Notable Reviews: Tony Wood on Latin America

In the New Left Review 58, Tony Wood reviews Michael Reid's Forgotten Continent. The review is worth reading because Reid's book is an example of the kind of revisionism I was discussing in previous posts. When neoliberal theorists encounter data that shows that the Washington Consensus has served more to redistribute wealth to the rich rather than continuously spur economic growth for the benefit of the lower classes, their (the neoliberals) solution is more neoliberal medicine. So as Wood summarizes:

In his balance sheet of the Washington Consensus, however, Reid admits that its overall economic record was ‘relatively disappointing’: growth picked up in the early 1990s, but stagnated from 1998 to 2002, the ‘lost half-decade’; the recovery from 2004 onwards, meanwhile, owed much to high commodity prices. The reason for this underwhelming performance, according to Reid, is that ‘too much remained unreformed’—Latin America continues to suffer from technological backwardness, low productivity, excessive regulation, bad transport and weak institutions. The answer, then, is more of the same neoliberal medicine—but this time, with ‘a greater emphasis on equity and the role of the state in obtaining it’, in line with ‘the new consensus being implemented by many governments in Latin America’ [my emphasis- DS].

As Wood points out, the new consensus in many of the governments of Latin America recognizes that neoliberal reforms are fundamentally antidemocratic, and anti-egalitarian. Instead, the 'new consensus', or Bolivarian Revolution, as it were, recognizes that neoliberalism increasingly leads to the enrichment of the few while the many end up working in an economy driven by a single export or the service industry (think, for instance, tourism), and increasing marginalization as democratic processes are subverted by powerful influences:

in the shape of the IMF, ratings agencies, hedge funds or multinational corporations, a host of outside actors entirely immune from democratic accountability have a decisively increased say over the fate of hundreds of millions, with the power to hold recalcitrant governments to ransom or blackmail them onto the path of macroeconomic orthodoxy.

Of course, one may object that authors such as Reid have learned a lesson. A reader may wonder why I claim that Reid holds a revisionist attitude when he admits that reform needs "a greater emphasis on equity and the role of the state in obtaining it." And this is why Wood's argument is important to read, because the

social schemes Reid advocates appear as little more than pious window-dressing, amid continual tranfers of massive resources to bondholders and the export overseas of ramped-up profits from privatized utilities. They are the symbolic element of redistribution—‘homeopathic’, in Perry Anderson’s phrase—designed to secure mass approval for the ongoing class project of neoliberalism. Their ideological character is made clear by Reid’s approval for their ‘individual’ nature, and by his disparagement of old-fashioned notions of ‘entitlement’. For such schemes seek to replace collective rights to a share of national income with atomized dependency on the state—and in the process have worked to entrench existing patterns of poverty. According to a 2007 UNRISD [UN Research Institute for Social Development] report, through their focus on women as guarantors of compliance with the schemes’ requirements, they have also reinforced traditional patterns of gender inequality [my emphasis].

Reid, as Wood points out, advocates these measures because they undermine an idea of collective rights and replaces them with a notion of individual rights. This transformation is not neutral: neoliberals know, as the path from Pinochet to Fujimori shows, the antidemocratic shock of neoliberal reform works best when social solidarity is destroyed. Many of the reforms that Reid advocates diminish social solidarities (such as unions) in a gentler form. After the disastrous decades of the 1970s and 1980s, market reformers know that this cannot be accomplished through direct brute force. Hence authors such as Reid seek ideological consensus for the continued, and in their eyes, unerring, project of neoliberalism.