This chapter seeks to manoeuvre the terms of the debate beyond the search for modifications within the ascendant neo-liberal policy agenda (or for ‘spaces’ within the international economic system as presently constituted) to consider:
Those committed to the pursuit of more egalitarian forms of development have faced a particularly bleak political scenario over recent years – a reflection of such issues as the collapse of Eastern European ‘socialism’ and the supposed crisis of Marxist thought, the continuing intensification of global interconnect-edness and the seemingly unassailable discursive dominance of neo-liberal ideas on development (see Brown 1996b). Such factors have spawned a series of wide-ranging debates over the prospects for the articulation of alternative strate-gies, central to which has been a stoical recognition of the constraints imposed by current global conditions.
In fact, the left has long been divided between those who have focused their political aspirations upon the pursuit of social transformation within individual countries and those who have maintained that any efforts towards progressive political change that were not international in their scope were doomed to failure, given the global reach of capital. Such conflicts resurfaced in academic debates within Marxism in the 1970s and 1980s and again, more recently, within discussions over the impacts of globalisation upon the possibilities for social transformation (Radice 1996). Within these recent exchanges, those most convinced that globalisation is occurring (and, moreover, that it represents a radical transformation in the dynamics of the international economy and a limiting of the possibilities for national economic management) often appear to argue that there is little that individual governments can do within such a context, implying that real alternatives can only arise from concerted political action at the global level. Indeed, even the more outspoken critics of the all-encompassing nature of the globalisation literature, such as Paul Hirst (Hirst1997), recognise that the possibilities for the renewed national regulation and stabilisation of financial markets which they advocate are dependent upon concerted international action by major nation-states. The first part of this chapter, then, explores a range of possible transformations in the operation of the international economy as a prior imperative in formulating any realistic alternative to the neo-liberal focus on liberalisation, deregulation and export promotion.
For some observers, the debates between the IFIs and their critics reviewed in the preceding chapter fail to convince because of their lack of direct considera-tion of the external economic circumstances facing developing countries. They argue that discussions over the pros and cons of specific policy instruments within SAPs (or alternative frameworks for adjustment), whilst of obvious importance, must be seen as secondary to wider concerns about the inequalities of the international economic system. In this sense, SAPs are seen as just one, albeit extremely important, facet of a broader global economic system that needs reforming as a matter of significant urgency. Then, and only then, it is suggested, can discussions about the most appropriate form of national economic adjustment be embarked upon effectively. There is now a large litera-ture detailing this position which explores the ways in which the mechanisms of the international economy work to the detriment of the developing world (in terms of the organisation of international markets, the commodity terms of trade, the forms of operation of the major international institutions, etc.).
There are, perhaps, two basic positions within this literature. First, there is the argument that the international economy, as currently constituted, actively works to the detriment of developing countries’ economic interests; a tendency which the free market-oriented reforms of recent years have certainly not addressed and, moreover, appear to have actively intensified. This position has, once again, focused attention onto issues which were central to the demands for a new international economic order which briefly flowered in the 1970s. Drawing upon certain strands of dependency analysis and the most pessimistic evaluations of the impacts of globalisation, attention has been drawn to such issues as the declining terms of trade facing the poorest commodity-producing countries (Singer 1991); the weak bargaining position of Southern countries within the World Trade Organisation (WTO) (and the detrimental impacts of its most recent settlements – Dasgupta 1998), the adverse impacts of the actions of, and the ‘cut-throat’ competition to attract, transnational investment (concerns over this were clearly articulated in the international opposition to the proposed Multilateral Agreement on Investment – see Davis and Bishop 1998/9) and the continuing burden of indebtedness afflicting many countries (Mihevc 1995: 55–84). Without addressing such fundamental issues, it is argued, whatever one’s perspective on the theoretical merits of market liberalisation and the advocation of SAPs, in practice they will not lead to sustainable economic outcomes.
In essence, this perspective builds upon some of the concerns central to the structuralist critique of SAPs detailed in the previous chapter – the argument that there are structural causes (here considered to be of both national and international origin) underlying economic phenomena which SAPs, through their orientation towards internal policy issues, cannot address sufficiently. Such views are, however, combined here with a much more vehement critique of the negative impacts of adjustment and a much wider questioning of the goals of adjustment and the nature of development itself. Adjustment is, then, not only seen as ineffectual and misplaced, but also actively damaging in a much wider sense. From this perspective, the neo-liberal reform process is interpreted, not only as misguided in its understanding of individual economies, but also as pivotal in wider international transformations that have shifted the global economy towards a more ‘savage’ version of capitalism which has actively inten-sified the reproduction of global inequalities.
Second, there is a related, but somewhat distinct, argument that, whilst simi-larly focusing upon aspects of the global economy that impact negatively upon developing countries, has highlighted the ways in which such outcomes have been produced (or intensified) through a range of distorting practices that have been adopted by powerful Western economies. Such practices include: the restricting of imports in contentious economic sectors, such as those encom-passed under the Multifibre Agreement (MFA) in the textiles industry; the replacement of traditional tariff-based barriers to trade with a range of non-tariff barriers (such as Voluntary Export Restraints (VERs) or anti-dumping legislation), that continue to restrict the access of developing country exports to key Western markets; and the continued endorsement of Western agricultural policies that subsidise agrarian exports, prohibit competition in internal markets and fundamentally distort international commodity markets (Woodward 1992:156–161 and Dasgupta 1998: 151–162).
Whilst a wide range of commentators would agree upon the detrimental impact of these practices, there are sharply divergent views of their wider signifi-cance or quite how they should be responded to. One important point is that the continued adoption of such practices makes a mockery of the IFIs’ demands for ever-greater liberalisation and deregulation of markets in the developing world – given the clear lack of commitment to such policies demonstrated by richer economies. As David Woodward (1992: 155–156) argues:
the World Bank, through the dependence of most developing countries on its loans, is in a position to push them into adopting more market-oriented policies in their external trade; but, since it does not lend to the developed countries, it does not exercise any similar influence over them; and there is no other effective source of pressure on them to adopt the policies they are instrumental in imposing on the developing countries.
At another level, however, the focus upon the distorting effects of government intervention is actually fairly reminiscent of neo-liberal positions on interna-tional trade – where similar arguments have underpinned their advocation of the continued liberalisation of international trade as the only effective way of combating Western protectionism and ensuring that developing countries are able to compete on a level playing field. Others, however, have a much less sanguine view of the potential for further rounds of trade liberalisation to secure any real changes in the global balance of power – either because of an a priori rejection of the mutual benefits of ‘free’ trade or because of the historical propensity for more powerful nations to circumvent measures designed to limit their unfair economic practices. This ability of the powerful to ignore the types of actions that are demanded of weaker states is termed ‘brutal pragmatism’ by Rosen (1997: 24) who, referring to the work of Theotonio Dos Santos, illus-trates the idea in reference to the role of the United States within Latin America as follows:
the US has been under pressure to reduce its own trade deficit. It has been pressuring Latin American countries to import US goods and to pay for their own trade deficits by bringing in ‘hot money’ with the high interest rates that strangle their own producers. And it has the power to do so. Neoliberal ideology has nothing to say here, argues Dos Santos. There is a rather ‘brutal pragmatism’ at work.
