The values of free enterprise versus the new populism in Latin America.

• Author: Braun, Carlos Rodriguez
• Position: Essay

Like pornography, populism is hard to define, but we know it when we see it. And what we have seen in Latin America is a succession of often unstable populist governments that face delegitimization more clearly and in shorter periods. My conjecture is that Latin American populism may enter into a new transformation in order to achieve more stability and will not seek that transformation in the more aggressively antiliberal alternatives such as Chavism and even less in dusty Castrism. It might approach liberalism, (1) but its doing so would be unprecedented because all types of populism have been hostile to liberty up to this day. It is sadly more likely that Latin American politics will not embrace the cause of liberty, but rather the interventionist flag of the welfare state.

Populism has shown time and again that it gives birth to expectations it cannot fulfill. In addition, its failure is visible in briefer intervals (Cammack 2000, 152), a critically damaging circumstance for populism because if something approaching a theory of populism were to be sketched out, it would stress precisely the regime's relation with time, torn as it is between its leaders' demagoguery and what Guy Hermet calls "the rash impatience of its clients" (2003, 11). This urgent time preference, dangerous for politicians and destructive for the economy, appears also when interventionism adopts an institutional shape, as in developed democratic countries, but with one difference: populism is linked to specific persons, sometimes bearing their names, and accordingly ties its fate to these persons' vicissitudes, habitually more convulsion than the evolution of political systems that remain broadly unaltered when the government leaders succeed one another. Populism's luck will depend on this institutional leap.

Populism's self-destructive character is so undeniable that attempts to interfere with markets in the old populist style (through nationalizations or price controls) bring discredit from public opinion. There is, accordingly, a learning process, whose consequence is that today Latin Americans value a country such as Chile, which apparently has profited from experience, more than a country such as Venezuela, and they respect more the leaders in Santiago, Bogota, Brasilia, and Mexico City than the ones in Caracas, La Paz, Managua, Buenos Aires, and Quito (Dornbusch and Edwards 1991, 12; Isern Munne 2004; Valenzuela 2006; Walker 2006, 44). Even more clearly, they have shown recently, by voting with their feet, that they appreciate Spain, to which for the first time in history they have migrated in waves. The fact that the tax burden associated with the onerous welfare state amounts at present to approximately half of gross domestic product (GDP) and did not fall below 40 percent in the years of the so-called neoliberal Jose Maria Aznar is not taken into consideration, rejected, or criticized. If such esteem diminishes in the future, it will do so not only because of taxes, but also because of the combination of higher taxes and doubts about the system's sustainability.

The fiction of neoliberalism, understood as a regime that reduces much of the state's weight and opens the way to private entrepreneurs in a market economy, held lull sway also in Latin America, where some governments in the 1990s were said to have submitted to a sort of liberal populism. In this article, first I explore this liberal populism, which was more populist than liberal and did not escape classical populism's contradictions. Next I compare populism's interventionist policies with the policies followed in the democratic developed nations, which are not so different, as public opinion and academics often believe. Consideration of both misunderstandings allows me to conclude with a look at populism's transformation in Latin America in the search for more economic and political stability and at liberalism's potential to counteract the new democratic and antiliberal populist message.

Populism and Liberalism

The diverse types of populism in Latin America were always statist and antiliberal (Aguinis 2005, 18; Mmonte and Crespo Alcazar 2009, 26). Since its early days, populism has been interventionist, nationalist and even xenophobic, protectionist and even autarkic, as well as permanently hostile to rich countries, with paranoid fears of conspiracies--Great Britain in the nineteenth century, the United States in the twentieth. In recent years, it has rehabilitated anti-Spanishness and endeavors to trace Latin American evils back to none other than the remote times of the conquest and colonization, even suggesting that before 1492 there was no violence on the subcontinent, no invasions, no killings, and no plundering of natural resources. Falsification of history has ranged from the divinization of the cruel primitive peoples to the distorted proximity between the native Latin Americans and Simon Bolivar or Ernesto Che Guevara, who did not sympathize with the Aborigines--nor did the latter, to their credit, with the former.

