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<font size=3>Chomsky: Latin American Unity <br><br>
Written by Noam Chomsky <br>
<a href="http://upsidedownworld.org/main/content/view/1503/68/" eudora="autourl">
http://upsidedownworld.org/main/content/view/1503/68/<br><br>
</a>Wednesday, 01 October 2008 <br><br>
</font><font face="georgia" size=3>VII Social Summit for the Latin
American and Caribbean Unity<br><br>
(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. <br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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."<br><br>
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.<br><br>
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]<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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."<br><br>
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."<br><br>
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.<br><br>
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.<br><br>
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."<br><br>
A matter of no slight significance.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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. <br><br>
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.<br><br>
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. <br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
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.<br><br>
<br><br>
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