With fresh insight and analysis from Argentina, Bolivia, Colombia, Ecuador, Mexico and Peru, this book looks at the political dynamics of capitalist development in a region where the neoliberal model is collapsing under the weight of a resistance movement lead by peasant farmers and indigenous communities. It calls for us to understand the new extractivism not as a viable development model for the post-neoliberal world, but as the dangerous emergence of a new form of imperialism.
With fresh insight and analysis from Argentina, Bolivia, Colombia, Ecuador, Mexico and Peru, this book looks at the political dynamics of capitalist development in a region where the neoliberal model is collapsing under the weight of a resistance movement lead by peasant farmers and indigenous communities. It calls for us to understand the new extractivism not as a viable development model for the post-neoliberal world, but as the dangerous emergence of a new form of imperialism.
The New Extractivism: A Post-Neoliberal Development Model or Imperialism of the Twenty-First Century?
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The New Extractivism: A Post-Neoliberal Development Model or Imperialism of the Twenty-First Century?
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Overview
With fresh insight and analysis from Argentina, Bolivia, Colombia, Ecuador, Mexico and Peru, this book looks at the political dynamics of capitalist development in a region where the neoliberal model is collapsing under the weight of a resistance movement lead by peasant farmers and indigenous communities. It calls for us to understand the new extractivism not as a viable development model for the post-neoliberal world, but as the dangerous emergence of a new form of imperialism.
Product Details
| ISBN-13: | 9781780329956 |
|---|---|
| Publisher: | Bloomsbury Publishing |
| Publication date: | 03/13/2014 |
| Sold by: | Barnes & Noble |
| Format: | eBook |
| Pages: | 320 |
| File size: | 2 MB |
About the Author
James Petras is Professor Emeritus of Sociology at Binghampton University and Adjunct Professor in International Development Studies at Saint Mary's University (Canada). He is the author and co-author of over sixty books and numerous other writings on the dynamics of world affairs and Latin American development, including Globalization Unmasked (Zed 2001), Social Movements and the State (2005), Multinationals on Trial (2007), What's Left in Latin America (2009), and Social Movements in Latin America (2011). Many of his periodical and political writings are accessible via www.rebelion.org.
James Kurth Department of Political Science,Swarthmore College James Petras Department of Sociology, CUNY Binghampton
Henry Veltmeyer is Professor of Development Studies at Saint Mary's University (Canada) and at the Universidad Autónoma de Zacatecas (Mexico). He is author, co-author and editor of over forty books on issues regarding Latin American and world development, including Critical Development Studies: Tools for Change, The Cuban Revolution as Socialist Human Development, and Development in an Era of Neoliberal Globalization. Books co-authored with James Petras include Unmasking Globalization, System in Crisis, and What's Left in Latin America.
James Petras is Professor Emeritus of Sociology at Binghampton University and Adjunct Professor in International Development Studies at Saint Mary's University (Canada). He is the author and co-author of over sixty books and numerous other writings on the dynamics of world affairs and Latin American development, including Unmasking Globalization, Social Movements and the State, Multinationals on Trial, What's Left in Latin America, and Social Movements in Latin America. Many of his periodical and political writings are accessible via www.rebelion.org.
Read an Excerpt
The New Extractivism
A Post-Neoliberal Development Model or Imperialism of the Twenty-First Century?
By Henry Veltmeyer, James Petras, Verónica Albuja, Pablo Dávalos, Norma Giarracca, Jan Lust, Kyla Sankey, Darcy Victor Tetreault, Miguel Teubal
Zed Books Ltd
Copyright © 2014 Henry Veltmeyer and James PetrasAll rights reserved.
ISBN: 978-1-78032-995-6
CHAPTER 1
A NEW MODEL OR EXTRACTIVE IMPERIALISM?
This chapter puts into perspective the ongoing debate about the meaning and significance of the 'new extractivism' and the 'new developmentalism', a model of national development associated with what has been described as a 'red' or 'pink' tide of regime change in Latin America in the first decade of the twenty-first century leading to the formation of a post-neoliberal state. More than a few observers and analysts have viewed these developments as the beginning of the end of the neoliberal era, auguring a new world of social justice and sustainable development. Some have gone so far as to see in them the makings of a more authentic form of socialism – the 'socialism of the twenty-first century' as Hugo Chávez would have it. Others have been quick to point out that these 'post-neoliberal' regimes are not what they seem or what they are presented as being by many leftist observers and analysts. For one thing, these regimes have mostly turned towards natural resource extraction and primary commodity exports as a national development strategy: a particularly predatory and backward form of capitalism dominant in the nineteenth century (Cypher, 2010). For another, due to the diverse pitfalls of this strategy and the dependence of the state on the bearers of 'extractive capital', these 'progressive' or post-neoliberal regimes are unable to deliver on their promise of greater social inclusion and equity in the distribution of the society's wealth and the social product, and a development that is socially inclusive, sustainable and protective of the global commons.