Both of these positions, therefore, albeit for somewhat different reasons, view SAPs with some suspicion and alarm because of their failure to recognise the importance of the negative impacts of the operations of the international economy upon developing countries (however those impacts are understood) or to suggest effective ways by which those impacts might be alleviated. These types of arguments have led to a range of different proposals (some relatively minor and others far-ranging and radical) for introducing fundamental changes in the way in which the international economy operates, as a necessary first step in the articulation of any alternative economic models at the national level.
Due to the key roles of the World Bank and the IMF in the emergence and promulgation of neo-liberal adjustment, they have, unsurprisingly, received significant critical attention from those campaigning for reforms in the opera-tion of the international financial system (see, for example, the materials produced by the ‘50 Years is Enough Campaign’, an international campaign organised around the fiftieth anniversary of the formation of the World Bank and its sister organisations – Danaher 1994). Obviously, given the range of different motiva- tions for pursuing international reform, the types of transformations advocated have varied considerably. Some of the most polemical interventions have called for the complete abolition of the IFIs (or, perhaps, a gradual reduction in their funding – Rich 1994: 202) and their replacement with a range of smaller sectoral and regional organisations. Others have focused upon the organisa-tional structure and forms of operation of the institutions as currently constituted. This has reflected an unease with how decisions are taken and poli-cies formed within the IFIs – leading to proposals for the democratisation of their internal structures and voting procedures through, for example, changes in the system of voting rights for their major decision-making bodies (see the collection of essays in Griesgraber and Gunter 1996a). It has also been suggested that their activities might be made more accountable if their opera-tions were to be considerably decentralised (Culpeper 1996, for example, explores the possibility of transforming the relationship between the World Bank and the Regional Development banks).
Somewhat wider in scope is the suggestion that the IFIs could be reconsti-tuted so that they come under the direct control of the UN (or at least work in tandem with the UNDP) or that a new institution dedicated to facilitating debt reduction could be constituted (Woodward 1992: 121). Boutros Boutros Ghali, when he was Secretary General of the UN, called for the creation of a UN Economic and Social Council that would co-ordinate policy for the ‘specialised agencies’ (including the Bretton Woods Institutions), arguing that the ‘present ambiguity and lack of co-ordination between the UN, the World Bank and the IMF can hardly continue for the next fifty years except to the detriment of the cause of development’ (quoted in Multilateral News 2: 19: 5 October 1994). Whether the argument being made is for the internal transformation of the existing institutions, their replacement by new, more decentralised, organisa-tions, or a limiting of their independence so that they come under the control of a new body with wider developmental aims and objectives, is, however, something of a moot point. Underlying each, there are a range of common sentiments.
First, there is the argument that, for some time now, the IFIs have not been fulfilling the role originally designed for them. It can be argued convincingly that the IFIs’ role in the regulation of the global economy (eliminating large economic fluctuations; preventing huge surpluses/deficits and speculative capital movement; and recycling surpluses and preventing large exchange rate fluctua-tions) has been increasingly taken over by the periodic meetings of the G7 Group (adding weight to arguments over the lack of access of developing country governments to the real centres of economic power and decision-making). It is also suggested that the neo-liberal attitude of the IFIs in recent years has led to the abrogation of their original commitment to the prevention of speculative capital movement. Elson (1994: 521) points out that even rela-tively mainstream economists such as James Tobin have long been calling for measures that might slow down the speed of movement of capital through ‘putting sand in the wheels’ of the international money markets via transaction taxes or other similar measures designed to discourage speculation. Furthermore, at the same time as their traditional roles have been cut back, it is argued that the IFIs have been taking on new roles (involving much greater penetration into policy affairs which used to be seen as purely the preserve of elected governments) to which they are often clearly not suited.
Second, there is a shared conviction that the current regulatory framework of the international economy is not well suited to the rapidly globalising world of the 1990s, since it has not provided for an adequate response to the increasing ability of capital to escape from national levels of regulation. It is often pointed out that the current administration of the international financial system was obviously set up during a period of much lower levels of international integra-tion. The massive transformations of recent years demand, it is argued, a radical overhaul of the institutional framework within which the global economy oper-ates. There has also been sustained pressure, for example, for more effective regulation of the activities of transnational corporations – through the enhance-ment of existing corporate codes of conduct or the setting up of a more comprehensive regulatory framework (Brecher and Costello 1994: 123). Furthermore, the enhanced power bestowed upon the IFIs, following the economic crisis of the early 1980s, raises important questions regarding issues of national sovereignty and international accountability. It has not escaped the notice of many critics that, at the same time as the latest tranche of conditions imposed by the institutions has focused upon government accountability in the South, these same governments are being forced to transfer more areas of responsibility to remote unaccountable institutions in Washington (see Cahn1996; Gillies 1996: 118–123 and Green 1995: 55).
Finally, there have also been calls for a more fundamental distinction to be drawn between aid (reflecting developmental goals) and loans designed to help tackle broad macro-economic imbalances. Under the SAP regime, this distinc-tion has been lost and international aid, designed to meet basic human needs, has become diverted into crude economy-wide financial packages. The sugges-tion is that aid should recover its more direct developmental role through a form of conditionality that is much more closely tied to individual governments’ record on meeting the basic needs of their populations rather than broad macro-economic criteria. Such ideas have been associated with proposals for the drawing up of a World Social Charter defining universal social rights, together with related mechanisms for their enforcement (see also the section on social clauses below) – although other critics have questioned what they have inter-preted as a further enhancement in the power of unelected international institutions (Waterman 1996: 172).
Intimately linked to the calls for the transformation of the international financial system considered above, has been a campaigning focus upon debt cancellation. Here, the basic argument is that whatever the pros and cons of SAPs, the funda- mental problem facing developing countries is the continued necessity of meeting interest payments on their national debt – a task that years of austere adjustment have not managed to ease for many countries (despite it being the basic rationale for adjustment processes in the first place). Addressing this ‘day-to-day’ drain of resources is seen as a much more urgent task than critiquing the failures of the adjustment programmes designed to maintain debtor states’ ability to service their debts. In some campaigning quarters, such positions have been reflected in demands for the total ‘forgiveness’ of the debt or, at least, the debt of the poorest countries (see, for example, the global efforts of the Jubilee2000 Campaign – http://www.jubilee2000uk.org/ ) or, perhaps, some form of global income redistribution through increases in overall aid levels (e.g. Frankman 1992). Others, however, have been quick to point out that, whilst an end to debt repayments would certainly have immediate beneficial impacts, it would not address the reasons underlying the growth of the problem in the first place and would leave the inadequate systems for dealing with such issues in place, so that the problems would no doubt recur in the future. Elsewhere, therefore, there have been demands for a much more co-ordinated approach towards the whole issue.
There have recently been a series of major attempts to force ‘debt’ back on to international agendas, such as the Latin American parliament’s (PARLATINO) recent challenge to the legality of continued debt servicing at the International Court of Justice (Rosen 1997). This stress upon the need for a more co-ordinated approach to the whole issue of debt and its management effectively leads us back to the more generalised arguments regarding the trans-formation of the international financial system or, at the very least, for changes in the way in which the current system has responded to the continuing finan-cial crisis of many countries. Much has been made of the inadequacies of the case-by-case approach that the institutions have adopted and many analyses have called for much more effective international co-ordination that recognises the severity of the problems being experienced much more seriously and sympa-thetically.
