Protestors attacked by tear gas in Quito, Ecuador (October, 2019). Photo by Jeremy Rayner
In Ecuador, however, the historical memory invoked is the crises of the 1990s and early 2000s, not the 1930s. As is the case for Latin America generally—and in contrast to Europe or the United States—the 1930s lacks special resonance in contemporary public culture. For most of the region, the Great Recession was a passing moment in the midst of an historic commodities boom. As that boom has come to an end, bringing economic troubles in its wake, the obvious comparison is to the more recent period of financial crises and economic depressions between 1980 and 2002, which occurred in living memory of many, and which involved a similar cast of actors (most prominently, the IMF).2 As for authoritarianism and genocide, the most salient referents are the military dictatorships and counterrevolutionary violence which claimed hundreds of thousands of lives between the 1960s and 1990s. The historical memory that does exist for the 1930s is varied and rather ambiguous, including many aspects of progressive change, along with the formation of dictatorships and episodes of collective violence, including the Chaco War, and the racialized violence that killed tens of thousands in El Salvador the Dominican Republic.
Nevertheless, I will argue that there is insight to be gained by thinking about contemporary Latin America in light of the 1930s—or, rather, the decades-long, global process of political and economic transition that culminated in the 1930s and 1940s. This “crisis of 19th century civilization” (Polanyi 2001) was shaped by processes of “financial expansion” and “systemic chaos,” which returned in force in the 1970s, and which continue to shape our contemporary moment (Arrighi 2010). It is because we are again positioned within such a long moment of financialized global turbulence that Latin Americans can find examples of economic crisis near at hand. It also helps to explain certain similarities in the politics of both periods: most importantly, the emergence of “populist” movements promising revolutionary change, while delivering a moderate expansion of social welfare and a limited capitalist modernization. This process of “passive revolution,” which characterized the so-called pink tide of the early twenty-first century as well as the pioneering populisms of the long 1930s, reflects the tensions and contradictions produced by moments of financial expansion and transition between regimes of accumulation—contradictions that have also resulted in fragile transformations that are vulnerable to shifting tides of global capitalism and political reaction.
Financial Expansion, Systemic Chaos and Passive Revolution
A starting point for this essay is the proposition that the first four decades of the twentieth century, and the half century from 1970 to today, are structurally similar periods for the world economy in general, and for Latin America in particular. This structural similarity is produced by long cycles of capitalist accumulation on a global scale, which alternates between “great surges of development,” in which new industries are established and expanded, and “financial expansions,” when those industries become saturated, and capital, seeing declining returns from reinvestment, seeks other avenues for accumulation (see Arrighi 2010; Perez 2003). These moments of financial expansion are characterized by speculative investments and the formation of “fictitious capital”: in unproven technologies, land, and other speculative claims on future income. They are times of stock and real estate bubbles, increased internationalization of capital flows, and aggressive attempts to “profit without producing,” through debt-farming and financial intermediation (see Lapavitsas 2013).
It is also during these periods that new technologies are developed, although converting these into a surge of development depends on the creation of a set of new practices, institutions, and infrastructures, what Carlota Perez (2003) calls a “techno-economic paradigm.” In the early twentieth century, the emergent technologies were the automobile and mass production, whose potential would only be realized after the Second World War, while the period since 1970 has been characterized by the disruptive “eruption” of information and communications technologies, which has not (yet) achieved a “great surge” (Perez 2013). The process of transition between “paradigms” is turbulent and historically has only been completed after economic crisis and a transition in global hegemonies (Arrighi 2010). These transitions, while global, follow distinct rhythms in core and periphery: peripheral regions behind the technological curve may come to specialize in technologies of a prior paradigm (Perez 2003, 60–70), and while the great global crises, such as the and the Great Recession, have been centered in the United States and Europe, more peripheral regions experience capitalist crises more frequently, and at earlier moments of the financial expansion.
