not agreements, at
least if people are part of their countries. A more accurate term
would be "investor-rights arrangements," designed by multinational
corporations and banks and the powerful states that cater to their
interests, established mostly in secret, without public participation
or awareness. That is why the US executive regularly calls for
"fast-track authority" for these agreements - essentially,
Kremlin-style authority.
Another regional organization that is beginning to take shape is
UNASUR, the Union of South American Nations. This continental bloc,
modeled on the European Union, aims to establish a South American
parliament in Cochabamba, a fitting site for the UNASUR parliament.
Cochabamba was not well known internationally before the water wars
of 2000. But in that year events in Cochabamba became an inspiration
for people throughout the world who are concerned with freedom and
justice, as a result of the courageous and successful struggle
against privatization of water, which awakened international
solidarity and was a fine and encouraging demonstration of what can
be achieved by committed activism.
The aftermath has been even more remarkable. Inspired in part by
developments in Venezuela, Bolivia has forged an impressive path to
true democratization in the hemisphere, with large-scale popular
initiatives and meaningful participation of the organized majority of
the population in establishing a government and shaping its programs
on issues of great importance and popular concern, an ideal that is
rarely approached elsewhere, surely not in the Colossus of the North,
despite much inflated rhetoric by doctrinal managers.
Much the same had been true 15 years earlier in Haiti, the only
country in the hemisphere that surpasses Bolivia in poverty - and
like Bolivia, was the source of much of the wealth of Europe, later
the United States. In 1990, Haiti's first free election took place.
It was taken for granted in the West that the US candidate, a former
World Bank official who monopolized resources, would easily win. No
one was paying attention to the extensive grass-roots organizing in
the slums and hills, which swept into power the populist priest
Jean-Bertrand Aristide. Washington turned at once to undermining the
feared and hated democratic government. It took only a few months for
a US-backed military coup to reverse this stunning victory for
democracy, and to place in power a regime that terrorized the
population with the direct support of the US government, first under
president Bush I, then Clinton. Washington finally permitted the
elected president to return, but only on the condition that he adhere
to harsh neoliberal rules that were guaranteed to crush what remained
of the economy, as they did. And in 2004, the traditional torturers
of Haiti, France and the US, joined to remove the elected president
from office once again, launching a new regime of terror, though the
people remain unvanquished, and the popular struggle continues
despite extreme adversity.
All of this is familiar in Latin America, not least in Bolivia, the
scene of today's most intense and dangerous confrontation between
popular democracy and traditional US-backed elites. Archaeologists
are now discovering that before the European conquest, Bolivia had a
wealthy, sophisticated and complex society - to quote their words,
"one of the largest, strangest, and most ecologically rich artificial
environments on the face of the planet, with causeways and canals,
spacious and formal towns and considerable wealth," creating a
landscape that was "one of humankind's greatest works of art, a
masterpiece." And of course Bolivia's vast mineral wealth enriched
Spain and indirectly northern Europe, contributing massively to its
economic and cultural development, including the industrial and
scientific revolutions. Then followed a bitter history of imperial
savagery with the crucial connivance of rapacious domestic elites,
factors that are very much alive today.
Sixty years ago, US planners regarded Bolivia and Guatemala as the
greatest threats to its domination of the hemisphere. In both cases,
Washington succeeded in overthrowing the popular governments, but in
different ways. In Guatemala, Washington resorted to the standard
technique of violence, installing one of the world's most brutal and
vicious regimes, which extended its criminality to virtual genocide
in the highlands during Reagan's murderous terrorist wars of the
1980s - and we might bear in mind that these horrendous atrocities
were carried out under the guise of a "war on terror," a war that was
re-declared by George Bush in September 2001, not declared, a
revealing distinction when we recall the implementation of Reagan's
"war on terror" and its grim human consequences.
In Guatemala, the Eisenhower administration overcame the threat of
democracy and independent development by violence. In Bolivia, it
achieved much the same results by exploiting Bolivia's economic
dependence on the US, particularly for processing Bolivia's tin
exports. Latin America scholar Stephen Zunes points out that "At a
critical point in the nation's effort to become more self-sufficient
[in the early 1950s], the U.S. government forced Bolivia to use its
scarce capital not for its own development, but to compensate the
former mine owners and repay its foreign debts."
The economic policies forced on Bolivia in those years were a
precursor of the structural adjustment programs imposed on the
continent thirty years later, under the terms of the neoliberal
"Washington consensus," which has generally had disastrous effects
wherever its strictures have been observed. By now, the victims of
neoliberal market fundamentalism are coming to include the rich
countries, where the curse of financial liberalization is bringing
about the worst financial crisis since the Great Depression of the
1930s and leading to massive state intervention in a desperate effort
to rescue collapsing financial institutions.