In the 1990s, however, some Latin American leaders, in particular President Carlos Safil Menem of Argentina, applied policies that seemed to run against the populist tradition, such as privatizing public firms and opening markets to local and foreign trade. These leaders were soon labeled neoliberals and associated with liberalism, and some liberals erroneously supported them (Gallo 1992; Rodriguez Braun 1997).

In fact, so-called neoliberalism was a false and freakish version of liberalism (Bongiovanni 2010), an opportunistic system that never abided by the main liberal principle: the limitation of power (Novaro 1996, 100). In March 1994, I, along with a small group of commentators from the Spanish press, was invited to talk with President Menem in Barcelona. I asked him two questions. First, why had he adopted liberalizing economic policies without having previously given any clue that he would adopt such a strategy? He smiled and said: "Because if I had announced such measures, nobody would have voted for me!" It should be noted that this reply is really not in the least funny because it makes liberty wholly dependent on the whims of power's occupants or contenders. (2) My second question was what he thought about the notion of limits on political power as the guarantee of citizens' freedom. He revealingly did not answer except to tell me that he did not understand what I was talking about.

More privatization and market-friendly policies are not sufficient to define a liberal government because measures operating in the opposite direction can neutralize them and because liberalism hinges not only on economics, but on institutions of various types and on a political culture and shared moral notions, as F. A. Hayek and many earlier classical-liberal thinkers have highlighted (Gallo 1992, 124-25). Those policies, then, can coincide with major expansions of coercion in terms of taxes, public expenditure, and debt, as happened under Menem and under Felipe Gonzalez in Spain, another leader accused of being a neoliberal who was responsible for an unprecedented increase in the burden of government, which amounted to half the Spanish GDP. (3) Today, President Jose Luis Rodriguez Zapatero also comes with the brand of neoliberalism, even though he has increased taxes and encroached on liberties. Moreover, neoliberalism's counterfeit liberalism reproduced one of populism's traditional features: the craving for constitutional changes to allow providential presidents to hold the office of chief of state repeatedly. Juan Domingo Peron did so in 1949, and Latin American populists followed suit later with almost no exception: Hugo Chavez and Evo Morales modified their countries' constitutions, as did Menem, Alberto Fujimori, and even Alvaro Uribe, who was never included in the populist family and with good reason. Carlos Malamud aptly summarizes the populist notion of power, "[P]ower is forever, it is not shared or distributed" (2010, 95), and he brings up the case of Daniel Ortega, illustrative for its despotism and ridiculousness. Ortega put pressure on Nicaragua's Supreme Court to agree that the article in the Constitution that forbade successive reelection violated the candidates' human rights!

Populism tends to stand against liberal values, and in its classic form it flourished with the interventionism that spread in the 1930s, successfully personified in economics by John Maynard Keynes but present all over the world, as the rise of fascism and other variations of socialism proved (Rabello de Castro and Ronci 1991, 158; Sturzenegger 1991, 83-86). Yet populism does not conform to one clear model, and its interventionism can include liberal features, more or less intense for purely opportunistic reasons, that populism can wield precisely because of the absence of the shared liberal culture and traditions I have already mentioned (Bazdresch and Levy 1991, 228). Its argument has points in common with those of fascism and socialism, although no populism has been thoroughly socialist in the sense of advocating the end of private property and the full socialization of the means of production. On the contrary and more along the fascist lines, it usually presents itself as a system that integrates businesspersons, using adjectives such as national, and assigns them important political roles, starting with the corporatist tripartite "social" pacts or dialogues with government and trade unions. Given the policy of so-called inward development, the businesspeople whom populism welcomes have been as a rule protectionist, and their businesses inefficient and costly. But firms in general have not been harassed by populist policies. Federico Sturzenegger recalls that in the midst of the chaos in Argentina after 1973, the longer-lasting economy minister, who survived four presidents, was Jose Ber Gelbard, a businessman who presided over the employers'...