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| AUTHOR(s) | TITLE & ABSTRACT |
| Arturo Guillén | The Global Crisis and Latin America |
| The aim of this paper will be to analyze the current phase of the global crisis that began in the United States in 2007 and the way it has manifested itself in Latin America. The current phase, which began during the last quarter of 2008, is characterized by the interaction of the financial crisis —far from having been overcome— and the deepening and universal expansion of recession. The global crisis is the most important capitalist crisis since World War II. It is a new type of debt-deflation crisis, highlighting the limits of the finance-dominated regime of accumulation in place since the 1980s and characterized, among other things, by securitization, that is, a financing regime based on issuing securities and derivatives. Setting up this finance-dominated accumulation regime sustained by liberalization, deregulation, and the globalization of goods and financial markets was the response of the cutting-edge sectors of capital and the main capitalist powers when confronted with the “great crisis” that began in the late 1970s. That great crisis put an end to the state-monopoly mode of regulation in place since World War II and the Fordist regime of accumulation it was based on. It is my opinion that today’s global crisis is not a new “great crisis,” but rather an extension of the one from the 1970s. Neoliberal globalization fostered a new regime of accumulation dominated by finance, but was incapable of establishing a new mode of regulation. While this regime of accumulation made it possible for some capital sectors to amass enormous fortunes, it was incapable of ensuring the structural stability for capital reproduction in the system as a whole. The recession began in Latin America during the fourth quarter of 2008. The IMF also predicted that the GDP of 18 of the 32 countries in Latin America and the Caribbean would contract in 2009, including those of the largest countries: Brazil, Argentina, and Mexico. The main mechanisms for transmitting the crisis in that region were the deterioration in the terms of trade, shrinking remittances from emigrants, and the massive withdrawal of private capital from financial markets. Contrary to the opinion of many analysts, the crisis in Latin America did not come from outside. Since the 1980s foreign debt crisis, countries of that region have passively inserted themselves in neoliberal globalization within the parameters established by the Washington Consensus. That was the main cause of the economic stagnation they experienced during the 1990s. Instead of contributing to the growth of domestic investment and employment, foreign capital inflows over-valued currencies; encouraged consumption and imports; stimulated governments and large corporations’ foreign indebtedness; and created the conditions for the outbreak of severe financial crises, like the ones in Mexico in 1994-1995, in Brazil in 1999, and in Argentina in 2001. The best proof that the neoliberal model does not work in Latin America is the fact that the countries that managed to stave off stagnation in the previous expansionary period were the ones that shunned the Washington Consensus and tried alternative development strategies. Recession may be over but the crisis still has a long way to go. A lot will depend on the development model and the kind of economic policies that are adopted. Although there are important national differences, since the beginning of this century, Latin America has been split into two large blocs: one neoliberal space headed up by Mexico, Colombia, Peru, and a few Central American and Caribbean countries; and a growing “post-neoliberal progressive pole” that includes a broad gamut ranging from Chile’s government or Lula’s Brazil to the countries. The situation in Latin America is complex, and it faces grave difficulties in the immediate future. The road taken by Mexico, Colombia and the countries closest to the Washington Consensus seems clear: to integrate more with the United States, subordinating themselves to the multilateral agencies, waiting until the deluge is over to re-launch the neoliberal model. For some, this may seem like an attractive scenario, but the social costs will be immense. Undoubtedly, structural heterogeneity, social inequalities, and poverty will deepen. The way forward for the governments that define themselves as progressive —the majority in the region— is not easy either. In a world in convulsion, these governments will have to continue to remain stable and united; deepen their internal processes of economic and political transformation; continue the quest for and implementation of alternative strategies and policies; broaden out their relations with the emerging powers; and concretize and strengthen South-South integration. | |
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| Gregorio Vidal and Eugenia Correa | Challenges of Development Paradigm in Latin America: Past and Present |
| At least fifty years the Latin American countries (LAc) had have the hope of development. The economic theory and even the Latin American economic theory of development had establish a large vision of the economic horizon, with strong critics over the neoliberal path. Instead of development LAc have social and economic inequity, the uncertainty in the labor life, the insecurity, the injustice and impunity that became in the majors flagella. In general it could be say that the capitalist institutions of the states are weak, unstable or partners of the main factice powers This paper establishes the critics over the neoliberal model as the predator accumulation process, which transforms the local economies in subsidiaries, achieving a large social fragmentation and growing inequities. Then this paper analyze some of the main proposes of an alternative path, including a relooking of the main regional experiences. Finally, the last part of the paper studies the perspectives of a social convergence in South America, as the main component for the integration process of the South. | |
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| Carlos Americo Moreira and Agamenon Tavares de Almeida | "Financialization" of Capitalism and Its Recent Effects on Latin American Emergent Economies |
