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  Number 121 | Agosto 1991
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Latin America

Latin America in the "New World Order"*

Xabier Gorostiaga

A series of international meetings and seminars held in Latin America and elsewhere in 1990-1991 indicate a common evaluation of the nature of Latin America's crisis, its dominant tendencies and counter-tendencies, and a constellation of surprisingly coinciding alternatives. All this takes place at a historical moment dominated by the crisis of model and theory as well as of an alternative vision of society and history itself.

The depth and speed of the changes throughout the world make the 1990s very strategic. The structural and all-encompassing nature of these changes has the character of a "fourth long wave" in the cycles described by the Soviet economist Kondratief. It is thus in this decade that the correlation of international forces that will dominate the first part of the 21st century will be defined.

We are also experiencing a crucible of Copernican changes, greater than those seen in the 1914-1917 period. The 20th century started late, in 1914, with the great confrontation between capitalism and socialism, and ended early in 1989, with the toppling of the Berlin Wall and the end of the Cold War. The 21st century has begun with a confrontation between North and South, between capital and labor. While this is a longstanding confrontation, it is entering a new phase with qualitatively different parameters.

The coming year, 1992, is symbolic. The "discovery" of Latin America cannot be celebrated, since the continent had its own identity and civilization when the Spaniards arrived. What were discovered in 1492 were universal history and the world as one totality. In the 1990s, humanity itself is being discovered as one world, an inseparable unity, a communal home linked to a common destiny. That destiny is the product of a technological revolution, a revolution in information, social communication and transportation, and of a growing consciousness of the threat of collective suicide for having overstepped the bounds of the planet.

In addition to symbolism, 1992 represents a tremendous challenge for Latin America's self-discovery and self-construction, for overcoming these last 500 hidden years. This challenge, however, comes in these "times of cholera," which reflect the depth of the economic and political crises facing Latin America. We are also witness to the massive exodus of the Kurdish people, the ecological disaster in Bangladesh, the civil war in Yugoslavia and the threat of disintegration of the Soviet Union. Persistent and growing starvation in Africa surpasses all these other human tragedies in drama, all at a moment in which both "the end of history" and the "New World Order" are being irresponsibly proclaimed.

In this essay, we hope to underscore the contradictory, dialectic and global character of the changes taking place. Latin American intellectuals are debating between hope and desperation, anguish and rage, while the people are using their ingenuity to survive increasing impoverishment.

The first part of the essay analyzes the structural causes of this new crossroads in the broadest framework of the restructuring of capital and the new world order proclaimed in the wake of the Gulf War. The second part assesses the impact of these changes on Latin America and the Caribbean and Bush's Initiative for the Americas in the context of the trilateral mega-markets and the US recession. Finally, we indicate some characteristics of the dialectic between increasing democracy and economic submission, both of which are contributing to the crisis of ungovernability and political weariness that affects both the Left and Right throughout Latin America.

The crisis of civilization demands a restatement of the problems from within as well as from the base and a search for new alternatives to respond to the neoliberal avalanche. The most recent Papal Encyclical reflects how far this avalanche of North against South and capital against labor has surpassed limits until very recently considered lesser evils.

Far-reaching structural changes

We agree with historian Paul Kennedy that never before in history has there been such a concentration and centralization of capital in so few nations and in the hands of so few people. The countries that form the Group of Seven, with their 800 million inhabitants, control more technological, economic, informatics and military power than the rest of the approximately 4 billion people who live in Asia, Africa, Eastern Europe and Latin America. This concentration of capital corresponds to the character of the new technological revolution in which the cycle of capital accumulation depends less and less on intensive use of natural resources and labor, or even of productive capital, and more on an accumulation of technology based on the intensive use of knowledge. The concentration and centralization of technological knowledge is more intense and monopolistic than other forms of capital, and only increases the gap between North and South.

The repercussions of this have led to the growing "de-materialization" of production, in which less and less raw material is required per product produced. Over the last 20 years, the Japanese production process has reduced the amount of raw materials used per product by 33%. Even more significant is the accelerated rhythm of this reduction in the use of raw materials per industrial product. In the 1965-76 period, raw material use shrank 0.6% annually; since 1980, the annual reduction has been 3%, nearly a six-fold drop.

In essence, this de-materialization is expressed in the tendency of real prices to fall for the 33 principal raw materials, the majority of which are the South's export products. This deterioration is even more pronounced in recent years.

Additionally, the automating and robotizing of production means that labor loses value relative to capital in both the North and South. Both processes lead to a permanent structural deterioration of value relative to what are supposedly the South's comparative advantages in production and world trade.

These phenomena coincide with the transnationalizing of production, financing and marketing systems, which for the first time permits a truly global market.

The new areas of expansion of global accumulation for the end of the century—such as space, sea and energy—are completely subordinated to the control of economic, technological and military power, which will provoke even greater concentration and centralization, and thus, a greater gap and asymmetry between North and South.

The revolution in telecommunications, transportation and informatics has produced management innovations that have further facilitated mergers of capital and technology, whereby private business in Latin America and the South in general is increasingly incorporated in a dependent way into the logic of centralized capital. National business, both private and state-run, is increasingly marginalized and in an asymmetric position vis-à-vis transnational industry and thus more and more isolated from the logic of the domestic market and the survival of the large impoverished majority.

