Rethinking Development in Latin America: The Search for Alternative Paths in the Twenty-first Century

Introduction

More than six decades ago, Karl Polanyi warned that the expansion of market relations was not a natural, let alone a desirable feature of human society. As he saw it, the equation of human development with the growth of markets was a misconception; it “was utterly materialistic and believed that all human problems could be resolved given an unlimited amount of material commodities” (Polanyi, 2001, p. 40). In contrast to the developmental economists of the post-war period, Polanyi did not presume that economic growth throughout the Third World put them on the path to progress, enlightenment, and prosperity; rather, he saw the penetration of market forces as a highly disruptive process, one that would tear apart the relations of social cooperation, community, harmony, and sharing that existed in non-capitalist societies and threatened to destroy the “human and natural substance” of society itself.

So much so that the history of capitalist development would, he predicted, simultaneously be accompanied by a backlash, the generation of protective countermovements in which societies take action to protect themselves from the ravages of the market. According to Polanyi’s predictions, the dislocations and insecurities caused by unregulated market forces would inevitably generate countermovements of groups seeking to protect themselves against the effects of untrammeled free-market expansion. He had formulated this as a countermovement against economic liberalism, or “a spontaneous reaction” against “a threat to the human and the natural components of the social fabric,” expressing “an urge on the part of a great variety of people, to press for some sort of protection” (Polanyi, 2001, p. 186).

The neoliberal turn in Latin America beginning in the 1970s might aptly be called the “revenge of the market.” Under pressure from multilateral institutions, such as the World Bank, International Monetary Fund (IMF), and World Trade Organization (WTO), governments privatized national assets, weakened labor unions, and opened up flows of goods and capital to the world economy to promote the growth and vitality of the market. However, far from invigorating economic growth, the result was a surge in social exclusion, inequality, and environmental devastation. As we see it, the rise of popular mobilizations in the 1990s, which eventually lead to the electoral victory of left and center-left governments throughout Latin America, must be understood as a backlash against the dislocations and devastations caused by the untrammeled market forces of neoliberal globalization. A central feature of these new countermovements has been the attempt to counter the devastating effects of free-market forces, seeking new types of economic relations with the ability to restore, as Polanyi put it, “the human and natural substance of society.” Such endeavors have taken the form of a variety of post-neoliberal development projects in Latin America. As we see it, this project might be understood as an attempt to re-embed the economy in social norms of humanism, solidarity, and democratic participation. This allows for an exploration of the problematic of how capitalism might be transformed, or how the economy might be re-embedded today.

To understand the current sociopolitical project being undertaken in Latin America requires a re-engagement with the longstanding dilemmas surrounding the theory and practice of development. For some time, Latin America has stood at the heart of the discussion surrounding the concept of development, its relation to human societies, as well as its means and goals. The notion of development as a series of stages of economic growth has been criticized as not only “unrealizable” (Furtado, 1982) but also as a geopolitical weapon used to convince the people of so-called developing countries to accept the path of capitalist development followed by their more developed counterparts, with all the social, environmental, and cultural destruction this would entail (Sachs, 1992). The neoliberal agenda was a hyperbolic expression of the problems traditionally associated with development, limiting development to a series of policy formations that sought to integrate national economies with the world market to rejuvenate economic growth.

However, the rise of anti-neoliberal social and political movements in Latin America has to some degree opened new spaces for political and socio-economic projects that are able to not only rein in the harmful effects of neoliberalism but also build alternative paths of development based on more fundamental social, economic, cultural, and political transformations. While there is a significant degree of diversity between the various development projects of the leftist governments, they share the overall objective of countering the neoliberal disembedding of markets by re-subordinating the economy to society through protective measures promoting social equality, democratization, national sovereignty, and regional integration. Within this broad objective, two main currents have emerged. On the one side, there have been attempts to re-engage with traditional problems of development, including economic growth, structural reform, state intervention, control of national resources, regional integration, and social inclusion. On the other side, a more radical sociopolitical project has attempted to follow a different path altogether, one that disassociates development from its consumerist, materialist, and Western-centric connotations of the past in favor of a new form of human development and societal transformation that has engaged with notions of democratic participation, indigenous rights, feminism, and radical ecology.