| This paper intends to open up a discussion concerning the role and importance of financial dominance - a component that characterizes the existing regime of capital accumulation of the world economy - this approach has scarcely been included in the analysis of today's economic crisis that hits the world economy. In first place, it will try to analyze the economic category - fictitious capital that had been discussed by Marx in some of his works. This concept needs to be retaken and reactivated as a fundamental instrument to the understanding of the crisis of world capitalism, seeking to integrate and to use it in characterizing this phenomenon that, in many analyses, has been treated in an isolated form, as if their roots were exclusively found in the structure and performance of the world financial markets. An important aspect that will be emphasized refers to the transformations that had been experienced by the international capitalist system in the last decades, both in the reengineering of the production and management modes, as well as in the redefinition of wage relations. Such transformations opened up the way for new proposals to build closer interrelation and integration relationships among different economies, with no reflection upon the reduction of the domination political relations, an important feature of the capitalist expansion process. The economic policies proposals and their corresponding instruments and mechanisms used to redefine some institutional aspects, - conventionally called neoliberal model - that were absorbed and implemented by most of the developing economies, specially during the last three decades, started showing that they resulted in answering the great needs of the international productive and financial capital. Moreover, this article intends to show that speculative financing of the big economic conglomerates contributes to the crisis of the regime of financial dominance accumulation and, at the same time, undergo their negative effects. A basic premise raised in this analysis is that the big conglomerates try, in all manners, to offer expressive returns to their shareholders in exchange for financial resources granted by economic agents in the stock exchange markets, in other words, returns generated by fictitious capital. To keep the value of these shares, CEO's were stimulated to use different mechanisms, from buying-back shares, to the implementation of fraudulent operations. On the other hand, the financial markets also feed the crisis by issuing and offering derivatives that, supposedly, would generate unbelievably high returns, with no real economic basis. In this way they were trying to defend the value of their enterprises, a necessary condition to get new financial resources. The same logic will be found in many emergent economies that, through monetary stabilization policies, appear as loci for patrimonial and financial valorization, based partially on the continuous growth of public debt, by offering attractive high returns, due to extremely high rates of interest. Recently, it has been noticed an accelerated process of acquisition/fusion of enterprises. This is a strategy that fortifies the continuation of the economic and political domination process of the internationalized capital. | |
| AUTHOR(s) | TITLE & ABSTRACT |
| Ludmila Costhek Abilio | Making up Exploitation: Study of a Cosmetic Brazilian Company and the Work of Its Saleswomen |
| This paper presents an analysis of the direct sales system in the Brazilian context. Researching the working relations between a cosmetic company and its one million informal sellers it takes as its main purpose of discussion the relation between labour and accumulation in their contemporary forms. The accumulation of the company is analysed through the empirical research of its production chain, the consolidation of its brand and the distribution and commercialization of its products – which are made exclusively through the hands of its sellers. These workers are not recognized as workers. Labour in this kind of activity loses its shape, becoming totally connected with consumption. For the most part, the saleswomen do not recognize themselves as workers. Meanwhile they are responsible for selling and distributing all the products of the leading company in the Brazilian cosmetic sector. We analyse how the loss of boundaries between work and consumption allows these women to handle all the risks of the distribution of the products: the lack of work regulation combined with the strength of the company´s brand allows the company to transfer almost all the risks of commercialization to the sellers. Relating economic crisis with labour exploitation, we analyse the growth of this kind of activity over the last 20 years. Thinking about the flexibilization/flexibility of work, we discuss how the contemporary direct selling system benefits from the new forms of the very old precarious labour relations of the past. More than 800 thousand women work for this company in Brazil alone. In Latin America they are more than one million. This huge number allows us to bring the direct sale system to the analysis as a social phenomenon, which has to be understood through the relation of accumulation and labour exploitation in the context of unemployment, precarious work and economic and social crisis. | |
| [Paper forthcoming in a revised form in special issue of the International Journal of Management Philosophy and Concepts 2011 vol. 5(4)] | |
| Luigi Maria Antonio Ventimiglia Di Monteforte | Financialisation in the Primary Commodity Dependent Developing Countries: The Case of Chile |
| Part of the political economy literature on financial crises focuses on the relation between the real and the financial sectors. Neo-marxists focus on the real sector and explain that the recent expansion of finance was led by stagnation or over accumulation within the real sector (Sweezy, Brenner etc). Post Keynesians argue that the relation of causality runs in the opposite direction and that the expansion of finance led to weak production. The work of Crotty tries to bridge these two views in an attempt to integrate the Marxist predominance of the real with the post Keynesian dominance of finance. The present paper argues that the relation between these is mediated and that this mediation has to be investigated empirically. The idea at the root of this paper is that the relationship between the financial and the real depends on outcomes and that the search for the primum mobile of financialisation has little usefulness to actual problems that some developing countries face. A theoretically imposed direction of causality from finance to real or vice versa does not help in analysing specific financialised markets such as the primary commodities today. The paper analyses the effect of the financialisation of a primary dependent developing country. The financialisation of this market is defined as a predominant presence of institutional investors in the derivative market which had been created, originally, with the idea of providing the opportunity to hedge against price changes for producers and users of the commodity. Once financialised, the function of providing this opportunity is no longer delivered by the derivative market. In fact, the price of the commodity is driven by dynamics originated in the financial markets. As a result, the producer country has a limited set of political tools to protect its economy from price changes. Chile provides an example of successful policy that goes beyond the separation between the financial and the real. The paper is organised as follow. The first section introduces the concept of financialised markets and shows how the price of physical copper is increasingly associated to the price of the future contract on copper; the second section presents the problems faced by a commodity dependent developing country; the third section discusses in particular, for the case of Chile, the policy implemented by the country in the copper sector with respect to both the real and the financial spheres. The fourth section concludes. | |
| [Paper forthcoming in a revised form in special issue of the International Journal of Management Philosophy and Concepts 2011 vol. 5(3)] | |
| Remy Herrera | TBC |