The underdeveloped countries, with 75% of the world's population, have access to scarcely 19% of the world's gross domestic product, a reduction from the 23% figure of a decade ago, and their participation in foreign stock investment dropped from 25.2% to 16.9%. This is even more serious if we consider that in the same decade the net financial transfers from the South to the North were the equivalent of 10 Marshall Plans. In the case of Latin America, according to the most recent Latin American Economic System (SELA) report, foreign debt-service payments alone were 80% more than the total amount of foreign investment. If we include Latin American capital in the North (on the order of $160 billion) and the deterioration in the terms of trade (some $100 billion), Latin America's financial and productive debacle in the 1980s could be compared to the worst years of colonial pillage.

We have described this structural phenomenon as an avalanche of North against South, of capital against labor. Never before in history, not even in colonial times, has such an extreme bipolarization of the world existed. This bipolarization, from the South's perspective, is the fundamental element of the structural changes defining the end of this century. The so-called "Africanization" of Latin America is an objective reality. In the 1980s, Latin America decreased its participation in the international market from 7% to 4%, and direct foreign investment stock dropped from 12.3% in 1980 to 5.8% in 1989, making Latin America the region of greatest backward movement in the world, even greater than in Africa, which went from 2.4% to 1.9%.

Thus, it should not be surprising that the UN Economic Commission on Latin American recognizes that, in the same decade, the number of people living in poverty in Latin America has jumped from 112 to 184 million people.

Worldwide political changes

Four fundamental elements define the political characteristics of the 1990s:

The profound crisis in Eastern Europe. This has had dramatic repercussions throughout the world, touching off a new historic phase with the end of the Cold War. From a Third World perspective, the evaluation of these changes is very complex. One concern from the Latin American experience is whether there really ever was socialism—understood as an alternative social, economic and political system to capitalism—in the Eastern bloc. The Latin American debate tends to assert that a socialist alternative in the Soviet Union may not have outlived the period of the soviets from 1923-24. Later, the USSR became a military alternative to the Nazi regime and, after the defeat of Germany, a military alternative to the threat of nuclear war. The majority of the Eastern European countries never developed a socialism indigenous to their own countries, instead forming a defensive and imposed military alliance. The negative impact of this militaristic and statist socialism was tremendous in Latin America. Dogmatism, top-down organizing styles and statism imported from the Eastern European experience affected all the Communist parties and the majority of the Latin American Left. Nevertheless, the socialist bloc served as a counterbalance of sorts to permit a geopolitical space and a rearguard of support for changes in the South.

The collapse of Eastern Europe means the loss of a paradigm, of that economic and geopolitical counterbalance. At the same time, it potentially opens ideological and practical space for new experiences in a world leaning towards resolving conflicts by negotiation and the use of international law.

"Real" or "state" socialism, which was successful in toppling feudalism and in creating an important industrial base, collapsed definitively in the face of the technological revolution and consumer society. The crisis of democracy is, however, the political root of this collapse.

The "illusion of the West" could cloud quickly in some of the Eastern countries, including Poland and what used to be East Germany, under the specter of a market that does not respect social customs or habits and is unconcerned with social or cultural consequences or questions of national identity. The majority of Eastern Europe is heading towards a rapid Latin Americanization, and could easily be transformed into an area of natural resources and cheap labor for further development in Western Europe and the rest of the North. The USSR may well face even greater challenges given the threat of disintegration of the entire federation and of a military coup or ascent of populist fascism.

In the coming years, Eastern Europe will absorb Europe's political attention and much of its available financial resources, affecting the attention needed by the South both politically and economically. The impact on the South of the changes in Eastern Europe, however, could be very different over time from what they have been to date. The direct relationship between the South and the former Eastern bloc, transformed by its crisis, could become an international source of creativity and complementarity. For this to happen, the complexities and isolation facing both civil societies will have to be overcome.

European unity. Hegemonized by German unification, this new European unity has changed the international correlation of forces. From Yalta to Malta, from February 1945 to December 1989, the world has undergone transformations in less than half a century that in other times would have required many centuries. These changes are ideological, political and economic and, for the first time, tragically, ecological. A united Europe could become the productive, financial and commercial center of the world, together with Japan and the Pacific nations. This would leave the US in an increasingly vulnerable position, and could lead to a new divvying up of world "spheres of influence." It would also open the possibility for the countries of the South to take advantage of new arenas and contradictions in the system.

Emergence of the Pacific basin bloc. As the century comes to a close, Japan and Southeast Asia are emerging as a preeminent industrial, financial and technological power bloc. Japan, however, though an economic giant, is diminutive in political stature. It has not been able to play a foreign policy role corresponding to its economic power. From the perspective of Latin America and the South, Japan's history, culture, race and religion are seen as very different than those of the North. The Japanese are not white, Western or Christian. But the structural forces of the market and the different institutions of the Group of Seven tend to draw Japan into the northern orbit, thus increasing the avalanche of North against South and capital against labor.

The loss of US economic hegemony. This phenomenon coincides with the three described above, but has its own clear economic roots. The US has been unable to overcome its fiscal and commercial deficits and is saddled with a gargantuan military budget. Its tendency to base the last decade's growth on a rapidly increasing debt has transformed the only country whose national currency functioned as an international reserve into the most indebted nation on the face of the earth. Under these conditions, it will be very difficult to avoid a recession without an annual net inflow of more than $100 billion.

