It is true that banks are less leveraged, but the outflow of capital is intensifying. Internationalized industry is hit by global overproduction, and lower prices of raw materials depress growth. Moreover, attempts at stimulation collide with reduced resources from the central economies.
Those who expect geopolitical benefits to follow from the crisis forget that the initial impact of the thirties was devastating and that the crisis of the seventies ended with the suffocation of attempts at autonomy in the periphery. This margin of independence now faces a higher level of internationalization of the economy and is dependent on unpredictable political events.
US domination is in crisis, but a counteroffensive looms. Whether the U.S. decline is of a limited or lasting nature is still uncertain, as the superpower preserves a military leadership accepted by its competitors.
The ruling classes of the region employ strategies of their own, especially in the south of the continent, and there is no sign of the type of neocolonial subjection which prevails in Africa. Yet a possible multipolar scenario might also feature serious repression and accentuate the association of local elites with the hegemonic powers.
Brazil already is able to put that option to use through its own multinational corporations, which unleash conflicts with neighboring countries. With rearmament, the occupation of Haiti, and the geopolitics of the Union of South American Nations (UNASUR), the Brazilian Ministry of Foreign Affairs at the Itamaraty Palace seeks to occupy the space opened by the US crisis, without clashing with the giant of the North.
This subimperialist policy confirms the disappearance of the old national bourgeoisie. This is illustrated by the dominant sectors in Brazil investing outside the country a capital surplus generated by a policy of restricting internal accumulation. It is also important to recognize the existence of semi-peripheral formations in order to go beyond the oversimplifications of the center-periphery scheme.
The capitalists of Mexico, Brazil, and Argentina receive the assistance that should be allocated for the destitute. The social-liberal and neo-developmentalist governments all follow statist programs on behalf of the rich and powerful and do not coordinate their anti-crisis policies.
It is clear that the mass of the people shall suffer hard blows if they do not resolutely resist the outrages that are on their way. We must be prepared to confront unemployment and poverty with a program that expropriates the bankers, suspends debt payments, and nationalizes natural resources.
The political conditions for this turn exist in several countries. Meanwhile the right seeks to recover ground lost in recent major battles. Radical nationalist governments could adopt a robust agenda, reinforcing the alliance with Cuba and revitalizing the Bolivarian Alternative for the Americas (ALBA). The fight against neo-liberalism demands action against capitalism and a socialist perspective that goes beyond the mere regulation of the existing system.
Claudio Katz teaches economics at the University of Buenos Aires, does research at the Consejo Nacional de Investigaciones Científicas y Técnicas (National Council of Scientific and Technical Research), and is a member of Economistas de Izquierda (Economists of the Left). The original article “América Latina frente a la crisis global” appeared in CubaDebate on 21 February 2009. Translation by John Mage.