Interview with James Petras: Neoliberalism and resistance

FRFI 172 April / May 2003

James Petras is a revolutionary, anti-imperialist activist and writer, who has worked with the Brazilian landless workers’ movement and the unemployed workers’ movement in Argentina. He gave this interview to Fight Racism! Fight Imperialism! on 21 March 2003.

FRFI: What is the strategic importance of Latin America for the US, particularly in the present circumstances?

Well let’s deal with the phoney arguments that say Latin America’s percentage of world trade has been declining; its importance for the US economy as a whole, as a percentage of its world trade, has been declining, so it is not very important. These are generalised arguments with inappropriate comparisons. It is important to note that Latin America is the area where the US banks get the highest rates of return and where historically they have received the greatest part of their overseas earnings. Banks like Citibank and Bank of America have been enormously successful in transferring illegal funds from Latin America, amounting to tens of billions of dollars every year. In addition Latin America is the only region in the world where the US has favourable external accounts balance of payments, so it helps to compensate for the enormous deficits it has in Asia and even in Europe. From that vantage point, if the US did not have Latin America the dollar would be weaker and its external accounts would be in even worse shape than they are right now.

There are other factors apart from its significant global strategic importance. Mexico, Venezuela, Ecuador, Colombia, and Argentina are all oil-producing regions and provide an important source of petroleum to the United States, particularly in times of crisis in the Middle East. The US has in Latin America, usually, a solid bloc of votes which it is able to mobilise to counteract opposition in other regions. There is also the fact that the US corporations in Latin America, particularly the 500 biggest corporations in the United States, control significant parts of the Latin American economy, and I don’t just mean industry and raw materials. I mean fast food, real estate, tourism, air traffic etc. You have a whole array of important strategic sectors of the US multinationals and banking which are able to appropriate profits, interest payments and royalty transfers, that help bolster sagging positions within the United States. For all these reasons, I think Latin America is extremely important. The concern particularly with Colombia, but Venezuela also, has to do precisely with the fear that a successful social transformation would have a demonstration effect on the rest of Latin America. It would undermine this notion that it is not possible to carry out change under the so-called conditions of globalisation, which has become one of the main arguments for all sorts of fake left and reformist people who say: ‘Well yes of course we should forget about the debt, of course we should fight neo-liberalism, but let’s be realistic, how far can we go given the power and dominance of the US?’ Or again they use this very amorphous term ‘globalisation won’t allow it’. I think the struggle in Colombia is precisely over the attempt by the United States to prevent that invincibility myth from being eroded.

FRFI: Could you say something about the Free Trade Area of the Americas (FTAA), which is being planned in this context?

First let’s look at what has happened in the last decade. The 1990s was a decade that was horrible for Latin America in every sense of the word. Income declined, poverty increased, the biggest economies went belly up and Brazil had the worst growth record in its modern history. On the other hand, for US investors, bankers, industrialists and telecommunications, it was the golden age. Never did they take out so many profits, never were so many public firms handed over to monopolies, never were they able to enforce so much interest transfers, never were they able to ship out so much illicit earnings through their financial circuits because of the deregulation of financial markets. Now, this golden age isn’t enough. Washington wants it all and I think a lot of thinkers are mistaken in underestimating the voracious appetite of US imperialism.

Two things have to be kept in mind. One is that extremely lucrative sectors of the Latin American economies still are in the public sector, largely because of mass trade union struggles. I’m talking about the petroleum industry, electrical power and light industries in Ecuador and in Mexico. I’m talking about some of the minerals, gas and oil in Bolivia and several other strategic sectors which they haven’t been able to privatise because of enormous worker resistance. The same is true in Colombia, some of the public utilities held back. So FTAA will fashion a framework in which the rules it sets will supersede national legislation on public-private divisions. Secondly, and more importantly, the principal backers of the current neo-liberal policies have lost support. They are no longer able to mystify the population; they are totally discredited. That group of political clients of the US in the 1990s are totally discredited everywhere. Toledo [in Peru] gets elected and within six months he is down to single digit support. Sanchez de Lozada [in Bolivia] is barely holding on to power and the betting is that he doesn’t last out his regime.

There is fear that this golden egg that they have been hatching every year is going to be lost, so they want to go beyond the nation state where the pressures are enormous, to set up a commission of free trade, in Miami probably, run by a US official or a notable client, where they don’t have to worry directly about legislators and local officials or mass movements. They will be immune to those direct pressures. So the free trade area will be multi-purpose. It is a further stage that goes from neo-colonialism to outright colonialism. Sovereignty is totally dissolved in this supra-national entity which is simply another arm of US imperialism. The US government will have the dominant influence. Along with this free trade area you need some mechanism to sustain the decisions and implement them against forceful majorities and that is why US military bases are being set up, joint training exercises and further deepening involvement through the Plan Colombia initiative or the Andean initiative etc.