The reform of the international financial organisations and a more effective treatment of developing world debt represent major goals for many critics; although it is also recognised that significant steps in such directions will not happen rapidly, if at all, given current political realities. Significant attention has also, therefore, been devoted to the search for other international arenas and initiatives where alternative viewpoints might be articulated, or where pressures for reform of the institutions might be effected. As we have seen in earlier chap-ters, many other international organisations have been far from convinced by SAPs and the neo-liberal stance of the IFIs. We have already discussed attempts made by the regional United Nations institutions to suggest alternatives, as well as the critique of the social impacts of adjustment articulated by UNICEF.
Perhaps the most obvious arena for the development of critiques and the evolu-tion of alternative frameworks (given the impacts of SAPs upon the relations between capital and labour and overall working conditions across the globe), however, would appear to be the International Labour Organisation (ILO).
The primary objective of the ILO, as stated in its constitution, is to ensure the protection of fundamental workers’ rights. Given this, it would appear to be the natural institutional arena within which the interests of labour might be defended against the global attacks on employment, wages and working condi-tions which neo-liberal adjustment has promulgated. Nevertheless, there is scant evidence of this potential being realised. This is not that surprising, given that the ILO has never been an organisation which represents labour as such. It is, rather, a tripartite organisation that attempts to accommodate the interests of governments, employers and workers (at each annual conference, for example, the individual member nations are represented by two government representa-tives and one each from the national trade union movement and the employers’ organisations). Nevertheless, in previous decades, the ILO’s focus upon labour issues had made it a natural ‘lead player’ in the evolution of ideas on develop-ment (during the 1970s, for example, the ILO had been one of the major architects of the emergence of a basic needs agenda amongst the IFIs – see Kitching 1982). Its relative silence on the social impacts of adjustment and the formulation of more labour-friendly alternatives is, therefore, even more surprising.
Despite this, some observers still see the ILO’s focus upon building interna-tional support for the protection of basic labour rights as a possible counter-weight to the over-economism of the IFIs. The ILO attempts to achieve this through the establishment and ratification of international conven-tions on labour issues. By the early 1990s, there had been 174 international conventions and 180 recommendations concerning basic human and workers’ rights, often referred to as the International Labour Code. Whilst of obvious significance, there have been two major limitations to this process. First, the fact that each government has to be persuaded to ratify any of the conventions passed and, second, the fact that the ILO has no real power to penalise nations who fail to comply or break conventions which they have ratified. The willing-ness of governments to ratify conventions, in fact, varies widely; a point which has led to some criticism of the ILO’s preoccupation with the whole system of convention building. In 1983, of the 159 conventions existing at the time, Spain had ratified 90, the UK and France had both ratified 80, the USSR 57 and the USA had ratified only 7 conventions (this had increased to 11 by1994). Even where a country has ratified a convention it may only express an intention to act and not a firm commitment (Bendiner 1987; Richardson 1983; Brecher and Costello 1994 and Galenson 1989). Overall, the ILO remains an important potential source of alternative ideas and checks on the extremes of neo-liberal reform but, to date, has generally appeared strangely muted in the face of the growing problems faced by labour movements internationally.
Recent years have seen growing international support for a much more specific attempt to highlight abuses of basic human rights and unacceptable working conditions (and, on occasion, environmental destruction) – the advocation of social clauses within international trade agreements (Shaw nd). These proposed clauses, often based around criteria derived from the International Labour Code, consist of additions to international trade agreements which would facili-tate the application of sanctions (involving banning or restricting exports – or revoking any preferential trading status) against countries that fail to observe certain minimum labour standards.
Not surprisingly, such proposals have inspired heated debate. It is worth noting, however, that the whole question of social clauses is one of the few elements of progressive reformist agendas that has received attention at the highest international levels. The WTO, for example, has debated the issue quite extensively, although it shied away from any commitment to setting up an exploratory working group. As would be expected, most of the major financial organisations are against the idea – viewing social clauses as representing a slide into protectionism. The issue has also been raised at the ILO on several occa-sions (1973, 1988 and 1994) but the case for social clauses has failed to gain ‘across the board’ support – with union representatives largely in favour, employers against and governments divided. Some of the most detailed proposals for the implementation of social clauses have come from the International Confederation of Free Trade Unions who, obviously, support their implementation; although interestingly several regional trade union organ-isations have come out strongly against the idea (as have several Third World governments – it was the Latin American negotiators, for example, who ‘scut-tled’ proposals to set up a working group in the WTO in 1994) (Shaw nd:22–26; Brecher and Costello 1994: 135).
The arguments in favour of social clauses are obvious – the moral and polit-ical cases for the protection of basic human rights and restoring a concern for social justice to international institutional debates. In addition, low labour stan-dards can be seen as imposing substantial longer-term economic costs through their impacts upon labour productivity, social unrest, etc. More widely, the advocation of social clauses can be seen as part of an attempt to establish a freer market in labour to match the free markets rapidly being established in trade, finance and industry. If workers cannot migrate to the West and, therefore, earn the international market price for their labour, the argument runs, how can they be denied access to a mechanism that might improve that price in the countries where they have to stay?
Given the weight of these arguments, why has there not been more universal acceptance of the case for social clauses amongst international NGOs and devel-oping country governments? One interpretation might be to stress the ways in which repressive Third World governments might seek to perpetuate the over-exploitation of their workforce, but this does not explain the opposition of some trade union organisations. A good part of the unease with social clauses expressed in the developing world reflects a concern that the international advo-cation of such clauses, rather than offering a means of protecting the working conditions and living standards of the poorest, largely reflects the interests of protectionist forces in the West who see social clauses as a potential mechanism for combating some facets of Southern competition in Western markets (a possi-bility which, the cynical might suggest, helps to explain the seriousness with which the case for social clauses has been explored at the highest levels). The unease amongst Southern governments and organisations, therefore, reflects the fear that social clauses are merely a thinly disguised tool of Western protec-tionism or, perhaps more appropriately, too open to manipulation towards that end. Some evidence from countries that have unilaterally adopted similar measures suggests that social clauses could be susceptible to very obvious polit-ical manipulation. The Reagan administration in the United States, for example, used the US Trade Act of 1988 in some very suspect political manoeuvres (Brecher and Costello 1994: 132).
More generally, the advisability of seeking to pursue a renewed process of progressive regulation of economic activity within the arena of the management of international trade – a notoriously conservative set of institutions – has been seriously questioned. It would, perhaps, make more sense to try and incorpo-rate any commitments to the greater protection of labour rights into an international effort to overhaul the ILO and increase the commitment of Western governments to its principles and conventions. There is also a feeling that the pursuit of social clauses has tended to isolate the issue of labour condi-tions from broader issues of international economic inequality – leading to questions surrounding the ability of inter- national agreements of this type to deal with the global activities of transnational corporations and the limitations of a restricted focus upon those actually engaged in wage labour.