The argument advanced in this chapter is constructed as follows. First, we summarize the views of some theorists regarding the propensity of capitalism to crisis, i.e. a built-in tendency for the system to exhaust its capacity to expand the forces of production. This allows us to place the subject of this book – the economic, social and political dynamics of the new extractivism – within the current context of a system in the grip of a deep multidimensional crisis. Second, we introduce the policy dynamics of what has been described as the economics and politics of natural resource extraction. We then review the dynamics of foreign direct investment (FDI) in Latin America in the context of the new world order of neoliberal globalization established in the 1980s. Here, we argue that neoliberal policies of structural adjustment were designed to pave the way for the expansion of capital and a new wave of capitalist development and imperialist exploitation. Fourthly, we review the brief history of this development process over the past two decades and the emergence of a new consensus that has led to the formation of what some have termed the 'post-neoliberal state', focused (under prevailing conditions in the world economy) on the economics and politics of natural resource extraction – the 'new extractivism' – and fostering a more socially inclusive form of development. Here, we argue that the post-neoliberal state, the supposed outcome of a sharp turn to the left in national politics, is merely the latest twist and turn in the politics of what we term 'extractivist imperialism'. The fifth section briefly explores the political economy of this development in terms of an imperialist strategy of natural resource exploitation and the consequences of this strategy: the accumulation of capital based on the pillage of natural and human resources, the destruction of the environment and of the livelihoods of local communities affected by the resource extraction process, and widespread resistance leading to a new and virulent form of class conflict. We suggest that the agents of the post-neoliberal state will rally to the defense of extractive capital as the result of congruent economic interests (profits for the corporations, royalties and taxes for the governments). We end the chapter with some reflections on the likely or possible outcome of this political development. As we see it, the outcome is uncertain but promises to be bloody and fraught with conflict.
A system in crisis
Because the capitalist system has expanded over the years from its initial nucleus in the cities and urban centers of what we might term the 'global north' into virtually all corners of the world, including the developing societies of the 'global south', the forces released in the capital accumulation process now operate on a global scale and do so within what remains of the neoliberal world order. A major impetus to this 'development' and the associated process of productive and social transformation was provided by the 'new world order' installed in the 1980s under conditions of a conservative counter-revolution that pushed back against the gains made in previous decades through the agency of the developmental state and the class struggle. One of these conditions was the financialization of economic development, which led to the separation of finance or investment capital from its productive function in expanding the forces of production in the real economy. It also led to the growth of a money economy divorced from the real economy that was so large that it absolutely dwarfed the real economy in size and in the value of economic transactions, and to an increase in the number, frequency, scope and virulence of financial and economic crises – culminating in the 2008 'global financial crisis' (Bello, 2009; Veltmeyer, 2010). This crisis was a by-product of the system of free market capitalism established under the neoliberal world order. Another was the loss of the sovereign power of the state in peripheral societies to harness its wealth of human and natural resources to benefit a project of national development, to design an industrial policy in the national interest and to bring about an inclusive form of development based on an equitable distribution of the social product.
Both this industrial policy and its sovereign claim to its own resources were surrendered as the price of admission into the new world order, the cost of participating in the process of 'globalization'; and this idea was presented as the only way of making economic progress and achieving prosperity. The 'structural reforms' of the Washington Consensus (privatization, deregulation of markets, and liberalizing the flow of investment capital and goods across national boundaries) that were designed and implemented as means of integrating all economies into one worldwide system governed by the rules of free market capitalism prevented the governments of nation states in Latin America and elsewhere in the 'global south' from protecting their domestic firms and producers, and workers and communities, from the destructive forces of capitalist development. They also resulted in the rapid growth of an enormous global and national divide in the distribution of wealth and income, with enormous concentrations of wealth and poverty at the extremes of this distribution (Petras & Veltmeyer, 2001).