There is one further embellishment to this and I think this is probably a bit more controversial. With the disintegration of the older generation of neo-liberals, I am talking about Cardoso [in Brazil], Noboa [in Ecuador] etc, a new wave of neo-liberals disguised as social-democrats, like Lula da Silva [in Brazil], a populist, like Gutierrez [in Ecuador], are now backing the FTAA, although they want to discuss the timing and the concessions they can secure from the United States. So they are not just operating on the level of direct control, they are also working through this new wave of former leftists or populists as the new supporters. However, Gutierrez, is already facing opposition from his former allies in the Indian organisations, and Lula is already facing major challenges from metal workers and public employees for his drastic IMF austerity programme. So again this idea of having a supra-national entity is high on the agenda in Washington.

FRFI: How do you see the resistance in Latin America developing?

The resistance is extremely widespread; the opposition to FTAA is enormous. I would say it involves three quarters of the population without exaggerating. I think if we look at Bolivia we see some of the most significant mass struggles today. They almost toppled Sanchez de Lozada on the day of the urban insurrection. When the police became involved he had to actually slink out of the Presidential Palace in an ambulance. Someone said he was dressed as a nurse – I don’t know if that is simply apocryphal – but the fact is that streets in cities like Santa Cruz and Cochabamba were practically taken over by the army but surrounded by huge opposition movements. They have an extraordinary leader there, Evo Morales, who has combined extra-parliamentary and parliamentary struggles in a very creative way, subordinating the parliamentary struggle to the mass struggle and creating a comando popular [popular coordinator] trying to merge the urban movements, the self-employed and progressive or class-oriented trade unions. The struggle there is extraordinarily advanced. Evo is a clear anti-imperialist, no ambiguities there, and while he embraces an autonomy for Indians and of course the legalisation of coca, he has a broader vision of a kind of Andean socialism, that is socialism adapted to the social formation of the Andean countries. Now that is one of the most advanced struggles.

Colombia is a second advanced struggle and I think we have to look at it as a multi-dimensional struggle. The big confrontation by the guerrilla movement encompasses up to 25,000, but could easily escalate to 50,000 combatants. They are extremely well armed with light weaponry and prepared by an extraordinary leadership. Manuel Marulanda is one of the great guerrilla commanders of Latin American history, comparable to Ho Chi Minh in many ways or General Giap, the famous Vietnamese. The influence of the FARC probably extends anywhere between 40% upward of the countryside. Overwhelmingly a peasant formation, over 70-80%, whose leaders are closely tied to the mass struggle. They differ from some of the commanders of Central America, petty bourgeois professionals who found it pretty easy to return to cushy seats in Parliament abandoning many of their principles. I don’t think you’ll see that kind of phenomenon in Colombia. They are a very advanced movement with very strong class roots.

The second thing about Colombia is the mass struggle and here I think we have to look at the neo-liberal policies that have radicalised the trade union movement, that have radicalised the countryside. There is an agricultural block that goes from landless workers, small peasants, middle-sized coffee growers, who are adversely affected by the ending of government subsidies and free trade policies that have resulted in the import of cheap grains and the failure to provide support for coffee. So you have a block here that has had extraordinary success in mobilising tens of thousands in opposition to this government. You have the trade union movement, the public employees, school teachers, sections of manufacturing workers and banana workers, petrol workers, who have been in head-to-head confrontations with the regime and suffered the consequences through scores of killings etc. It’s a life and death struggle. The question of state power is on the table. At least the advanced detachments of the class struggle have put the question of socialism versus capitalism on the table. I think it’s the principal concern of the United States outside of the Middle East.

I just highlighted what I think are the most advanced movements. On a secondary level, but not far behind, is the movement in Venezuela, which is very complex, very contradictory, but moving toward a clearer class polarisation. Chavez began as a kind of foreign policy nationalist, which was enough to provoke the United States. He had carried out some welfare spending programmes, on housing, on schools etc. Very minimal introduction of some progressive taxation, the beginning of taxing some part of wealth. The whole tax system in Venezuela is extraordinarily regressive, based on taxing petroleum income. Chavez’s politics is a kind of progressive Bonapartism, balancing between different internal groups, maintaining US corporate interests while also determining independent foreign policy, on OPEC, on Cuba and in relationship to Plan Colombia etc. However, after two coup attempts led by the local bourgeoisie in alliance with the US, Chavez has begun to move in some very significant ways.

First, he’s cleaned out some sectors of the pro-imperialist military, which is important for any progress in the country. Secondly, he’s moved towards a more conscious and deliberate organisation of the neighbourhoods, the Bolivarian circles. Thirdly, he’s beginning to develop a policy of creating alternative class-orientated trade union nuclei to displace the pro-imperialist trade union cabals. Most significantly he has nationalised the public enterprises. Now that sounds a bit anomalous, but these are public enterprises in which 60% of the revenue was spent on salaries. The salaries of the senior executives were between $400-500,000 a year. Most of the profits from the oil earnings were invested in CITCO in the US, a $1 billion chain of gas stations bought by the Venezuelan state enterprise. Instead of investing back into Venezuela, instead of utilising the Venezuela financial networks of the public central bank to devise the priorities for social investments, economic investments, it was going outside, it was going through US, Wall Street and financial circles. So you have the bleeding of the principle dynamic sources of investment under the name of public investment.