We should note that this is a regular feature of contemporary state
capitalism, though the scale today is unprecedented. A study by two
well-known international economists 15 years ago found that at least
twenty companies in the top Fortune 100 would not have survived if
they had not been saved by their respective governments, and that
many of the rest gained substantially by demanding that governments
"socialise their losses." Such government intervention "has been the
rule rather than the exception over the past two centuries," they
conclude from a detailed analysis. [Ruigrok and von Tulder]
We might also take note of the striking similarity between the
structural adjustment programs imposed on the weak by the
International Monetary Fund, and the huge financial bailout that is
on the front pages today in the North. The US executive-director of
the IMF, adopt ing an image from the Mafia, described the
institution as "the credit community's enforcer." Under the rules of
the Western-run international economy, investors make loans to third
world tyrannies, and since the loans carry considerable risk, make
enormous profits. Suppose the borrower defaults. In a capitalist
economy, the lenders would incur the loss. But really existing
capitalism functions quite differently. If the borrowers cannot pay
the debts, then the IMF steps in to guarantee that lenders and
investors are protected. The debt is transferred to the poor
population of the debtor country, who never borrowed the money in the
first place and gained little if anything from it. That is called
"structural adjustment." And taxpayers in the rich country, who also
gained nothing from the loans, sustain the IMF through their taxes.
These doctrines do not derive from economic theory; they merely
reflect the distribution of decision-making power.
The designers of the international economy sternly demand that the
poor accept market discipline, but they ensure that they themselves
are protected from its ravages, a useful arrangement that goes back
to the origins of modern industrial capitalism, and played a large
role in dividing the world into rich and poor societies, the first
and third worlds.
This wonderful anti-market system designed by self-proclaimed market
enthusiasts is now being implemented in the United States, to deal
with the very ominous crisis of financial markets. In general,
markets have well-known inefficiencies. One is that transactions do
not take into account the effect on others who are not party to the
transaction. These so-called "externalities" can be huge. That is
particularly so in the case of financial institutions. Their task is
to take risks, and if well-managed, to ensure that potential losses
to themselves will be covered. To themselves. Under capitalist rules,
it is not their business to consider the cost to others if their
practices lead to financial crisis, as they regularly do. In
economists' terms, risk is underpriced, because systemic risk is not
priced into decisions. That leads to repeated crisis, naturally. At
that point, we turn to the IMF solution. The costs are transferred to
the public, which had nothing to do with the risky choices but is now
compelled to pay the costs - in the US, perhaps mounting to about $1
trillion right now. And of course the public has no voice in
determining these outcomes, any more than poor peasants have a voice
in being subjected to cruel structural adjustment programs.
A basic principle of modern state capitalism is that cost and risk
are socialized, while profit is privatized. That principle extends
far beyond financial institutions. Much the same is true for the
entire advanced economy, which relies extensively on the dynamic
state sector for innovation, for basic research and development, for
procurement when purchasers are unavailable, for direct bail-outs,
and in numerous other ways. These mechanisms are the domestic
counterpart of imperial and neocolonial hegemony, formalized in World
Trade Organization rules and the misleadingly named "free trade agreements."
Financial liberalization has effects well beyond the economy. It has
long been understood that it is a powerful weapon against democracy
Free capital movement creates what some international economists have
called a "virtual parliament" of investors and lenders, who can
closely monitor government programs and "vote" against them if they
are considered irrational: for the benefit of people, rather than
concentrated private power. They can "vote" by capital flight,
attacks on currencies, and other devices offered by financial
liberalization. That is one reason why the Bretton Woods system
established by the US and UK after World War II instituted capital
controls and regulated currencies. The Great Depression and the war
had aroused powerful radical democratic currents, taking many forms,
from the anti-fascist resistance to working class organization. These
pressures made it necessary to permit social democratic policies. The
Bretton Woods system was designed in part to create a space for
government action responding to public will - for some measure of
democracy, that is. John Maynard Keynes, the British negotiator,
considered the most important achievement of Bretton Woods to be
establishment of the right of governments to restrict capital
movement. In dramatic contrast, in the neoliberal phase after the
breakdown of the Bretton Woods system, the US Treasury now regards
free capital mobility as a "fundamental right," unlike such alleged
"rights" as those guaranteed by the Universal Declaration of Human
Rights: health, education, decent employment, security, and other
rights that the Reagan and Bush administrations have dismissed as
"letters to Santa Claus," "preposterous," mere "myths."
