Ideas presented by the author in the forum “The situation of the Left in Latin America” organized by the Friedrich Ebert Foundation in Panama City on Aug. 25, translated into English by Michael Otto of Workers World.

I. The crisis of capitalism has turned into a crisis of human civilization.

Today, what happens in any single country in the world — and even less so in an entire continent like Latin America, nor the power relations between social classes and political parties — cannot be explained without first making clear the general context that frames the dynamics of all phenomena: the great crisis of the global capitalist system.  It is so extensive and covers such diverse factors that it has been defined as a civilizational crisis or a crisis of human civilization.

We are facing a deep economic crisis of overproduction (as Marx defined it); a huge social crisis of an increasingly unequal system; a humanitarian crisis whose antecedents can only be found in the 1930s and 1940s; an ecological crisis with catastrophic consequences; and a political crisis of increasing polarization.   One could add a cultural and even a philosophical crisis.

The enormity of the crisis gives the capitalist system a more aggressive, violent and anti-democratic character, as shown by the wars in Afghanistan, Iraq, Syria, Libya, Palestine, etc. But the crisis is also a sign of the weakness of the capitalist system, which — despite all its virulence — is unable to stabilize any situation. Nor can it deliver continuous defeats to maintain its domination without aftershocks. On the contrary, every action it takes generates an adverse response with greater impact.

It is the implementation of the Hegelian law of the “cunning of reason,” which Nahuel Moreno called the “mad firefighter” — i.e., when at a historic moment the objective situation is ripe to advance in one direction, everything you do to avoid it will either fail or backfire.

We are witnessing the fulfilment of the prophecy that Rosa Luxemburg raised 100 years ago: “Socialism or barbarism.” If we are unable to achieve the first one, humanity will regress to the second. Capitalism has failed. We must build a socialist alternative or human civilization may perish.

The economic crisis of capitalism, a symptom of its insurmountable contradictions:

The economic crisis persists, despite the fact that neoliberal globalization, which has guided the world for the past 30 years, achieved important victories for the capitalist system, including the capitalist restoration in China and the disappearance of the USSR; the commercial and financial openness for capital which moves freely; the extensive deregulation of labor and the imposition of higher rates of exploitation, low wages, precarious work and unemployment on the wage workers of the planet; massive privatization of state enterprises and services; and massive cuts in social spending; etc.

Those huge blows to the victories won by the workers and peoples of the world produced only relative improvements and momentary capitalist growth and in the long run, have led to “Capitalism at a Dead End” (see book of that name by Fred Goldstein), with low growth, low consumption, almost no job creation and massive loss of worker’s purchasing power. It’s what Karl Marx called the “crisis of overproduction” — that is, people cannot consume what is produced, not because they don’t produce what they need, but because they have insufficient income.

Economist Michael Roberts defines (the current stage of capitalism) as capitalism of “weak economic growth, high unemployment … falling income … low growth of productivity and very weak business investment.” [1]

A profound social crisis that also hit the Northern metropolitan [imperialist] countries:

The economic crisis is expressed in disastrous social consequences for a growing part of humanity that is mired in poverty, chronic unemployment, precarious labor and low wages, no social security, living in suburbs where insecurity prevails and the quality of public services is abysmal, or at best deficient.

Only counting the countries of the OECD (Organisation for Economic Co-operation and Development), i.e., “developed countries,” more than 39 million people are unemployed and tens of millions more have precarious jobs with nonpermanent contracts, low wages, “mini-jobs,” etc. Unemployment particularly affects young people, where rates can reach 50 percent in Spain, for example. In the United States there are 50 million people living in poverty and tens of millions more who receive wages barely enough to survive miserably.

According to ECLAC (Economic Commission for Latin American Countries), “in Latin America the number of poor people increased by 7 million in 2015.” In total, 175 million people live in extreme poverty; 29 percent of Latin Americans live under precarious conditions. [2]

A humanitarian catastrophe is hitting the world:

At this moment, millions of refugees wander in search of a safe haven for themselves and their families. They are made up of those fleeing wars in the Middle East or Africa, where the great powers and their battle to control natural resources have reduced the refugees’ countries to ashes.  By the millions they are fleeing countries in Asia, Africa and Latin America where there are no jobs and no future.

Each month, tens of thousands of Africans risk death by drowning while crossing the Mediterranean Sea to find a less miserable life in Europe; or journey through the Amazon and Darién (Panama) forests, joining the pilgrimage of tens of thousands of Latin Americans to the United States in search of an impossible “dream.” In 2015 alone, a million people came on foot to the borders of Europe seeking asylum. That’s something not seen since World War I and World War II.

