Envío Digital
Central American University - UCA  
  Number 300 | Julio 2006



Has a Neoliberal Democracy Been Institutionalized in Nicaragua?

Thoughts on Nicaragua’s current political situation and the electoral options being offered to the population for the November 5 general elections.

Andrés Pérez Baltodano

One of the crucial questions we should ask ourselves in Nicaragua’s current political context is whether a neoliberal democracy has been institutionalized in the country. Before attempting an answer, we should first define all three concepts at play here: institutionalization, democracy and neoliberalism.

Defining institutionalization

When we talk about institutionalization, we’re talking about the crystallization of the standards, values and principles we use to guarantee social life, about the maturing of the ideas and values with which we consciously or unconsciously organize social life. These values determine what is considered good and bad, just and unjust, legal and illegal, utopian and practical in a society, as well as who eats and who doesn’t, who’ll be poor and who’ll be rich, who’ll live and who’ll die.

All social organizations are based on standards and values that become normalized under certain circumstances and at determined moments. That’s another way of understanding institutionalization: something is institutionalized when it becomes normal. Yet another explanation is that something gets institutionalized when it becomes legitimized.

Capitalism, which contains a set of values, standards and ideas, is a model of social organization that has achieved an impressive degree of institutionalization throughout the world. Let’s take a look at one of my favorite examples to illustrate this: if so much money is kept in banks, those symbols of the capitalist system, how can it possibly not occur to a poor person whose children are dying of hunger to go ask a bank manager in the name of God and humanity to give him a little money to feed them? But it never does occur to that poor person, and anyone who actually were to do such a thing would be declared mad and end up in a mental institution. Ask a bank for money to survive? We’d think it was absolute insanity because banks only give money to people who already have it. Representing capitalism and the idea that banks only lend with added interest rates to those who can guarantee repayment, banks have become so institutionalized that the legitimate and correct thing for that poor person to do is die of hunger in front of the bank’s doors without ever daring to knock. Any other attitude is pure folly. Michel Foucault has helped us understand that it is society that determines who is and isn’t mad, because madness is also a social construction that is very much influenced by how the norms we use to organize social life are institutionalized.

We could demonstrate how the acts and impunity of those committing corruption are being institutionalized in Nicaragua. We could also demonstrate how gender inequality was institutionalized throughout the world. But in the latter case, the feminist struggle against all forms of inequality between men and women and against the ideas that have normalized them help us understand that what is institutionalized can also be de-institutionalized, that what has been institutionalized doesn’t automatically become sacred, even when it’s presented as untouchable, because there’s never a god behind any social construction.

What do we mean by neoliberalism?

Has neoliberalism been institutionalized? When we talk about neoliberalism, we’re talking about a model of society with a set of standards, principles and values that legitimize determined practices, about a specific way of establishing the relations among the state, the market and society. In this model of relations, the market assumes the role of the independent variable to which all other variables that form part of the social equation have to be adjusted.

The regulatory state of the countries of the North, the welfare state that was institutionalized in many European countries and in Canada, is in crisis. The idea of a state that actively participates in regulating the economy, that transfers resources from those with more to those with less through the socializing of medicine and basic education or the subsidizing of university education—as in the case of Canada—is under attack. The strength of the workers who pushed the state to assume these social responsibilities is in crisis because capital mobility is now granting capitalists the capacity to turn a deaf ear to union demands. The welfare state is now bending to capital’s pressures because state regulation makes the global capitalist game inefficient. In neoliberal-ism, the idea is to return all power to “the invisible hand of the market,” to the law of supply and demand. Under that law, who wins wins and who loses loses. And who dies does so legally and legitimately.

Neoliberalism’s ultimate objective is for none of this to outrage or even upset us, because “that’s life.” Every language in the world has expressions such as that, which reflect that moment at which the social becomes natural, at which history almost becomes biology or nature. In Canada’s case, the struggle against the welfare state has not yet succeeded and people still can’t envision how they’ll be able to say “that’s life” without socialized medicine. But the attack is continuing and maybe in a few years people will come to believe that it makes no sense for the state to provide health services to all its citizens, that it’s inefficient, even crazy, just as we currently think it’s demented for a poor person to knock on the bank manager’s door and ask for some money to stop his children starving to death.