The preceding discussion has illustrated a range of positions on the unequal nature of the functioning of the global economy. Obviously, this brief survey has not been exhaustive, but it has illustrated the breadth of the case for inter-national reform. One further factor that should be addressed, however, is the way in which apparent campaigning successes (in other words the achievement of policy, or even institutional, changes) do not always produce the results intended because of the abilities of the institutions themselves and other domi-nant groups to divert, weaken or co-opt criticism (as was outlined in our discussion of the Bank’s reaction to specific policy critiques in the previous chapter). The point being made here is not that campaigning at the interna-tional level is pointless (it obviously has brought modifications to specific policies and raised the profile of issues that would otherwise not have figured in global debates) but, rather, that it cannot be seen as a panacea and must be complemented with approaches that are more fundamentally concerned with what happens on the ground in individual countries. As Duncan Green puts it:
Although the technological genie which drives economic globalization cannot be put back in its bottle, changes in the management of the global economy could ease the task of switching to a growth-with-equity develop-ment model. … But Latin America needs much more than a new deal with outside forces, however important they are.
(Green 1995: 207–208)
Pleas for fundamental changes in the functioning and dynamics of the global economic system and its institutions must, therefore, be tempered by political realism. The simple fact is that the political will to achieve such reforms is very unlikely to exist amongst the global powers and, if that is the case, it raises serious questions about concentrating upon international reform as the panacea for ‘developmental’ problems. Even if such transformations were to occur, however, they could only ever be part of the story because, if the existing national structures of production and exchange were to continue in their present form, the vast majority of people would gain little. As argued by Frances Stewart:
Governments may be relatively powerless to steer the course of world markets, but they can protect their own people from the excesses of the market. Conversely, there could be a good international system which protects countries, but if gross inequalities emerge within countries, such a system will not succeed in protecting poor people – and since it is people rather than countries with which we should be concerned, domestic measures to control the market and protect the vulnerable are generally more important than international. This is, indeed, just as well, since while it is quite easy to identify changes in the international system which would help prevent international inequalities, it is much more difficult to envisage (and even more to bring about) the political conditions in which such changes are plausible.
(Stewart 1995: 164–165)
Stewart’s concern for domestic measures to control the market and protect the vulnerable in the context of limited international room for manoeuvre is impor-tant in that, whilst everything should be done to pursue reform at the international level, it is at the national and local levels that real alternatives to neo-liberalism must be found, although such alternatives will, no doubt, find themselves restricted by the international considerations that we have touched upon thus far (bringing us back once again to the controversies over the extent and impact of globalisation with which we started this chapter).
Moving to the national arena once again, the most immediate problem encoun-tered by those opposed to neo-liberal adjustment relates to the apparent collapse of the major policy alternatives to that model. For most of this century, there have been two major alternatives to free market capitalism (of which neo-liberalism is the latest incarnation). First, what we might loosely term ‘reformist’ versions of capitalism (the breadth of this term can encompass the interventionist Keynesian approach to macro-economic management, the social democratic politics with which it was often associated and the various terms used to suggest the interventionist role of the state within such models – statist or dirigiste strategies) which sought to control capitalism in the pursuit of specific socio-economic aims and objectives. Second, various radical socialist alternatives that proposed a much more fundamental break with capitalism.
Many of the criticisms of SAPs and the alternatives suggested in chapter 7 owe much to reformulations of reformist approaches to capitalism, few of which suggest a decisive break with the dominant neo-liberal development discourse. In fact, most reconfigurations of such positions today reflect an accommodation with elements of the dominant neo-liberal perspective. As many neo-liberal theorists have come to recognise the limited applicability of the more extreme models of adjustment to market forces, and more reformist minded economists have conceded aspects of the neo-liberal critique of the state and faced the cold reality of increasingly liberalised and global markets, so the differences between reformist and neo-liberal approaches to the South have become increasingly blurred. It was, of course, the idea of socialism that stood as the major alterna-tive to Western capitalism throughout most of this century through its profound critique of the nature and dynamics of the latter and the advocation of a radically divergent egalitarian alternative. Today, however, following the collapse of the Soviet bloc and the end of the Cold War, it has become far more difficult to establish a firm and definitive divide between capitalist (be it orthodox or reformist) and radical or socialist approaches towards development. Many avowedly socialist political parties appear to differ little in their policy recommendations from their social democratic, or even in some cases neo-liberal, counterparts.
Few treatments of the adjustment process (or even of the alternatives to it) pay much attention to specifically socialist alternatives. Generally, existing socialist regimes are interpreted as anachronisms, living on borrowed time and awaiting the unleashing of pro-democracy forces which will inevitably see them pass into history in the same way as the Eastern European socialist states. It cannot be doubted that the world facing socialist movements has changed considerably since the Cuban revolution at the end of the fifties or, indeed, since the emergence of Marxist regimes in Angola and Mozambique or the Sandinistas in Nicaragua during the late 1970s. Whatever one’s thoughts on the ex-socialist regimes of Eastern Europe, and however far individual socialist governments or movements in the Third World attempted to distance them- selves from the more unsavoury aspects of such regimes, the enormous changes in global geopolitics caused by their collapse and disappearance have made any attempt to pursue ‘socialist’ policies in the years which have followed much more difficult. An important alternative source of financial resources obviously dried up and, even worse, was accompanied by descent into international depression and the emergence of an international financial regime that granted precious little leeway to the pursuit of alternative economic programmes. Similarly, the events of recent years have seen ‘socialist’ become a word associ-ated with the past, reflecting economic failure and the abuse of basic individual human rights and certainly not as a potential source of realistic alternative development policies. As Cavarozzi (1993: 152–153) suggests in relation to the Latin American left specifically:
The ideological crisis of the Latin American left has certainly intensified with the collapse of the communist regimes of Eastern Europe and the Soviet Union. … Their mere survival was enough to fuel illusions of repli-cating them in Latin America, purging them of their negative traits – that is, bureaucratic control and political totalitarianism – and preserving their relative egalitarianism. In this sense, the evaporation of the Communist regimes in Europe – and the confirmation of the fact that almost the entire populations of those countries perceived those systems as oppressive and stagnant – has affected the credibility of the entire Latin American left. … There are still some activists and ideologues who argue that there are still a thousand million Chinese living under a communist regime and that there is a remnant of virtue in the Vietnamese and Cuban regimes. But this can only be understood as the desperate search for a psychological refuge from the wreckage of the political and economic parameters that had prevailed for seven decades.
There is certainly a good deal of truth in Cavarozzi’s position but it would be a mistake to assign all of the experiences and, indeed, achievements of socialist governments and movements to the wastebasket of human history. Whilst many expressly socialist regimes have disappeared over recent years under the weight of their own contradictions (or the pressure of unfavourable international events), a number of regimes have persevered (if not prospered) into the final stages of the twentieth century. More importantly, socialist political parties and movements (of many different orientations) remain key political actors in many countries (in Latin America alone 30 per cent of the electorate voted for left-wing alternatives in the mid-1990s – NACLA 1997: 5). Much of the most vociferous criticism of the social impacts of adjustment has come from these organisations; their major challenge remains quite how to transform that oppo-sition into a workable progressive agenda for the economy. The search for such a programme hinges around the need (1) to go beyond the state-centred approach to the economy which, to differing degrees, had dominated socialist regimes in the past, (2) to ensure that any alternative is not simply a form of ‘managing’ neo-liberalism (in other words the reformist attempt to ameliorate the social costs of neo-liberal policies without offering a fundamental alternative) and (3) to re-evaluate the relationship between socialism, democracy, popular participation and the development of civil society. This section considers some of the debates that have occurred amongst the left as it has grappled with these three elements.
