The New Politics of Protest: Indigenous Mobilization in Latin America's Neoliberal Era

CHAPTER THREE. Collective Action in the Neoliberal Era

This chapter is tasked with examining the changing basis of collective action in Latin America’s neoliberal period. The imposition of neoliberalinspired policies of stabilization and adjustment has had dramatic social, political, and economic consequences in Latin America. While scholars have debated the merits and limits of the neoliberal model for stimulating economic growth in the region (Berry 1997; Huber and Solt 2004; Portes and Hoffman 2003; Sheahan 1997; Stallings and Peres 2000; Walton 2004), more research is needed on its social and political effects. To this end, the chapter addresses three central questions on the topic. First, how are the socioeconomic costs of market reforms distributed across social groups? Second, what has been the impact of economic restructuring on the capacity of the popular sectors to organize and mobilize? Finally, what are the options available to popular-sector actors in the struggle for social justice? The chapter suggests that market reforms have undermined the structural foundations of collective action in the region. In general, workers and peasants have been the main bearers of the costs of economic restructuring . A more flexible and informal workforce has diminished the strength of unions and reduced their role in popular-sector struggles (Baño 1993; Kurtz 2004a; Murillo 2001; Roberts 1996). As a result, organized labor and the peasantry have lost their significance as central political actors in Latin America and become “just another interest group” (Oxhorn 1998, 216). The decline of traditional, class-based collective action has left a void that in some cases is being filled by new social and political actors. The cumulative CHAPTER THREE Collective Action in the Neoliberal Era 34 effect of market reforms has thus been to demobilize certain types of collective actors while activating others. The chapter begins with a look at the neoliberal economic model itself, including its promises and failures. The social impacts of neoliberal policies are then examined. Particular attention is paid to the differentiated effects of free-market reforms on the welfare of the region’s indigenous and popular sectors. The political effects of market reforms are then examined, including the changing basis of collective action and the crisis of representation that has resulted from the erosion of linkages between the state, political parties, and society in the 1990s. The chapter concludes with an in-depth examination of the various courses of action or pathways to change that are available to popular-sector actors in the era of free markets and democracy. The Economics of Adjustment The dominant response to the debt crisis of the 1980s in Latin America has been a profound shift in development thinking, away from state-led, inward-oriented models of growth towards an emphasis on the market, the private sector, and trade. The prevailing policy approach is known as neoliberalism . The neoliberal counterrevolution, as it is often referred to in the literature, challenges the central tenets of the state-led model of development . Specifically, neoliberalism challenges the overextension of the public sector, in favor of privatization; the overemphasis on investment in physical capital, such as infrastructure, in favor of trade and exports; and the use of protectionism, in favor of free-market principles (Willis 2005). Economic reform generally consists of two distinct programs. Stabilization programs are immediate, short-term measures to reduce budget imbalances and inflation levels, typically through currency devaluation, the removal of price controls, and the reduction of consumer subsidies. Structural adjustment consists of longer-term policies that retract the state from its role in the economy and typically focus on privatization, trade liberalization, and the opening up of the economy to foreign investment (Green 2003; Lora and Panizza 2003; Nelson 1990). The primary economic objective of market reform is to halt inflation and restore growth. While neoliberal policies are generally hailed as a success in reducing inflationary pressures, analysts strongly disagree over the extent to which they have reactivated the region’s economies. Most economists agree that structural reforms have increased average income levels in Latin America over time (Lora and Panizza 2003; Walton 2004). However, critics counter that market reforms have resulted in minimal economic gains at best, and exaggerated social inequalities at worst (Berry 2003; Huber and Solt 2004; Collective Action in the Neoliberal Era 35 36 chapter three Portes and Hoffman 2003; Wade 2004). Table 3.1 displays selected social and economic indicators for the study’s four country cases as well as for...