Envío Digital
Central American University - UCA  
  Number 440 | Marzo 2018


Latin America

Persistent inequality: Disputing the legacy of Latin America’s “pink tide”

Why, during the cycle of Latin America’s progressive governments, those that either defined themselves as 21st-century Socialist or as moving toward it, those the authors called the “Pink Tide,” did they make much more modest progress in the struggle against the inequality reigning in their countries than they had proclaimed and expected?

Sérgio Costa/Francesc Badia I Dalmases

In this election year in Latin America, when what has been called the “pink tide” may confirm its ebb and strengthen conservative forces, the time is ripe to reflect on how the progressive governments throughout the region failed to reduce inequality during their virtuous decade although they did manage to remove millions of citizens from extreme poverty.

An issue to analyze and debate

New measurements, no longer based on household surveys but on income tax declarations, have shown that the impact of Latin America’s leftist governments on income redistribution and wealth was less than assumed. It has been found that these governments were able to significantly reduce poverty, but not to decrease the concentration of income and wealth among the small group of millionaires located at the peak of the social pyramid in each country. This argument has been used to undermine the credibility of the leftist governments, alleging that they were not efficient even in the objective for which they have said they are essential, which is the reduction of inequality.

To address this controversial question, the Institute of Latin American Studies of the Freie Universität Berlin and DemocraciaAbierta are launching a series of articles under the title “Persistent Inequality” in this year of key presidential elections in major Latin American countries like Colombia, Mexico and Brazil. The objective is to propose solid arguments and analysis in times of rapid political change to be considered and discussed in the Latin American and international public spheres, which often neglect the lessons of the recent pink tide.

We propose to analyze the limitations and difficulties the Left in Latin America has faced and continues to face to redistribute wealth and incomes in each country, taking into account the redistributive impact achieved considering the different components of social inequalities: the socioeconomic dimension, power asymmetries and environmental questions, as well as the actors and circumstances that have detained the governments’ redistributive impetus. We will try to transcend the academic debate to be able to reach a broader public of legislators, opinion-makers, political actors, civil society activists and media, which are the ones that make up the arena in which the battle of ideas develops and political proposals are presented.

The struggle against inequality

It is true that inequalities and poverty have decreased more in the countries that were or continue to be governed by leftist forces in recent years, particularly Argentina, Brazil, Bolivia, Chile, Ecuador, El Salvador, Nicaragua, Paraguay, Uruguay and Venezuela, than in the Latin American countries not governed by such forces.

Nevertheless, it cannot be denied that advances in the struggle against inequality in the pink tide cycle have been much more limited than expected from governments elected based on their promise of reverting inequalities accumulated since the colonial period.

The explanations for this modest performance normally combine external and internal factors. In terms of external factors, it is alleged that the cycle of economic growth that helped leftist governments finance spending on their social policies was based on the exports of raw materials and agricultural products whose volatile prices have been largely declining on international markets in recent times.

From an internal perspective, the central social policy adopted by practically all the leftist governments—i.e. cash transfers to the poorest—has been criticized. It is known that these policies have a very limited redistributive impact, unlike those aimed at forming enduring welfare state structures (state-provided quality education and healthcare, public investments in professional training, etc.).

The tax question has also been highly debated. Except in isolated cases, the leftist governments were unable to create progressive tax structures that could redistribute income from the top to the base of the social pyramid.

These explanations are solid and pertinent and deserve to be considered, but they only reveal the surface of the phenomenon they study. They do not elucidate the ultimate reasons the leftist governments have not gone much beyond the programs for distribution of money to the poor.

To understand these reasons, it is necessary to link the analysis of social inequalities with the study of power relations in each case. That is, it is necessary to understand the political circumstances that rendered the leftist governments unable to go further in their concern for promoting income redistribution.

Six factors to be addressed

The exhaustion of the grand national narratives that at other moments of recent Latin American history have allowed a nation to unite around common objectives. This was the case, for example, of the national developmentalist discourse that in the mid-20th century helped legitimate the decisive participation of the State in the socioeconomic development of countries such as Argentina and Brazil.

Something similar is observed during the democratization process at the end of that century, when groups with quite diverse interests joined around the common objective of re-establishing democracies in countries such as Argentina, Brazil, Paraguay, Uruguay or Chile.

Even though the leftist forces that reached power in the 21st century were capable of winning elections, they were not able to transform the fight against inequality into a national hegemonic project.

The erosion of the national public spheres: In the context of democratization in the various countries, public spaces were formed that were capable of promoting the effective interchange of ideas, interpretations and arguments of various social groups. These arenas of debate allowed the governments to both promote and defend their policies as well as readjust them according to public reactions.

In recent years, however, the intensified concentration and increased partisan nature of the mass media coupled with the rise of a multiplicity of forums and blogs that do not communicate with each other have transformed the public sphere into an arena of struggle in which insults and fake news carry more weight than good arguments. This new context creates insurmountable difficulties for the legitimation of proposals for substantive changes such as the profound income redistribution programs the Latin American Left intended to implement.

A volatile parliamentary base: Most of the leftist governments were only able to establish themselves at the cost of alliances with conservative forces. While these alliances guaranteed the formation of the legislative majority necessary to govern, they also very often impeded projects for tax reform or bolder redistributive plans.

The emergence of the so-called new middle classes, which demonstrated greater commitment to individual upward mobility and the broadening of their own opportunities for consumption than to the promotion of social justice.

This obviously does not imply a moral condemnation of these strata for wanting material prosperity, but it does indicate that these new strata, made up of traditional voters for leftist parties, obliged the governments to correct their more radical discourse and redistributive intentions in favor of measures aimed at expanding their consumption possibilities and upward mobility.

The resistance of the established middle classes: in many countries these established middle classes saw the growing consumption capacity of the new middle classes as a threat to their class reproduction. After all, their common marks of social distinction, such as access to certain goods and services (cars, domestic employees, university education, etc.) were either no longer guaranteed or failed to be a privilege of those already established, transforming them into a large and powerful opponent of the leftist governments and their redistributive plans.

Appropriation of the State and of politics by economic elites: in recent years, the wealthiest groups in Latin America were able to extend and consolidate their control over the States in the region, including those governed by the Left.
Through strong and often corrupt influence over politicians and governments, these elites were able to instrumentalize portions of the State to serve their own interests, as well as obstruct laws and reforms in the legislative realm that could limit their economic power.

This explains, at least in part, the inexistence in many countries of a fair taxation of capital gains or of large fortunes. It also explains why the peak of the social pyramid (the wealthiest 1% of each country) was able to broaden its participation in the appropriation of wealth and income even in countries governed by the Left.

The results weren’t due
to a lack of political will

The combination of these six factors, and others relevant for particular countries but not all, allow a deeper and better-articulated interpretation of the modest results of Latin America’s leftist governments with respect to promoting the distribution of income and wealth. The meager results are not due to a lack of political will, technical incompetence or ignorance of the effective mechanisms for promoting greater equality. The circumstances in which the governments took power seem to indicate that the leftist forces have still lacked enough power to promote more radical reforms.

Sérgio Costa is a sociology professor at the Freie Universität Berlin’s Institute of Latin American Studies and Institute of Sociology. Francesc Badia i Dalmases, an international affairs expert and political analyst, is editor of DemocraciaAbierta (www.opendemocracy.net) and an author. His most recent book (2016) is “Order and disorder in the 21st century.” The English language version of this first article of a series was edited by envío.

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