The loss in technological competitiveness and productivity means that the US will not be able to maintain its political hegemony unless it is based fundamentally in military and ideological power. This, in turn, requires a military budget of about $300 billion annually and control over some two-thirds of all media images produced in the world. The financial instability of October 1987 and the more recent savings and loan crisis, along with the growing deterioration in the US productive and social infrastructure, indicates that the debt, deficits and military budget are simply no longer sustainable under these conditions. The Gulf war could temporarily alter this and thus the global political balance, but without changing the structural tendencies outlined here.

These three significant groups comprise a "neo-trilateralism," hegemonized by the Group of Seven, with a constellation of world institutions organized under its control (the IMF and World Bank). The United Nations itself, with its financial dependence and the veto power that the key economic powers hold in the Security Council, still maintains a framework that has its origins in the Cold War, in which the majority of the member countries cannot benefit from equitable and democratic participation.

The threat to the South is increased by the alliance of geo-economic interests shared by the countries in the Group of Seven, which are incapable of attending to the cultural, religious and national characteristics of the many different peoples of the South, increasingly submerged in poverty and marginalization. The proposal on the table from the North is integration into "market culture," with a liberalization of trade, finances and privatization that reduces state autonomy. This assumes that market forces will be able to overcome poverty and achieve political and democratic stability in an increasingly unified world.

A crisis of civilization

Five hundred years ago, the world emerged as one geographic and historic unit. The world in 1992 is recognized as one inseparable, although dramatically divided, entity. The trilateral North, which revolves around the Group of Seven, has increased and centralized power in all possible forms. The restructuring of the capitalist system tends to reinforce this polarization and asymmetry given that there is no longer a countervailing weight to the West. The increasing division of the world between a North of few people and many resources and a South with many people and few resources is the axis of the current crisis. It is true that the terms "North" and "South" simplify the world's problems, but they also allow us to underline the dominant contradictions.

Under these conditions, the current model of society in the North—its style of development and lifestyle—cannot be reproduced throughout the world because it has definite ecological and population limits and carries within it many structural contradictions. One such contradiction is between the model's requirement for progressive accumulation—with its growing concentration of capital, technology and power in the North—and the excluded majorities in the South who demand not only survival but also a standard of living conducive to peace and democracy.

It is revealing that precisely when "the end of history" and the triumph of capitalism are being touted, the World Bank published its Report on World Development 1990: Poverty, in which it emphasized poverty as "the most pressing question of the decade." The reality of a billion people throughout the world with less than a $370 annual income is not only shameful but also unsustainable.

The crisis is not only one of distribution and equity; it is a crisis of values and the direction humanity is taking. For this reason we can call it a crisis of civilization. Society worldwide is neither sustainable nor stable under these conditions. Democracy is not possible for the majority of the world's population, and this fact is making many nations of the world increasingly ungovernable. Samuel Huntington, the ideologue of the Trilateral Commission in the 1970s, called the South’s increased demands for democracy a threat. "Guiding" democratic processes in the South has become an imperial necessity if the North wants to maintain its current privileges. What we could call Low Intensity Democracy in Latin America is more a structural than an ephemeral product of the material base’s inability to sustain even these incipient democratization processes.

To lend legitimacy to this situation, an attempt is underway to ideologize the North-South confrontation, presenting the South as the new enemy in the wake of the "evil empire's" demise. The South is portrayed as a den of evil goings-on, a dangerous place for citizens from the North. In this vision, the threats of drugs, immigration and political instability, along with regional conflicts, all come from the South.

The objective structural gap between North and South is widened with this subjective ideologizing, which has deep racist roots. Instead of confronting the causes of the crisis, this ideological view looks at the consequences, and seeks to lay blame there.

Latin America: Harvest of the 1980s

The so-called "lost decade" was complex and dialectical. Latin America's competitive capacity in the 1990s is substantially lower than in the 1980s. Losses in foreign trade and foreign investment, thoroughgoing decapitalization and disinvestment—both productive and social—as well as other well-known indices from this "lost decade" demonstrate profound and structural economic deterioration throughout Latin America. Most of the continent, with the possible exception of Mexico, Chile and, in a certain sense, Brazil, Colombia and Venezuela, is simply not attractive to capital. The appearance of cholera in "the times of adjustment" symbolizes Latin America's growing "Africanization" and economic marginalization. Political marginalization is also evident as a result of the Middle East conflict and the strategic interests involved there, as well as the growing disintegration of the Soviet Union.

The "lost decade," however, is much more complex. Latin American society is qualitatively different than it was at the beginning of the 1980s. The "lost decade" coincides with and is in part a cause of the "explosion of Latin American democracy" in the 1980s. Electoral democratization is nothing more than a reflection of a radical and profound democracy that has touched different areas of civil society. Decades of struggle against oligarchies, dictatorships and militarism have gelled in this revolution of civil society. As representatives of Latin American political parties made clear in an April 1991 meeting in Vienna, "Incipient electoral democracy in many countries is expressed by representative democracy, which tends to transform itself, through the democratic and constitutional pressure of the majorities, into authentic participatory democracy."

This complex dialectic of the economic crisis and the revolution in civil society is the defining characteristic of the 1980s. The democratic participation of the organized and mobilized majorities in their own civic institutions has created new historical subjects that demand participation in the economy, politics, religion and culture.