The world capitalist system is leading to ecological chaos:

Another element of the global crisis of capitalism is the ecological catastrophe, not only restricted to areas stricken by mining and industrial exploitation, but on a global scale, warming caused by the consumption of fossil fuels. Despite its increasingly obvious climatological effects, governments are not even meeting the minimum carbon dioxide reduction targets established at the Paris Conference of 2015. [3]

The crisis of the system is also manifested as growing political polarization:

The crisis is also expressed in very acute symptoms ranging from increased political instability, with critical flashpoints in the Middle East and Africa, where civil wars and military interventions have become daily occurrences with no end in sight, to the subsequent humanitarian disaster of millions of refugees migrating to northern countries for shelter, food and work.

There is a movement toward the extremes of the political spectrum of the electorate, which puts in crisis the traditional parties — both of the center right and of social democracy — which have been guarantors of stability for decades.

In the 2016 election campaign in the United States, this crisis has been expressed in the candidacies of Donald Trump (the far right) and Bernie Sanders (for the left), which have shaken the traditional structures of the Republican and Democratic parties. In Europe, polarization has led to new anti-systemic movements, such as Syriza in Greece and Podemos in Spain, and to extreme neofascist and xenophobic right wing.

Another manifestation of this process is the discrediting of the institutions of the European Union for much of the public, which constitutes a real threat of possible dissolution. The triumph of “Brexit” — the exit of Britain from the European Union — is the most obvious face of that reality.

II. The crisis in Latin America and the ‘progressive’ governments is part of the crisis of the world capitalist system:

What is the nature of the political crisis that we are experiencing in Latin America? Why is there talk about the “end of the progressive cycle”? Why are right-wing governments returning? Have all attempts at social change on this continent failed, just as earlier the Soviet Union collapsed? Does the crisis of progressive governments prove that the only possible system is neoliberal capitalism?

These and other questions trouble the Latin American vanguard and deserve the most serious answers possible. Such answers cannot be based on denying that the crisis exists — in order to continue giving unconditional support and claiming that all criticism is “treason” and that only adulation of the leaders is acceptable.

We should not proceed as if we have learned nothing from the bureaucratic degeneration of the Soviet Union during the rule of Josef Stalin, his personality cult and anti-democratic crushing of critical thinking.

The Latin American economic crisis reveals the continuity of economies dependent on the mono-exporting of raw materials:

In the Latin American example, the global economic crisis is expressed as a pronounced drop in the export prices of raw materials. (This is partly) explained by the slowdown in China’s economy, Latin America’s main customer, which has reduced the demand for industrial minerals, and also because Latin America suffers from the “foreign currency war” enforced by the U.S. in an attempt to shift its own crisis onto the so-called BRICS. [Brazil, Russia, India, China and South Africa.]

According to Augusto de la Torre, chief World Bank economist for Latin America: “Things are bad, in the fifth year of economic slowdown … and next year may also be one of recession.” [4] The cause of the Latin American recession is the fall in prices of raw materials. The most dramatic decline is the price of oil, which five years ago was trading above $100 a barrel and which this year stands at $41.

De la Torre said that prices of mineral exports and Latin American agricultural products will drop by 5.1 percent in 2016. This, from the perspective of the World Bank, obliges Latin American governments to reduce consumption by cutting purchasing power by forcing a fall in real wages combined with austerity.

It is evident that, after half a century of “developmental” political-economic orientations and a decade of progressive or populist governments, the essence of the economic structure of our Latin American countries and their role in the world capitalist system have not changed. We continue being, as we have been for 100 years, dependent capitalist countries with economies based on the export of one or two agricultural or mineral products.

The World Bank official outlines the systematic capitalist response to the crisis: decrease of worker purchasing power — in other words, greater exploitation, impoverishment and social inequality. For this they need governments willing to apply more neoliberalism, that is, right-wing governments.

The political crisis is a struggle for control of the national income:

The political effect of this situation on our continent leads to the crisis or “end of the cycle” of the “populist and progressive” governments, which funded important social programs with the “boom” of the prices of raw material exports. The political crisis manifests itself as an intense dispute between the parties and social classes for control of the state apparatus.

The system cuts off the possibility of governments seeking social equilibrium mediated by transfer programs (subsidies). The “medicine” is more austerity ordained by the command centers of capitalism. That is why it is impelled through all means, right wing governments capable of imposing it on the peoples.

Although there may be “progressive” governments willing to apply the [austerity] adjustments, even if only partially, as happened with the Brazilian Workers Party (PT) which  led to the erosion of the PT’s social base of support and facilitated the parliamentary coup against Dilma Rousseff, it is more efficient, however, for the system to operate with nakedly right-wing governments. In general terms, social democratic, progressives or populists governments always have the pressure of its internal and electoral bases that hinder the consistent application of neoliberal measures.