Such periods of financial expansion present unstable and shifting hegemonies and “systemic chaos,” as dominant capitalist powers are challenged politically and economically (Arrighi 2010). For more peripheral regions, including Latin America, the weakening of the hegemonic center and the emergence of competing financial powers create some additional space for autonomy. At the same time, financial expansions provide particularly challenging contexts for projects of national development: competition in established industries is fierce, while the process of financialization itself destabilizes and often drains capital from the periphery. The clearly defined pathway for economic transformation provided by a global “great surge of development”—or at least by the one that occurred in the mid-twentieth century—is absent, in its place a faith in foreign investment, abstract markets, and “entrepreneurialism” (see Elyachar 2005). In Latin America, the shortcomings of economic liberalism in both periods of financial expansion eventually led to the emergence of regimes utilizing state intervention to promote structural change (away from the traditional dependence on natural resource extraction), responding, to a greater or lesser degree, to perceived opportunities in an emergent techno-economic paradigm.
This is, however, a contentious and contradictory outcome of diverse social conflicts, as channeled through the politics of “passive revolution.” Here I follow Callinicos’ interpretation of Gramsci’s “passive revolution” as a “processes through which revolutionary pressures are simultaneously displaced and fulfilled” (2010, 501). In particular, I refer to state projects that promise “revolutionary” change, and do in fact accommodate some demands from below, but without fundamentally altering the distribution of property and power—a balancing act which has usually implied a state-led project of economic transformation to make room for a reformed social compact. Passive revolution in this sense is part of the zeitgeist of moments of upheaval and political-economic transition. As a concept that expresses contradictory and equivocal processes, it resists ideal types, although it may be more or less aptly applied to particular regimes; Cárdenas’s “revolutionary” Mexico makes a particularly good fit, while a transformation that does not declare itself revolutionary hardly merits the term, and neither do those that remain purely rhetorical. Nevertheless, even regimes such as Somoza’s Nicaragua or Trujillo’s Dominican Republic, which no one could call revolutionary in any meaningful sense, to some extent “displaced and fulfilled” revolutionary pressures from below: they supplemented repression with (very limited) social and economic reforms, flirted with unions, peasant organizations, and leftist parties, and instituted new forms of “strong man” politics that replaced traditional oligarchic rule (see Walter 1993; Turits 2003).
Passive revolution is associated and intertwined with the phenomenon of “populism,” but neither term is reducible to the other. Understood as a logic of articulation of diverse social interests (Laclau 2007), some degree of populism has been central to most processes of passive revolution—but not all populist processes are transformative enough to count as passive revolutions (the phenomenon of Velasco Ibarra in Ecuador, for example). Distinguishing between these two processes helps us sort out some of the knottiness that has characterized discussions of Latin American populism as political style and as regime type.
Passive revolutions might be particularly characteristic of the capitalist periphery, where hegemony is difficult to consolidate and where capitalist development requires an active state (see Morton 2011). And Latin America, with its combination of revolutionary republican and socialist traditions and deep-seated inequalities, has been particularly fertile terrain. But history suggests that the politics of passive revolution is temporally, as well as spatially, uneven; here I argue that it has been particularly characteristic of the tail end of periods of financial expansion and turbulent transition between techno-economic paradigms.
Percent change on prior year, GDP per capita for Latin America and the Caribbean in constant 2011 dollars
The authoritarian liberalism that prevailed through the bulk of both financial expansions was ultimately forced to adapt in the face of these contradictions or cede to political movements that emerged to articulate diverse discontents: in either case creating new admixtures of reform and repression. The most transformative of these took the form of passive revolutions that promised fundamental change, accommodated some demands from below and reformed the class structure without radically challenging it. These usually involved some attempts to adapt to the emerging techno-economic paradigm, taking advantage of freedom of movement opened up by the decline of the hegemonic power and the emergence of competing sources of finance: the United States, Germany and France in the first period, Europe and China in the second.3
The Early Twentieth Century and the Crisis of the Liberal Order
The early twentieth century was a tumultuous period of financialization and “systemic chaos” on the world stage (Arrighi 2010; Hobsbawm 1989, 1995). Since the late nineteenth century, increasingly centralized capitalist firms allied with increasingly imperialist states, culminating in an unprecedented world war. Capital, over-accumulating in core industries, spread out over the globe in search of natural resources and new investment opportunities, while assuming ever more speculative forms that culminated in the Wall Street crash of 1929.
