Thread by @dsal1829

PARLIAMENTARY/MILITARY COUPS IN LATIN AMERICA: SOCIOECONOMIC CAUSES

So @BadEmpanada gave me a shoutout yesterday & dozens of people started to follow me. So to give them something interesting that adds to the discussion about Bolivia & beyond...

@BadEmpanada I wanna discuss on the underlying socioeconomic causes of these right wing shifts that keep happening, often through illegal govt. changes. There are several people that have written extensively about this and I'll try to condense some of their ideas...

@BadEmpanada WARNING: This is a really long one, so first I'll write a summary in three tweets, then the complete, more detailed explanation, which got as far as six pages in a word document...

@BadEmpanada TL;DR: As progressive policies expand the economy the combination of growing resentment by the old middle class and increasingly threatened interests of concentrated capital lead to growing support for right wing groups...

@BadEmpanada Support for the government drops when the applied model of economic expansion reaches its limits and is unable to keep up. The combination of disenchanted supporters and radicalized opponents creates the opportunity for a right wing takeover...

@BadEmpanada Depending on how much support the right can get, it'll take the form of an electoral victory followed by consolidation, a judicial-parliamentary coup (lawfare) or an armed insurrection/military coup...

@BadEmpanada FULL EXPLANATION: In his book "Political Order in Changing Societies" Samuel Huntington argued that improvements in literacy, purchasing power, urbanization, economic growth, etc. increased tensions due to new expectations...

@BadEmpanada It's not hard to understand why: People move to the middle class, so now they start to have bigger dreams and push to move higher on the pyramid and if institutions are not capable of accommodating these new demands, there's tension, conflict and political upheaval...

@BadEmpanada But that really doesn't say much about how that really happens and why progressive governments in developing countries are so good at lifting people out of poverty but incapable of "finishing the job" so to speak...

@BadEmpanada The thing that I found interesting about the progressive governments that were taken out, either in elections or in parliamentary, judicial and/or military coups is the familiarity of the beginning, middle and end of their stories...

@BadEmpanada In all five recent cases, Argentina, Bolivia, Brazil, Ecuador and Venezuela, we see the same pattern repeating itself over and over again, a pattern that also matches past experiences:

Prologue: progressive govt. wins in the middle of a crisis with serious unrest...

@BadEmpanada ...this government starts by taking drastic measures to take control of the economy and redirect outward flows of resources inwards to reinvest in the country, pay debts and launch soc. programs to tackle poverty...

@BadEmpanada Middle: As the economy starts to improve and poverty begins to shrink, there's an expansion of social programs and investment to expand the internal market and national industry & overhaul public services...

@BadEmpanada ...This leads to further economic growth, but improvements are not as dramatic as earlier on and things seem to stabilize for several years...

End: After a considerable period of growth, the economy begins to stagnate or even enter a recession...

@BadEmpanada Poverty stops dropping and the efforts of the government to turn it around aren't as effective. In the middle of this, support of the government, which remained high until this point, starts to fall while the opposition becomes stronger and more consolidated...

@BadEmpanada It is at this point when the right, strengthened, makes their move, sometimes actually winning an election like in Argentina and Ecuador, sometimes through illegal means like in Brazil, Venezuela and Bolivia.

So now that we have the story, let's look at why...

@BadEmpanada First, look at these charts. They show poverty reduction in Argentina, Brazil, Bolivia and Venezuela.

Argentina and Brazil are the most clear-cut examples, showing deep poverty reduction, then stability before the right takes power...

@BadEmpanada Venezuela is a more complicated example but you can still see the same pattern. Chavez took power in 1999 and began reforming the country's constitution, retaking control of the oil industry and moderately expanding on existing social programs...

@BadEmpanada During his 1st term poverty keeps dropping steadily as it was in the prev. government (forced to implement soc. welfare programs after mass protests against austerity). But when Chavez is reelected the old political parties & oil executives try to depose him between 2002 & 03...

@BadEmpanada After this Chavez manages to overcome the crisis, consolidates power in the PSUV and launches a massive economic and anti-poverty program that between 2003 & 07 reduces it by half. Then it remains between 27% & 29% till 2013 when Chavez dies...

