Liberalism in Latin America and US Global Strategy

Abstract

There are a number of explanations for the liberalization policies that have been applied in Latin America. One school argues that there is a nationalist-populist policy cycle, which begins with state intervention, nationalization and protectionism; consolidates an ‘import-substitution’ development strategy, then enter into crisis because of growing state and trade deficits, macroeconomic imbalances and declining competitiveness leading to the initiation of the ‘liberal revolution.’ Another line of argument focuses on the growth, during the 1970’s of a class of transnational Latin capitalists linked to the world market and benefiting from state sponsored export strategies who became the central nucleus defining the strategy of liberalization. A third school emphasizes the role of the foreign debt and the leverage and influence of the World Bank (WB) and the International Monetary Fund (IMF) in imposing the liberal agenda as a condition for refinancing the debt. Others emphasize class conflict and the changing relationship of class forces, both internally and externally. According to this line of inquiry a coalition made up of the national bourgeoisie, the working class and peasantry, which formed the basis of the import-substitution strategy, broke apart as a result of a ‘squeeze’ on profits and state resources, leading to a new coalition of military regimes, linked to an export bourgeoisie in partnership with MNCs.