Latin America’s left turn began in 1998 with the electoral victory of Chavez in Venezuela. However, by 2012, this trend seemed to have reached a new turning point as the Latin American economies began to feel the repercussions of instability in the international economy, as well as popular mobilization and political disintegration. At the present conjuncture, there is a debate surrounding the achievements of the left and the prospects for future transformation. This article is an attempt to coherently present the new ideas and debates surrounding the attempts to construct development alternatives in Latin America, and whether we have a “new” development paradigm emerging that can contribute to the international development debate while providing a new lens to interpret current and future events.

Neoliberalism and the Great Transformation in Latin America

Neoliberalism first arrived in Latin America under the military regimes of Chile and Argentina in the 1970s; by the 1990s, it had come to dominate economic policy in all countries of the region except Cuba. From a Polanyian perspective, the basic purpose of neoliberalism involves the implementation of market systems in sectors or institutions that have previously been protected from the full force of the market. Imposed under pressure from the World Bank and the IMF, the neoliberal market-led reforms sought to “open up” national economies by liberalizing markets, privatizing public services, deregulating private economic activity, and opening developing economies to cross-border flows of goods, services, and capital. The stated goal of the reforms had been to boost efficiency and rejuvenate economic growth, premised on the basic presumption that society’s interests are best served when markets are given free reign and allowed to operate as freely as circumstances permit. According to this theory, it is through the activity of free, open markets that the common good is best served; the countries of Latin America could achieve the levels of efficiency to combat the longstanding problems of poverty and unemployment.

The contradictions of this neoliberal utopian vision were foreseen by Polanyi, who saw the deregulation of the market as a form of subordination of society to the exigencies of market-based accumulation, and the commodification of land, labor, and money. For Polanyi, an untrammeled market system would lead simply to the demolition of society and nature. He writes: “the idea of a self adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness” (Polanyi, 2001, p. 3).

In contrast to the “utopian” predictions made by neoliberal ideologues, market liberalization did not solve the social and economic problems of the region. On the contrary, what in fact transpired was a series of major dislocations and inequalities: a decade “lost to development,” characterized by low growth, soaring levels of debt, and increased poverty (Easterly, 2001). The economic exclusion resulting from neoliberal reforms sent the region into a period of social and political turmoil characterized by a dramatic increase in inequalities, an overshadowing of democracy and political instability and conflict (Sandbrook, Edelman, Heller, & Teichman, 2007). The one-size-fits-all economic reforms had stripped the working classes of social protection.

More than a temporary setback, the implementation of neoliberal policies put the very structures of society at risk of collapse. As civil society was disarticulated, traditional forms of sociality went into decline and the capacity for collective organization and action was severely curtailed. In particular, workers’ movements were hit hard by the implementation of neoliberal labor regulations such as subcontracting and flexibilized labor conditions. Douglas Chalmers and co-authors referred to the emerging political system as “socially disembedded,” a condition “where remaining popular organizations are few and often politically isolated and ineffective” (Chalmers, et al., 1997, p. 553). However, by the mid-1990s, neoliberalism lost its legitimacy due to its incapacity to solve the major problems of both the economy and society.

The context inevitably detonated a backlash of mobilization. Beginning in the 1980s and 1990s, a new form of countermovements arose across the continent. These movements began as relatively small and localized, organized on a community basis often around issues of gender, human rights, or the environment. Their composition included a small representation from unions, and larger groups of unemployed, indigenous peoples, pensioners, and neighborhood associations, among others. The most prominent and effective of these appeared in Venezuela (El Caracazo), Argentina (Los Piqueteros), Bolivia (the water wars), and Ecuador (indigenous movements) (Silva, 2009). The origins of many of these groups can be found in their adoption of new types of organizational strategy based on the need to protect societies from the devastation caused by the expansion of free markets. These included takeovers of factories, workplaces, unoccupied buildings and banks, pots and pans protests, the formation of barter economies, soup kitchens, self-defense organizations, and neighborhood assemblies. They also adopted new types of leadership, which rejected former notions of the vanguard and instead encouraged pluralism, participatory decision-making processes, and were more frequently represented by women (Ellner, 2014). It should be noted that these groups were anti-neoliberal rather than anti-capitalist; they sought reforms in the form of workplace protections, re-nationalization, education and health, greater democratic participation, stronger political representation, environmental protections, against corruption, and for a more significant role for the state (Silva, 2009). These practices, in turn, allowed the movements to unite forces in broad-based anti-neoliberal coalitions.

