The assignment:
Suppose you have just been elected president of a "typical" Latin American country in the late 1980s/early 1990s. Your country's economy is in trouble. Describe the main economic problems you face and how you plan to address them. Remember that international economic factors may exert some pressure on you and that you are, after all, a politican and would like to be re-elected for a second term.
In your answer be sure to discuss these economic pressures and the groups in your country that may oppose you and those that may support you, including the space that may or may not be available for class compromise and building support coalitions. You should also link these issues to the economic policy changes you propose, including changes in the labor market (the effects of the policies on the formal sector, informal sector, possible creation of EPZs).
You must support your argument with references to the readings.

Michael N. Escobar

PS 148A

Paper #2

Ruth B. Collier

Wendy Sinek








The generals couldn't do it. The Chamber of Commerce couldn't do it. The Liberals and Conservatives couldn't do it. Perhaps they didn't want to. But we have history on our side. In last year's election, the people placed themselves squarely on our side. We will do it: to turn the República del Promedio[1] into a first-world country.

Our country lies at a crossroads: to remain in a state of clientelistic dependency on the North Atlantic economies, or to leave behind the national adolescence, the vías de desarrollo[2], and become, finally, developed. The neoliberal model has been discredited, as our army has been forced from the presidential palace to the barracks. The regressive policies of secondary import-substitution industrialization have similarly been discarded: the class struggle they caused was the pretext for the coup. This Congress rejects the state capitalism and state terror of Stalinism. What, then, is to be done?

Our country is rich in natural resources. We enjoy every possible climate zone: great highland ranges and valleys, coastal plains and forests, and tropical jungle. Our soils possess petroleum and metals. Our arable soils are rich. So why are most of us poor? Because one man's wealth comes at the expense of another man's poverty. A fraction of a percent owns the majority of the land. A commercial aristocracy owns, and mismanages, our factories and businesses. True Indians make up a fifth of our population, but are found in the bottom fifth of our income distribution.

Capitalist institutions like the IMF, the World Bank, and the Bolsa[3], only guide us into capitalist bondage.  The Liberals concede that this state of affairs is untenable, but propose only reforms; at worst, half-hearted sleight-of-hand tricks to make the Conservative initiatives easier for the popular press to praise. We say that the model which favors the powerful is built to exploit the weak. Our programme will protect individual initiative, and ensure social justice. We propose the following social coalition: workers and peasants and Indians.

Indians have always been a people apart from the rest of the country. Criollos, mestizos, and negros[4] have participated in national politics, and won benefits from doing so, but never the indigenous. In the absence of coercion, they choose their own system, trading with each other, growing food for sustenance, so that even the liberal government policies of the 60s did not touch them. Encroachment by oil, by ranchers, by coffee, has attacked the indigenous people. Now the tribal leaders have recognized that through participating in the national system on their own terms they can win the power to preserve their traditional culture. When they opted out of politics before, it left them with no route to seek redress when oil engineers or coffee planters came to steal their homes. They have registered to vote, and they helped vote us into power. The capitalists who cry so often for the protection of property must learn to respect the property of others. And there is more that the indigenous people desire: education, health, and the farmers' services of credit and infrastructure.

The peasant is the best thing in our country. Any banker, broker, or poet can tell you this. The soul of our country is the countryside, in its dances and cuisine and speech. Middle-class people are eager to buy their fincas[5] for weekend marranadas[6], reciting poems and singing songs around the fire, and they find often that the land is cheap. That's because the peasants are leaving; they can't afford to grow our food for us - so we import food. Our government will first eliminate the reasons for the flow of rural-urban migration, re-establishing the state system of credits for small farmers, assuming the debts of small farmers, and developing rural infrastructure. These are the most minimal of activities which any state properly oriented towards development would undertake. Roads, electricity, schools and health clinics: the subversive demands for which hundreds of Communists were executed. But we do not hide our highest and proudest demand: land expropriation. We will start with the foreign-owned land, but when our programme is completed, no man will own more land than he himself can work; no cooperative will own more land than what they can effectively cultivate. In sum, we do not advocate land reform, but agrarian reform, for a peasant needs more than just a title deed to become a productive agriculturalist.

