The Crisis of ‘Delayed and Dependent’ Development in Latin America

Under the developmental perspective, it has been argued that the ‘first crisis’ of ‘delayed and dependent’ capitalist development in Latin America occurred in the 1930s and that populism was a general regional response to the crisis.

For almost half a century, beginning around 1870s, Latin American economies had experienced a long period of boom based on the exports of primary products.

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It was the stimuli emanating from the industrialised capitalist states of Western Europe and the United States that had led to export boom. While experiencing boom, Latin American economies haiu also become even more deeply integrated with and dependent on the international capitalist economy for markets, capital, technology and goods.

Such an ‘outward-oriented’ economic development model had numerous effects on the Latin American economies, politics and societies:

(i) There was more emphasis on the development of export sector at the expense of the domestic needs. National economies had become increasingly dependent over international market, over which they had little or no control.

Major decisions relating to the production of primary resources and their pricing were all determined by the ‘demand’ in the industrialised economies. Foreign investors also decided matters relating to the introduction of new technologies or otherwise in the export sector of the economy,

(ii) The expansion and modernisation of export oriented sectors contrasted with the backwardness of the sectors producing for domestic needs. It created extreme imbalance; so much so the economies developed ‘structural dualism’,

(iii) The ‘deepening’ of the dependence on more advanced industrialised economies had also produced some very complex societal patterns. More notable was the expansion of urban middle class.

It was a class mainly of liberal professionals and public and private white- collar employees who lived off wages, salaries and fees but did not control any hard source of wealth. A sizeable group depended on public employment.

It was a case of ‘premature bureaucratisation’, that is formal governmental apparatus had expanded much faster than the underlying socio-economic structures. It would be this dependent urban middle class that would become a critical political actor from the 1930s and the .human base that spawned populism.

(iv) ‘Delayed and dependent’ development significantly also affected the position of formal governmental structures or ‘the state’. By the latel920s, most Latin American state structures were weak and characterised by low level of autonomy visa-vis the domestic oligarchy and its foreign collaborator viz., the foreign investors.

The expanding, consumption- oriented new middle class would further press the structures of the state with their demands so as to make it weaker and more dependent. It is therefore to be noted that from the 1930s onwards, a critical political issue in Latin America would be the power, effectiveness and autonomy of the various structures of the state.

The world-wide economic depression of the 1930s brought an end to the outward oriented economic model. In other words, with the particular phase of ‘delayed and dependent’ development having come to an end, the ‘crisis’ of the development model expressed itself throughout the region in the economic and political weakening of the oligarchic rule.

There were tremendous internal economic, social and political dislocations; in other words, there was a hegemonic crisis in all the Latin American countries.

Large sectors of the middle class were unaffected from the oligarchic system, and began agitating for political and economic changes.

In the ensuing region wide rethinking, there was a significant rise in the nationalist sentiments which found expression in the general desire for autonomous national development. Thus, nationalism and developmentalism became, and were to remain, dominant ideological themes throughout the region from the 1930s.

Populism was the political expression of the sentiments of nationalism and developmentalism. Though populism, as a concept remains broad and somewhat amorphous, there was sufficient similarity in terms of group composition in all the populist movements and enough thematic consistency behind their programmes to justify considering them as of a piece.

The unaffected middle class-given its size and consumption culture-could not independently carry out the basic structural transformations. It had to seek allies in other social strata importantly the urban working class, military and in some countries even the peasantry.

Populism became the guise within which change-oriented segments of the middle class sought to construct multi-class coalitions, powerful enough to gain control of the state and underwrite programmes of structural change.

Populism in Latin America was and remained largely the ideological product of the highly bureaucratised and largely dependent middle classes whose previously secure position had been threatened by the multiple effects of the ‘exhaustion’ of the export-oriented growth model.

Populist movements varied widely from the highly personalised style of Peron and Vargas who had constructed the movements when in power in Mexico where populist elements dating back to the Revolution were coalesced into the ruling party by the Cardenas.