The emergence and popular mobilization of these movements starkly demonstrated not only the inability of the neoliberal model to deliver economic results for the people but also the apparent redundancy of the democratic system itself under globalization. The crisis was demonstrated not only in the inability of political parties to rule but also with the very form of democracy established in the post-dictatorship era. The battle cry of the Argentinian protesters, “¡Que se vayan todos!” was representative of the general stance rejecting all politicians, associated with scandals of speculation, financial swindles, and the pillage of public treasuries during the period, with mobilizations bringing down elected officials and presidents in Argentina, Bolivia, Ecuador, and Venezuela. However, by the turn of the century, the struggle had departed from its initially apolitical stance to an increasing engagement with political parties and established forms of power in the search for political and economic reforms.

As Sader put it, the turmoil had generated a “crisis of hegemony” (2008), characterized by the exhaustion and widespread rejection of the neoliberal model. There is no doubt that this shift at government level does reflect the widespread rejection of the “made in U.S.” economic model that was unsustainable and on the verge of collapse, and a deep desire to explore alternatives. It was a new era for development theory and practice but it was by no means clear what would take its place. As Garretón and co-authors put it, even before the Great Recession, “the region confronts a vacuum left by the failure of the neoliberal project” (Garretón et al., 2003, p. 99). They posit the emergence of a new multicentered sociopolitical matrix not only based on continued linkages with the world economy but also “by the strengthening, autonomy, complementarity, and mutually reenforceable interactions among the state, the system of representation and civil society” (Garretón et al., 2003, p. 100). What ensued was a form of Gramscian hegemonic struggle, in which various forces have vied for political and ideological dominance in implementing an alternative development model to take its place.

A turning point came in the new millennium, when popular mobilization and rejection of the neoliberal project was first crystallized into the electoral victory of center-left “pink tide” governments in a number of Latin American countries including Venezuela, Argentina, Brazil, Bolivia, Ecuador, Paraguay, and Uruguay. The rise of these governments represented a new era of rejection of the “made-in-US” economic policies, as well as a re-engagement with the classic problems of development and dependency for Latin America, including the potentialities and limits of economic growth, the role of the state, as well as the potential for societal transformation. From a Polanyian viewpoint, the dilemma facing this conjuncture might be seen as one of re-subordinating the economy to society through measures such as protective regulations and social norms to promote human development and values of solidarity. From this perspective, the conjuncture has opened the doors for a rethinking of development, and new development alternatives that should be pursued as an anti-neoliberal solution to the dilemmas of the twenty-first century.

The context has allowed for what Gudynas has called “a broadening out of the debates on development” (Gudynas, 2013, p. 24), with discussion surrounding the nature, purpose, and limits of development for the people of Latin America. As Polanyi recognized, the goal is to move beyond the idea of development qua economic growth as an end in itself, focusing instead on processes of qualitative change in the social norms and institutions through which the economy is embedded in society. They seek an economy based on relations of solidarity, social justice, sustainability in both human and environmental terms, and they have opened the possibility for the discussion of indigenous and other forms of knowledge and cultural practices to be included in the notion of development. The central development problematic needs to be rethought in a radically different way.

The central theme for these alternative developments is the understanding that development cannot be limited to the issue of economic growth alone, and that other goals such as the value of “Mother nature” and respect for cultures and ways of life are taking a greater priority. They seek to humanize development, disassociating it from its consumerist, materialist, and Western prejudices of the past, tying it to a new sociopolitical project for transformation related to collective, feminist, and indigenous values, participation, social justice, and radical ecology. This context provided the background for a re-opening of the debate on development, dependency, and the possibility of reformism among academics, politicians, and social movements alike. Debates have surrounded issues such as the need to strengthen the state, the de-commodification and nationalization of natural resources, controls on currency exchange, as well as the need for progressive taxation and redistribution to protect the poorest of society.