In earlier years the public had not been much of a problem. The
reasons are reviewed by Barry Eichengreen in his standard scholarly
history of the international monetary system. He explains that in
the 19th century, governments had not yet been "politicized by
universal male suffrage and the rise of trade unionism and
parliamentary labor parties." Therefore the severe costs imposed by
the virtual parliament could be transferred to the general
population. But with the radicalization of the general public during
the Great Depression and the anti-fascist war, that luxury was no
longer available to private power and wealth. Hence in the Bretton
Woods system, "limits on capital mobility substituted for limits on
democracy as a source of insulation from market pressures." It is
only necessary to add the obvious corollary: with the dismantling of
the system from the 1970s, functioning democracy is restricted. It
has therefore become necessary to control and marginalize the public
in some fashion, processes that are particularly evident in the more
business-run societies like the United States. The management of
electoral extravaganzas by the Public Relations industry is one illustration.
The primary victims of military terror and economic strangulation are
the poor and weak, within the rich countries themselves and far more
brutally in the South. But times are changing. In Venezuela, in
Bolivia, and elsewhere there are promising efforts to bring about
desperately needed structural and institutional changes. And not
surprisingly, these efforts to promote democracy, social justice, and
cultural rights are facing harsh challenges from the traditional
rulers, at home and internationally.
For the first time in half a millennium, South America is beginning
to take its fate into its own hands. There have been attempts before,
but they have been crushed by outside force, as in the cases I just
mentioned and other hideous ones too numerous and too familiar to
review. But there are now significant departures from a long and
shameful history. The departures are symbolized by the UNASUR crisis
summit in Santiago just a few days ago. At the summit, the presidents
of the South American countries issued a strong statement of support
for the elected Morales government, which as you know is under attack
by the traditional rulers: privileged Europeanized elites who
bitterly oppose Bolivian democracy and social justice and, routinely,
enjoy the firm backing of the master of the hemisphere. The South
American leaders gathering at the UNASUR summit in Santiago declared
"their full and firm support for the constitutional government of
President Evo Morales, whose mandate was ratified by a big majority"
-- referring, of course, to his overwhelming victory in the recent
referendum. Morales thanked UNASUR for its support, observing that
"For the first time in South America's history, the countries of our
region are deciding how to resolve our problems, without the presence
of the United States."
A matter of no slight significance.
The significance of the UNASUR support for democracy in Bolivia is
underscored by the fact that the leading media in the US refused to
report it, though editors and correspondents surely knew all about
it. Ample information was available to them on wire services.
That has been a familiar pattern. To cite just one of many examples,
the Cochabamba declaration of South American leaders in December
2006, calling for moves towards integration on the model of the
European Union, was barred from the Free Press in the traditional
ruler of the hemisphere. There are many other cases, all illustrating
the same fear among the political class and economic centers in the
US that the hemisphere is slipping from their control.
Current developments in South America are of historic significance
for the continent and its people. It is well understood in Washington
that these developments threaten not only its domination of the
hemisphere, but also its global dominance. Control of Latin America
was the earliest goal of US foreign policy, tracing back to the
earliest days of the Republic. The United States is, I suppose, the
only country that was founded as a "nascent empire," in George
Washington's words. The most libertarian of the Founding Fathers,
Thomas Jefferson, predicted that the newly liberated colonies would
drive the indigenous population "with the beasts of the forests into
the Stony Mountains," and the country will ultimately be "free of
blot or mixture," red or black (with the return of slaves to Africa
after eventual ending of slavery). And furthermore, it "will be the
nest, from which all America, North and South, is to be peopled,"
displacing not only the red men but the Latin population of the South.
These aspirations were not achieved, but control of Latin America
remains a central policy goal, partly for resources and markets, but
also for broader ideological and geostrategic reasons. If the US
cannot control Latin America, it cannot expect "to achieve a
successful order elsewhere in the world," Nixon's National Security
Council concluded in 1971 while considering the paramount importance
of destroying Chilean democracy. Historian David Schmitz observes
that Allende "threatened American global interests by challenging the
whole ideological basis of American Cold War policy. It was the
threat of a successful socialist state in Chile that could provide a
model for other nations that caused concern and led to American
opposition," in fact direct participation in establishing and
maintaining the terrorist dictatorship. Henry Kissinger warned that
success for democratic socialism in Chile might have reverberations
as far as southern Europe - not because Chilean hordes would descend
on Madrid and Rome, but because success might inspire popular
movements to achieve their goals by means of parliamentary democracy,
which is upheld as an abstract value in the West, but with crucial
reservations.
Even mainstream scholarship recognizes that Washington has supported
democracy if and only if it contributes to strategic and economic
interests, a policy that continues without change through all
administrations, to the present.
