Structural Adjustments, Then and Now: A Conversation with Miguel Ángel Contreras

Miguel Ángel Contreras Naterra teaches sociology at Venezuela’s Central University. His recent books include Insurgent Imaginaries and Postneoliberalism in Latin America (Stanford University Press, 2013) and Crítica de la razón neoliberal (Critique of Neoliberal Reason, Akal, 2015). In this interview, we talk about an ideological constellation – made up of neoliberalism, post-neoliberalism, and post-liberalism – that has had a huge impact on the continent.

In Critique of the Neoliberal Reason, you look at the role of structural adjustment plans in the continent. Can we go over your findings?

The book examines the global transition from the Keynesian vision of the economy to the neoliberal consensus. We could say that the most visible turning point at the global level are the Margaret Thatcher and Ronald Reagan governments, especially Thatcher’s political-and-spiritual discourse: her statement that “There is no alternative” [TINA]. In fact, the neoliberal discourse has been very successful in naturalizing its political and economic agenda.

In Latin America, there are at least four stages of the neoliberal offensive. The first comes with the Augusto Pinochet dictatorship that followed the 1973 coup d’etat against Salvador Allende. The Pinochet government implemented a structural adjustment program that could be called “disciplinarian neoliberalism.” That plan combined the implementation of neoliberal policies in the economic sphere with widespread repression in the social and political spheres.

Interestingly, Friedrich Hayek and Milton Friedman themselves advised the dictatorship on this adjustment program: they lectured in Chile’s Catholic University on a regular basis and were interviewed by El Mercurio, Chile’s largest newspaper, quite often. As it turns out, Hayek and Friedman eventually became spokespeople for neoliberalism in Latin America.

The second moment of neoliberal implementation begins in 1982 when Mexico declares a debt moratorium and its government established a program of structural adjustments. That is when the World Bank and the International Monetary Fund enter the scene.

In Venezuela, the first signs of neoliberalism appeared in 1983, with the implementation of a new currency exchange policy and the liberalizing of prices. Later, in 1989, during Carlos Andrés Pérez’s second term as president, a full-blown structural adjustment plan was put in place.

The third phase came in the 1990s when neoliberalism combined economic adjustments with structural institutional reforms. In other words, the old package now came with an addition: political reforms.

The 1990s also came with a rightward turn in Latin America’s political culture. For example, in his América Latina: el imperio del realismo mágico [Latin America: Empire of Magical Realism], Venezuelan economist Emeterio Gómez argues that the continent cannot compete in the global sphere with its “magical realism” [meaning left or progressive ideals]. He argued for letting go of such ideals and accepting structural reforms. In Perú, the chief TINA advocate was Mario Vargas Llosa. Jorge Castañeda, Mexico’s neoliberal demiurge, wrote Utopia Unarmed: The Latin American Left After the Cold War, in which he argues that the revolutionary pathway is exhausted.

The year 1995 is an important one for the consolidation of the neoliberal project, in cultural and political terms, in the continent. A meeting of key politicians and intellectuals – including Carlos Salinas de Gortari, Jorge Castañeda, Roberto Mangabeira Unger, and Germán Caballero (the most important liberal thinker in the region) – lays out the so-called Buenos Aires Consensus.

The overall conclusion of the meeting is that structural reforms are needed, but that simultaneous reforms to the political and social systems in place are required to stabilize the model. I call this the “post-liberal vision,” and it’s what defines the fourth neoliberal wave, of which Luiz Inácio “Lula” da Silva’s Brazil will be the main proponent.

So would post-liberalism be a close kin to Anthony Giddens’ “Third Way”?

Indeed. Post-liberalism is a deliberate attempt to go forward with the economic contents of neoliberalism as part of a Third Way strategy. The assumption is that a market economy is the only option and structural reforms are necessary. Yet their implementation should come with reforms that strive to “widen” political participation and soften the impact of neoliberal policies.

Nonetheless, while TINA dominated the discourse in the continent in the 1990s, anti-neoliberal rebellions such as the Lacandona Declaration in Mexico and mass mobilizations in France and Seattle pointed to the exhaustion of the neoliberal consensus.