This dynamic of civil society has obvious exceptions, including Guatemala, Argentina, Panama and Peru. The culture of terror imposed by military repression in the first two cases, the US military occupation of Panama and the economic collapse of Peru explain the disintegration of civil society in these nations. This contradictory dynamic leads to a state of ungovernability, in which the demands that arise as part of the advance of democracy find no material base to sustain them. This is expressed in the rapid loss of prestige of the neoliberal political leadership that has controlled the majority of electoral democracies since the mid-1980s. Menem in Argentina, Collor de Mello in Brazil, Fujimori in Peru, Cristiani in El Salvador and Callejas in Honduras are examples of a broader phenomenon starkly expressed in the ungovernability of Nicaragua and Panama. In neither of those countries has the US-backed neoliberal project brought political stability or economic recovery. In fact, there are deep divisions within both governments. To their apparent surprise, the United States has been unable to financially assist these governments, which could have become showcases for "the marvels of US foreign policy.”

Ungovernability is leading to a society of beggars and criminals who seek individual survival at any cost. This unorganized mass is an important challenge for alternative projects in Latin America. It is a group easily co-opted by escapist religions, drugs and growing migration out of Latin America, as well as by violent ultra-leftism unconnected to alternative and viable proposals. Between hope and disaster: that is how this dialectic of sentiments could be characterized. In another historical moment, Pablo Neruda eloquently declared a similar feeling: They can cut all the flowers, but they will never stop the spring.

Debt, neoliberal adjustment and the Bush initiative

The continuing debt crisis, the structural adjustment processes underway and Bush's new proposal for the Latin American continent allow us to visualize a project to restructure Latin American capitalism and reinsert the continent into the world capitalist market. Latin America will take its place in the "new world order" proclaimed by Bush and Baker in the heat of the Persian Gulf war.

In announcing this "new" order, Bush declared to Congress that "there are no substitutes for American [sic] leadership in the world." Secretary of State Baker said, "We remain. We are the only nation that has the political will and the military and economic tools at our disposal to control the illegality dominating certain areas of the world. The world has become a dangerous place and we need global reach. We are the only remaining superpower."

Debt has substituted the direct investment of the 1970s as a mechanism to extract net financial transfers out of Latin America. It puts the state and even private enterprise into a submissive position with its denationalizing effect. Latin American attempts to renegotiate the debt individually could not achieve equitable terms despite various attempts to declare a moratorium on payments. The International Monetary Fund, the World Bank, USAID and, more recently, the Inter-American Development Bank have imposed overlapping conditions on national governments and enterprises, such that the adjustment policies linked to these conditions have severely weakened Latin America's negotiating capacity. It is in this context that President Bush's Enterprise for the Americas Initiative must be understood.

SELA's cogent April 1991 analysis of the Bush plan states, "The Bush Initiative for the Americas does not propose a strategy for development of the region, but rather constitutes a mechanism to accelerate the economic reforms underway, whose principal elements have been promoted by multilateral financial institutions, with the support of the US government. It responds to the economic needs and concrete strategies of the United States." SELA thus proposes a search for elements allowing mutual benefits within an identification of mutual interests that create an authentic partnership. This requires defining the rules of the game and criteria for an understanding with the United States. We hold that the Bush plan is a product of the need for a macroeconomic readjustment of the US economy in light of its profound recession and lack of international competitiveness. The United States needs the creation of a hemispheric "mega-market" from which to confront both a united Europe and its new zone of economic and political influence in Eastern Europe, and the mega-market of Japan and the Pacific nations.

The extension of a free market from Alaska to Patagonia would permit the US to share the costs of its own adjustment with Canada and Latin America. At the same time, it would increase US negotiating power in the debates on the new global trade agreements now taking place in the Uruguay Round (the current round of GATT talks). Given the possible failure to reach new agreements, the US needs to broaden its competitive capacity to take on trade agreements—both bilateral and multilateral—with Europe and Japan.

Debt, trade and investment—the three pillars of the Bush plan—bring with them strict conditions that President Bush has repeatedly underscored. The SELA document declares, "In all matters relative to the debt, the conditions derived from the linkage to economic reforms constitutes an essential requisite." We think that this criterion will also be applied to trade issues and investment. It is already evident with respect to market mechanisms that have not been used for debt reduction; in official negotiations, financial organizations refuse to accept the real, substantially reduced, market price of the debt as set by the secondary market. By the same logic, conditions for the incorporation of US investment in Latin America will be linked to the acceptance of conditions regarding the debt and the non-reciprocal and asymmetrical use of the market, which will never extend to a free flow of the work force between the US and Latin America, even in the case of Mexico.

We take as our starting point that the Bush plan should be analyzed first from the perspective of the recession and need for a macroeconomic adjustment in the United States. It will permit the United States to face its structural indebtedness and loss of international competitiveness in better conditions, and expand its market towards a zone of privileged influence to increase its strategic security and continental supply of natural resources, particularly petroleum. This will allow the US to maintain its geo-strategic hegemony based on a geo-economic competitiveness that it currently lacks.

The total US debt, shown in Figure 1, reflects the largely fictitious nature of the US economy, which depends on international transfers superior to $100 billion and on a progressive indebtedness of the state, private business and consumers.