Latin America had been incorporated into the process of capitalist expansion as a provider of natural resources and consumer goods: wool, wheat, beef, rubber, oil, minerals, cacao, coffee, and bananas. This was a dependent integration that made whole regions susceptible to the fortunes of a single product in a particularly volatile world market, while providing difficult conditions for broad-based economic growth outside of a few countries such as Argentina (Bulmer-Thomas 2003). The “commodity lottery” meant more localized crises, such as the collapse of Amazonian rubber or Ecuadorian cacao, while manifestations of global turbulence—the outbreak of the First World War, the depression of 1920–1921, and the stock market crash of 1929 had effects across the region, as evidenced in Fig. 3.2. Even some forgotten incidents of financial turbulence could have important ripple effects: the Wall Street “panic of 1907” provoked a three-year depression in Mexico, and was particularly significant in the northern mining region that nursed the first movements of the Mexican revolution in 1910 (Cahill 1998; Meyers 1994).
The Mexican revolution also responded to the alienation of peasant and Indigenous lands (notably in Zapata’s state of Morelos) and growing foreign control over mineral resources, which typified Porfirio Díaz’s presidency (1884–1911), but which also occurred to greater or lesser degrees in other parts of the region, generating similar tensions. To the extent that the early twentieth century did produce an expansion of industry and services, notably in Argentina, Chile, Brazil, and Mexico, new working- and middle-class groups emerged with distinct organizational capacities and demands, as well as new dependencies on market conditions.
The overall trend of increasing foreign investment (both direct and indirect) from the nineteenth century became a “foreign loan splurge” in the 1920s (Marichal 1989). This capital largely came from Wall Street, which was becoming the epicenter of an increasingly speculative process of financial expansion. Initially used to sustain shaky public finances in the wake of the depression of 1920–1921, as the decade progressed foreign capital in Latin America was directed toward “development loans” to finance the construction of public works—railroads, ports and utilities—usually by foreign firms, under questionable contracts (ibid.). The US military interventions that accompanied this rise of foreign investment also provoked responses ranging from armed resistance movements to a more diffuse critique of imperialism.
The onset of the Great Depression brought these processes to a head. Fiscal problems emerged even before the crash of 1929, as capital was redirected from development loans to Latin America toward the bubble on Wall Street. The subsequent financial collapse and dramatic fall in commodity prices provoked a generalized (although also unevenly severe) crisis in the region, including debt defaults, massive unemployment and impoverishment, protests, rebellions and coups (Bulmer-Thomas 2003; Drinot and Knight 2014; Marichal 1989).
Thirteen governments fell to coups between the years 1930 and 1934 alone (Knight 2014, 289). This immediate political reaction was, however, generally reactive: a more coherent set of political responses to the crisis of the liberal world order would take time to emerge. Diverse forms of resistance, radicalism, and reformism had flourished in the volatile years before 1929. “The social question” had figured prominently in public debate, art, and literature, while homegrown and hybrid radicalisms flourished, drawing on anarchist, Marxist and other socialist currents from Europe as well as on domestic traditions; the diverse tendencies of the Mexican revolution, Sandinismo, APRA in Peru, the writings of Martí and Mariátegui, and others, which in turn influenced each other.
The crisis of the 1930s augmented these antagonisms, leading to their gradual and piecemeal cooptation through the formation of political regimes that, in varying forms and degrees, both “displaced and fulfilled” revolutionary pressures from below, while laying the seeds of a distinct regional adjustment to the emergent techno-economic paradigm of mass production, which would reach its full global expression under US hegemony after 1945. In broad strokes, these are the elements of passive revolution: it created regimes that fulfilled some demands from below (in labor legislation, land reform, etc.), while instituting a process of capitalist modernization “from above” that ultimately expanded capitalist accumulation by placing it on a new footing and opening up new pathways (see Morton 2011).
