U.S. Should Form a Marshall Plan for Latin America
Venezuela's vote points to the threat of growing, far-reaching class turmoil.
By Andrew Reding
Andrew Reding is senior fellow for hemispheric affairs at the World Policy Institute.
August 19, 2004
The clear rejection by Venezuelan voters of the recall effort against
leftist President Hugo Chavez is both a testament to democracy and a
warning of the dangers of class polarization throughout the hemisphere,
including the United States.
In Venezuela, where a chasm divides the rich and the poor, the only
place everyone is reasonably equal is in the voting booth. Not
surprisingly, the poor have marshaled their voting power to elect
populists who promise to address their needs.
Naturally, that
frightens the rich and the middle classes. A couple of years ago,
Venezuela's elites backed a military coup against Chavez. Having failed
in that attempt, they organized the recall effort. Now the Chavez
opposition has made it clear that it will not accept the outcome of the
vote, even though it has been certified as accurate by the Organization
of American States and by former President Jimmy Carter. In other
words, the better-off are saying that if democracy jeopardizes their
net worth, it is expendable.
They have powerful allies in this
confrontation. The Bush administration initially endorsed the
unsuccessful coup against Chavez, and it has been accused of backing
the recall effort. Most political commentators in the United States —
Democrats as well as Republicans — are harshly critical of Chavez and
his objectives.
They argue that Chavez used Venezuela's oil
revenues — swollen by high oil prices on world markets — for social
programs to buy votes among the poor. But U.S. presidents and members
of Congress routinely use public revenues in a similar way. We call it
pork-barrel politics. And no one argues that it invalidates the outcome
of our elections.
Another argument against leftist populists
like Chavez is that their initiatives inevitably lead to a decline in
per capita income. There is no question about that. Many of the rich
flee with their wealth to places like Miami. Others send their capital
abroad to safer havens. Foreign investors understandably steer clear of
the country. Still, Chavez's use of oil wealth to offer some measure of
relief to the poor can hardly be blamed for his country's economic
inequality. The real cause lies with unfettered free markets.
Acting by themselves, free markets generate a lot of wealth, but they
also concentrate that wealth. The relatively egalitarian advanced
democracies in Europe, North America, East Asia, Australia and New
Zealand came about only through such government interventions as
guaranteed minimum wages, quality public education and, in many cases,
medical care, antitrust legislation and other means of ensuring that
the benefits of economic development were widely distributed. Postwar
Europe became prosperous and democratic because the Marshall Plan's
massive investment was aimed not just at rebuilding after the war but
also at supporting social structures like labor unions, which in turn
helped create middle-class majorities and a bulwark against Soviet
communism.
The U.S. has never made a similar investment in
Latin America. Instead, it has in the past chosen to prop up military
dictators who kept the poor in check while giving free rein to U.S.
multinational corporations. Today, it pretends that free markets and
free trade are the answer to all of the region's problems, when it is
clear that laissez-faire globalization acts to increase the gap between
rich and poor. It is therefore disingenuous to accuse Chavez of
polarizing Venezuelan society. Chavez is a symptom of polarization, not
the cause.
In fact, much the same polarization, different only
in degree, is now being seen in the United States itself. Job flight
abroad and the transfer of tax burdens onto those who can least afford
it are thinning the ranks of the U.S. middle class. As that happens,
the U.S. is gradually becoming Latin Americanized. Not surprisingly,
our political discourse is becoming more strident, and our elections
are more hostile and disputed.
Instead of attacking Chavez, or
aiding and abetting his opponents, Washington should recognize that
stable democracy is the fruit of societies in which the middle class
thrives. The free market alone cannot guarantee that, but a Marshall
Plan for the Americas could — were we not so blind to the threats posed
by widening gaps between rich and poor at home and abroad.