Neoliberalism is a special form of capitalism, a model of relations among the state, the market and society, a specific set of institutions, policies and processes that intensify the capitalist rationale and permit the market to become the guiding force behind all life in society. When we refer to the institutionalization of this model, we’re talking about the crystallization and naturalization of a set of ideas into something “normal.” This includes ideas such as trade liberalization; liberalization of the markets, including the labor market; the privatizing of state assets and the slashing of the state’s social role...

The PND’s neoliberal vision

Neoliberalism is also a way of looking at life. And it’s a language. In Nicaragua, the most concrete expression of neoliberal values and of the relations the neoliberal model proposes among the state, the market and society—with the market playing the determining role—is the National Development Plan (PND) for what President Bolaños’ government has touted as “The New Era.” The PND is an authentic neoliberal broth, even if those who wrote it don’t openly describe themselves as neoliberal. In it, for example, the organization of Nicaragua’s territory and population will be defined around what are known as “clusters,” which the state will support in its role as “facilitator of the market forces.” The idea of clusters is similar to that of the post-war “development poles” during the Chamorro government, although at that time the state still played a more active role in defining social life. In the clusters it’s the market that defines and determines where to install development and at what human cost. The PND says that specific clusters will be organized in the municipalities with the greatest capacity to participate in the market game and the greatest competitive potential. So what will happen to the people who live in municipalities that, largely through no fault of their own, lack those requisites? The PND’s proponents calmly answer that they will have to move to where there is such a capacity. In other words, the market will determine where Nicaraguans are going to live and the government, according to the PND, will monitor this mobilization of people that will modify the country’s territorial and population map. Just imagine the surrealist scenario: Nicaraguans sniffing out market fluctuations to move to the most competitive clusters; and a state such as ours—which has proved incapable of building a highway from the Pacific side of the country to the Caribbean in the country’s almost 200 years of independent life or of reconstructing its capital in over 30—monitoring that chaotic mobilization of modern-day nomads.

It’s an absurd idea copied from European countries and other countries of the North, where such models have been implemented but with a number of fundamental differences. For starters, there’s a competitive market in those countries. Nicaragua’s “market” is little more than a group of private businesspeople who exploit any opportunity and are currently desperate to act as junior partners in the game of globalized capital. Another difference is that the people following job opportunities in the North are citizens who have rights and enjoy relatively favorable economic conditions. It’s possible to imagine Canadians taking a plane from Toronto to Alberta because they’ve discovered there are better job opportunities there. They are mobile people protected by rights, for whom risk-taking isn’t a life and death issue. What kind of mobilization would we see in Nicaragua? Here the plan isn’t just unrealistic; it’s terrifying. With the poverty levels in the parts of Nicaragua abandoned by the PND, we’d see more of the kind of camp-in protests we’ve already seen by laid-off workers during the height of the coffee crisis several years ago. At that time starving families with no work, no land, no rights and no other options walked down from the coffee haciendas in the mountains to the sides of the highway where they set up miserable camps of nothing more than hammocks and black plastic sheeting for a roof in hopes that the government might be moved to do something structural. When that netted little more than handouts from passing motorists, the families that still had some strength left trekked down the long highway into Managua and re-pitched their tent city in the park across from the government buildings. For months, even as children died, the government’s answer was much the same as that of the bank manager had they opted to camp on his doorstep.

What is democracy?

And finally, what is democracy? What do we understand by that word? When we talk about democracy, we’re talking about two things: the first is the formal processes designed to decide what group or party assumes control of state power; and the second is the social consensus around the kind of relations that should exist among the state, the market and the society in which those processes are developed. The most important thing to keep in mind is that formal processes of democracy—elections, referendums and all the mechanisms that form part of democracy’s technological machinery—occur within a framework of more or less institutionalized values and norms, within a more or less established consensus on how to organize the state-market-society relations. To ask if there’s democracy, we have to look at both these aspects. In the current electoral scenario, we need to ask whether that consensus now favors the neoliberal model in Nicaragua, and whether such consensus around a neoliberal democracy been institutionalized. Because if it has, all the political parties will offer us in the electoral process are different ways of administering the system enjoying such a consensus.