This most iconic examples are Mexico under Cárdenas (1934–1940), Brazil under Vargas (1930–1945), and Argentina under Perón (1946–1955), where substantial institutional changes and “social reforms” accompanied the “structural transformation” of the economy toward “inward-looking” development and industrialization. But to one or another degree this dual process characterized the emergent politics of the period; the short-lived “military socialism” in Bolivia, socialist and popular front governments in Chile, reformist governments in Colombia and Cuba, and even the new breed of authoritarian strong-man dictatorships in Central America and the Caribbean. Degrees of repressive accommodation were more characteristic than the kind of bald state terror employed by the Salvadoran military regime, which infamously massacred tens of thousands of peasants and Indigenous in 1932.
These transformations emerged from pragmatic political and economic adjustments in the context of crisis and a changing capitalist order, rather than from some previously existing program, consolidating gradually through the 1930s and into the 1940s. In politics, a “populist” style was developed by leaders such as Vargas, Cárdenas, and Perón, which would have profound and long-lasting impacts. Influenced by Italian Fascism, with its cult of personality and its appeal to corporatism, it also articulated the diverse unrealized demands that had accumulated in these troubled decades, as a promise of transformation by a unified people under a vigorous (masculine) leader. As this politics operated more through the projection of hopes onto “empty signifiers” than on any program or ideology (see Laclau 1979, 2007), its class politics was flexible and therefore ideally suited for the shifting accommodations of passive revolution. Labor legislation and social welfare, and more rarely, land reform, were accompanied by policies oriented to fostering emergent industrial bourgeoisies.
The process of political consolidation was accompanied by the adaption of economic structures to new constraints and emergent opportunities, which ultimately led to the emergence of a new economic development model for the region (Bulmer-Thomas 2003). The gold standard system that had briefly held sway over Latin American finances was abandoned by necessity in the context of declining export earnings and withdrawal of international credit; but flexible exchange rates and money creation subsequently came to be seen as necessary tools of economic policy generally and industrial policy in particular. Import substitution likewise emerged originally out of necessity, provided by the collapse of export markets. If this did not lead directly to the postwar expansion of import substitution industrialization (ISI), it did provide examples and laid the seeds for this more comprehensive program. The expansion of public works provided employment in the face of dangerous levels of popular discontent, but also laid down the infrastructures for automobiles, airplanes, modern social welfare and mass production: the infrastructure of the emergent techno-economic paradigm. These processes converged with the global shift toward active states engaged in economic planning, employment and infrastructural creation in response to the 1930s crisis, from Franklin Roosevelt’s United States to Italian and German fascism, the Five-Year Plans of the USSR, and Japanese-led industrialization in colonial East Asia (see also Taek-Gwang Lee, this volume).
The “Golden Age” of Capitalism (and Socialism) 1945–1975
As the outlines of a new regime of accumulation under US hegemony were clarified in the postwar period, the pragmatic adjustments of the 1930s emerged as a distinct model of development centered on ISI, whose principal intellectual advocate was the Argentine economist Raúl Prebisch. This model was an adaptation of the emerging techno-economic paradigm of mass production for Latin America: exchange rate and tariff policies were used to encourage the installation of mass-production industries, complemented by the creation of the necessary infrastructure (electricity, roads, airports, schools, etc.).
This was a period marked by the consolidation of two forms of the mass-production techno-economic paradigm on a global scale, US corporate capitalism and the central planning of the USSR (which was very much influenced by the Fordist example). The mid-twentieth century therefore offered two seemingly clear pathways for modernizing (industrial) development, which tended to sort both defenses of, and challenges to, the existing order. The diversity of early twentieth-century anti-systemic radicalism, with its many homegrown hybrids of agrarian, artisanal, cooperativist, anarchist, and socialist politics ceded to a more uniform revolutionary program for the creation of a socialist state. At the same time, capitalism seemed to offer a pathway of national industrialization fostered by state intervention, in the context of which distributional struggles also flourished, including a relatively powerful labor movement. The existence of these two well-defined pathways, each with its own infrastructure of political, economic and military support, sharpened the fault lines and raised the stakes of confrontation. In this context the United States collaborated with regional elites to block the socialist path and maintain access to the region’s markets and products, failing only in Cuba.