In one short decade, the United States went from being the world's largest international creditor to being its greatest debtor, almost doubling its budget for debt servicing and reducing the country's savings by nearly half. That has created an eminently unstable situation. The United States simply cannot continue to consume 25% of the world's energy, 50% of which is imported. It cannot continue to maintain gasoline taxes six times less than those of Japan, Germany, Italy and France. If the US were to increase its gasoline tax to the level of its economic competitors, it could increase its income by $180 billion annually. This squandering of energy explains the decision to get involved militarily in the Persian Gulf.

Despite this energy subsidy, US productivity, measured by per-capita GDP, was fourth among the world's 22 most industrialized nations by 1988. If this trend continues, the US will drop to 13th in world productivity by 2030. The fundamental reason for this decline in US productivity is that the rate of savings in the US is half that of its industrial competitors and a quarter that of Japan. The reduction in US savings, moreover, contradicts a basic tenet of neoliberal policy, which holds that a concentration of income allows for an increase in savings and investment. In the US, the income concentrated in the hands of the wealthiest 10% of the population increased by 4% between 1980 and 1990, making that group's share of the GDP 27%. In the same decade, however, savings fell from 7% to 4%.

US military spending as a percentage of GDP is four times greater than that of other industrialized countries, while its non-military spending, including infrastructure and social spending, is 45% lower.

The US loss of international competitiveness is also notable. Figure 2 shows an almost 50% decline for the key areas of US technology in the same decade that its petroleum dependency tripled. In 1990, the United States held a technological lead in only a few areas, primarily biotechnology and industrial design.

This loss of competitiveness corresponds to a reduction in the investment rate, funds dedicated to research, productivity and infrastructure, and even in the loss of its own internal market, which shows a growing propensity for imports. The US consumer is losing confidence in US products, particularly vis-à-vis Japanese and European design and technology. US consumer confidence in domestic products has dropped 54% since 1980, which has begun to have international repercussions. In 1990, Japan withdrew more than $30 billion from the US market. At the same time, the prolonged US recession has caused a dramatic increase in the number of poor in the US, now some 30 million.

Maintaining such a high military budget and dedicating two-thirds of all funds to high-level military technology increases the competitive gap in terms of civil technology, particularly with Japan and Germany, which do not have such high spending levels for military technology.

This analysis could be expanded with other data illustrating the irrevocable need for a structural adjustment in the US economy. The topic has touched off sharp debates in Congress, and even President Bush had to break his key campaign promise to not raise taxes. The fact is that the US needs an adjustment even stricter than those imposed in Latin America. Furthermore, the distortions in the US economy have multiplier effects on world financial markets, interest rates and stock market fluctuations and speculation. The international institutions established to guarantee world financial stability, however, are unable to deal with one of the most fundamental distortions of the modern economy.

For Latin America, having a neighbor and key market in a structural recession and with imbalances as great as those outlined above means having a permanently destabilizing factor in its own economies. The Bush plan cannot be analyzed independent of the US economy's need for a readjustment and the urgency of increasing US geo-economic competitiveness vis-à-vis the mega-markets of Europe and Japan.

Those Latin Americans who believe that the Bush plan could serve as an element of growth and stability, much like the motor force of growth that the US economy was in the 1960s, when the United States was the world leader in technology, investment and productivity, need to rethink their relation with the US in this new context. The US military monopoly, coupled with the multi-polar economic situation, does not lead to stability. As Professor Paul Kennedy maintains, empires in decline tend to be more militarily aggressive to compensate for their economic weakness.

Three alternatives can be posed to the Bush Plan:

1) Negotiate better terms with the United Statds to overcome the lack of reciprocity and the asymmetry that the SELA analysis so clearly shows. This position assumes as a given that the Bush Initiative is the only way out of Latin America's economic crisis.

2) Strengthen the mechanisms of sub-regional integration in Latin America, integrating the continent through sub-regional common markets (Mercosur, Andean Pact, Central America-Caribbean, with a special relation with Mexico, Colombia and Venezuela). This integration would permit the complementarity necessary to deal with the US and Canadian markets. This second alternative hopes to obtain more positive results for Latin America from the Initiative by diversifying its linkage to the United States through it own integration and by opening new relations with Europe and the Pacific nations.

3) Put forth an alternative vision and proposal for Latin American society. The thrust of this proposal would be to resolve the causes of the economic crisis and respond to the accumulated demands of emerging civil society. It would seek to create the material base for maintaining and deepening participatory democracy. This alternative springs from a vision of society that has been called "the logic of the majority" and aims to overcome the historic exploitation of work, nature and sovereignty. The crisis of civilization dehumanizes both victors and vanquished in the market and thus calls for a reconstitution of equity and symmetry, both necessary to an authentically free market.

This alternative offers a medium to long-term solution that reinforces the Latin American vision of the second proposal. For the 1990s, the most viable route is to advance and deepen Latin American integration and diversification in a context of reciprocity and symmetry. Bold pragmatism, however, requires having a vision of a society that goes beyond strict market mechanisms. The Latin American agenda must not reduce itself to the Bush Plan agenda.

This third alternative implies some strategic priorities:

1) Develop a strategy of survival and appropriate technology based on the accumulated experience of the grassroots Latin American economies in which the majority of the population is barely surviving.