Right-wing governments are more useful to the capitalist system in dealing with such crises. Consequently, the overthrow is driven from the centers of world economic power, toward right-wing or neoliberal governments, either through elections or through more or less concealed coups. Also within countries, the national bourgeoisies are less willing to share the profits from exports and national income with the working classes, so they fight for control of the state apparatus in order to use it for their benefit in the crisis.

This is the political phenomenon that is occurring in Latin America. Its origin is the very same systemic crisis of capitalism.

The electoral defeat of Peronism in Argentina, the growing instability in Venezuela and the intention of the opposition there to force the recall referendum, and the parliamentary coup against President Dilma Rousseff in Brazil are the clearest expressions of the political crisis and the class struggle for control of national income.

Do not forget that these events have been preceded by coups against legitimately elected presidents, such as Aristide in Haiti, Zelaya in Honduras and Lugo in Paraguay.

Other direct targets of the right-wing offensive are the international institutions such as ALBA [the Bolivarian Alliance for the Peoples of Our America], CELAC [the Community of Latin American and Caribbean States], Mercosur [the Southern Common Market] (and UNASUR [the Union of South American Nations]) founded or refounded under the leadership of Hugo Chávez, which sought to give a little more sovereignty and unity to Latin American nations confronting U.S. imperialism’s control.

If during the 10 years of good export prices, the Latin American bourgeoisie took their slice and at the same time it was financed through the government social programs of ”transfers,” now these programs have to be cut and someone has to lose. The bourgeoisie is not willing to give up its piece.

Therefore, we see the imposition of right-wing governments is accompanied by strong neoliberal measures, cuts in social spending and economic rights, as proved by the management of Mauricio Macri in Argentina and Michel Temer in Brazil.

What has been the character of progressive or populist governments?

Latin American progressive or populist governments have arisen from genuine popular revolutions that erupted back in the 1990s, after more than a decade of the application of tough plans of “structural adjustment” by oligarchic, neoliberal governments obedient to the dictates of the IMF and the World Bank. The superexploitation that subjugated the workers and brought misery and unemployment to millions of people, also gave rise to popular uprisings in some countries.

The leadership of Hugo Chávez was born out of the dramatic events of the “Caracazo” [popular rebellion in Caracas] of 1989. Evo Morales’ leadership emerged from the struggle of the coca growers in defending their farms, and the “water war” against privatization. Rafael Correa’s emerged from similar social movements and political crises. The Kirchner government in Argentina is not understood without the explosion of 2000-2001 produced by “el corralito.” [popular rebellion after the Fernando de la Rua government restricted cash in Argentina]

The 15 years of governments led by the Workers Party in Brazil are the product of a more moderate but steady rise of workers’ struggles, similar to the return to power in Nicaragua of the FSLN [the Sandinista National Liberation Front] and the victory of the FMLN [the Farabundo Martí National Liberation Front] in El Salvador.

The character of these popular processes was essentially popular, anti-neoliberal and democratic. These processes have been channeled through elections, in a manner that has not transcended, thus far, the borders of bourgeois democracy and capitalist property. Contrary to the revolutions that occurred in the 20th century, from the Russian to the Cuban, which rapidly expropriated their capitalist classes, Latin American populist processes of the early 21st century have remained within the boundaries of the system.

The late President Hugo Chávez, who occupied the forefront of this continental process, had the merit of reviving the aspiration of the masses for a society without exploiters – socialism – at a defining moment in human history when the “Fall of the [Berlin] Wall,” and the disappearance of the USSR and the “market socialism” of China had been transformed into a political victory of neoliberal capitalism.

In a decade at the beginning of the 21st century, when the anti-capitalist forces who gathered at the World Social Forum in Porto Alegre hardly dared to suggest that “another world is possible” beyond capitalist globalization, Hugo Chávez stood on his podium and clearly said that that possible world was the ”Socialism of the 21st Century.” Millions of people felt grounded in this slogan, which inspired their struggle. That’s one of the great contributions of Chávez to the class struggle at the turn of this century.

However, “Socialism of the 21st Century” was a formulation that all understood as they wished: Some saw a continuity with Soviet socialism of the early 20th century, others saw a Latin American version of social democracy, others a critique of Stalinism. In any case, the fact is that (despite providing) a catchy political slogan, the Venezuelan political process, until today, has not exceeded the limits of capitalism, bourgeois democracy and capitalist private property.

The country where the nationalization of enterprises advanced most was Venezuela. However, at no time did the weight of the nationalized economy ever surpass the private sector. And the nationalized companies have suffered mismanagement, internal labor conflicts and even, in some cases, corruption among managers. Banking and foreign trade have remained under the control of the big importing capitalists.

