The Class Struggle in Latin America

Making History Today

James Petras, Henry Veltmeyer

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351763103
• Topic: Politics & International Relations
• Subtopic: Global Politics
• Index: Politics & International Relations

The Class Struggle in Latin America: Making History Today analyses the political and economic dynamics of development in Latin America through the lens of class struggle. Focusing in particular on Peru, Paraguay, Chile, Colombia, Argentina, Brazil and Venezuela, the book identifies how the shifts and changing dynamics of the class struggle have impacted on the rise, demise and resurgence of neo-liberal regimes in Latin America.

This innovative book offers a unique perspective on the evolving dynamics of class struggle, engaging both the destructive forces of capitalist development and those seeking to consolidate the system and preserve the status quo, alongside the efforts of popular resistance concerned with the destructive ravages of capitalism on humankind, society and the global environment.

Using theoretical observations based on empirical and historical case studies, this book argues that the class struggle remains intrinsically linked to the march of capitalist development. At a time when post-neo-liberal regimes in Latin America are faltering, this supplementary text provides a guide to the economic and political dynamics of capitalist development in the region, which will be invaluable to students and researchers of international development, anthropology and sociology, as well as those with an interest in Latin American politics and development.

1
Class Struggle back on the Agenda

One of the most important and yet surprisingly most neglected factors of social change and historic development, a fundamental determinant of the way in which capitalism has taken form in Latin America, is the ‘class struggle’. In one of his most pithy metaphors, Karl Marx referred to class struggle as ‘the motor force of history’. The assumption made here by Marx – a fundamental principle of historical materialism – is that with each advance in the capitalist development of the forces of production can be found a corresponding change in the dominant social relations of production as well as in the correlation of force in the class struggle. At each particular conjuncture of the class struggle the forces of change that are unleashed in the capitalist development process can be mobilized towards either the right or the left, depending on the relative strength of the contending classes – the balance of class power at the national or regional level. In this chapter we will analyse the central role of the class struggle in the process of capitalist development that is unfolding in Latin America, on the periphery of what has emerged as a world system.

There are two parts to this chapter. The first section focuses on the different dynamics of the struggle ‘from above’ and ‘from below’. After clarifying the changing forms taken by the class struggle in the current conjuncture, and the different methods used to advance the struggle on different fronts, we briefly turn to the specific outcomes of class struggles in different parts of the region and selected countries. We then briefly discuss several cases of the class struggle in order to highlight the dynamics of a class struggle from below formed to effectively counteract the class offensive from above. This brief outline of the panorama of the class struggle prefigures the country case studies detailed in Chapters 5–11.

In the second section we turn towards the contemporary dynamics of the class struggle in Latin America, with a focus on the period 2000–15. The dynamics of class struggle are complex and variegated, but our account focuses on the following: changing class actors and the context of class action, the ebbs and flows of the class struggle, and the shifts in the correlation of class forces. Rather than providing a regional overview of these dynamics, we profile seven countries where the class struggle in its various fronts and forms have exhibited the greatest dynamism, namely Argentina, Brazil, Chile, Mexico, Paraguay, Peru, and Venezuela.

1 The two faces of the class struggle

Too often political analysts conceive of class struggle in rather narrow terms as collective actions taken by workers to advance the economic interests of the working class, overlooking other actors in the class struggle and the equally significant (and in the current epoch even more important) collective actions taken and directed by the ruling class, particularly those that engage the state apparatus, which is normally controlled by different factions of this class.

The entire panoply of neo-liberal policies, from the so-called ‘austerity measures’ and mass firings of public and private employees to the massive transfers of wealth to the financiers and creditors, are designed to enhance the power and accumulated wealth of capital and its primacy over labour. To paraphrase Marx, class struggle from above is a motor force designed to reverse history – to seize and destroy the advances secured by workers from previous class struggles from below.

Class struggle from above and the outside is waged in corporate boardrooms, stock markets, central banks, executive branches of government, parliaments and congresses, as well as in the political arena. Decision makers are drawn from the ruling class or ‘in their confidence’. Many, if not most, strategic decisions are taken by non-elected officials and increasingly located in financial institutions such as the International Monetary Fund, the European Central Bank and the European Commission, which represent and act on behalf of financiers and creditors, bondholders and big banks, and other members of the global capitalist class.