The Communist Party is the workers' party. We were born in the machine shops of Hamburg, the textile mills of Manchester, and the coal mines of France. This party's roots are in the petroleum refineries of the port and the mines of the sierra. Our policy is to replace the corporatistic structure of the Liberal governments with a democratic, bottom-up system. Workers will freely organize, freely choose their unions, freely choose their officers. That is the fundamental objective of our administration, because politics is never more than a reflection of the underlying balance of power in society. Worker organization is the only way to shift that balance in our favor. We must open the union movement to new players, force the old leaders to become accountable to their members. Organizational strength and autonomy is the only way to safeguard our agenda in the long run, no matter who lives in the Palacio of the capital.

While we are nationalists, we are not chauvenists. We must search everywhere for ideas to implement, and mistakes made by others which we can avoid. Stalin made the Soviet economy grow by dumping more and more inputs into the process. This process has its limits; in economies which are not run by fiat, workers' wage rises can lead to inflation without improvements in productivity. Our ideology must understand economic realities, and political constraints; because we foreswear armed revolution, we must proceed rather through evolution and democracy.  Here is the first of our agreements with the Liberals: state intervention in labor disputes must bring improvements in productivity along with wages. We see that the Asian economies can provide labor even cheaper than Latin America; the only way to escape this spiral towards misery is to improve our competitivity through productivity. American workers have done this, European workers have done this, we will too. Introduction of technology need not come at the expense of workers; we must look to the Scandinavian model, where union negotiation involves more than compensation and benefits, but has come to encompass democratization of workplace control. Introducing new technologies eliminates some jobs but creates others, it creates new categories of jobs; unions must ensure that those new jobs are union-controlled, as are the jobs which are lost.

The second of our agreements with the Liberals is the anticorruption campaign. This is the corollary to our social spending program; we cannot take on more debt, yet we are obligated to spend for national development programs. Thus, we must tax. We will tax the wealthy, as they are able to pay. In order to ensure the proper deployment of state revenues, a new Cabinet department is to be created: the Inspector General. One branch, the Inspector, will focus on anticorruption investigation and prosecution, including of tax evasion; the other, in service to the first but with its own goals, is the Auditor. This we borrow from the United States: their Legislative Analyst. All proposed legislation shall be reviewed by the Auditor, who will publish synopses of the acts with breakdowns of their costs and benefits. In addition, the Auditor will investigate all branches of government, to recommend methods for improving efficiency and removing those conditions which facilitate or encourage the misuse of public funds and facilities. There was a time when funds raised through our sovereign debt would be spent, somehow, on mansions for legislators, yachts for ministers, and girlfriends for presidents. Those days are over. We tax because we must spend for the people; public property belongs to society, it is sacred, and we will ensure that it is used for the people's purposes. As Che Guevara wrote, the revolutionary proves his worth to the people through his actions, and acquires a well-deserved reputation for incorruptibility; we who have survived the cauldron of military persecution will not squander our prestige with the bourgeois corruption that so distinguished our señores presidentes in the 30s and the 50s.

The search for new ideas takes us also to Brasil. The Workers Party represents the new unionism which fought the dictatorship there, which broke out of the corporatistic bonds to create new political spaces in which the people participate. New unions displaced the old, and new organizations grew up in the slums: the Neighborhood Associations. Democracy is the rule of the people; it is antithetical to corporatism, in which organizations grafted onto the people from above claim to represent them, blunt their demands, and accommodate them to the existing system of power. Democratic organizations rise from the bottom-up, and ensure justice through participation. We seek to mobilize the people through every possible avenue, through the neighborhood associations, pensioners' associations, peasants' leagues, workers' centrals, on pluralistic lines, on collective, cooperative lines. Let the consensus model prevail; no matter if an association meeting lasts for hours, in the end the people will have decided, and all voices will be included. The PT promotes the participatory budget: let the people themselves decide best how to spend money in their communities.  We see in this the way forward to the new society.

The impatient days of Communism are over. Like the early Christians, we hoped for a quick victory, an early Redemption; Communism today is mature. We have learned that violence may result in a temporary victory, but forcing one's opinion on the opposition guarantees you only new enemies; truth is arrived at through dialogue, as Marx taught us. How can we know that we're right if we extinguish our interlocutors? The policy of the vanguard party is a rationalization for action in the absence of broad popular support. Lenin scoffed at the idea of revolution through consensus; we say that consensus is the only just form of government. Viva la evolución. Not everyone who voted for us is a Communist; we must prove ourselves to the people.

[1] promedio=average.

[2] The Spanish term for "developing countries" is países en vías de desarrollo.

[3] bolsa=stock market

[4] in Spanish, the word negro is not considered to have pejorative overtones.

[5] finca=country cottage or estate

[6] marranada=party involving roasting and eating a pig