The Search for a New Development Model

The search for development alternatives has captured the imaginative powers of a variety of academic, governmental, and social organizations, all of which have in some form attempted to re-embed the economy in society and develop a new paradigm offering renewed emancipatory horizons. The question then inevitably turns to the two types of alternative goals to be pursued: on the one hand, reformist measures taken to rein in the market, and on the other hand, a more radical project in which the economy is focused on satisfying human needs and promoting values of solidarity.

Latin America’s Left Turn and the Politics of Development

Latin America has long been a central focal point for disillusionment and criticism, debate, and reorientation in regards to the dominant development models. The rise in social activism and left-wing governments in Latin America has brought a renewed interest in finding alternative means of subordinating the economy to society through rethinking development, which has opened the possibility of “disputing the historical meaning of development” (Acosta, 2009). The challenge has been not only to address issues of growth, state intervention, and poverty but also bring to the development debate new types of experience and knowledge from, for example, indigenous and peasant movements, feminism, and ecology. In Latin America, it would seem that the search for an alternative to neoliberalism has taken many forms, all of which have brought the question of development to the fore as the site of contestation and struggle among activists, policymakers, and academics alike.

In this way, we may assert, in the same way as Boa Santos, that ours is “a time of paradigmatic transition” (Santos, 1995, p. ix), which has inspired academics, policymakers, and social activists alike to use their imaginative powers to develop a new paradigm offering renewed emancipatory horizons. Debates that once stood at the sidelines have now come to center stage. An example is provided by Correa’s reformulation of the problematic originally conceived by Arturo Escobar that “we need to construct alternatives to development rather than alternative development.” At issue here is not only the traditional problems concerning the place of Latin American countries in the world economy, structural reform, and economic growth but also new questions including democratic participation, the diversity of markets including the economy of care, as well as markets based on other logics or cosmovisions such as reciprocity.

The governments of the left and center-left were all elected on an anti-neoliberal platform. What unites these governments is their rejection of free-market policies, the emphasis on the strengthening of the state, political democratization, reducing social inequality, and the search for regional integration. Nonetheless, there is a significant degree of diversity between the governments, in terms of the measures they have introduced but also, more deeply, their approach to the development question as a whole. On the one hand, some countries, while rejecting neoliberalism, continue to operate within the traditional framework of development, accepting the basic tenets of development as economic growth, modernization, export-led growth, macro-economic stability, and the appropriation of nature. These governments, often referred to as “neo-developmentalist” (Bresser-Pereira, 2007) or “pragmatic neoliberal” (Petras & Veltmeyer, 2011, p. 152), include the new developmentalist projects of Lula and Rousseff in Brazil, and the national-popular projects of the Kirchners in Argentina, as well as Chile and Uruguay. The new developmentalist model espoused by these governments has received praise through various development bodies as the new “third way” for developing economies. In contrast to the developmental states of the post-war period, and the market-oriented orthodoxy of neoliberalism, the model aims toward a state-led insertion into the world market.

On the other hand, in the regimes claiming to be socialist (labeled “populist” by some—see Castañeda, 2009) in Bolivia, Ecuador, and Venezuela, the critique of neoliberalism has been extended to a critique of capitalism itself. In these countries, the anti-neoliberal campaign has been developed to a more fundamental transformation, seeking not only a reversal of the free-market neoliberal regime but also a new version of socialism for the twenty-first century. For these countries, the search for an alternative has gone beyond the traditional debate on “development” as economic growth and institutional reform to include proposals for a radically different way of organizing society and the economy. To varying degrees, the governments shared the goal of not only reversing neoliberal policies but also searching for “another development,” based on a radical transformation of social relations, property structures, state–civil society relations, as well as new approaches to questions of the environment, gender, indigenous people, and cultural rights, often backed up with new constitutions. Nonetheless, alongside this, these countries continue to adhere to many of the tenets of neo-developmentalism, including the promotion of economic growth primarily through foreign investment and export-led development. The remainder of this article will examine the variety of ideologies and projects behind the “new-developmentalist” or progressive policies of the “pink tide” governments, assessing the novelty of these claims and providing a critical analysis of their performance.