In considering the possibilities for the articulation of a workable socialist alter-native, the obvious place to begin is by looking at the developmental performance of existing socialist regimes. Twenty years ago, there would have been a wide range of material to consider that detailed such experiments, as there were a broad range of socialist regimes in existence (Utting 1992). Today, many of those regimes have fallen from power and those that remain have undergone such transformations that many are hardly recognisable as ‘socialist’ at all. Nevertheless, it is still worthwhile revisiting some of those experiences.
The classical writings on the construction of socialism were largely based around economic strategies that assumed the existence of an economy that had already experienced a high degree of productive development. For much of the earlier decades of this century, this produced a dominant Marxist view that any transition towards socialism was impossible without the prior transformation of society under the expansionary influence of capitalism (see Warren 1980 for a reassertion of this view). In Latin America, for example, the ‘official’ communist parties of the region generally subscribed to such analyses and, accordingly, they (and other leftist forces within the region) tended to prioritise political alliances with the more nationalist-orientated sectors of the emerging bourgeoisie, rather than revolutionary mobilisation towards a more immediate attempt at constructing socialism. This tendency was to change markedly following the Cuban revolution and the subsequent emergence of dependency theory within Latin America (see Kay 1989 for what is probably the most accomplished survey of this literature) as well as the growing association of socialist ideas with the nationalist revolutions in Africa. Under the influence of these emerging theoretical positions (and the examples of praxis in Cuba and China, etc.) a body of literature on socialist transition, rooted in the concrete experiences of developing countries, gradually emerged – although the Soviet influence was to remain considerable (as a non-capitalist route to socialism was gradually adapted to the orthodox communist canon – see Solodovnikov and Bogoslovsky 1975).
In the years that followed, a great number of regimes came to embrace some sort of variant of the socialist approach and, as Simon (1995: 709) notes, ‘almost as many forms arose as the number of countries claiming such a pedi-gree’. These ranged from the limited number of expressly Marxist regimes, ‘through various hybrids to the large group of essentially populist, nationalist governments cloaking their ideology in socialist rhetoric’ (ibid.). Nonetheless, despite these different individual circumstances and orientations, what united the various socialist regimes that emerged in the South was a shared emphasis upon the role of the state (in its productive and administrative roles) in guiding society towards a (supposedly) more egalitarian form of development.
The key dilemma facing socialist regimes in their search for the most appro-priate forms of state intervention in the pursuit of their objectives was the delicate trade-off between prioritising overall output levels and developing the forces of production (hence hopefully ensuring the ability to finance its social programmes) or attempting to, more rapidly and radically, transform the relations of production (through, for example, land reforms designed to break the power of traditional agrarian elites). The latter alternative may itself involve substantial financial costs due to inflationary impacts upon labour costs or the loss of the economic experi-ence of business leaders in important sectors of the economy. In practice, financial concerns (often coupled with a mistrust of the peasantry and smaller-scale produc-tion units) tended to lead towards policies that prioritised overall gains in productivity, with changes in social relations relegated to those that would gradu-ally be produced through the expansion of the dominant state productive sector (Griffin and Gurley 1985 and Fagen et al. 1986).
This approach, often termed ‘state-centred accumulation’, owed much to the legacy of Eastern European thinking, and led to emphases upon the rapid promotion of industrial activity (largely financed via the extraction of surpluses from the agricultural sector), the subsidisation of basic necessities, the collectivi-sation and rapid modernisation of agriculture, and centralised comprehensive planning systems (White 1983: 1; Brown 1996a: 277 and Harris 1992: 87). By and large, the record of this state-led model of socialism, even though it was centred around the rapid development of productive forces, was not generally successful in economic terms. Whilst there were certainly some successes in terms of the development of social provision and the, at least partial, eradication of inequality, these advances were generally jeopardised by a lack of economic success. As expressed by Forrest Colburn (1994: 63):
an atmosphere of crisis and austerity has become the normal condition of economic policy in the revolutionary setting. Rosy expectations are frustrated. While some states, notably Cuba, reduced inequality, economic growth has in most cases been disappointing, and in some cases absent altogether.
The sorts of problems identified include: the poor productive record of state enterprises, the limited capacity of the state to effectively carry out the expanded range of tasks that have been expected of it, poor levels of produc-tivity given the lack of individual motivation afforded within collectivised economic activities, the centrality of the export sector (given its vulnerability to external circumstances and destabilisation and the distributional impacts of its prioritisation) and the contradictions between production, consumption and distribution (Harris 1992; Colburn 1994; Vilas 1990). There is also, of course, the issue of the lack of basic democratic rights and the over-arching role assigned to the vanguard party within the traditional state-centred model and the political costs that this has often involved (see Post and Wright 1989 for example). There is a massive literature on the problems and pitfalls of the state-led model of socialism and it is certainly not worth revisiting those arguments in detail here – suffice it to say that, with some exceptions, few would now actively defend the record of such strategies. The stress on productive development under the auspices of strong state control leads Carlos Vilas (1992: 16) to conclude that ‘much of what is conventionally considered socialist economic policy in the underdeveloped world is simply a leftist version of desarrollismo, the notion that technological advance equals development’.
Most assessments of the developmental record of the state-led strategy of socialism in the South would, then, encompass the sorts of damning assess-ments considered briefly above. Before moving on to consider some of the alternative directions in which the attempt to rethink socialist economic strategy has led, however, it is worth applying a number of caveats to the discussion thus far.
First, it is easy to overstate the economic failings of the state-led socialist strategy and certain social achievements under that model need to be recog-nised. Cuba, for example, despite the problems its dependency upon the Soviet bloc has bestowed upon it and the clear limitations on individual freedoms, certainly boasted health and education systems that, at least until the economic crisis of recent years, were unequalled anywhere in Latin America, as well as a level of equality that was unprecedented within the region. Even the poor economic record ascribed to the model needs some qualification. For the period1960–74, for example, Jameson and Wilber (1981) found that a loosely defined group of socialist countries actually grew at a faster rate than non-socialist coun-tries.
Second, many negative reviews of the economic performance of socialist states tend to ignore the external aggression which many of them have had to contend with (such as the US blockade of Cuba and the covert war fought against revolutionary Nicaragua or the South African destabilisation of Angola and Mozambique) although the special treatment which they received from the Soviet bloc should equally be borne in mind.
Third, it is easy to over-generalise about ‘socialist’ regimes (see White 1983:10). There are different lessons to be drawn from the experiences of those countries most closely linked to the Soviet bloc when compared to those of more open and pragmatic regimes such as the Sandinistas in Nicaragua or specifically African variants of socialism such as the Ujamaa experiment in Tanzania. Whilst each of these examples shares many of the characteristics of the state-led model described above, it is worth stressing both the individual priori-ties of those regimes and the fact that there have always been socialist traditions that differed substantively from that general tendency (even if they have not been terribly influential in the trajectories of socialist-inspired movements and regimes in the Third World).
