Chapter 13 Summary

CHAPTER 13

Having already taken root in Pinochet's Chile in the 1970s, the political-economic ideology of neoliberalism gained ascendancy in the Anglo-American world in the 1980s and globally in the 1990s after the Soviet bloc collapsed as a socialist alternative. In Latin America, as throughout the world, neoliberal governments adopted the "Washington Consensus" – free elections, but more importantly, removing regulatory and tariff barriers to foreign trade and investment, privatizing state- and collectively-owned properties, and cutting public payrolls and social spending. Transnational investors, local elites, and middle-class consumers reaped most of neoliberalism's benefits, while the lives of the poor and vulnerable grew increasingly precarious.

While neoliberalism, in a milder form, continued smoothly in democratic and prosperous Chile, elsewhere in Latin America the neoliberal era brought disruptive shocks. Argentina's generals mismanaged halfhearted neoliberal reforms, then bowed out after losing a humiliating war against Britain. Their elected successors, like those elsewhere in the 1970s and early 1980s, binged on debt and faced hyperinflation before imposing unpopular austerity measures. After democracy returned in 1985, Brazil's civilian governments likewise wallowed in corruption and runaway inflation; the latter was eventually tamed through austerity, though the former remained entrenched. The region's big oil producers, Mexico and Venezuela, fueled their debt binges with petrodollars in the 1970s before the oil-price collapse of the mid-1980s forced them into unpopular spending cuts. In Venezuela, an aging party duopoly limped along until the 1998 elections inaugurated a new populist promising to re-found Venezuelan democracy and end neoliberalism. In Mexico, neoliberal reforms eroded the PRI's support among campesinos and organized labor, while indigenous peoples' discontent was manifest in the Zapatista uprising beginning in 1994, the day Mexico entered the NAFTA free-trade pact.

Transnational phenomena highlight other challenges of the neoliberal era. The production and trafficking of cocaine for export (mostly to the US) brought employment to hundreds of thousands in Bolivia, Peru, and Colombia. While little wealth trickled down from the drug kingpins, violence did; US-backed governments fought wars with the narcos, who shifted their smuggling routes to Mexico and Central America, with ominous implications for those countries' future. Urbanization created worsening environmental consequences, as well as a huge informal sector, where tens of millions of impoverished Latin Americans live and work without formal jobs, access to municipal services, or title to their homes. Pressures on urban families led feminists to push, with mixed success, for greater access to divorce, contraception, and abortion.