Class struggle from above is directed at enhancing the concentration of wealth, increasing regressive taxes on workers and reducing taxes on corporations, selectively enforcing regulations that facilitate financial speculation and lowering social expenditures for pensions, health and education for workers and their families. In addition, class struggle from above is directed at maximizing the collective power of capital via restrictive laws on labour organizations, social movements and public workers’ collective bargaining rights. In other words, class struggle penetrates numerous sites besides the ‘workplace’ and the strictly ‘economic sphere’. State budgets over bailouts are sites of class struggle; banks are sites of class struggle between mortgage holders and households, creditors and debtors.

The fact that class struggle from above usually precludes public demonstrations is largely because the ruling class controls the decision-making institutions from which its class policies are imposed. Nevertheless, when institutional power bases are fragile or under siege from labour or other elements of the popular classes, ruling classes have engaged in extra-parliamentary and violent public activity such as coups d’état, assassinations and/or appointing a technocratic regime that is ostensibly beyond the class struggle; or engaged in lockouts, financial intimidation and blackmail, not to mention the mass firing of workers and co-option of collaborators within the political class.

In times of severe crisis, the ruling class nature of political institutions and policies becomes transparent and the class struggle from above intensifies both in scope and depth. Trillions of dollars are transferred from the public treasury to bail out bankers. Hundreds of billions in social cuts are imposed on workers, cutting across all sectors of the economy. During depressions, the class struggle from above takes the form of an all-out war to save capital by impoverishing labour, reversing decades of incremental income and benefits gained in previous class struggles from below.

The class struggle from below

Working-class struggles from below range from workplace strikes over wages and social benefits, to general strikes to secure social legislation (or to defend past gains) or to prevent assaults on living standards. In critical moments, struggles from below lead to social upheavals in the face of systemic breakdowns, destructive wars and autocratic rule. The participants in the class struggle from below and the methods used vary greatly, depending on the socio-economic and political context in which class conflict takes place. What is striking in the contemporary period is the uneven development of the class struggle between countries and regions, between workers in the imperial creditor countries and those in debtor neo-colonial countries. The class struggle from below is especially intensifying among some of the more dynamic capitalist countries in which workers have experienced a prolonged period of intense exploitation and the emergence of a new class of ruling billionaires linked to a dominant one-party elite – the cases of China and South Africa.

The capitalist crisis and the ruling class offensive

In time of capitalist crisis with declining economic wealth, growing threats of bankruptcy and intense demand for state subsidies, there is no basis for sharing wealth – even unequally – between capitalists, bankers, creditors and workers, peasants and farmers, debtors and rentiers. Competition over shrinking resources intensifies conflict over shares of a shrinking pie. The ruling class, facing what it perceives as a life-and-death struggle for survival, strikes back with all the forces – state and private – at its disposal to ensure that its financial needs are met. The public treasury exclusively finances its debts and stimulates its recovery of profits. Ruling class warfare defines who pays for the crisis and who benefits from the recovery of profits.

In turn, the multifaceted capitalist crisis, rooted in in the deregulation of the banking system and the financialization measures put into practice in the 1980s and 1990s with the installation of the new world order of free-market capitalism, is a temporary threat to the capitalist economic system. In response to this threat, and using the crisis as a pretext for taking action, with the aim of reversing the gains made by labour over previous decades of struggle and reactivating the accumulation process, the political representatives of the imperial and local capitalist classes dismantle the social safety net constructed in the process of class struggle from below, undermining in the process the entire legal and ideological underpinnings of ‘welfare capitalism’. ‘Austerity’ is the chosen term to mark the ruling class’s seizure of the public treasury on its own behalf – without regard for its social consequences. ‘Austerity’ is the highest form of class struggle from above because it establishes the arbitrary and unilateral power of capital to decide the present and future allocation of the social product between wages and profits, affecting thereby conditions of employment and unemployment as well as the returns to creditor states and the interest and principal payments of neo-colonial debtor states.