Fourth, whilst socialism has been written off as an irrelevance in many quar-ters it continues to inspire many people and movements; indeed political parties retaining a commitment to such ideals remain, as has already been pointed out, important political actors in many regions. Nevertheless, given the limitations of previous socialist experiences in government and the problems and contradic-tions experienced by those that still exist, quite what such movements stand for and what types of economic programmes they might administer, were they to achieve political power, remains very much open to question and the subject of much internal deliberation. The nature of some of those areas of debate and the question as to whether they might lead to the articulation of clear economic alternatives, substantively different from the dominant neo-liberal model (and the state-centred reformist and socialist models of the past), forms the focus of the remaining parts of this chapter.
Some orthodox socialist parties have continued to espouse traditional state-led economic strategies revolving around the nationalisation of the most important sectors of the economy, far-reaching processes of collectivisation and the state administration of markets. The interesting thing to note is that the advocates of such strategies appear not to have noticed how even those regimes which often form the focus of their aspirations have undergone considerable transformations in recent years. Even Fidel Castro, for example, has suggested that any leftist governments achieving political power under contemporary circumstances would not be advised to adopt sweeping processes of nationalisation.
Another traditional tendency within some socialist strategies in the Third World is that, given the exploitative nature of international economic relations, engagement in international markets is something to be avoided as far as possible. Particularly associated with certain elements of the dependency school, such autarchic strategies have not often been attempted and, where they have been, they have not produced particularly impressive economic results and have often been associated with savage repression of the dissent that they have engendered. Given the contemporary processes of globalisation and the increasing size of urban populations, autarchic experiments (by necessity largely agrarian in orientation) appear neither politically feasible nor economically desirable in the current context. Despite its limitations, this type of perspective is also still artic-ulated on the contemporary political stage. It is most strongly present within positions held by the most violent sections of the left, through, for example, what Cavarozzi (1993: 155) refers to as the idea of ‘Millenarian violence’ which centres around the need to make a dramatic break with the past through the forced re-education of the urban sectors or the ‘profit-maximising’ peasantry (Sendero Luminoso in Peru would appear to be representative of these ideas). Common to both of these positions is a continued adherence to the Leninist model of socialist politics where socialism is pursued through the autocratic actions of a verticalist vanguard party that monopolises political power (although it should also be recognised that a more localised form of autarchy is also advo-cated by ‘deep green’ environmentalists).
In some instances, revolutionary elites were forced out of power. More commonly, revolutionary ideals were just abandoned by their erstwhile proponents.
(Colburn 1994: 89)
Self-styled revolutionaries, with rare exceptions, have yet to get beyond the state-centred vision of socialism so discredited by the experiences of the Soviet Union and Latin American populism. The parties of the Left are in many ways as conservative and authoritarian as those of the right. … During the transition to electoral regimes, most revolutionaries either stuck to their guns, decrying democratization as false, or embraced the establishment, abandoning altogether their hopes of achieving socialist reform.
(NACLA Report on the Americas 1993: 12)
Whilst some socialist movements continue to cling to the economic models of the past, others appear to have abandoned their socialist ideology in all but name (and sometimes that as well!). Thus, some traditional communist parties have renounced their previous orientation and embraced the market even more obviously than some social democratic parties – reflecting either a renounce-ment of anything approaching socialist ideology or a reversal to the ‘socialism can only emerge from the eventual contradictions of a fully developed capi-talism’ position of the past. The Chinese opening up to market forces (as well as that of some of the communist parties of Eastern Europe and several ‘socialist’ regimes during their death throes in Africa) and, in particular, the decisive new orientation towards serving export markets, can also be interpreted in this light. Such strategies have, despite an often-repeated claim to be building ‘a socialist market economy’ (Miliband 1996: 15), left little indication of what might demonstrate their continued ‘socialist’ orientation, save the maintenance of the traditional authoritarian one-party political system.
In a sense, those societies living under such regimes have the worst of all worlds – the social impacts of export-orientated capitalism and the authoritarian political system of one-party socialism. Before we totally write off the Chinese system for its obvious political brutality, environmental disasters and neo-liberal-inspired restructuring, it is worth sounding a note of caution. Whilst the working conditions and lack of worker representation in the burgeoning export enterprises in the industrial sectors have been well documented, the transforma-tions that have occurred in rural areas over the last few decades are less well known. Here, the opening up of rural markets and the setting up of state-funded rural township enterprises (amongst other policies) have seen rural incomes practically quadruple. There has been a mixture of state protection and encouragement of small-scale agricultural and industrial production with market incentives. However, in contrast to the neo-liberal approach towards market reform in rural areas, land has remained in the hands of the state, avoiding the escalation in rents and speculation in property that has occurred elsewhere (Burbach et al. 1997: 92–93).
Nevertheless, there are a number of factors that make it debatable whether the Chinese experience is likely to prove attractive to other socialist strategists. First, whilst the strong Chinese state has enabled it to avoid the political chaos that accompanied market-led reform in the former Soviet Union (Marshall1998: 286), it also remains an autocratic, profoundly anti-participatory presence that has effectively strangled any political reactions to declining living standards and increasing inequality and failed to offer any space for the articulation of ideas and strategies reflecting real grassroots interests. Second, whilst rural development schemes may have proven successful, the dominant force within the Chinese economy is undoubtedly the highly divisive, income concentrating, industrial activity of the export sector (Cannon 1994: 523) and it is far from clear how, or indeed if, the inherent social contradictions will be dealt with. Finally, the sheer size of the Chinese economy (and perhaps most importantly its potential domestic market) has enabled it to enjoy a very different relation-ship with the international community to that of other smaller developing economies who are much less able to ‘pick and choose’ which elements of the neo-liberal agenda they wish to adopt.
Moving away from the experiences of existing socialist regimes and the most orthodox political parties, other leftist movements have been caught up in an urgent search for renewal – for a new strategy (or range of strategies) that might prove capable of offering a workable alternative to the state-centric models of the past, without a wholesale capitulation to neo-liberal deregulation.
In its more reformist guises, the left has played an active role within the struc-turalist attempts to articulate a more interventionist response to neo-liberalism which we considered in the preceding chapter. This type of approach, predi-cated upon extremely pessimistic readings of global economic circumstances (or a genuine acceptance of major parts of the neo-liberal critique of the state), represents, in essence, an effort to manage the social impacts of neo-liberal reform through a more progressive distribution of its costs and benefits – a more socially responsible model of neo-liberalism as it were (often conceptu-alised under the idea of the social market).
This approach is probably most clearly developed in Jorge Castañeda’s (1993) exhaustive review of the circumstances facing the Latin American left – Utopia Unarmed . In essence, he calls for the left to abandon the search for a socialist utopia and instead engage in the struggle being undertaken by organisations such as CEPAL to accept global economic circumstances as they are (and some of the insight of the neo-liberal critique of previous development models) but to look for a way of combining this with a more sustainable and equitable approach, perhaps based on the legacy of the West European welfare state and the Asian approach to state–market relations. His argument is that it is only through ‘formally and sincerely accept(ing) the logic of the market’ that the left will attain the credibility to challenge the most starkly anti-interventionist and brutal forms of market capitalism (Castañeda 1993: 432). The specific policy measures proposed are familiar and include regional integration and a form of state activity that involves ‘protection without full-scale protectionism, regula-tion without stifling the market, state ownership without operating a command economy and competition without savage capitalism’ (Castañeda 1993: 441). Central to any of this, he argues, is the effective reform of the taxation system followed by a more effective tackling of poverty (Green 1995: 191 and Portantiero 1993: 17–20). The political challenge, according to Castañeda, is to convince the business leaders of the region (and the US) that the social costs of neo-liberal economics have so heightened the gap between rich and poor that it is leading towards an inevitable social explosion unless ameliorative action is prioritised (Castañeda 1993: 428).