In Venezuela, the state has controlled the currency, but the bourgeoisie has had the ability to use exchange controls and the underground dollar market to make off with a big part of the oil profits and reserves of the nation, siphoning off capital estimated at $300 billion to countries like Panama, draining part of the national wealth, even using it to sabotage the economy, hoard and promote political destabilization. [5]

Without the nationalization of the banks and the national financial system, without state control of foreign trade and without the nationalization of big industry — in other words, without basic, outright socialist measures, Latin American governments in general are within reach of the bourgeoisie, of imperialism and economic sabotage, as has repeatedly been shown in Venezuela.

This contradiction explains Venezuela’s limitations and the difficulty in responding to the offensive of the domestic right wingers, who are supported by U.S. imperialism and encouraged by the large corporate media.

Added to that are the reformist attitudes of many leaders of these progressive governments that are affected by a kind of “parliamentary feebleness” (Marx), who meekly submit to the formalities of bourgeois institutions, wanting to prove that they are good managers of capitalism. Above all, they fear to convene the masses to the streets. The performance of the leaders of the Brazilian Worker’s Party under the coup against Dilma is clear in this sense. Dilma’s government would have been defended better with a general strike than with charges against a corrupt Senate.

Social programs and some nationalizations don’t add up to socialism:

Some people have wrongly confused the social programs characteristic of this “progressive or populist decade” with socialism. Social programs, the “missions” or subsidies, are not measures of a socialist type, but are redistributive measures of a neo-Keynesian style, which have been financed by the positive numbers of the exports of raw materials, principally oil.

It’s not the expropriation of the bourgeoisie that has funded these social programs. On the contrary, they have even been recommended by institutions of international credit (IMF, World Bank) to mitigate social unrest caused by the inequality that neoliberalism imposed. The capitalist financial institutions call them transfers and they have been executed even by right-wing governments, such as Ricardo Martinelli’s in Panama.

Nationalizations in and of themselves are not genuine socialism, although they are largely progressive. If nationalizations become a purely bureaucratic function of the state in the framework of a market economy, especially if, in the end, they lead to a corrupt and inefficient administration by imposed managers, then what they have been transformed into is “state capitalism.”

For the “state-ization” or nationalization of industry to acquire a socialist character, it must come from the authentic and independent mobilization of workers, workers’ control of factories and democratic mechanisms of people’s assemblies (soviets). Socialism is not an administrative measure, but a social relation, to paraphrase Marx.

III. Latin America needs a new revolutionary wave

Confronting the offensive of imperialist capitalism, which is closely bound up with the right wing and the national bourgeoisies, will require a turn in the class struggle that gets the working masses back on the offensive. Only revolutionary popular mobilization (without welfare-state electoral politics or class collaboration with the bourgeoisie) can make the difference in the correlation of forces.

In fact, in many sectors of Latin America struggles have not stopped and continue, but they have not escalated to the level of the 1990s. To exceed the limits that the democratic and anti-neoliberal revolutions of the 1990s reached, new revolutions are required, the revolutions of the 21st century, which are already emerging in the current popular struggles, especially among anti-system youth who are fighting everywhere.

The independent and revolutionary mobilization of the working masses and the people, their intensity and conscious maturation is an objective process, whose course and rhythms are difficult to predict and direct. Like wine, the working classes require time for maturation, to exhaust choices through experiences, to draw conclusions, to build new political leaderships, to decide courses of action.

Successfully confronting the reactionary offensive will require new leaders who will have to avoid two political defects in vogue today:  On the one hand, the opportunism of those who seek no more than to administer the capitalist system, without extending beyond the limits so far achieved; and sectarianism, which denies the concrete experiences of the people, because that doesn’t coincide with an imagined ideal, [which leads to] an inability to speak to the masses who have already mobilized under the political leadership of Chávez, Evo, Correa, Kirchner or Lula.

It will demand new political leaders who are willing to take risks and bear the costs in confronting imperialist reaction, to defeat the reactionary offensive, combining the struggle for democratic and human rights, and anti-neoliberalism, with true socialist measures, such as genuine workers’ power by means of assemblies, nationalization of the banks, industry and foreign trade.

[1] Roberts, Michael. “The problems of the economies of the G 7.” Electronic journal Sin Permiso, 26.05.2016. www.sinpermiso.info

[2] ECLAC. “Latin America increased its poor by 7 million in 2015.” March 22, 2016 www.diariouno.com.ar

[3] United Nations. “Framework Convention on Climate Change.” Paris. 12 December 2015. unfccc.int/resource/docs/2015/cop21/spa/109s.pdf

[4] AFP. “The recession could be extended next year. WB calls for savings to Latin America.” La Prensa. Panama, July 28, 2016.

[5] Sutherland, Manuel. “2016: The worst of the economic and ruin chronicle of announced crisis, causes, measures.” Center for Research and Education Workers (CIFO). Caracas, February 16, 2016.