As the crisis deepened among debtor nations, the global ruling class intensified its class war against the workers, employees in both the public and private sectors, and small-business operators and other segments of the ‘middle class’, which is being squeezed and hollowed out in a process of economic concentration – transferring financial assets to the big players, major investors and creditors in the system of financial capital. First, the creditor imperial states (in Europe the Troika – the European Commission, the International Monetary Fund and the European Central Bank) overthrew the constitutional order by seizing state power. Then they proceeded to dictate market-friendly macro- and micro-socio-economic policies. They decreed employment, wage and fiscal policies. They decreed the present and future allocation of state revenues between imperial creditors and local workers. Class warfare went ‘global’: regional organizations, like the European Union, which embody formally equal members, revealed themselves as imperial organizations for concentrating wealth among the dominant banks in the imperial centres.

Class struggle from below in times of crisis

Working-class organizations – trade unions, pensioners’ associations etc. – are ill prepared to confront the open and aggressive all-out war waged by the ruling class. For decades they were accustomed to the rules of ‘collective bargaining’ and occasional strikes of short duration to secure incremental improvements. Their parties, labour or social democratic, with dual loyalties to capitalist profits and social welfare, are deeply embedded in the capitalist order. Under pressure of the crisis, they abandoned labour and embraced the formulae of the ruling class, imposing their own versions of ‘austerity’. Labour was abandoned; the working classes were on their own – without access to the state and without reliable political allies. The trade unions, narrowly focused on everyday issues and their immediate membership, ignored the mass of unemployed, especially young unemployed, workers. The class struggle from below lacks the leadership, vision, organization and state resources, which the ruling class possesses, to launch a counteroffensive. Class struggle from below at first was entirely defensive – to salvage fragments of labour contracts, to save jobs or to reduce firings. The fundamental problem in the ongoing class struggle is that the trade unions and many workers failed to recognize the changing nature of the class struggle: the ‘total war strategy’, adopted by the ruling class, went far beyond pay rises and profit reports and embraced a frontal attack on the living, working, housing, pension, health and educational conditions of labour. The politics of ‘social pacts’ between labour and capital was totally abandoned by the ruling classes. They demanded the unconditional surrender of all social demands and seized the executive prerogatives of the state to enforce and implement the massive re-concentration of income and political power.

Under these conditions, prevalent throughout Europe and the US, what can be said of the class struggle from below? More than ever, the class struggle has developed unevenly between the new imperial creditor centres and the debtor working-class regions. The most advanced forms of struggle, in terms of scope, demands and intensity, are found in France, Greece, Portugal, Spain, Italy and, to a lesser degree, Ireland. The least advanced forms of working-class struggle are found in the US, Canada, Germany, England, Scandinavia and the Low Countries. Among the BRIC countries, class struggle is intensifying, particularly in China and South Africa but also in India, Russia and Brazil.

The issues raised in each region are significantly different. In China the working class is demanding socio-economic changes and is securing positive improvements in wages, working conditions, housing and health programmes via ‘offensive’ class struggles. In the face of pending mass firings in heavy industries, the Chinese workers are preparing a counteroffensive. In Brazil, the working class and the rural proletariat of landless workers have adapted or been accommodated to the neoliberal/agro-mineral self-styled Workers Party regime in exchange for policies that effectively lowered poverty levels and unemployment between 2004 and 2013. In South Africa, despite bloody massacres by the state and yawning social inequalities, struggles over wages and salaries have intensified. This was a defining feature of Lula’s legacy.

For most of the rest, the class struggles are defensive and, in many cases, unsuccessful efforts to defend or minimize the loss of employment, labour rights, social insurance and stable employment. The most intensive militant working-class struggles are taking place in countries in which the offensive of capital – the class struggle from above – has been most prolonged, widest in scope and deepest in terms of the cuts in living standards.

The working-class struggle has been weakest in the Anglo-American countries, especially the US, where the tradition of class struggle and general strikes is the weakest. Trade unions in these countries have shrinking memberships (in the US 50 years ago, one-third of all workers were members of a union; today less than 12 per cent are – compared to 18 per cent in Germany, 22 per cent in Greece, 26 per cent in Canada and well over 50 per cent in the Scandinavian countries); trade union leaders are generally closely linked to capitalist parties and there is a very weak or non-existent political identification with class solidarity, even in the face of massive transfers of state revenues to private wealth and earnings from workers to capital. On the other hand, during the 2016 US presidential primaries over 60 per cent of voters under 40 years declared in favour of socialism, a possible harbinger of change. However, this possible change is not at all reflected in data on union membership in the US, which dipped to an all-time historic low in 2014 as a percentage of total workers – 11.5 per cent, according to the Bureau of Labor Statistics (2016).