Clearly, Castañeda’s approach is not very different from the structuralist strategies discussed in the previous chapter and it shares their somewhat techno-cratic nature, in that it revolves around an economic strategy that relies upon essentially technical and institutional interventions in the market (Cole 1996) and a political strategy geared towards convincing sections of the elite that a socially mediated version of neo-liberalism is in their best interests. It is this political dimension – the somewhat naive suggestion that somehow Latin America’s elites will respond to the threat of social violence in the manner hoped for – which is probably the weakest element of Castañeda’s proposals (which is surprising given the depth of political analysis elsewhere in his book, Hammond 1995: 119). Finally, despite his protestations to the contrary, Castañeda’s position in reality amounts to little more than an appeal for European-style social democracy and this is somewhat ironic given the current state of the European left which appears to have gained a certain political initia-tive in recent years through moving closer to the neo-liberal model and abandoning the more interventionist type of approach that Castañeda is looking to embrace. As Miliband (1996: 17) argues:
the leadership of Western social democratic parties in France, Germany, Britain, Spain and even Sweden have moved fairly sharply to the right over the years and have come to accept without much difficulty the market economy and privatization. They qualify this acceptance in various ways, but they do not provide anything like a serious counterweight, in ideological, political, programmatic, or practical terms, to conservative or neo-liberal parties.
This type of strategy has been fairly typical of the party political left over recent years in Latin America and appears to be a throwback to the ‘popular front’ polit-ical strategies of the early decades of this century. As Ellner (1993: 7) suggests, however, there was, in that earlier period, a much clearer political strategy (that of supporting nationalistic fractions of local capital against feudal elites and US inter-ventionism) which appears to be lacking in the current electoral strategies.
In a sense this brings us back to the problem identified at the end of the last chapter – a political agenda dominated by underlying neo-liberal ideas that appears to preclude the evolution of any more radical alternatives. The discred-iting of the state-led strategies of the past, be they capitalist or socialist, has left those committed to more egalitarian development strategies struggling to artic-ulate an alternative that does not repeat the mistakes of the past and yet also provides something more than a choice between different variants of neo-liberal capitalism (Burbach et al. 1997). As William Robinson (1998/9: 125) puts it, these circumstances have created a situation where:
many leftist parties, even when they sustain an anti-neoliberal discourse, have, in their practice, abdicated earlier programmes of fundamental struc-tural change in the social order itself. Their programmes in the 1990s were confined to strategies of state intervention in the sphere of circulation to achieve limited internal redistribution, while respecting the prevailing struc-ture of property and wealth and the model of ‘free market’ integration into the global economy.
As such, there is a serious danger that, whilst the extreme social polarisation produced through neo-liberal adjustment might render socialist alternatives more attractive to disillusioned electorates (and that is by no means certain – see discussions on this in chapter 5), the lack of a viable economic strategy for achieving socialist political goals will mean that leftist governments may well end up ‘managing neo-liberalism’ by default – providing a slightly enhanced social safety net and yet doing little to challenge the prevailing patterns of income and resource distribution or the dominant attitudes towards society and politics. In the light of such arguments, many on the left are suspicious of reformist efforts such as Castañeda’s, seeing them as little more than a capitula-tion to the contemporary dominance of neo-liberal ideas and an abandonment of any pretence at more radical social transformation. For those with such concerns, there is an urgent need to articulate a more expressly socialist alterna-tive which, nonetheless, remains frustratingly elusive.
In Latin America, one of the arenas for discussing the formulation of just such an alternative has been provided through the establishment of the São Paulo Forum launched by the Brazilian PRT in 1990. The 1992 meeting of the Forum in Managua saw representatives from over fifty organisations from seventeen different countries attempt to outline the basis for an economic alter-native to neo-liberalism (this number had increased to 112 member parties by the time of the 1996 Forum in San Salvador – NACLA 1997: 5). The declara-tion produced from that meeting started from the premise that neo-liberalism could not be amended since it is part of an unjust economic order, echoing our discussion of the wider calls for international economic change outlined above, rather than Castañeda’s accommodation with the neo-liberal rules of the game. None the less, quite what the alternative might be did not progress far beyond vague commitments to autonomous economic development, meeting the basic needs of the majority, providing a fairer distribution of wealth and property, enabling a leadership role for popular grassroots organisations and a central regulatory role for the state (Green 1995: 195–196).
At this juncture, it is worth briefly returning to a number of facets of our discussion of the experiences of socialist regimes in power – whatever our view of the democratic credentials of such regimes their attempts to reform the state-socialist models of the past, without a wholesale adoption of neo-liberal reform, may prove instructive. Peter Utting (1992) provides an excellent discussion of the attempts made by a range of socialist regimes during the 1980s to switch from state-dominated economic strategies to some new model which, whilst less centralised, still retained a clear socialist orientation. As Utting points out, a number of such regimes had realised the limitations of the state-led model well before the generalised crisis of the late 1980s and the specific circumstances of that period were certainly not the only factors pushing them in new directions (see also Fitzgerald and Wuyts 1988). The productive limitations of state-run enterprises and the incapacity of the state to fulfil the role expected of it, together with a recognition of the complexities of social identity and the declining size of the social sectors comprising their traditional political constituency, had already begun to convince certain sectors of the need for a fundamental re-evaluation of how socialism was conceived.
In essence, this re-evaluation stemmed from the need to confront two inter-related problems centring around the role of the state. First, a growing accumulation crisis, whereby the state-led model, which, as we have seen above, had never been exactly over-successful productively, was increasingly unable to meet even the basic consumption or investment needs of society due to its increasingly apparent inefficiencies in the context of reduced external co-operation and international recession. Second, a crisis of hegemony, whereby regimes found themselves increasingly unable to maintain control over the direction of social change and economic development and forced to recognise the complex fragmentary nature of class and other social relations within their societies and their political impacts (Utting 1992: 256–258). As David Simon (1995: 713) argues, the changing circumstances allowed ‘previously suppressed domestic resistance to authoritarian rule and opposition, deriving from the inability of these regimes to deliver material needs and social welfare to their people, … to resurface to challenge regimes of all ideological hues with greater vigour’.
These crises produced a number of different responses. Some regimes sought, as far as possible, to maintain the dominant role of the state within the economy, although most, as they desperately sought for strategies that would improve their economic performance, at least flirted with the introduction of markets in some areas. The types of strategies embarked upon included measures that recognised the continued importance of the peasantry to the agricultural sector and sought to improve their economic circumstances (often through the re-introduction of market mechanisms), more general processes of denationalisation and the limiting of the productive role of the state (within an effort to address the losses consistently made by state-run farms and industries), the abandonment of state pricing controls and subsidisation policies and, in many cases, the introduction of Western-style electoral democracy (Utting1992: 43–44; Fitzgerald and Wuyts 1988: 1–3). It should be noted that different regimes embarked upon the reform process from different starting points. Some had nationalised extensive portions of their economies, others had not. Some had allowed markets to operate freely in certain sectors, whilst others had attempted to set prices right across the economy. All, however, sought to limit the role that the state had previously played.