@BadEmpanada If we now look at Bolivia, we see that the rate at which poverty was reduced during Evo's government (2006-19) was slower and steadier than in the other three countries, but the pattern of stabilization during the last years of the progressive period is still visible...

@BadEmpanada But it's not just that poverty reduction slows down, it's also the rising tensions between the traditional middle class, built around the commodities-focused model, and the new emerging middle class tied to government-sponsored industrial development...

@BadEmpanada The rise of this new middle class generates friction with the traditional one because, though for poor people the progressive model leads to a massive improvement in upwards social mobility, the benefits for those already in the mid. class are fewer...

@BadEmpanada What's more, the expansion of the middle class adds new pressure for greater access to college education, luxury goods and good paying white and blue collar jobs, increasing competition for those goods, services and jobs...

@BadEmpanada the combination of increased upward mobility for the lower sectors with insufficient upward mobility for those established in the middle lead the traditional middle class to perceive itself as threatened by a government that doesn't care about them...

@BadEmpanada And the new middle class, moving away from poor neighborhoods, lowers their support to the government not only due to the effects of stagnation in the ending phase, but also due to lowering their ties to the network of support & mobilization of lower class communities...

@BadEmpanada Since those networks are usually the foundation of popular support and mobilization of the progressive government, while the right keeps a strong presence in middle class communities, this leads to a shifting trend towards the right...

@BadEmpanada In other words the shift to the right happens when the first phases of progressive policies hit their limit and are unable to continue building upon the progress that was made, leading to a drop in support and higher unrest due to a drop in social mobility...

@BadEmpanada But that still leaves out the main component of the right wing shifts we've seen in the last decade: The business sector. For that I'll use GDP as the main value because it's easier to understand as a measure of economic activity. Here are the four graphs...

@BadEmpanada Starting with Argentina, Brazil and Venezuela, we see a similar pattern: During the first years there's a substantial, steady GDP growth, then during the last ones it begins to stagnate and even recede in Brazil...

@BadEmpanada What this shows is that economic expansion hits a limit, but the importance of this has to do with the economic structure of latin american countries that still preserves several colonial elements, mainly a concentrated, powerful commodities export sector...

@BadEmpanada ...an underdeveloped industrial sector divided between large industrial conglomerates, usually linked to the global market and small and medium companies that rely mostly on the internal market...

@BadEmpanada ...and finally a small banking sector (relative to developed countries) that caters mostly to importers and exporters, real estate and financial speculators, leaving industrial investment as a low priority for private banks, with the bulk of ind. credit coming from public ones...

@BadEmpanada What this means is that during the beginning and middle phases economic expansion is fueled by the growth of the internal market and medium businesses, which concentrate the bulk of employment, while large corps take the lion's share of international trade...

@BadEmpanada As for the private banking sector, being structured around the needs of commodity exporters and concentrated capital, it's not only ill-equipped to contribute to industrial expansion, but also hinders it by contributing to capital flight and financial speculation...

@BadEmpanada ...meaning that public banks have to compensate. Private banking is also concentrated on large multinational banks, with the larger latin american ones usually being foreign subsidiaries of first world banks...

@BadEmpanada Commodity exporters were the core of the colonial economy and their main interests are cheap local labor, unregulated trade to export to core markets and unregulated finance linked to the metropolis to funnel their profits...

@BadEmpanada They have remained like that even after independence and the only thing that has changed s the metropolis they link themselves to, first Britain in the 1800s, then America in the 1900s and eventually China if it takes the 1st spot...

@BadEmpanada Added to that are large industrial firms, most of them foreign subsidiaries that act as links between first world multinationals and third world markets, selling to the local market and also taking advantage of cheap labor for the global market...

@BadEmpanada This means that the profits they take from their sales to the internal market, plus those from their exports, are also sent abroad to their parent company. This also means that they don't contribute much to technological development...

@BadEmpanada Adding to the interests they share with commodity exporters, they also have an antagonistic relation with local companies that, as the economy grows, start taking a bigger share of the market and may threaten their privileged position...

@BadEmpanada As for local companies, the fact that the bulk of foreign trade is concentrated in large corporations that act as an extension of first world economies means that their growth is severely limited and can't compete on their own...