That is precisely when the post-neoliberal model emerges. The key figure in post-neoliberalism is Hugo Chávez, who carried out a temporarily successful attempt to contain and overcome neoliberalism. However, the post-neoliberal model proved to be unstable.

Chávez began the shift away from neoliberalism around 2001-2002, but he didn’t do it over a tabula rasa. Neoliberalism in Latin America came hand in hand with deindustrialization and divestment from science and technology, and Venezuela was no exception. The scorched-earth ruins that resulted from deindustrialization made the implementation of a post-neoliberal model precarious. In the Venezuelan case, it eventually led to restoration.

So, according to your schema, Lula’s Brazil was post-liberal, and Chávez’s Venezuela was post-neoliberal. Can you explain this further?

An example of Brazil’s post-liberal path is the “Bolsa Familia” policy [direct subsidies to poor families], which limited the impact of the economic measures in place. Nonetheless, the generally market-oriented logic of the economy remained unquestioned.

By contrast, Chávez declared himself to be against neoliberalism. Also, Venezuela’s 1999 Constitution is clearly anti-neoliberal. Chávez tried to contain the neoliberal precept and build outside of it. Lula did not. In fact, Roberto Mangabeira Unger, Lula’s Strategic Affairs Minister, was one of the architects of the Buenos Aires Consensus.

The 1990s saw many intellectuals abandon their leftist ideals. What you call “spiritual neoliberalism” takes over. How would you describe this phenomenon?

Spiritual neoliberalism is when the intelligentsia embraces the neoliberal agenda: the individual becomes the epicenter and liberty, understood in very abstract terms, is also central. All this is linked to the market, to which society must surrender. In other words, among Latin American intellectuals and those around the world, the discourse moves away from revolution.

It’s interesting that, although the structural adjustment agenda has visibly failed, the philosophy of neoliberalism is alive and well today. The idea of social Darwinism won: the individual now comes before the collective, so there is no need to build a common agenda.

And how would you describe what is happening in Venezuela right now?

What we are witnessing is a process of dismantling [its earlier] social conquests. This has to do with two key elements. First, the starting point at which Venezuela began its post-neoliberal path: a deindustrialized nation and the fact that there were no correctives taken to revert this situation.

Second, there is the US blockade, which began “softly” at the beginning of the second decade of the twenty-first century and then picked up steam around 2018. In the Venezuelan case, neoliberalism wasn’t on the agenda, but the existing conditions and market inertia led to implementing structural adjustments.

You have also written about the pandemic. How do you analyze that event?

The pandemic lockdown as it was implemented in Wuhan is the first large-scale collective experiment in the twenty-first century. In fact, the lockdown method eventually became a kind of common sense at a global level.

There were four main response mechanisms to the pandemic: the Chinese (with Wuhan origins) and the Trump model would be the most important ones. There are also the Korean and the Japanese models, but they didn’t have a global impact. It is evident that Trump’s non-confinement model failed. More than a million people died in the US and hundreds of thousands died in Brazil, where it was implemented by Jair Bolsonaro.

Like many other countries in the region, Venezuela implemented the Chinese model. It was very successful. There was a sort of “social immunity” in place: when Covid-19 broke out on a global scale, because practically nobody was coming into Venezuela. Instead, thousands were leaving the territory. On top of that, gas shortages had already restricted mobility within the country.

If the lockdown was the first large-scale collective experiment in the twenty-first century, what are its political and social consequences?

First, I want to highlight once again that the Trump model did not work, so I am not defending it. However, it should be acknowledged that the Wuhan model – which, by now, is global – has social and political consequences.

In that model, the party-state dictates social control policies based on scientific knowledge, but not everyone is privy to the latest scientific developments and certain interpretations are privileged. At the end of the day, the policies cannot be questioned because of their scientific base.

Additionally, the model comes with a new schism within society: delivery people and caretakers are considered superfluous for society and can be disposed of. I would go as far as saying that a new metapolitics is emerging, and it disposes of some while separating many others from the decision-making process.

A cultural change is underway; it’s a process of depoliticization that we can see here in Venezuela, but it is also happening at the global level with an authoritarian metapolitics where the subject is science and all other agencies disappear.