Elsewhere, for instance, the more organised movements such as the American Popular Revolutionary Alliance (APRA) in Peru and National Revolutionary Movement (MNR) in Bolivia constructed organisations and ideologies as a means to assault the entrenched oligarchies, promote national economic ownership, continental solidarity, and projected the indigenous past and integrate the indigenous communities.

Whatever may be the variations of these movements and regimes, populism, in a powerful way, set the political debate in the period from the 1930s; and in one manner or another, all political forces from the left to the right had been forced to structure their behaviour in response to the populist challenge well into the 1980s.

Notwithstanding its rhetoric and self-designation, populism had, however, never been revolutionary. It never advocated a radical break from the past and a total overhaul of the existing economic and social structures.

In both theory and practice, it was a reformist attempt at limited structural change aimed at adapting to the new exigencies while maintaining basic continuity with the past patterns of elite political domination and skewed income distribution.

The political principles of populism proceeded from diagnosing the economic and social ills of Latin America; and, in important respects, populist diagnoses had anticipated the many theoretical formulations of Raul Prebisch and the UN Economic Commission of Latin America (ECLA) and, later on, of the ‘dependency school’.

For the populists, the central problems of Latin America were economic underdevelopment and deformed economic structures. A central dilemma was the lack of internal ‘integration’ owing to the economic dualism. In Peru and Bolivia, populists also stressed upon the geographical and ethnic- cultural divisions that were reinforced by economic dualism.

For the populists, the problem was not a simple one of one class exploiting another class. What had made Latin America under­developed was the exploitation of the ‘nation’ by the ‘antination’. The ‘nation’ was made up of all the groups other than the oligarchy (at the minimum, it comprised of the middle class, workers, and the peasantry) who shared some common interests.

The task, therefore, was not to form a class-based party but a broad multi-class movement of ‘national’ forces to unseat the ‘anti-national’ oligarchy and install a leadership that would represent the entire ‘nation’.

The chief declared goals of the populists were to assert national economic independence and anti- imperialism; to break local semi-feudal structures so as to liberate human and material resources for economic development, and to promote social justice for all sectors of the nation.

The central agency charged with achieving these goals was the state. The central themes for the populists were state, nation, development and social justice. The task of the multi-class coalition was to seize the state and use it to promote development and distribution.

Populism in that sense was ‘statist’. Populism condemned capitalism and imperialism; but it did not stand for socialism. In fact, the entire orientation of populist ideologies and programmes was anti- socialist.

Invariably, populists ousted socialists and others from the leadership position in labour unions and peasant associations etc. Populists like Peron talked of ‘neither capitalism, nor socialism’ and advocated a third path of development, which he called justicialismo.

What the populists had intended was to reform and regulate the internal and external structures so as to achieve gradually a controlled but autonomous economic development under the aegis of the state.

In a sense, populists advocated some kind of a ‘state capitalism’ or a ‘reformed’ capitalism. Later on the writings of Raul Prebisch and ECLA further underwrote the imperatives of import substitution industrialisation and lent an ideological credibility to populist development strategies.

Populism had stood for “integral’ development so as to achieve the maximum socio-political harmony. They rejected the Marxist notion of class struggle as well as the ideas of ‘economies of scale’.

They rather had an organic view of the society and assumed a community of interests among all groups and sections of the nation. They advocated the need for a society that would foster interdependence and cooperation among its various sections and regions.

The influence of populism was deep and wide. Countries where populists did not come to power also responded in their own ways to the populist ideas and programmes. In the 1940s, most countries either wrote new constitutions or amended old ones to reflect many populist ideas, which included labour rights, social welfare measures, land reform and national ownership of resources, etc.

These ideas were so widespread that one could argue that there had developed, particularly among the middle classes of Latin America, a general consensus around the image of reforms proffered by the populists.

The main challenge was how to put these reformist ideas into practice. In fact, Latin American politics since the 1930s and well into the 1980s can be interpreted in part as a struggle to realise the reformist image of populism. Cuban revolution of 1959 was in its initial stages, also very much in the reformist mould of populism.

However its ‘radicalisation’ into Marxian socialism by 1962 dramatically put forth the radical potential of populism. In Argentina, many Peronista labour groups moved left-ward after Peron’s ouster. APRA, facing constant persecution by the armed forces, had also at one time embraced more radical ideas.