The sign of anticommunism was used to justify the repression of workers and peasants through campaigns of torture, terror and mass murder, eventually resulting in hundreds of thousands of deaths. This recourse to violent repression was especially notable in the Southern Cone in the 1970s and Central America in the 1980s. In the latter case, the violence reflected the attempt by agrarian elites to maintain a coercive and exclusionary system of surplus extraction, which had remained relatively untouched by the processes of passive revolution and industrialization elsewhere in the region. In the Southern Cone, reaction responded instead to the internal contradictions of those processes. The mobilization of labor in support of programs of national industrialization—a mobilization further encouraged by industrialization’s successes—began to threaten the profitability of capitalist industry. And while it allowed for relatively rapid industrial growth in some cases, ISI contained its own contradictions. A high degree of dependence on multinationals for foreign direct investment limited the development of domestic productive capacity, while multinational firms often preferred to repatriate their profits rather than reinvest. The development of industry in consumer goods meant the increased imports of capital goods, which in turn meant that ISI often worsened, rather than improving, the balance of payments (Bulmer-Thomas 2003). And the lack of any real revolutionary or even strongly redistributive movement in the region meant the ongoing domination of rentier landed interests, with little real interest in industrial development, and the stunting of the domestic consumer markets upon which import substitution had to depend.
It was in this context that military dictatorships took over, employing extreme violence and an anti-political, technocratic discourse to counter populist mobilization (Loveman et al. 1997). The limited accommodation of popular demands was sacrificed, leaving only the second moment of the passive revolution: modernization from above. It was under this guise of modernization that the military governments in Chile, Argentina and Brazil began the first moves toward what would come to be known as neoliberalization (Munck 1985), which would merge with the global processes of systemic chaos and financial expansion marking the end of the surge of mass production and the incipient beginnings of a new regime of accumulation centered on information and communication technologies.
Neoliberalism and Post: The Return of Financialization
About 1970, the great surge of development of the mid-twentieth century came to an end, initiating a process of financial expansion and systemic chaos with important parallels to the early twentieth century. Arrighi (2010) dates this transition to the late 1960s, when large pools of surplus capital began to destabilize the Bretton Woods monetary system, followed by the US defeat in Vietnam and the OPEC oil price hikes of the 1970s. For Perez (2003), the key moment is the invention of the microprocessor in 1971, initiating the turbulent process of transition from the mass production to information and communications (ICT) paradigm. Along with other innovations in transport and communications that facilitated the reorganization of global systems of production, these changes certainly pointed to a destabilizing transition for Latin America.
The first decade of financial expansion in fact meant a last hurrah for inward-looking development and the mass-production paradigm in Latin America. Several Latin American states were direct beneficiaries of rising oil prices (especially Venezuela, Mexico and Ecuador). Others were recipients of the surplus money capital made available by the oil price rises; the recycling of petrodollars contributed enormously to the financial expansion already in progress, further augmented by the US loose monetary policy (Arrighi 2010, 321–324). Lending to Latin America, and particularly Latin American states, seemed a safer bet than reinvesting in the expansion of industries. For Latin American states, these resources promised the ability to transcend the limits of ISI, by enabling the shift from consumer goods to capital goods, although these investments were not necessarily well-planned or executed (see, e.g., MacLeod 2004).
The rise of interest rates on the dollar and resulting global recession at the end of the 1970s brought this expansion to a halt, putting Latin American states in the unsustainable position of greatly increased debt service, on the one hand, and declining revenues and worsening balance of payments, on the other. The subsequent “Latin American debt crisis” brought a dramatic worsening of livelihoods and extensive cut-backs in social welfare spending. This was followed by austerity, privatization, and liberalization in the context of structural adjustment programs administered under the tutelage of the IMF and the World Bank and guided by the neoliberal ideology that came to be known as the Washington Consensus. This adjustment involved a redirection away from both agricultural and industrial production for national and regional markets, a process of deindustrialization throughout the region and a renewed emphasis on the export of primary products from agriculture and mining. There was also a return to the liberal capital accounts of the early twentieth century, along with a renewed commitment to “hard money,” including fixed exchange rates in Argentina, and in El Salvador and Ecuador, outright dollarization. This return to a modified form of the monetary and financial policies of the early twentieth century also brought in tow a predictable “return of depression economics” (Krugman 2009) resulting in a series of financial crises in the 1990s, notably in Mexico, Argentina and Ecuador.