Democratic theory and experience tell us that the conflicts resolved through democratic electoral processes are always minor, marginal. Elections do not define the big questions, which are rather answered through the consolidation and institutionalization of the system of values that legitimizes a determined way of establishing the state-market-society relations. In a consolidated democratic system such as the United States, despite the relative nature of the concept of democracy applied to that or any other country, neither capitalism nor the presidential system are ever at stake. The only thing Republicans and Democrats offer at election time are different ways of administering a system consolidated by social consensus long ago. They don’t propose transforming that system. So while elections can resolve very important problems, they’re always marginal compared to the nature of the problems related to institutionalizing a system. The question for Nicaragua regarding November’s elections is whether the parties are offering different ways of administering the neoliberal system or proposing to initiate a struggle against its reproduction.

We’re talking about “neoliberal democracy” here, although some would prefer to call it a “neoliberal dictatorship.” It’s necessary to demystify democracy, because people die of hunger in democracies as well. The US democracy co-existed quite happily alongside the suppression of black civil rights before they were finally recognized. Right across the world the current form of democracy coexists with brutal gender inequalities. How long can this continue? Can the US system be truly democratic when it maintains the Guantánamo prison, which puts humanity to shame? Democracy must be demystified and understood as a process of conflict resolution.

The crucial thing is to know exactly within what consensus the democratic process is functioning. And it’s important to understand that the formal democratic processes and democracy itself are compatible with almost any kind of consensus, including a neoliberal one. It’s naturally important to establish the degrees of difference between different kinds of democracy. And if we conclude that all democracies in the world today are neoliberal, it’s important to determine which are the most damaging, because there are always degrees and relative differences. Neoliberalism has managed to institutionalize itself around the world but in different forms, because social organization is also influenced by the cultures of different peoples and specific historical conditions. The ways in which neoliberalism is expressed in Russia differ from those in Canada or Nicaragua, for example.

Neoliberalism’s institutionalization
limits leftist governments

The institutionalization of neoliberalism explains why, once they take power, leftist parties find themselves working within a system that limits them. The system of neoliberal values and ideas translates into rigid structures, policy formulation processes, relations with the international finance institutions and rules regulating international commerce, in short into a whole set of very tough and already legitimized conditions that impose powerful limits on parties of the Left.

That’s what happened to Lula’s government in Brazil and to all of the leftist governments in Latin America. Frei Betto ended up resigning as head of the ambitious “Zero Hunger” project, a post to which Lula appointed him. He found it deeply frustrating and said that “with all of the good intentions I have, that we have, to put an end to hunger in Brazil, the state doesn’t work in that direction.” And that’s just the way it was: a man like Frei Betto and many others like him have all the will in the world, but the mechanisms, the definition of the economy, the economic structure were not designed to do away with hunger, but rather to reproduce capital. Frei Betto said, “I feel like I’m astride a tortoise.” I think it was probably worse than that: the tortoise was going in the other direction. The fact is that the capitalist market, the neoliberal market, are not designed to resolve the problem of hunger. Capitalist economic theory is designed to reproduce capital and capitalism is designed to reproduce that theoretical way of organizing capital, not to fight against inequalities. Capitalism doesn’t concern itself with people’s dignity; it has nothing to do with it. Verifying that tortured Frei Betto and led to his resignation.

Alternatives to neoliberalism:
A crisis in thinking

Neoliberalism has managed to institutionalize itself globally in a number of different ways, causing a planetary crisis. There’s also a crisis of thinking in the attempt to come up with alternatives to that crisis that catch people’s imagination and encourage them to seek consensus around a different model. There are ideas, but they’re still very preliminary; they haven’t yet gelled or managed to develop. And the fact is that it isn’t easy to develop alternative ideas to neoliberalism when it means an uphill battle against the international finance institutions, states, universities—most of which have bowed down before neoliberalism—and against international cooperation, which with the best of intentions also helps solidify neoliberalism.

The crisis of alternative thinking is particularly serious in Nicaragua. It’s currently one of our main problems, involving a great deal of confusion even about the very concept of neoliberalism. As a result we can think that we in Nicaragua oppose neoliberalism when we’re actually contributing to its development. And it’s not enough to say there’s a “real will-ingness” to confront it, because willingness never built models of society, let alone alternatives to the neoliberal one.