Now Chavez has cleaned out most of these directors and some of the so-called technical people who would sabotage the whole operation. There was a kind of ruin or rule policy. They’ve been cut off and oil is now in the hands of – at least I can say – the nationalist Ali Rodriguez, who was a guerrilla in the 1960s and a moderate nationalist today. He’s a reasonably honest fellow, who, I think has given priority to revitalising oil as a source of domestic development and eliminating at least those extraordinary salaries and other investments. This is key. If you control the oil revenue, you can finance agrarian reform, you can finance public enterprises, you can finance public development of research, social development etc. So it is an extremely important move, the first step to creating what we might call a welfare state, a social economy, a nationalist social-democratic state. And I think the dynamics there are coming from below. Chavez has been trying to conciliate classes, but under the pressures of the struggle, the blows from imperialism and the pressure from below, he’s moving in a radical direction and that’s a very important development.

In Argentina, since the 2001 uprising you had an enormous radicalisation in the middle class. And I think we should use that term in quotation marks. What we know as the ‘middle-class’, making ten to twelve thousand dollars a year in Argentina, which in Buenos Aires was something like 35% or even more of the population, has been proletarianised. Many have lost their jobs, their incomes have been cut by two-thirds and they are no longer objectively middle-class. You have a downwardly mobile middle-class approaching the living standards of the proletariat and incorporating some of the mentality of class politics, engaging in marches, uprisings, supporting the unemployed workers’ movements etc. That’s a huge change. There has been an incredible collapse in living standards and growth of poverty reaching 60% of the population. This is in a country which in 1998 had a per capita income of $9,000 a year, now falling to $2,500-$2,700 per capita, which doesn’t take into account the great disparities. You have the organised unemployed, you have the growth of these neighbourhood popular assemblies, incorporation of the lower middle-class, the collapse of capitalism, the banking swindles and loss of savings.

Objectively, it should be a pre-revolutionary situation. However, what has happened? The fundamental subjective factor is lacking, and I’m not talking about the subjectivity of individuals or groups, I’m talking about the subjectivity problem of the existing left groupings. And one might add of the piqueteros, who have developed what I would call a very sectarian conception of the revolution. Each one with their small groups, fighting the other groups to see who can win over one or another neighbourhood, to put up their flag. So there’s been an appalling lack of unity in the face of this tremendous historical opportunity and I’m not picking and choosing. I think that there is a good deal of blame to pass around to all these groups. There’s been one ideological influence that’s affected some small groups of intellectuals who have disseminated it in popular neighbourhoods and actually influenced a few leaders. It is the concept that the new revolution will happen without taking state power. John Holloway [a British academic based in Mexico], for example, says that you don’t have to struggle for state power, you just create parallel organisations at the local level and they somehow multiply themselves and eventually they’ll transform the system through some form of permeation. This is a kind of warmed over Fabianism with a certain kind of populist veneer. It is an ideology which simply codifies the limitations of some of the locally-based movements instead of helping them to develop a real class consciousness and conception. None of the local problems can ever be solved – even the most elementary problems of food and jobs – simply by devising barter relations at the local level. In other words Holloway is raising to a political principle the survival strategies that people themselves have been forced to pursue.

So all of this together has led to a situation which is extremely difficult to deal with right now. The problem is that there are elections coming up. My position has been very negative toward electoral politics in general and in particular because of all the experiences we’ve had, past and present, with the evolution, adaptation of left electoral parties to the bourgeois state, bourgeois politics. However, the question I raise – I don’t have an answer – is how much of an abstentionist vote can you get? Can you get 50% abstention? What if you only get 25%? Then what do you do if 75% of the people are going to vote, particularly in the context where the insurrection is not on the table? So you have the possibility – I’m not saying I know the story yet – that the majority of the people in the streets is going to vote. The alternative perspective of an insurrectionary politics is not on the agenda. The bourgeois parties are divided at least six ways, which means a 25% majority, which a united left could secure, is being overlooked. What do you do in that context? Do you say elections? But if you say elections and all the little groups present their candidates to get two or three per cent of the vote, that’s going to be an illustration of weakness. If you call for an abstention and only get 25-30% of the vote what do you get out of that if a fascist like Menem comes to power, a Menem who is as sinister as any death squad leader in Latin America.

So it’s a difficult situation. I would dare to say, that if the left could present a unified candidate with some credibility, it could secure a vote and put into question the whole political order as a transition to a further radicalisation. If they can secure the 40-50% abstentions then by all means, delegitimise the system. So it’s hard to make a judgement from outside. It is clear that bourgeois parties are in deep crisis. It’s clear in the most vulgar Marxist sense that the whole capitalist system in Argentina is collapsing. Nothing is working. When you get 30% of the population that has absolutely nothing to lose but their chains, and 60% living below the poverty line, a middle-class that’s downwardly mobile, a ruling class that’s divided, obviously this is what Marx talked about when he talked about the possibilities of a socialist revolution.


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