Be that as it may, the Cuban revolution had added further to the belief, even among the conservative elements, that something resembling populist reforms had to be implemented if the region had to avoid more radical solutions.

Looking back at the theoretical and practical dimensions of populist regimes and movements, it is evident that populism was based on an implicit corporatist image of socio­political organisation.

Somewhere, it was more clearly delineated as in the case of Mexico; elsewhere, as in the case of Argentina, it could not. It is to be noted that populist corporatism was however ‘inclusionary’, compared to the ‘exclusionary’ corporatism which, the military regimes, that came to power in the 1960s, would enforce.

Populist doctrine-if one may describe it so-was also founded on the notion that because of economic underdevelopment and structural Deformity, class formation in Latin America has been deformed and demented. Masses workers and peasants themselves were underdeveloped and thus, ill prepared to define either their own interests or those of the nation.

Populists saw mass of workers and peasantry as ‘human capital’ to be freed from semi-feudal fetters; and organised more rationally as a productive force with the help and guidance of the state.

In several writings, it was suggested that workers and peasants have to be ‘capacitated’ (educated) under the leadership of the middle class-oriented elites to play a role in the future. In other words, populism had its own elitist moorings and it could not completely shed the elitist and paternalistic biases of Latin American politics.

Populist policies had led to the increased levels of consumption. The tension between development and consumption in an environment of relative scarcity manifested itself directly in the balance of payments crisis and deficit financing which together fuelled inflation throughout the region from the 1940s onwards.

Political mobilisation, concomitant with the rise of nationalism and consumption levels, had other consequences too. By the 1940s, the principles of nationalist-oriented welfare statism had become deeply implanted in the region.

Governments fearing loss of legitimacy and popular support often resorted to deficit financing and borrowings to maintain high levels of consumption often with disastrous economic consequences.

Inability to sustain high levels of consumption often created tensions within the populist coalitions with supporting classes and groups turning against the regime and the regime in turn resorting to coercion to keep the various supporting classes under state control.

No wonder, Latin American regimes, populist and non populist alike, showed high levels of social tension and political conflicts amidst worsening economic situation throughout the 1950s and the 1960s.

These factors brought populist experiments to an untimely and often violent end with armed forces staging coups against civilian regimes. The general increase in popular consumption had tended to outstrip both the rate of growth and the control capacity of public institutions contributing thereby to a general tendency in the direction of politics.

Under populism, the formal apparatuses of the state, though had grown markedly, this was accompanied not by an increase in the power and efficiency of the states but rather by the reverse. National economies were still primary product export dependent in the 1950s; and this largely made the states weak in reality though they had expanded and become formally more powerful.

Populist elites also could not keep for long the competing groups and clashing interests at bay. State apparatuses were appropriated by vested interests to sub-serve their particular ends. Such de facto parceling out of the state was particularly evident in the politics of social security policy.

Thus, instead of an assertion of the autonomous power of the state to regulate its internal and external environment, the period saw not only an increase in the size of the state but also a decrease in autonomy, power, and efficiency of the governmental apparatus. Despite these developments, the pressures generated in the 1930s and 1940s were, to a large extent, contained during the 1950s and 1960s despite rising confrontational politics.’

This was because established elites continued to incorporate new power contenders into the political coalitions as long as they did not seek to unseat the established power groups. So, while the number of groups and actors in the political arena increased, it did not mean that the basic rules of the political game had also changed.

The ability to include and co-opt new groups and interests was related directly to the availability of resources. So long as resources could be found, new and old groups in the populist coalitions could be satisfied. But there were structural limitations to the availability of resources, which with industrialisation had only accentuated further.

By the mid-1960s, a new structural crisis had developed as ISI had reached the stage of ‘exhaustion’. Contrary to all earlier expectations, external penetration of local economies had only increased under ISI, with the industrial sector also coming under the control of foreign capital, operating now as multinational corporations.

With nationalism and developmentalism having gained wide legitimacy and societies characterised by high levels of political mobilisation, the economic crisis of import substitution strategy only incensed the confrontational politics and the potential of radicalisation.

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