Against the grain

More in the way of notes than an actual post… sorry, I have just been too busy and overworked to keep up this site on any regular basis.

Ever since the crash of 2008 exposed the rotten core of a failed economic model, we’ve been told there are no viable alternatives. As Europe sinks deeper into austerity, governing parties of whatever stripe are routinely rejected by disillusioned voters – only to be replaced by others delivering more welfare cuts, privatisation and inequality.

So what should we make of a part of the world where governments have resolutely turned their back on that model, slashed poverty and inequality, taken back industries and resources from corporate control, massively expanded public services and democratic participation – and keep getting re-elected in fiercely contested elections?

Seumas Milne in The Guardian

Milne is talking about the electoral success of a string of leftist Latin American governments… most recently in Ecuador and Venezuela.  While on the right (or, rather in the media of those countries addicted to the Austerian School — or is that the “Austrian School” of economic theology, it’s tempting to label Hugo Chavez and Rafael Correa as “dictators” or “authoritarian”, as a way of discrediting their perverse ability to govern nations that are NOT in recession.  But, with the governing structures and political culture of countries like Venezuela and Ecuador are no more (or less) authoritarian than, say, Mexico, where — while growth rates have been less spectacular — there still is economic growth during a time of world-wide recession the argument falls flat.

While economic growth rates have not been as spectacular in Mexico as in some of the nations to the south (The Plurinomial Republic of Bolivia — often considered the most radically leftist of the South American Republics — had a 4.1 percent growth in its GDP last quarter, someone disappointing for the Bolivians, who’ve seen quarterly growth rates of over 9 percent per quarter in the last few years).  Mexico — in MOSTLY resisting the calls for austerity — hasn’t done as well as Bolivia, but it has  been weathering the economic crisis relatively well.

Credit in good part is due to Agustín Carstens who, as treasury secretary in the Calderón Administration and as later as President of the Banco de México resisted the “neo-liberal” calls for austerity despite Carstens’ own background as a University of Chicago trained economist.  Although stimulus spending was not as aggressive as elsewhere, and poverty has increased, for a “conservative” country (and one that basically echoes European and North American economic models), it has kept the Mexican economy — as a whole — from contraction.

Not that everyone is doing OK, or even that the majority is doing OK… food prices have gone out of sight in the last two years, but that overall things didn’t get nearly as bad as they could have.  I suppose in a sense, the “War on (some) narcotics” might be considered stimulus spending (although it was more a stimulus for the U.S. economy than here), but the Calderón Administration was also spending on basics like roads and bridges, a cash-for-clunkers program and the like, which at least put money into circulation, and Carstens should get some credit for that.

On the other hand, with the previous administration ideologically tied to an economic “theology” that just doesn’t deliver (i.e., neo-liberalism, or “Chicago School economics” or Friedmanism or Randifarianism or whatever you want to label this particularly crude form of Capitalism) people saw their personal economic situation getting worse, and that was a factor in the recent elections.

Although the foreign media focused on weariness with that stupid “drug war”, the economic situation played a much larger role in voter preference than the north of the border press reported.  The PRI, though hardly a leftist party any more, having adopted neo-liberalism under Carlos Salinas, and having not looked back since, did nudge the country back towards alignment with the  contrarian Latin American economic style of … for want of a better term… “whateverism”.