2) Make significant investments in human capital, converting the poor into productive agents so they can overcome their poverty. In classical terms, this would be what Adam Smith called the wealth of the nation.

3) Recognize local production as the economic arena of the great majority of Latin Americans, which should be integrated into the internal market and expanded to sub-regional projects to guarantee food self-sufficiency and competitive exports for the grassroots sectors.

4) Selectively connect with the international market, rather than provide an absolute opening. This is important until conditions of greater symmetry and competitiveness can be achieved.

5) Design special policies for the informal sector, both urban and peasant, that would allow for the creation of an internal market with enough demand to stimulate both agro-industrialization and manufacturing. Without incorporating the informal sectors, national industry will be elitist and totally dependent on its transnational counterpart. This requires regionalizing this proposal throughout Latin America.

6) Make the state—that ambiguous yet initially essential entity—increasingly unnecessary as the transition to civil society is effected. State power should be decentralized to civil institutions. Use the state to create the social framework that would strengthen the growth of grassroots organizations and increase their negotiating capacity at both the regional and international levels.

7) Internationalize the work, technology, institutions and financing of grassroots organizations required by the transnationalizing of capital in the world market. The internationalization of these experiences is aimed at democratizing the market at a national, Latin American and international level. The grassroots alternative starts from the premise that a monopolistic market produces an asymmetrical "economic Darwinism" in which state equilibrium disappears, given that the market progressively replaces the state and the weakest are absorbed by capital concentration.

8) Democratize the international institutions, particularly the International Monetary Fund and Inter-American Development Bank. This democratization is key to establishing equity in international relations. Like the United Nations, these institutions emerged during the Cold War, and respond to the interests of the North. The international network of nongovernmental organizations (NGOs) could play an important role in opening an arena for representation of the South. An analysis of the Mexican and Canadian experiences could be very instructive for the rest of Latin America. Initial evaluations indicate that the "fast track"—rapid negotiation—is not permitting Mexico to negotiate in equitable, reciprocal or symmetrical conditions. Moreover, Mexico's free trade agreement is essentially one of free investment with full supranational guarantees. In other words, trade is not subject to any legal changes that could take place in Mexico in the future. This avoids controls in both the US and Mexico, while the cheap and abundant Mexican labor force reduces the negotiating capacity of its US counterpart.

The social pact that permitted political stability in Mexico after its revolution has been broken with the latest electoral fraud that brought Salinas de Gortari to power. His policies have meant a drastic reduction in salaries—from 40% of the GDP in 1976 to 23% in 1990. Super-exploitation of labor, natural resources and sovereignty, all in the context of a so-called free market, could soon be the rule throughout the continent if the balance proposed in the second and third alternatives is not achieved.

The revolution of civil society

Columbus did not even know where he was when he "discovered" Latin America. This initial misunderstanding persists 500 years later. The "lost decade" conceals Latin American reality, rather than allowing for its discovery.

The ungovernability that will likely continue to characterize the 1990s implies the lack of a material base for the emergence of civil society through the innumerable organizational forms of the masses and the emergence of new historical subjects. We will try to synthesize some dominant characteristics of this new civil society whose explosion is hidden by the economic realities of the "lost decade" and the cynical proclamation of the "end of history."

The majority of Latin American societies are qualitatively different in the 1990s. They have overcome the old oligarchic, dictatorial and military models. A broad demilitarization process is underway, even in areas of great conflict, such as Central America. In most of Latin America, the military is being progressively subjected to civil society. In the face of pressures from civil society, authoritarian governments and military dictatorships have opened up to electoral processes and democracies, although these are still supervised and restricted. Nevertheless, submissive and asymmetrical stagnation, dependence and transnationalized insertion are the legacy of the 1980s. The harvest of the 1980s also clears up any ambiguity about foreign cooperation and the international market as motors of growth and development.

In telescopic fashion, we describe below some elements evolving in civil society. This takes us into the realm of hypotheses and suggestions, some provocative, which call for creativity and political honesty. If the proposals are not painful, there will be no solution to the crisis.

Fiscal crisis and state disintegration. The debt, adjustment plans and generalized economic recession have weakened, and in many countries (including Peru, Argentina, Haiti and Panama) completely destroyed the state's regulatory capacity. In its role as economic promoter and regulator, the state has become a factor of economic deregulation. The indiscriminate opening to the international market has provoked what has been characterized as transnationalized, submissive and asymmetrical insertion.

Emergence of new grassroots movements. These are the product of increasing impoverishment, social polarization and the weakening of traditional political parties, both of the Right and Left. The struggle for survival has spurred reorganization in both the informal sector and the peasantry. Neither the state nor the political parties offer channels of action for this emerging social phenomenon, since neither comprehend it theoretically or in practical terms.

The Lavalas movement that brought Jean-Bertrand Aristide to power in Haiti is quite possibly the best single symbol of the ability of these grassroots forces to organize a social avalanche that recreates its own leaders, makes new alliances and is able to defeat a dictatorship, initiating the reconstruction of the nation and the state itself.