Class struggles from above (and the outside) and from below (and within)

The most sustained and successful advances in social welfare and public services over the past decade have occurred in Latin America, where the crisis of capitalism led to militant, broad-based class movements, which overthrew neo-liberal regimes and imposed constraints on both speculative and productive (extractive) capital and – in the case of Argentina – debt payments to investors and rentiers in the imperial centres. Subsequently, nationalist and populist resource-based regimes re-oriented state revenues derived from the export of natural resources and primary commodities to fund poverty reduction and employment generation programmes. The sequence of popular revolts and political intervention, followed by the election in most cases of nationalist-populist regimes, ameliorated the crisis and sustained policies incrementally advancing working-class interests.

In Southern Europe, in contrast, the collapse of capitalism led to a capitalist offensive led by imperial creditors. They imposed the most retrograde neo-colonial regimes, engaged in savage class warfare – while the organized working class fell back on defensive strategies and large-scale social mobilization within the institutional framework of the existing capitalist state. No political offensive, no radical political changes and no social offensive ensued. Movements that do not move forwards move backwards. Each defensive struggle, at most, temporarily delayed a new set of social reversals, setting in motion the inexorable advance of the class struggle from above. The ruling classes have imposed decades of debt payments while pillaging budgets for the foreseeable future. The result will be the lowering of wage structures and social payments. New employment contracts are designed to concentrate greater shares of wealth in the hands of the capitalist class for the foreseeable future. The policies, imposed via the class struggle from above, demonstrate that welfare programmes and social contracts were temporary, tactical concessions – to be definitively discarded once the capitalist class seized exclusive prerogative powers and ruled through executive decrees.

The financial classes of the West have been bailed out and profits have returned to the banks, but the stagnation of the ‘real economy’ continues. The working classes have, in thought and via militant action, realized that ‘collective bargaining’ is dead. The state, especially the foreign/imperial creditor-banking state, holds power without any electoral mandate or claim to broad representation. The façade of parliamentary electoral parties remains as an empty shell. Trade unions, in the most militant instances, engage in almost ritualistic mass protests, which are totally ignored by the imperial ruling class bankers and their local political collaborators. The Troika dons earplugs and blindfolds while chanting for ‘greater austerity’ for workers; in the streets, the mantra of the destitute – basta – echoes in executive palaces.

2 Dynamics of struggle

One looks in vain among the writings of historians and contemporary social scientists for any systematic study of the role of class struggle in the shaping of economic systems, class structures and state power. Yet social classes are ever present in each and every discussion of the policy and political dynamics involved in the distribution of wealth or income by the state or the market, the concentration or de-concentration of property, representation in the state and in determining the beneficiaries of government policy and the lead ‘actors’ and agencies of social change.

To move beyond class analysis as positioning individuals and groups in an economic structure of social relations, and to see classes as changing and dynamic actors whose action shapes and reshapes the social, political and economic institutions through which they act and react, we have to turn from a purely ‘structural’ form of analysis in which classes are defined purely in term of their position in society and the ‘quotient of well-being’ (or problems) associated with this position to a ‘political’ analysis in which classes act with class-conscious determination to change their situation and to bring down the system if necessary. At issue here is Marx’s distinction between a ‘class in itself’ (class viewed in purely structural terms) and a ‘class for itself’ in whi...

Table of contents

• Cover
• Title
• Copyright
• CONTENTS
• List of figures
• List of tables
• Notes on contributors
• Introduction
• 1 Class struggle back on the agenda
• 2 Extractivism and resistance: a new era
• 3 Accumulation by dispossession – and the resistance
• 4 The progressive cycle in Latin American politics
• 5 Argentina: the return of the Right
• 6 Brazil: class struggle in the countryside
• 7 Democracy without the workers: 25 years of the labour movement and mature neo-liberalism in Chile
• 8 Mexico: dynamics of a class war
• 9 Paraguay: class struggle on the extractive frontier
• 10 Peru: return of the class struggle from below
• 11 Venezuela: in the eye of the storm
• 12 The return of the Right
• Conclusion
• Index