Under the conditions of this very uneven development, the system-wide production crisis of the 1970s, together with the fiscal crisis of the state in the late 1970s and early 1980s, the external debt crisis in the 'Third World' (also in the early 1980s) as well as the debt and financial crises of the 1990s and beyond, have morphed into a multidimensional crisis that has leached from the financial system into the very foundations of the economic system, threatening systems of local production, the ecosystems on which people depend for their livelihoods, and the right of people all over the world to a decent quality of life (Bello, 2009; Foster & Magdoff, 2008; Veltmeyer, 2010).
Capitalism is once again in crisis, but the crisis is by no means global – at least not in regard to the financial system. In fact, it seems that the epicenter of the 'global financial crisis' that erupted in 2008 in the wake of the sub-prime debacle in the US was to be found at the center of the system – within the US economy, still the largest in the world, and in Europe. But on the periphery of the system there is considerable continuing dynamism and economic growth. China has emerged as a major economic power with over two decades of exceedingly rapid growth, resulting in an economy that is expected within ten years to outpace the US economy, whose industrial base has been eroded by the financialization of development. More generally, the forces of change in the global economy have given rise to a number of emerging markets based on an expanding middle class with an appetite for material consumption and the income to match. The purchasing power of this class, combined with large-scale state-led investments, appears to be the driving force of the world economy today. This includes Brazil and Russia, as well as China and India (the BRIC countries). In Africa, a number of economies have been growing at an even faster pace than the BRIC countries – at 6 per cent per annum – giving rise to a new development discourse on the benefits of combining economic liberalization with natural resource extraction as a development strategy for countries that are resource-rich ('inclusive economic growth', with the 'private sector' as the 'driver'). Of course, this ignores entirely the heavy hand of the state in the ascension of China as a world economic power. The rapid growth of the Chinese economy is clearly state-led and can be attributed to the involvement of the state in developing the forces of national production on the basis of productive investment and the exploitation of the unlimited supply of cheap surplus labor generated in the capitalist development of agriculture and industry.
What about Latin America? Notwithstanding four cycles of neoliberal policies implemented under the conditions of the Washington Consensus on the need to liberate the forces of economic freedomfrom the regulatory constraints of the development state, the neoliberal era is drawing to a close – at least in this region. Three decades of neoliberal policies have produced conditions that have given rise to resistance against both neoliberalism and imperialism, and with this resistance a legitimation crisis in regard to neoliberalism. Within the vortex of these forces and a multidimensional crisis, the region is on the threshold of change in its struggle to shape the future. A crisis is rarely fatal. In fact, crises are functional for the system, serving as a means of shaking out weaker elements and restructuring the system, releasing in the process forces of change that can be mobilized in different directions, leading to a struggle (on the right) to manage or control the process or (on the left) to derail it.
The politics and economics of natural resource development
In a recent book on 'the study of natural resource extraction in resource-rich countries', the former director of development research at the World Bank, Paul Collier, and the director of the Oxford Centre for the Analysis of Resource Rich Economies, Tony Venables, concluded that 'often plunder, rather than prosperity, has become the norm in the industry' (Collier & Venables, 2011). In line with the post-neoliberal agenda of improving social outcomes through better governance, Collier and Venables set out to improve the management of natural resources in developing countries by 'highlight[ing] the key principles that need to be followed to avoid distortion and dependence'. They do this by focusing on the decision-making process in the management of natural resources, but they ignore the capitalist and imperialist dynamics that generate the distortion and dependence in the first place.
A more sophisticated variant of this approach to the economics and politics of natural resource extraction advances the argument that the approach relates to economic growth strategies and the politics of international trade, rather than to resource pillage and labor exploitation, or environmental degradation and class conflict. In this view, governing regimes in the developing countries (especially in Latin America) have responded to the growing demand for primary commodities by shifting their economic growth strategies to the extraction of natural resources, in response to the high prices for primary commodities on the world market. The result is a reversion to a trade structure based on the export of these commodities, which, Latin American structuralists have warned, is disadvantageous to countries on the periphery. This growth strategy in Latin America was abandoned when the world market collapsed during the Great Depression in favor of an alternative economic growth strategy based on state-led import-substitution industrialization (ISI). This strategy was designed to overcome what development economists have theorized as a 'resource curse': that is, rather than the extraction and exploitation of a country's abundant natural resources, such as minerals and fuels, leading to development, more often than not they result in underdevelopment and the impoverishment of the deemed 'owners' of these resources (Acosta, 2009; Norman, 2009: 183–207; Sachs & Warner, 2001: 827–38).