There has been a fierce debate within the literature as to how far these changes represented (1) a capitulation to market forces and neo-liberal ideology, (2) a temporary search for ways of accommodating changing interna-tional circumstances or (3) a redefinition and refining of socialist forms of economic organisation which would respond favourably to the problems of the state-led strategy. To some, then, the reform process of that time represented a real attempt to find ways of tackling the limitations of the state-socialist model without simply capitulating to the dominant neo-liberal ideology. Fitzgerald and Wuyts (1988) are, perhaps, the most eloquent supporters of this view. To them, the age-old debate between capitalist markets and socialist planning is misguided in the Third World context as, in the clear majority of socialist exper-iments, planning has proved illusory (markets have generally continued to operate, drawing scarce resources out of the formal planned economy and further reducing the capacity of the state to plan effectively). Thus, they argue that the central dilemma is not whether the economy should be centrally planned or left to market forces, but rather it is the question of how markets are to be best managed institutionally, so as to assure the most effective mobilisa-tion of economic surplus in support of clear progressive social agendas and strategic investment priorities – whilst also allowing for the maximum scope for local initiative in the setting of those agendas and their achievement (Fitzgerald and Wuyts 1988: 6–9; see also Hodgin 1998).
Despite the possibility that the reform process embarked upon at that time could have constituted a rejuvenation of socialist economic approaches, subse-quent experience has not dealt favourably with these experiments. In practice, in many cases, there was little to distinguish this reformed socialism from other attempts to ameliorate the impacts of neo-liberal economic reform through selective interventions and, in some cases (such as the Chinese experience we have already touched upon), it appears even less convincing. Furthermore, as White (1983: 20) argues, attempting to find a limited form of market regula-tion can be incredibly difficult since ‘the relationship between them (markets and planning) is also contradictory and, without a well-conceived programme of policy reform, the results can be the worst rather than the best of both worlds – an unproductive co-existence of inaccurate planning with “anarchic” markets’. In some cases, it is incredibly difficult to assess the impact of the reform process, as policy was almost conceived ‘on the hoof ’ in response to a range of damaging external circumstances. The Nicaraguan transition under the Sandinistas, for example, whilst endorsing a variety of ownership forms, attempted at first to administer the economy through a significantly enhanced level of state intervention. A change of direction with a limited reintroduction of market forces and much greater attention to the needs of specific sectors in1985 was, given the escalating conflict against the Contras and the spiralling economic crisis, never really given a chance and the continuing economic crisis eventually resulted in stringent austerity measures in 1988 and 1989.
Cuba has perhaps least wholeheartedly gone down the road of market reform but, even here, there have been considerable changes over recent years as the Cuban economy has been rocked by the collapse of the support that it had received from the Soviet bloc. The need for foreign exchange has led to the search for new sources of export revenue through, for example, the develop-ment of the biotechnology, pharmaceutical and medical equipment sectors and most importantly tourism – the active promotion of which has had a profound impact on Cuban society (Pastor and Zimbalist 1995). There have also been a range of alternative approaches towards the agricultural sector which have centred around the need for food self-sufficiency and the fascinating develop-ment of organic agricultural techniques (again related to foreign exchange constraints). Nevertheless, whatever the innovations arising out of its current economic dilemmas, it is the lack of space for dissent (and hence to a certain degree innovation) within the political sphere that serves to limit its apparent wider applicability. As Burbach et al. (1997: 20) argue, ‘the Cuban variant of socialism may survive into the foreseeable future, but until the political system opens up, the revolution will remain in a largely defensive position, unable to provide inspiration for a renewal of socialism in the Americas’. This reflects the need for a renewal of the basic model underlying the economic programme; as NACLA (1995: 6) put it, ‘the resultant overlay of the old state-socialist system and the new market and cooperative forms of production has spawned a plethora of contradictions. A new socialist paradigm – which would make sense of it all and act as a compass for the future – is still sorely lacking.’
Whatever the rationale behind the reforms, then, the basic problem with the attempts at reorientating the statist bias of socialist economic strategy was that, by and large, they were not associated with a clear ideological programme and were thus interpreted as precipitous of a gradual abandonment of socialism and the embracing of one of the variants of capitalism. For instance, whilst the Vietnamese opening to market forces is still heavily regulated by the state and, to a certain degree, insulated against the world economy, there does not appear to be a long-term strategy for dealing with the impacts of market liberalisation. Indeed, as Bezanson (1998: 43) suggests, ‘the debate, even at the highest levels of the Communist Party, seems to centre not on whether to liberalise further or open up the economy to the competitive forces of globalisation, but rather on how fast to do so’.
So where does all of this leave the search for a socialist alternative to neo-liberal adjustment? The first point to make is that it is generally accepted that the old state-centred approaches to socialism do not provide a workable alterna-tive. Those socialist regimes that remain have experimented with a variety of reforms to that model but they all basically suffer from two fundamental prob-lems. First, the fact that socialism has been so associated with state-centric ways of envisioning itself that the attempt to reform has, more often than not, ended up in some kind of market-based reform and rapprochement with the global-ising international economy. Second, the traditional one-party political system with which these regimes have been associated are basically part and parcel of the old state-centred model of socialism and, as such, have proved incapable of escaping far beyond its confines. Elsewhere, there remains something of a confusion over what a more radical, less state-centred, socialist alternative might look like. In some ways, this is a reflection of a change in the left’s under-standing of itself. Today, most left-of-centre political movements conceive of the constructing of a new, more egalitarian, society as something that will only take place over a long and extended period of time. This view suggests the abandonment of a long-held (and perhaps inherently debilitating) trait of twen-tieth-century socialist thought, ‘the belief that socialism means redemption, salvation, the cure of all ills that have plagued mankind since the beginning of time, a world made anew with new men and women’ (Miliband 1996: 18).
Does this mean that Castañeda was right after all? Is the best that we can hope for a long-term struggle to give ‘capitalism a human face while main-taining a social order dominated by it’ (Miliband 1996: 19) – a gradual reform of neo-liberalism from within? There are certainly many leftist political move-ments that appear to have answered ‘yes’ to that question – others, clinging to traditional dogma, reject its relevance. Still others are, however, more cautiously optimistic. Burbach et al. (1997) argue, for example, that the dearth of realistic alternatives to neo-liberalism needs to be explicitly recognised, leading to the acceptance of Castañeda’s piecemeal reformist approach to national politics and all of the compromises that will involve. Nevertheless, they argue that such a strategy must be guided by the long-term goals of enabling the emergence of a new economic model through protecting and sustaining new economic subjects amongst the majorities marginalised by neo-liberal globalism and fomenting the transformation of civil society and local political cultures in directions that might challenge the discursive dominance of neo-liberal ideas. As they put it, ‘in the short term reformism is the political scenario that the left has to work within as it struggles to articulate and consolidate a new historical project … these parties will not dramatically change their countries, but they may shift the balance of political debate and provide space for new ideas and approaches’ (Burbach et al. 1997: 166–167). These themes are explored in detail in the final chapter.