Neo-developmentalism: The New Paradigm of the Center-left

While all governments of the left have made attempts to implement neo-developmentalist policies, the clearest examples of neo-developmental regimes have come from the governments of Lula and Rousseff in Brazil and Kirchner in Argentina. For these governments, the implementation of neo-developmentalist policies was conceived as a way of challenging the hegemony of the national oligarchies and new imperial world order under neoliberalism by reclaiming national sovereignty. This translated into a neo-Keynesian economic program based on the halting neoliberal reforms and regulations, reversing privatizations, and implementing stronger regulations, together with the creation of a competitive environment for business and dynamic economic growth based on technological progress and increased international competitiveness of nationally based firms, competitive exchange rate management, as well as a massive new trade area and infrastructure investment program, and finally a more equitable distribution of the surplus, with a greater focus on social welfare programs.

While they share a progressive rhetoric drawing on so-called “populist” or “national developmentalist” traditions, there are significant differences in terms of their relationship with market relations and social forces. Both Argentina and Brazil, for example, attempted to form a strategic “neo-developmentalist alliance” with domestic and some factions of transnational capital, as well as organized workers and parts of the marginal population which are being integrated by means of mild redistribution. However, the weight of the rural elite in Argentina meant this process was more restricted than that in Brazil, and that the relative autonomy of the state elites vis-à-vis capital has been dependent on the state’s ability to mobilize popular forces and greater degrees of contestation between political forces. Both Brazil and Argentina attempted to expand their support base among the formal and informal working classes with social and labor policies; in Brazil, these included the Bolsa Familia conditional income support program and an increase in statutory minimum wage increase, while in Argentina measures included the Asignación Universal por Hijo, denationalization of pensions systems, and minimum wage increases.

To summarize the achievements of neo-developmentalism, we might begin with a reminder of Cardoso and Faletto’s original contention that, although it is possible to achieve greater economic dynamism, diversification of the productive structure, and social progress in semi-peripheral countries, these are nonetheless limited by the dynamics of the world economy and countries of the core (Cardoso & Faletto, 1979). While there has been a significant process of internationalization of capital, in particular, in Brazil, where inward foreign direct investment (FDI) stock increased sevenfold between 2002 and 2012, and the presence of Brazilian Transnational Corporations (TNCs) in Europe and North America, it is nonetheless the case that the lion’s share of foreign investment remains in the hands of foreign corporations and continues to flow into the primary sectors, particularly mining and agro-industry. With regard to international trade, the diversification of trading partners, including greater intra-regional trade for local industry and partnership with China and other countries of Southeast Asia, has created greater room for maneuver vis-à-vis the USA, while greater intra-regional trade expanded the market for local industry. In addition, the Pacific Alliance is conceived as a bridge with the two giant agreements that the USA is promoting with 28 nations of the European Union. However, the integration has only taken place at a superficial level, with inter-capitalist competition seeking to attract FDI in a “race to the bottom,” in defense of their own markets and interests as shown by the recent devaluations and protectionist measures between some countries.

The way Latin America responded to the global economic crisis of 2008–2009 provides some indication of the progress made since the high-water mark of the neoliberal era, when the fortunes of the region were closely tied to economic fluctuation in the affluent North. Whereas in the past a financial crisis in the North led to catastrophic collapse in the South, this time we saw Brazil’s gross domestic product (GDP) growing by 7.5 percent in 2010 and Argentina’s by 9.2 percent (following the virtual collapse in 2001 of an extreme neoliberal model). It appeared first that the “decoupling” of the Latin American economies from the global economy—once advocated by the dependency theorists in the 1970s—had come to pass. The reality was more prosaic but just as significant. As Cohen argues in a close analysis of this period, the disparity in performance during and after the crisis between Latin America and the North is striking and it “resulted in comparatively shallower and shorter recessions, smaller rises in unemployment and poverty and much faster recovery of previous growth rates” (Cohen, 2012, p. 13).