How to build an alternative…

Why start building such an alternative? In Nicaragua and other countries like it, we’ve always waited for finished models. But the truth is that the construction of a model, of an idea of the state, of democracy, of civic rights is always based on multiple forms of resistance to the existing reality, as has been demonstrated in the history of political thinking. We don’t need to wait for a previously constructed model and then use it to start to fight against neoliberalism. That’s not how theories are built or even how the construction of reality actually works.

Today, in the absence of a finished alternative model, the only way we can judge the anti-neoliberalism of any political movement or actor is to examine its capacity to resist the current model. And although there’s no alternative model, there is a global struggle, involving thousands of efforts generating thinking and actions. Both activists and theoreticians are involved in this struggle, because coming up with an alternative model isn’t just a task for theoreticians, nor will it be the political thinkers who come up with an alternative. Political theory has never been built that way. Never. The great theoreticians simply managed to capture the sense of a reality that was being created by activists, by people on the ground, engaging the struggle.

Do Nicaragua’s political parties and political actors have the capacity and willingness to challenge neoliberalism, to confront it? We obviously can’t expect them to have a complete alternative model or to eliminate neoliberalism immediately upon taking office in January 2007. But we can ask them for evidence that they’re willing to engage in a thousand and one acts of resistance to neoliberalism, because only such acts will allow Nicaragua to insert itself into the global fight against neoliberalism, a fight from which our country is currently absent.

Resigned to the institutionalization of
neoliberal democracy in Nicaragua

And now I’d like to answer my initial question. I think that a neoliberal democracy is rapidly being institutionalized in Nicaragua and that aspects of it are already pretty well consolidated in our country. That doesn’t mean that all Nicaraguans consciously accept neoliberalism, because things never work that way either. But there are dominant values in any society and neoliberal values and the structures derived from its are already dominant in Nicaragua and are being expressed in the way the state functions, by what logic and at whose service. At the same time, given the historical tendency in Nicaraguan political culture to adapt to circumstances—which takes the form of resigned pragmatism—and given that such a culture is present among both Nicaragua’s elites and masses, we all observe the neoliberal reality and say: Are those the dominant ideas? Then that’s where we’re heading!

One possible root of that pragmatic resigned political culture is providentalism, that view of history as a process governed by God right down to its final consequences. Such providentalism generates a tendency to accept reality as it is. Among the elites, providentalist religion translates into insensitivity to the misery of the majorities. And among the majorities it translates into passive and resigned acceptation of their misery. With that kind of religious and political culture, it’s very easy to respond to neoliberalism’s values and structures, which are so dominant, endorsed by international cooperation and disseminated by the international finance organizations, by saying, “That’s life! What can you do?” When we say this, the worst thing happens: we stop thinking. And when we stop thinking about the possibility of generating multiple resistances and stop demanding that politicians resist and explain to us how and how far they are willing to fight against neoliberalism, we start to justify almost anything. Not expecting and not demanding much from politicians is another manifestation of our resigned pragmatism .

Up to what point are the political parties running in the November elections willing to seriously confront neoliberalism within Nicaragua’s limitations? Will those elections develop within a social consensus that has already institutionalized a neoliberal democracy in our country? Are the competing parties offering any fundamental changes or just different ways of administrating the neoliberal system? After all, there are always better or worse ways to administer any system. Do they see any possibility of constructing an alternative to neoliberalism?

No change of “logic” with an FSLN government…

In the FSLN’s case, we can be sure that Daniel Ortega will never say he’s neoliberal, Quite the contrary, he condemns neoliberalism and always will. However, in a June 25 interview with El Nuevo Diario, Bayardo Arce responded to the question “Don’t you think that a Sandinista victory would generate capital flight?” in the following dogmatic way: “If I look at what Carlos Pellas, Ramiro Ortiz, Roberto Zamora and Ernesto Fernández Hollman are saying, none of them see why a change of government should imply a change of logic.” The word “logic” should be underscored here. Arce says that the big Nicaraguan capitalists aren’t concerned because the logic isn’t going to change. By “logic” we mean the values and norms that guide the distribution of social resources, the way public spending is shared out, and what is prioritized on the public policy agendas. They know, and Arce knows, that an FSLN victory would change the government but not the logic of the prevailing system.