Financial expansion historically has also provided resources for the spread of industrialization to new areas, especially those serving distinct markets (Arrighi 2010). The expansion of ISI in Latin America in the 1970s owed something to this phenomenon. But since the debt crisis of the 1980s, capital has rather flowed toward the core. Liberalization made this worse, in part because peripheral nations have had to maintain large reserves of hard currency as a hedge against speculative capital flows (Lapavitsas 2013). The capital that does arrive is often either short-term and speculative, is essentially extractive (such as mining), or has been dedicated to acquiring assets and extracting rents, as in the case of utilities privatizations (typified by the famous “water wars” in Cochabamba, Bolivia). After the crash of 2008—accompanied by a little-remembered spike in food prices—there was also a surge in “land grabbing” by transnational corporations, as surplus capital looked for assets that promised more than the low or negative interest rates on offer in the core (see Edelman et al. 2013). These are all reminiscent of the kinds of investments that characterized Latin America at the beginning of the twentieth century, a kind of neo-Porfiriato.
This was of course not a simple return to the past. The process of industrialization was not entirely reversed, and the emergent regime of accumulation created some new economic dynamics. The northern part of the region, Mexico, Central America, and the Caribbean, developed export-processing for (mainly) US industry and services. Tourism expanded and was held out as a promise of development for depressed rural areas throughout the region, especially those with tropical beaches or scenic ruins. For the most part, however, these industries did not provide a basis even for sustained economic growth comparable to the postwar period, much less broadly shared development.
Rural development as a comprehensive strategy was essentially abandoned, as public and private resources were again directed toward fostering export agriculture, often in the hands of agribusiness. The already limited standard postwar development package for peasant agriculture, which consisted of (limited) land reform and technical assistance, often oriented toward fostering the production of subsistence products for the national market, was abandoned in favor of a piecemeal “projectism” directed by international NGOs, with even fewer results. De-peasantization and outmigration followed. Often the main hope voiced in rural areas today is for a vaguely defined “community tourism,” while the historic demand for comprehensive transformation of rural property relations (land reform) has been largely abandoned (see, e.g., Bretón 2011).
This shift is symptomatic of broader changes in the prospects and agenda of oppositional movements. The long period of depression, stagnation and repeated crises that afflicted Latin America fostered enormous discontent among a diverse array of groups. But the absence of a clearly defined pathway for progressive capitalist development was matched, on the left, by the collapse of the centrally planned version of the mass-production paradigm, and the revolutionary socialist politics that had accompanied it. New social movements put forth a diversity of more localized or sectoral demands, or articulated a broad opposition to “neoliberalism” with a vaguely conceived sense that alternatives must be found (“another world is possible”). For left-leaning intellectuals, socialist development was replaced by varieties of post-development, most of which remained at the level of critique. There was a focus on process over result, as in the widespread demands for participatory and direct democracy. Like the early twentieth century, this was a period of diverse, localized demands and homegrown radicalisms, often innovative but rarely aspiring to a comprehensive program, a situation that mirrored—and often overlapped with—the retreat of capitalist accumulation to a vaguely defined entrepreneurialism.
By the end of the twentieth century, these diverse demands began to be articulated around the signs of Bolivarianism, Socialism of the Twenty-First Century, and other, similar “empty signifiers.” This repeated aspects of the process and sequence that characterized the emergence of consolidated “populist” movements at the beginning of the century. And, once again, the process took on an aspect of passive revolution. Participatory, pluralistic, and radical democratic programs were subordinated to top-down programs of modernization and development, often in more or less tacit pacts with economic elites, involving varying degrees of direct appropriation by political leaders themselves (see Modonesi 2015; Svampa 2016; Webber 2011). Despite post development rhetoric associated with “buen vivir” (good living), development was on the agenda again (Caria and Domínguez 2016), as it had not been in the neoliberal period. Much of this was a traditional return to the public investment in social welfare and infrastructure that had been so neglected. As in the 1930s, there were also tentative moves toward programs of economic modernization that might promote the growth of new industries. The Washington consensus was partially replaced by a “consensus of commodities” (Svampa 2013), which emphasized the nationalization and reinvestment of natural resource rents. But beyond the basic tasks of improving social welfare, the strategic goal of reinvestment was less than clear. Although there was some attempt to encourage manufacturing industries, it was evident that the manufacturing hub of the future would be East Asia—and in any case these were “mature” sectors of the last wave of development that were now characterized by over-investment and market saturation. Other investments were geared to an idea of the opportunities provided by the emerging techno-economic paradigm; for example, Ecuador identified tourism and biotechnology as priority sectors, while Bolivia began an audacious project to process lithium, plans are largely consonant with Perez’s argument that the emerging niche for Latin America is the development of “process industries” based on natural resources (Perez 2010)—although none of these programs has actually resulted in a significant economic transformation.