However, in recent times, the global economic crisis has caught up with the region by indirect routes. Since 2012, there has been a slowdown that has turned to near-total stagnation in many countries of the region, tightening fiscal and balance of payments constraints. The slowdown suffered by China has led to a fall of prices and demand for raw materials; together with this, there has been financial speculation in the futures market and the appreciation of the dollar against other currencies has made the region’s exports more expensive in relative terms, while quantitative easing in the North has led to destabilization of developing country currencies. Although many governments have attempted to increase national sovereignty by pulling economic policy away from neoliberalism by implementing capital controls and creating new public investment programs geared toward domestic investment, the strategy failed to counteract the decline and instability facing these economies. This suggests that there is no longer any room for significant concessions to the popular classes while working in the interests of capital; instead, changes in the balance of forces have seen the nationalist and center-left governments deepen a regressive course and implement severe cuts. In Brazil, Rousseff’s government has implemented a harsh austerity package and made pacts with the right wing, while in Argentina there was a major rightward shift with the election of Macri.

Twenty-first Century Socialism

The radical left-wing governments of Chavez and Maduro in Venezuela, Morales in Bolivia, and Correa in Ecuador have attempted a more radical project of social transformation, attempting to implement “21st century socialism” or as Bolivian vice president Garcia described it “communitarian socialism” (Garcia Linera, 2011). The central challenge facing these governments has been to forge a path that not only breaks from neoliberalism but also moves toward a more profound transition toward post-capitalist societies (Harnecker, 2015). A central component of this task has been the search for alternative development, which emerged from a criticism and reappraisal of social democratic and socialist strategies of the past, recognizing the mistakes of the left, and the incorporation of new issues including political participation, the environment, culture, and women. This new version of Latin American socialism rejected the problems associated with previous socialist models such as the Soviet Union or China, which often implemented equally disembedded economic projects (Sandbrook, 2011), and proposed a socialism that might be understood as “embedded”: relevant to contemporary times and the particularities of Latin American societies and governments (Harnecker, 2015; Petras & Veltmeyer, 2011).

As opposed to a top-down homogenous model of development, whether capitalist or socialist, the new radical left has emphasized the historical diversity of each country, in racial, ethnic, geographic, and cultural terms. It has not only a strong nationalist element but also draws on elements of Marxism, and mostly from the history, political practices, and sociocultural experiences of Latin America largely inspired by the ideas of Bolivar and Mariategui. Like the radical populisms of the past, they have celebrated the national will of the people but also promoted a new understanding of national identity, history, race, and citizenship that challenges the conventional wisdom legitimizing the old social order. Following the writings of Mariategui, they have sought to “Latinamericanise” Marxism, giving it a new relevance for contemporary left-wing thought based on the particular dynamics of economic exploitation and military repression of the Amerindian peoples. The class struggle would need to be based not only on the centrality of the working class but also on the incorporation of indigenous and rural communities. This re-envisioning of the past seeks to incorporate previously marginalized peoples, including not only workers and peasants but also indigenous, Afro-descendants and women who have often been at the forefront of struggles in countries such as Argentina, Ecuador, Bolivia, and Venezuela. A key idea has been a new approach to the relation between the state and civil society. They rejected of the models of undemocratic rule and denial of civil rights associated with past socialisms, as well as the corporatism associated with the developmental state and the individualist concept of state and society that prevails under neoliberalism. In contrast to capitalism’s emphasis on the individual, twenty-first-century socialism has a strong moral and ethical component that promotes social well-being, fraternity, and social solidarity.

In this vein, the new left governments have created new types of political space allying forces between political and social movements, and advocating a revitalized approach to democracy, based on “radical constitutional processes” (Ciccariello-Maher, 2013, p. 128) and a new configuration of the relation between states and social movements, “a creative constituent process of democratic experimentation and innovation” (Beasley-Murray, Cameron, & Hershberg, 2009, p. 321). In the case of Bolivia, for example, a central aspect of this approach, as García Linera states, has been the “project of self-representation of the social movements of plebeian society” (García, 2011). According to this idea, the political participation of marginalized communities is no longer a question of gathering support for political parties, whether led by the liberals, conservatives, or a “vanguard” proletariat; rather, they were now the protagonists in a new form of power that were involved a “dynamic and shifting relationship between movements and the state” (Ciccariello-Maher, 2013). The new constitutions of Venezuela, Ecuador, and Bolivia all introduced mechanisms for popular participation based on the principles of humanism, indigenous rights, endogenous development, and the popular economy often based on cooperative models, including citizen’s assemblies and community councils.