With Daniel Ortega heading up a Sandinista government, some of Hugo Chávez’s resources would certainly come to Nicaragua. But it’s almost impossible to predict what kind of government Daniel Ortega, Tomás Borge, Lenín Cerna and Rosario Murillo would create. This political option is a real game of chance, because Ortega might end up being a fervent neoliberal to legitimize his position with the United States and the international banks, or he could try to be a bit of everything and end up with a “hodgepodge.”

The Liberal alternatives: Clean and ordered
vs. vulgar and disordered neoliberalism

Nicaraguan Liberal Alliance leader Eduardo Montealegre is the candidate with least problems defining his position. His conscience is the least troubled of them all. He isn’t lying to anyone with either his words or his actions. His record is there for all to see. He’s the politician who is clearest about what he’s been, what he wants and what he has to offer. He’s the purest neoliberal of the bunch, the incarnation of neoliberalism, which in my opinion is a plague on humanity for being an anti-human and above all anti-Christian model of society. Even the Catholic Church’s catechism—a conservative text full of contradictions—states that the objective of social organization and the raison d’être of all the state institutions is human beings; that economic models, organizations and institutions should be at the service of humanity, rather than humanity being at their service. Of all the candidates, Montealegre is the most honest neoliberal and thus the most dishonest Christian.

What can we say about the “social Liberalism,” the “social revolution” offered by the PLC ticket of José Rizo and José Antonio Alvarado? This is also a neoliberal ticket. The choice between Montealegre and the PLC is between a clean and ordered neoliberalism with a banking ethic that is very attractive to the international banks, and a disordered and vulgar neoliberalism that steals state funds with utter impunity. Both are offering neoliberalism, but under Montealegre’s, the poor will die of hunger legally and the elites will enrich themselves within a legitimized economic, political and social order.

The MRS Alliance:
No signs of an anti-neoliberal alternative

And what about the MRS Alliance? A few months ago I wrote in envío that in these elections I was placing my hopes in the Movement to Rescue Sandinismo, which is part of the MRS Alliance and which until July 2 had Herty Lewites as its presidential candidate. Up to now I’ve found no signs that lead me to believe this group is an anti-neoliberal option willing to do everything it can to fight against neoliberalism.
I would expect such a movement to show signs of this in at least three areas. First, it would have to have a plan, a serious proposal indicating a willingness to transform the state’s role in its relations with the market and society. This would imply changing the modality of the current state, designing a state that, for example, sets norms and legitimizes health care for Nicaragua’s people as a moral, political, humanist and Christian obligation, naturalizing it as a state priority. This new design shouldn’t be controversial. It’s a question of developing the state’s social function in health and so many other areas, because one of neoliberalism’s key actions has been to transform the idea of the state, reducing its functions to put it at the service of the market.

I expect an anti-neoliberal group to tell us that fighting neoliberalism isn’t easy—it’s important to recognize this—and to explain why, at the same time explaining where this fight is going to begin, what its objectives are and in what direction it plans to channel people’s energy and imagination to be able to negotiate with the international finance organizations with dignity, sovereignty and justice. We expect it to explain that maybe we’ll end up failing, but that the objective is to transform the neoliberal state. This implies reformulating public spending and public agenda priorities. But up to now we haven’t heard anything from this group on its conception of state-market-society relations. All we’ve heard is that it’s thinking of increasing social spending through more effective tax collection. While that’s all very fine and necessary, getting the rich to pay their taxes isn’t being anti-neoliberal.

The second area is the active construction of citizenship, because a model like the neoliberal one won’t change just because a number of leaders want it to. If the people aren’t behind that alternative project, if the project isn’t a popular construction, it won’t get anywhere. In my opinion, neo-liberalism can’t be effectively combated just within the electoral logic that legitimizes it. It’s essential to build citizenship and develop people’s participation. How does this group plan to mobilize people and get them to participate? There’s currently fear of such mobilization and even of the word itself, use it smacks of the movement built around Venezuelan President Hugo Chávez. But I’m not a Chávez supporter, nor do you have to be one to understand the need to mobilize people, which would be the sign that we really have an anti-structural movement, which would naturally have to develop gradually.