These pervasive concerns are the rational form of the domino theory,
sometimes more accurately called "the threat of a good example." For
such reasons, even the tiniest departure from strict obedience is
regarded as an existential threat that calls for a harsh response:
peasant organizing in remote communities of northern Laos, fishing
cooperatives in Grenada, and so on throughout the world. It is
necessary to ensure that the "virus" of successful independent
development does not "spread contagion" elsewhere, in the terminology
of the highest level planners.
Such concerns have motivated US military intervention, terrorism, and
economic warfare throughout the post-World War II era, in Latin
America and throughout much of the world. These are leading features
of the Cold War. The superpower confrontation regularly provided
pretexts, mostly fraudulent, much as the junior partner in world
control appealed to the threat of the West when it crushed popular
uprisings in its much narrower Eastern European domains.
But times are changing. In Latin America, the source is primarily in
moves towards integration, which has several dimensions. One
dimension of integration is regional: moves to strengthen ties among
the South American countries of the kind I mentioned. These are now
just beginning to reach to Central America, which was so utterly
devastated by Reagan's terror wars that it had mostly stayed on the
sidelines since, but is now beginning to move. Of particular
significance are recent developments in Honduras, the classic "banana
republic" and Washington's major base for its terrorist wars in the
region in the 1980s. Washington's Ambassador to Honduras, John
Negroponte, was one of the leading terrorist commanders of the
period, and accordingly was appointed head of counter-terrorist
operations by the Bush administration, a choice eliciting no comment.
But here too times are changing. President Zelaya declared that US
aid does not "make us vassals" or give Washington the right to
humiliate the nation, and has improved ties with Venezuela, joining
Petrocaribe, and in July, joining the Alba as well.
Regional integration of the kind that has been slowly proceeding for
several years is a crucial prerequisite for independence, making it
more difficult for the master of the hemisphere to pick off countries
one by one. For that reason it is causing considerable distress in
Washington, and is either ignored or regularly distorted in the media
and other elite commentary.
A second form of integration is global: the establishment of
South-South relations, and the diversification of markets and
investment, with China a growing and particularly significant
participant in hemispheric affairs. Again, these developments
undercut Washington's ability to control what Secretary of War Henry
Stimson called "our little region over here" at the end of World War
II, when he was explaining that other regional systems must be
dismantled, while our own must be strengthened.
The third and in many ways most vital form of integration is
internal. Latin America is notorious for its extreme concentration of
wealth and power, and the lack of responsibility of privileged elites
for the welfare of the nation. It is instructive to compare Latin
America with East Asia. Half a century ago, South Korea was at the
level of a poor African country. Today it is an industrial
powerhouse. And much the same is true throughout East Asia. The
contrast to Latin America is dramatic, particularly so because Latin
America has far superior natural advantages. The reasons for the
dramatic contrast are not hard to identify. For 30 years Latin
America has rigorously observed the rules of the Washington
consensus, while East Asia has largely ignored them. Latin American
elites separated themselves from the fate of their countries, while
their East Asian counterparts were compelled to assume
responsibilities. One measure is capital flight: in Latin America, it
is on the scale of the crushing debt, while in South Korea it was so
carefully controlled that it could bring the death penalty. More
generally, East Asia adopted the modes of development that had
enabled the wealthy countries to reach their current state, while
Latin America adhered to the market principles that were imposed on
the colonies and largely created the third world, blocking development.
Furthermore, needless to say, development of the East Asian style is
hardly a model to which Latin America, or any other region, should
aspire. The serious problems of developing truly democratic
societies, based on popular control of all social, economic,
political and cultural institutions, and overturning structures of
hierarchy and domination in all aspects of life, are barely even on
the horizon, posing formidable and essential tasks for the future.
These are huge problems within Latin America. They are beginning to
be addressed, though haltingly, with many internal
difficulties. And they are, of course, arousing bitter antagonism
on the part of traditional sectors of power and privilege, again
backed by the traditional master of "our little region over here."
The struggle is particularly intense and significant right now in
Bolivia, but in fact is constant in one or another form throughout
the hemisphere.
The problems of Latin America and the Caribbean have global roots,
and have to be addressed by regional and global solidarity along with
internal struggle. The growth of the social forums, first in South
America, now elsewhere, has been one of the most encouraging steps
forward in recent years. These developments may bear the seeds of the
first authentic international, heralding an era of true globalization
- international integration in the interests of people, not investors
and other concentrations of power. You are right at the heart of
these dramatic developments, an exciting opportunity, a difficult
challenge, a responsibility of historic proportions.
Freedom Archives
522 Valencia Street
San Francisco, CA 94110
415 863-9977
www.Freedomarchives.org
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