In the context of a 'new world order' established in the 1980s during an ongoing overproduction crisis, widespread fiscal crises in the north and an emerging debt crisis in the south, the ISI strategy that dominated macroeconomic policy in the 1960s and 1970s fell victim to the forces of neoliberal globalization. Under the impact of these forces, Latin America reverted to a development strategy based on the export of primary commodities, as state enterprises were privatized and tariffs were lowered, forcing national industries to compete with imports from transnational corporations. The International Monetary Fund (IMF) imposed the discipline of free market capitalism on Latin American governments, many of which reverted to a commodity export strategy so as to capture the 'comparative advantages' derived from their wealth of natural resources in order to service their foreign debts. But, with the exception of Chile, this strategy failed to activate capital accumulation and economic growth processes in the region – or at least not until the new millennium when conditions in the global economy changed with the rise of China, and, to a lesser extent, India and other 'emerging markets' (Cypher, 2010: 565–638).
With favorable commodity prices in the 2000s vis-à-vis the price of imported goods and services, Latin American economies accelerated their shift back towards a growth strategy based on the primarization of exports. Deploying this 'reprimarization' strategy, state officials renewed their focus on the economics of resource extraction, but this time with a better regulatory framework and better management of the country's resource extraction industry. This is the so-called new extractivism, based on post-neoliberal governance in which renewed state activism is combined with a resource-based growth strategy in order to increase social inclusion (Bebbington, 2009b: 31–62; Grugel & Riggirozzi, 2009; Levitsky & Roberts, 2011; Silva, 2009).
The presumed state activism in this post-neoliberal strategy – dubbed 'inclusionary state activism' by Arbix and Martin (2010) – is predicated on the idea that rather than constituting a curse, the exploitation of natural resources such as minerals and hydrocarbons (oil and gas) could be a blessing, generating easily taxable rents that could be used to finance social development. For example, Argentina, Chile and Venezuela, as well as Bolivia and Ecuador, have each witnessed in recent years a major upsurge in primary export-led growth and associated increased fiscal revenues (Haber & Menaldo, 2012).
The post-neoliberal literature on resource-based growth and the regulatory state views resource extraction as a matter of the state's capacity to regulate the operations of the mining and oil companies, to exact a better deal from these agencies of global capital, and to hold the companies accountable for the environmental and social impacts of their operations. Exponents of this approach define the issue of resource extraction as a matter of 'politics' – as in the 'politics' or 'political ecology' of natural resource extraction and the 'international political economy' of resource extraction (Auty, 2001: 839–46; Hogenboom, 2012).
Here there are two fundamental issues. One relates to the 'economic imperatives [that] compel elites to adapt market opening strategies in response to pressures of global competitiveness' (Gudynas, 2010). The other concerns the mechanisms of this adaptation, which are 'development policies ... engineered to cushion the impacts of neoliberal reforms'. As a result, the only cases of 'successful' adaptation found by Collier and Venables (2011) are based on the transformation of the neoliberal into a post-neoliberal state, in line with a new generation of development theorists and self styled 'international political economists' (Grugel & Riggirozzi, 2012). Thus, the 'new extractivism' is predicated on a more interventionist state and regulatory regime and a post-neoliberal policy agenda (i.e. a softening of the social costs of extractivist imperialism), in what the exponents of this approach term 'post-neoliberal governance', which has both a national and a global dimension.
(Continues...)
Excerpted from The New Extractivism by Henry Veltmeyer, James Petras, Verónica Albuja, Pablo Dávalos, Norma Giarracca, Jan Lust, Kyla Sankey, Darcy Victor Tetreault, Miguel Teubal. Copyright © 2014 Henry Veltmeyer and James Petras. Excerpted by permission of Zed Books Ltd.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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Table of Contents
Introduction1. A new model or extractive imperialism?
2. Argentina: Extractivist dynamics of soya production and open-pit mining - Norma Giarracca and Miguel Teubal
3. Bolivia: Between voluntarist developmentalism and pragmatic extractivism - Henry Veltmeyer
4. Colombia: The mining boom: a catalyst of development or resistance? - Kyla Sankey
5. Ecuador: Extractivist dynamics, politics and discourse - Pablo Dávalos and Verónica Albuja
6. Mexico: The political ecology of mining - Darcy Victor Tetreault
7. Peru: Mining capital and social resistance - Jan Lust
8. Theses on extractive imperialism and the post-neoliberal state