We can’t expect this to happen overnight. But politicians have to be judged by what they seriously say they’re going to do and by the way they gradually go about implementing their ideas. So while we should respect life’s complexity, we do want to know where we’re heading and what the plan is. Breaking out of neoliberal democracy involves creating a new consensus and we can’t create it without people’s participation. Changing Nicaragua will never depend on a consensus between Herty Lewites’ group and Montealegre’s, or on consensus reached by the leadership within Lewites’ group. Does the MRS Alliance believe in civic participation, in social mobilization? Is it moving firmly in that direction?

The third area in which they must and can start to display anti-neoliberal resistance right now, without the need for campaign financing, is in transforming the national political culture. A political group whose words and actions reinforce that resigned pragmatism and utra-providentialist, magical religious vision that Nicaragua is living under will not succeed in confronting neoliberalism. As a dominant system, neoliberalism has dominant structures that not everyone is aware of. But a culture like Nicaragua’s, in which the masses feel obliged to accept a reality determined by God, fortune or, most recently, the “mystery” of globalization—which in Nicaragua is treated almost like the medieval version of the idea of God—needs to be culturally transformed and politicians have the obligation to carry out that transformation, to educate in another culture, and if they are believers to guide people towards a more responsible, non-magical and non-superstitious form of Christianity. Transforming the idea of God and Jesus in order to understand that Jesus wasn’t a master magician and Christianity isn’t about lauding Jesus’ extraterrestrial powers is another way of supporting the fight against neoliberalism.

We should demand an
anti-pact option that isn’t neoliberal

We should use the above three areas to evaluate the political options currently on offer. It’s not enough to say, resignedly, that if neoliberalism is already institutionalized in Nicaragua we should only evaluate the electoral options based on whether or not they’re against the pact. That’s not enough. We have to demand more. Why not ask them to confront the neoliberal pact? Why not demand an anti-pact option that isn’t neoliberal? Montealegre is an anti-pact option, but if our option is limited to confronting the Alemán-Ortega pact, then we forget about neoliberalism, that economic model, that model of society that defines who lives and who dies in today’s Nicaragua.

We should also ask the politicians what human cost we’ll have to pay for their proposals. More of the same and finding a solution somewhere down the road? The PND says we’ll see results in 25 years, and that one of those results would be “transforming the mentality of Nicaraguan businesspeople.” For over 35 years now INCAE has been failing in its endeavor to at least turn our businesspeople into modern capitalists! There’s a fallacy among neoliberals who ask us to wait patiently for medium- and long-term solutions: malnutrition among infants has irreversible consequences and a girl who prostitutes herself today is never going to be happy.

How can we make them react? By asking them whether they’d be patient if it was their child who had to wait 25 years to see results? If that question hit a nerve, we’d see another kind of government, other priorities and an abundance of actions to rescue so many people. It’s important to remember that those asking poor people to be patient aren’t necessarily “bad” or “indecent” people. They just function in an ideological framework that makes them call for patience without feeling the urgency themselves.

I mention the issue of decency and indecency because people argue that just as we Nicaraguans used different categories at different times—such as Somocismo/anti-Somocismo and then Sandinismo/anti-Sandinismo. Now the categories are decency/indecency, understanding “decent” people to be all those against the pact and the “indecent” ones to be those who defend the pact or don’t see it as an important factor at election time. But I find this point of view incredibly deceptive. We have to demand honesty and transparency and fight against the FSLN-PLC pact, but we also have to demand a model that doesn’t oblige people to live according to the market’s fluctuations.

Let’s banish the religious, falsely moralistic vision of politics and understand that we need to know the vision of the state behind the different political offers being put before us. We need to know what societal model the politicians have in mind. We need to question them, to ask whether they’re committed to reforming the state’s function as it’s currently institutionalized.

If we don’t ask these questions, or if there are no convincing answers to them, we can’t expect neoliberalism to start weakening, because it’s a comprehensive and harmonious vision. The only way to fight it is to understand its harmony and develop actions of resistance that one day—and let’s hope it’s soon— will lead us to build another equally harmonic model to replace it.

Andrés Pérez Baltodano is a political science professor at the University of Western Ontario, Canada, and an envío collaborator.

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