The coming together of a new Latin American Left. In many senses, this Left is returning to the historic vision shared by Latin Americans from the late 19th and early 20th centuries, including Martí, Mariátegui, Haya de la Torre, Sandino, Zapata, Recabarren and others, in the nationalization of theory. It also corresponds to what was being synthesized in the same era by Gramsci. Undoubtedly, this new Left has been affected by both the crisis of socialism in the East and the stagnation of the Latin American Left. Again today, alongside the confusion and initial loss of spirit, a strong and creative movement is restating the issues and demands in a new historic framework, making way for what has been called "socialism of the majority," "Creole socialism" and "third world socialism"—all of them part of a search for socialism within civil society. Lula's Workers' Party in Brazil and Cárdenas—more specifically than his PRD itself—in Mexico reflect similar dynamics. Lula, Aristide and Cárdenas symbolize this phenomenon, which also has peculiar expressions in Colombia's M-19 and Uruguay's United Front. The profound political restructuring of the FMLN and FSLN in their revolutionary processes would seem to indicate the existence of a conscious awareness of this phenomenon, which implies a new understanding of the party’s tasks with respect to civil society, the state and the armed forces.

In the innumerable encounters that have taken place among these new emerging forces, there are some fundamental points of agreement. This common profile permits a clear insight into the character of this new political leadership that is filling the void left by the traditional and neo-traditional parties across the political spectrum.

The radicalizing nature of democracy as culture, method, style and political project. For the first time, the Left has taken up democracy as a banner of struggle interwoven with the rest of its demands. The goal is to bring participatory democracy to all levels of society, respecting the independence and autonomy of different movements and transforming the top-down styles and ideological rigidity that characterized past actions.

A new political language. "Forbidden to forbid" was Lula's slogan at the PT Congress. "A President in the opposition" was Aristide's pledge to the peasant movement. These are only a few indications of a new language accompanied by a new pedagogy that respects popular rhythms and consciousness.

There is a rejection of the Left's political language, as there is of the oligarchic language Vargas Llosa used in his campaign. Collor de Mello, Fujimori and Menem have tried to create a new language, ultimately failing since they did not also change the content.

It is important to refer here to the massive invasion of the fundamentalist evangelical movement in Latin America. The "sects" indicate the need to take stock of liberation theology itself, along with the pedagogy and practice used in the Christian base communities in the face of these expressions of grassroots religiosity that have become escapist movements and serve as a political base for the Right. The advance of the fundamentalist evangelical movement points to a serious weakness and even failure on the part of liberation theology. It is clear that funding for these movements comes from the United States and that the CIA has politically infiltrated them. Nevertheless, liberation theology never adequately took up popular religiosity, in which the culture and consciousness of the impoverished masses is primarily expressed. Its theological discourse was excessively abstract, theoretical and politicized. In addition, it did not leave enough space for celebration, joy, letting go, for the spontaneous participation of a people exhausted by the struggle for survival.

New, not exclusively economic, demands. These demands seek a new project of society, new values and a new civilization. They come essentially from the new historical subjects—women, indigenous people, youth—as well as from growing awareness of the deepening ecological crisis. The topics of "gender" and "political machismo" open great potential for rectification, creativity and popular mobilization. The demands of women and of different ethnic groups, as well as those calling for environmental protection, are the most radical, alternative and international ones. The technological and neoliberal paradigm is weaponless against these demands, which have long been a challenge either rejected or given short shrift by the traditional Left.

New concertation and new alliances. The change in the correlation of forces within each country, resulting from the prolongation and extent of the crisis, is leading to unprecedented rapprochements between some sectors of society. At the same time, society's most extreme and ideologized groups are being polarized. Concertation, which at first glance could be seen as a centrist position, a third way, is an ambiguous and fluctuating movement. It has components of exhaustion and confusion, as well as of aspirations and demands unsatisfied by politicians from either the Right or the Left. It is not a third way that denies the Right and Left; it is a search for consensus, a common denominator that would permit a national project hegemonized by the grassroots majorities.

The economic concertation taking place in most Latin American countries has set ideology and even medium-term political interests off to one side, seeking instead stability and security. "Politics is the art of the possible," declared one of the more lucid modern thinkers. Politics in the 1990s needs this art, not to renounce values and principles, but rather to deepen and purify them, adapting them to new conditions.

Non-organized sectors. Setting up links with these groups is a priority task and one of the most difficult to achieve. The widening of the cultural and political gap between organized groups and the growing unorganized masses demands new styles and leadership. For many among the unorganized, political messages and politicians are increasingly seen as old and worn out. Ethical standards are determinant in the culture of the unorganized. It is a language with much to say to a culture threatened by desperation and with no hope for the future.

The crisis of management and the problem of efficiency. In the era of the technical revolution, efficiency and management are two paradigms of today's world, but they have not been the most outstanding characteristics of the parties and groups with popular objectives. Reversing both the lack of credibility in the Left's efficiency and the mythology of the private sector's efficiency is another of the challenges of this decade.

The crisis in management is also a crisis of the rhythm and speed with which new technologies are imposed. The changes produced by consumer society have put supply in direct communication with demand, at least in the manipulated imagination of media images.

It is also a crisis of the communication media. Brzezinski correctly declared that, in addition to military hegemony, the US hegemonizes the media, given that four of every five messages or images produced in the world are controlled by the United States.

At the same time, the revolution in management implies the de-ideologizing of this science, generally seen as bourgeois. It must be appropriated as a contribution to the socialization of available resources. The efficient and complementary linking of macro to micro is one of the greatest contributions of technical management and is an economic, political and even military necessity.