Contradictions

A closer examination of the programs and practices of the new left governments reveals a process with both significant advances and major contradictions. Although the projects for societal transformation currently face major setbacks, it would be misguided to dismiss the experiments as outright failures. So far, left-wing governments have made significant advances in replacing a disembedded market system with an economy that addresses social needs, humanistic values, and in some cases popular participation. The implementation of pro-poor programs and increases in social spending have seen significant reductions in poverty from 44 to 30 percent continent-wide (ECLAC, 2012), as well as increased access to schools, health clinics, and local political participation.

However, despite 15 years more or less of progressive governments, there is nonetheless a sense of incompleteness of the achievements of these governments’ attempts to “re-embed” the economy in norms of solidarity and democracy. There is a constant tension between the search for a society beyond capitalism and neo-developmentalist objectives; as governments have modernized economies, and for the large part increased their participation in the global economy, land, labor, and nature continue to be treated as commodities under the contemporary conditions of the world market. This is in stark contrast to the search for an alternative development model that seeks to radically transform the social norms in which the economies are embedded. Emphasis on the role of growth, an overall focus on macro-economic development, and material consumption comes into contradiction with the possibility of environmental sustainability and sociocultural transformation.

The most significant issue preventing the re-embedding of the economy in Latin America is its resource export dependency. If we examine exports in Latin America, we can see that between 2004 and 2013 primary products went from 46 to 76 percent of total exports for the entire continent, while this figure is as high as 92 percent for Ecuador and 95 percent for Venezuela and Bolivia (UNCTAD, 2014). As with the earlier emphasis on the negative impact of the “enclave economy,” this type of development is not sustainable either because the products are not renewable (petroleum and mining) and overexploited, or socially because it is capital intensive and does not create significant levels of employment or forward linkages into the broader economy, and often leads to the dispossession of communities from ecological resources (Dávalos, 2013; Gudynas, 2010; Svampa, 2015).

While the processes that have taken place in Venezuela, Ecuador, and Bolivia have transformed the development model to some degree, they are still cast in terms of neo-developmentalism, and economically dependent on natural resource extraction and oil rents. Their times in office have been characterized by the ongoing tensions between strategies of neo-developmentalism—the goal of continuing capitalist development albeit with a human face—and alternative development—the quest for a truly human and alternative form of development based on values of solidarity and cooperation. The governments have sought to amplify economic growth through mining—energy, hydrocarbons, telecommunications, mining, science and technology, water, and rural development as key strategic areas.

There is significant tension between the policy of raw materials exports and the principles of endogenous development and Buen Vivir. The path of post-neoliberal transformation has encountered greater contradictions due to the polarizing dynamics of the international political economy. A particular example is that of Correa’s government, which has persecuted environmentalist and indigenous activists under anti-terrorist laws for their protests. Correa has insisted that oil should be understood as “a blessing” so long as the rents are redistributed throughout the rest of the economy (Ruiz, 2015). The adherence of contemporary left governments to policies of extractivism, the promotion of foreign trade and investment in mining, with all the human and environmental consequences is a stark demonstration of the contradiction between the radical discourse and the neo-developmentalist practices of the new left governments (Gudynas, 2010; Svampa, 2015). The ideals of Buen Vivir and twenty-first century socialism contrast with the model of growth tied to consumption, where the figure of the citizen-consumer overshadows the imaginary of Buen Vivir and the constituent assemblies.

