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c h a p t e r t h r e e The Left Destroyer or Savior of the Market Model? k u r t w e y l a n d Discontent with the market reforms of the 1980s and 1990s was crucial for sweeping left-wing governments into power during the past decade in a striking number of Latin American countries. Neoliberalism clearly failed to fulfill its promise of reigniting sustained growth and producing steady increases in employment. As high— and exaggerated—hopes for a turnaround in the region’s economic fate were dashed, disaffection and malaise spread. While a majority of Latin Americans continue to regard the market as the best development scheme in principle, dissatisfaction with its actual performance reached up to 84 of the population in the early 2000s (Latinobar ómetro 2005, 63). This disappointment has weakened the political forces that implemented and administered neoliberal reforms during the 1990s and has boosted the electoral fortunes of left-wing challengers (Lora and Olivera 2005). Therefore, from 1998 onward, critics who attacked neoliberalism with more or less stridency have managed to capture government power in countries ranging from Argentina in the south to Guatemala in the north. What do leftist election victories mean for the political sustainability of the new market model, the economic project of the Right? Will left-leaning governments reverse the changes of the 1980s and 1990s and institute a viable alternative to neoliberalism —either a substantially improved version of the economic nationalism and state interventionism prevailing before the 1980s debt crisis or a coherent new model of “21st century socialism”? Or do the constraints of global capitalism preclude such drastic change, so that moderate efforts to reform and improve the market model, yet maintain its basic outlines, nowadays constitute a more realistic strategy for the Left? Can such limited modifications produce enough change to remedy the most important deficiencies of neoliberalism? If the moderate Left can significantly enhance the market’s socioeconomic performance, it may end up bolstering its future political sustainability. Accordingly, as in Europe during the 20th century (and despite obvious 72 Thematic Issues differences), the Latin American Left in the 21st century may save rather than destroy the market system. My chapter addresses these important issues by comparing the socioeconomic development projects and policies of different “new left” governments. The assessment focuses on Venezuela, Bolivia, Brazil, and Chile. These cases capture the range of leftist experiments and experiences, which span from a more radical pole,¹ anchored by Bolivarian leader Hugo Chávez, to a more moderate pole exemplified by Chile’s center-left Concertación and Luiz Inácio Lula da Silva in Brazil. Bolivia’s Evo Morales seeks to be closer to Chávez, but a less-developed economic base and stronger, regionally concentrated opposition have hindered his transformatory project. By examining these two main types of projects, I compare the accomplishments, limitations , and future prospects of radicalism versus moderation and probe their repercussions for the political fate of the new market model.² This study holds considerable substantive and theoretical relevance. Neoliberal reform is often seen as a watershed in Latin America’s socioeconomic and political development. This “critical juncture” (Roberts, forthcoming) dismantled the protectionist , inward-looking strategy of industrialization that the region had followed for decades. Trade liberalization, privatization, and state shrinking affected the social structure, slimming down the working class and the middle class and further increasing the informal sector, where precarious employment prevails. These social changes helped reshape politics, undermining established parties and interest groups, especially unions, and allowing plebiscitarian, neopopulist leaders to rise (Roberts 1995; Weyland 1996). If Latin America’s new Left successfully reverses neoliberalism and pushes the pendulum back to state interventionism and protectionism, the critical-juncture argument needs revision. In that case, market reform would remain an episodic interlude and temporary deviation from the region’s state-centered development path (cf. Véliz 1980). From this perspective, Bolivia’s “Movement toward Socialism” (MAS), for example, is reviving the redistributive nationalism of the 1952 revolution, which the once-powerful Nationalist Revolutionary Movement (MNR) had promoted for decades but abandoned with its turn to market reform in 1985. By contrast, if the more radical Left does not manage to chart a promising, sustainable alternative, market reform may indeed mark a profound inflection in Latin America’s trajectory. The precise impact of this critical juncture then depends on the performance of the moderate Left...


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