Negotiation and alliances as political forces. The end of the East-West conflict and the new "culture of peace and tolerance" after decades of polarized ideological alliances, turn negotiation and alliances into priority instruments, both for co-opting the enemy and for achieving hegemony over the pluralism and diversity of civil society. The ideological alliance that divided the world into two poles has left a void in values for the creation of a new world order. A truly global world requires an alliance of common values able to link together 21st-century civilization. It is an alliance of common material interests in the face of shared threats (ecological crisis, security and disarmament, regional crises, etc.). Without this alliance, imposed political power will determine the future within the very same parameters that have brought us to civilization's current crisis.

Popular agenda for the 1990s

The 1990s is a complex decade, ushered in with the Sandinista defeat, the growing disintegration of socialism in Eastern Europe, the division of the South exacerbated by the Gulf Crisis, and the current incongruence of the Movement of Nonaligned Nations. Pax Americana implies a defeat for the "wretched of the earth" and the formation of a new trilateralism coordinated with the Group of Seven.

The United States has overcome "the Vietnam syndrome" with the Persian Gulf victory and consolidated the already strong coalition in US economic, political and ideological power circles. The alliance of the three huge US lobbies—petroleum, military and pro-Israel—around the Gulf crisis exceeds in strength the alliance that brought the new Right and Reagan to power, the Committee of the Present Danger. The ideological roots of the Truman Doctrine in the 1940s and the National Security Council's foreign policy formulated in the 1950s (known as NSC 68) have also been strengthened with the Gulf victory. There is even talk of establishing a special alliance between the US and Japan, which Brzezinski refers to as "Ameripon."

At the same time, the international counterweights are disappearing—first of all in the East, but also in the nonaligned movement and the international organizations. The last is particularly true for the United Nations, which has been virtually paralyzed by the veto power wielded by the five big Cold War powers.

From the perspective of the South, this avalanche is a threat comparable to 1930s fascism in Europe. Confronting it will require a broad alliance within each country as well as internationally, including with the new historical subjects of the North, who, though minorities, are increasingly conscious that this crisis of civilization affects both North and South.

What is still needed is a rethinking of the global theory of socialism or other non-capitalist alternatives. The longstanding debate about socialism in one country is again demonstrating that it cannot survive, something Lenin realized at the beginning of the century when it did not expand throughout Europe. The lack of a global project of change and of an accumulation of forces will make any alternative project in one single country impossible, or at least extraordinarily costly.

The triangulation of labor and the south. International social subjects are sending out calls in different forms in all parts of the world, through political, religious, union and NGO forums, and for the first time they have begun to link up internationally. Examples include the Japan-Asian People's Plan 21, which brings together hundreds of Japanese and Pacific organizations; the Third World Network; and the Forum for People's Economics, which draws in numerous groups of researchers from the North and South and is working on economic alternatives to neoliberal economics.

The network of NGOs and the South, political parties that have organized around a "socialism of the future" project, which for the first time includes diverse tendencies from the European Left—Communists, Trotskyists, Socialists—and the "common house of socialism" originated in a meeting between Mikhail Gorbachev, Willy Brandt and Ernest Mandel organized by the Polish philosopher Adam Schaft. This network is trying to put to one side the historical differences within the Left and create an "ecumenical humanism." Although this project has not produced more than a few relatively small ideas with relation to the South, the significance of these examples is the growing tendency toward transnationalizing non-capitalist alternatives whose dominant logic is that of the majorities.

Nevertheless, there is no room in this new single world for "anti" revolutions; there must be "pro" projects and proposals. Anti-imperialism and non-capitalism should be rethought within the sweeping global changes taking place and within a culture of peace and democracy, where any form of imperialism loses legitimacy and remains isolated as an "enemy of humanity." This demands contextualizing, which could well include broad sectors of the North, around an international agenda for the 1990s that puts forth common and viable proposals. It requires beginning a country-by-country process of grassroots agendas in Latin America to find the cumulative synthesis and consensus in all forums dealing with the problem of the New Order.

In the meeting of Latin American political parties in Vienna, it was proposed that UN World Conference, scheduled for July 1992 in Brazil, as well as the UN Conference on Trade and Development (UNCTAD) meeting in Colombia in February next year, serve as initial platforms for launching alternative global proposals by numerous countries and innumerable popular organizations in all continents. What is needed is an assertive and creative attitude, going beyond "protest without proposals" to instead present the “proposals with protest" that need to be put forth now.

To think and analyze in an alternative manner in these times causes anguish. Thinking can be done painlessly, but when thought processes aren’t painful, it’s because there’s a crisis of ideas and, more importantly, of alternatives. We would otherwise be agreeing with Fukuyama that politics can continue, but that ideological history has ended.

This complete crisis of visionary utopia is a necessary outcome of technological totalitarianism, which permits no space for a future or hopes that are not subjected to its parameters. The crisis of civilization is not a concept, but a reality that cries out for a new historic synthesis. It may seem romantic to think that in 1992, 500 years after the beginning of universal history and of racial, cultural and historical syntheses in the mestizo continent of Latin America, that the opportunity exists to begin this process. But, as Ruben Dario would say, "Who exists who is not romantic?"

* Speech by Xabier Gorostiaga, president of the Regional Coordinator of Economic and Social Research (CRIES), to the Latin America Sociology Association Conference, Havana, May 1991.

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