@BadEmpanada These companies usually support progressive governments during the beginning and middle phases but when the economy reaches the end phase of stagnation their support partially drops in favor of right wing leaders who promise to protect their wealth...

@BadEmpanada This happens because the largest local companies, even if they can't rival the scale of multinational conglomerates, begin to share some of their interests and to associate themselves with them, changing their priorities...

@BadEmpanada This growth is also the reason for the subsequent stagnation and recession: The main thing developing countries need is capital, and the more they grow the more they need to keep up with the needs of economic expansion...

@BadEmpanada Since the bulk of global capital is concentrated in the first world, multinational firms and commodity exporters are their main source of capital. But they're not interested in reinvesting it in the internal market, their priority is funneling profits abroad...

@BadEmpanada And since large private banks are made to cater to that need, the amount of capital that's left in the country is only useful to maintain and expand the operations of those conglomerates and cater to their employees (commercial banking)...

@BadEmpanada So to promote national industrial development, the government has to redirect that flow back inwards through taxation and import & export duties, in other words economic protectionism and state-directed industrial development...

@BadEmpanada The more these policies help the internal market grow, the more capital is needed to keep up with said expansion, mainly because the poor industrial development means that a lot of imported capital goods are required...

@BadEmpanada So the cycle is taking dollars from exports and using them to buy capital goods for local industry, which operates mostly with local currency for sales and wages. As the economy expands, more dollars are needed to maintain and expand ind. capital...

@BadEmpanada AND THAT'S THE CORE OF THE PROBLEM: Economic expansion goes directly against the interests of concentrated global capital since a) their business is focused on global markets, b) higher wages (part of int. mkt. expans.) hurt their profits...

@BadEmpanada ...and c) greater economic expansion increases demand for dollars in the internal market, which come mostly from their transactions. The point of stagnation is where the government can't get dollars simply through the growth of the economy...

@BadEmpanada ...because the internal market is now growing faster than multinational businesses (commodity exporters and foreign investment into multinational subsidiaries)...

@BadEmpanada ... so to keep up the government has to put stricter controls on speculation and capital flight and increase taxes and duties on large conglomerates that represent the bulk of foreign trade...

@BadEmpanada This is met with heavy resistance by said conglomerates, increasing their pressure on the government and their support for increasingly radicalized right wing movements...

@BadEmpanada Said movements exploit the discontent among the middle class due to the economic slowdown to fuel class and race resentment between the traditional middle class and the new emerging one, creating a mass right wing populist movement...

@BadEmpanada If said movement is large enough to take the government in an election, it will then try to consolidate power once in office, anticipating the increase in poverty and drop in living standards that result from neoliberal policies...

@BadEmpanada If it takes the national legislative body (at least the upper house) it will try to push for a parliamentary/judicial coup, using corporate media to create the narrative that the government is massively corrupt, fraudulent and authoritarian (known as lawfare)...

@BadEmpanada If it reaches a large plurality of support but is still not capable of dominating elections, then it will try to subvert the loyalty of armed forces (police, the military) and build a large paramilitary force to push for an insurrection and/or a military coup...

@BadEmpanada Going back to Bolivia, unlike the cases of Argentina (electoral victory) and Brazil (lawfare parliamentary coup) Evo's government was able to maintain the majority of electoral support (or at least block the right from getting close to 50%)...

@BadEmpanada ...and his government was able to anticipate the changing scenarios as the economy expanded, adapting policy as it progressed. However, unlike in Venezuela, the right was able to gain the support of the military, leading to a successful coup...

@BadEmpanada And that's the core of it. This isn't the entire reason why these shifts to the right (often violent and illegal) happen, but represents the core of the socioeconomic aspect of them and the core problem that developing countries need to overcome...

@BadEmpanada This also explains how US meddling is perpetrated: Not only through armed forces that are formed under american Nat. Sec. doctrine or the actions of intelligence services, but also through large conglomerates linked to global markets and american finance...

@BadEmpanada That's all I can say for now. writing all of this was quite exhausting. Sorry if it's too long but I wanted to make a complete explanation.