Certainly, enduring issues, such as the concentration of wealth in the hands of an essentially rentier elite, insufficient investment in education and infrastructure, and domination by imperialist interests and transnational capital, have continued to present obstacles to dynamic, much less inclusive capitalist development. But the more basic fact might be that the framework for a global “surge of development” has not been established, while conditions of financial expansion and systemic chaos continue to prevail.
The “progressive” governments of the early twenty-first century did benefit from financial expansion and systemic chaos in a way. Both phenomena contributed to the formation of the “commodity super cycle,” which financed economic growth and the expansion of social welfare and infrastructure in this period; the surge of capital looking for profits in speculative activities was a major contributor, reflected, for example, in the explosion of futures trading (Bain 2013). There were complex feedback loops, as any chaotic situation will produce: the Arab Spring, partly provoked by a speculation-driven rise in food prices, eventually produced a decline in oil production (and a renewed round of speculation in oil) that caused oil prices to rise dramatically again for a few years.
The other great source of the commodity supercycle was the development in China, including a massive project of urbanization and fixed capital formation, driven in part by counter-cyclical measures taken to boost domestic demand after 2008. The rise of Chinese capitalism might eventually inaugurate a new regime of accumulation or techno-economic paradigm, but for the moment it remains part of the panorama of systemic chaos and financialization, precisely because China has largely developed within the matrix of the previous, mass-production paradigm. While offshoring to China and Latin America helped transnational corporations from the capitalist core to increase their profits, China subsequently developed their own firms to compete in already-saturated product lines, such as steel, auto and electronics. Neither process is propitious for Latin American mass-production industry, while Chinese interest in Latin America seems resolutely set on gaining access to its natural resources.
For all these reasons, what seemed to be a new birth of development was in fact another manifestation of systemic chaos and financial expansion that could not outlast the boom years of the commodity supercycle. (Even Brazil, one of the foundational “BRICs” with a large industrial base, still has an export profile centered on a few primary product exports—such as soy—which meant that collapse of prices in 2014 drove Brazil into its worst crisis since the Great Depression.) Although some effects remain—a healthier and better educated workforce, perhaps with higher expectations for public services, and some highways and dams of variable quality—it is clear that the pink tide and neostructuralism did not place Latin America on a new path. The rightwing governments that have since replaced the Left through much of the region have even less to offer, except a return to generic neoliberal rhetoric of entrepreneurialism and foreign investment masking an even more intensive extractivism. In Brazil, and increasingly elsewhere, this has been armored by a recourse to violent repression, especially of Indigenous and environmental activists.
Conclusion
I have used two cyclical theories of capitalism for the useful heuristic that they provide in explaining the similarities between the early 20th and 21st centuries. I do not mean to argue that these are unchanging temporal structures, or that they apply to the more distant past, much less the future. Many of the characteristics of these two moments have been defined in relation to the post-Second World War period that separates them. It is likely, however, that that is the exceptional time, for the region and indeed for global capitalism, and that much of what I have outlined as characteristic of these two moments of systemic chaos, is rather the norm for (semi-) peripheral capitalism, or for capitalism in general. There are certainly, from where I sit now, few signs of a “great surge of development” on the horizon, which suggests that the revolutions to come—however passive or participatory they may be—must chart courses distinct from those that have brought us here.