Moreover, as these governments demonstrate increased top-down orientations, it is becoming increasingly apparent that the rhetoric surrounding popular democracy is far from the existing reality. This is evident not only in the continued concentration of executive power, cronyism, and corruption but also most importantly in the management of natural resources. Left-wing governments have implemented large-scale “predatory” mining projects without social license, due consultation with the local populations, environmental controls, and a reduced state presence, where governments tend not only to empty the concept of sustainability of all content or to manipulate the forms of popular participation, seeking to control all collective decision-making (Gudynas, 2011b; Petras & Veltmeyer, 2014; Svampa, 2015). Social forces have not proven strong enough to check the power of political parties, and there have been an increasing number of clashes between the leftist governments and popular social forces, particularly in Brazil and Ecuador. The political and social dynamism and support for left-wing political movements created during the anti-neoliberal mobilizations of the 1990s and up to the mid-2000s are increasingly being eroded, and the social energy to drive forward more radical change is in danger of becoming exhausted (Zibechi, 2015)

Way Forward

A clear conclusion from our overall analysis in the pages above is that we are now living in an interregnum in Latin America. The significant growth experienced during the boom years was also accompanied by a continuation of a new variety of “dependent” development, demonstrating the persistence of primary resource dependence of Latin American capitalism. In essence, the subordinated position of Latin America in the global market has not been changed, and Latin America retains its basic status as a supplier of raw materials and financial speculation. The progressive governments may have taken important steps in terms of gaining greater space for national sovereignty and reducing social inequalities, but they have not made a clear structural break with neoliberalism and globalization. The model of “growth-with-equity” remained within the framework of the essential elements from the 1990s: there has been an orientation to the world market based on comparative advantage, openness to foreign capital, job insecurity and informality, financialization, and debt.

A prime concern for many has been that the radical changes taking place in the political arena have not been accompanied by a parallel cultural, economic, and social transformation in which commodity relations are replaced by norms of solidarity. For a number of observers on the left, the radical political projects have not overcome the widespread persistence of the values of a capitalist society: consumption, individualism, and private property (Lebowitz, 2006). In this context, as Oliveira has pointed out, the danger is that the social programs of the left serve to increase the consumption capacity of the popular classes, while co-opting and depoliticizing social forces (2015). There persists a strong individualist and consumerist orientation, which stands in contradiction with the collectivist vision underlying Buen Vivir and the solidarity economy, inherent in the progressive conception of human development and an embedded economy (Piñeiro Harnecker, 2007).

The main constraint on the leftist projects today is the conservative pro-market opposition and their allies, including the Catholic church, the US government and corporations, and the media, which remain very strong and have been actively combatting the electoral turn to the left over the last two decades. The conservative and neoliberal right maintains control not only of state power in countries, such as Mexico and Colombia, but also in major cities and regions across the subcontinent. They have shown their commitment to organize a variety of strategies of destabilization, including media campaigns and even coups with either the direct or indirect support of the USA. The constant threat of elite recapture of power has pushed governments to adopt more authoritarian measures, including preventing public debate and persecuting social activists (Ellner, 2014).

Since the economic downturn of 2012, we are now faced with the exhaustion of developmentalism and without its objectives having been achieved. Of course, modernization and development have occurred but, we would argue, they have not been able to create a stable and sustainable new matrix for development based on an embedded economy partly because of the limitations of attempting to transform the social norms of capitalism while maintaining its main structures. The ongoing struggle for hegemony will, in turn, dictate what type of development model will be pursued. For some time now, there has been a lack of a clear hegemonic model to come together around. There is lip service paid to “growth with equity,” there is a rhetorical critique of “neoliberalism,” but there is no sustainable development model with widespread consent.

It is clear that the process now unfolding in Latin America is as much about counterhegemony as it is about hegemony. The ongoing process of social transformation is not only set within the parameters of the development model but also its impacts upon it. A decade and a half of left-of-center governments has created the space for the slow, patient work that creates a mind-shift among the population. Even if there is not a coherent alternative as yet to the neoliberal model, it no longer represents the popular common sense. The shifting development model (expressing the state–economy relationship) is intimately linked with the hegemony model (which springs from the state–masses relationship). Statist, nationalist, popular, developmental, and even socialist discourses are now part of the mainstream debates across Latin America. They are setting the terms for a debate around a new hegemonic order, perhaps.