“You can’t build socialism with dollar signs in your eyes” – Fidel Castro
Many experts and commentators describe the political process in Latin
America as one of ‘alternating right and left governments’. Journalists
focus on the abrupt regime changes from democratic to authoritarian; from
neo-liberal to progressive programs; and from oligarchs to populists.
The financial media present the ‘right’s’ socially regressive policies and
strategies as ‘reforms’, a euphemism for the re-concentration of wealth,
profits and property into the hands of foreign and domestic oligarchs.
Leftwing intellectuals and journalists paint an image of socio-economic
transformations under Latin America’s ‘left’ regimes where ‘the people’ take
power, income is redistributed and growth flourishes.
The rise and demise of left and right regimes are typically attributed to
‘economic mismanagement, social crisis, political manipulation and erroneous
Orthodox economists, under the presumption that greater profits ‘create’ the
foundation for long-term stability and growth, prescribe a series of
‘structural reforms’. ‘Structures’ refer to measures and institutions, which
strengthen the organization of the governing elite and their socio-economic
A deeper analysis of both left and right wing perspectives shows that the
basic understandings are flawed; there are fundamental misunderstandings
regarding the long-term, large-scale continuity of the developmental process
crossing political persuasions.
As a result, the left and right socio-economic classes and political elites
exaggerate the dynamics of development while profoundly underestimating its
‘stasis’ or resistance to change.
The most striking aspect of Latin American development is not the change of
regimes, but the stable continuities of the (1) class structure, (2)
ownership of the strategic sectors of the economy, (3) rates of profit, (4)
pattern of foreign trade and (5) principal recipients of state credit.
Viewed from this perspective, it is clear that leftwing as well as
rightwing electoral victories result in mere incremental changes in the
ownership of the means of production, finances and distributions. The basic
structures remain intact.
Increases in progressive taxes by the left, as well as tax cuts by the
right, are puny compared with the large-scale pervasive tax evasion by the
elite. Massive capital flight to offshore holdings offset any increase in
public revenue. Capital flight and the transfer of export earnings to
overseas subsidiaries in low tax countries distort any real redistribution
As a result, ‘progressive’ taxes fail to reduce real upper class income.
Any increase in income for workers and salaried employees result from
volatile cyclical economic shifts, which are subject to abrupt reversals
undermining medium term improvements in livelihood.
For example, progressive re-distributive programs are based on the size and
scope of commodity prices, which, in turn, increase or reduce consumption.
This is best understood as a function of the domestic structural
continuities and the volatility of global demand for agro-mineral exports.
When progressive regimes face the challenge of rising unemployment, income
inequalities and economic crisis, regime shift occurs with the ‘rise of the
right’ exacerbating the economic crisis and social regression.
The negative indicators, seen during a cyclical downturn when a left regime
is in power, become more acute with the ascendency of the right. Structural
continuities persisting under both progressive and rightist regimes, and not
specific policies, account for this lack of real change.
The socio-economic downturns under progressive regimes, which is usually
related to decreased global commodity demand, are largely responsible for
the electoral victory of succeeding right-wing regimes.
The continued socio-economic declines, under rightist regimes, inevitably
lead to a renewed crisis, as is happening in Brazil and Argentina.
In all cases, class and economic continuities under left regimes are much
more important in determining their trajectories and their short and
medium-term incremental improvements. Likewise the rise and decline of
rightwing regimes are based on electoral victories linked to the gross
opportunism of the established oligarchical classes seeking fast gains and
quick flight. Regimes may change with dizzying frequency but the state and
class power remain constant.
Corruption: The Engine of Left and Right Growth
A sober review of Brazil’s corruption nexus between the PT (Lula) and the
oligarchy leads to the following observations:
Inequalities are based on large-scale, long-term corruption linking new
progressive leaders with traditional rightwing politicians and elite
Coalitions or partnerships between left and right parties and leaders
represent kleptocracy, not democracy.
It is clear that the greater the dependency on revenues from the extractive
sector (minerals, oil and gas), the more intense the party competition, the
more pervasive the corruption and the wider the web of kleptocrats.
The more intense competition between the elite and Party, the
less the people have any access to the economic pie defining class society.
Corruption greases the wheels of political campaigns, elections and
strategic appointments within state institutions, whether ‘progressive’ or
In other words, electoral politics and ‘free markets’ function smoothly and
without turmoil when the competing parties engage in a mutually compatible
coalition of corruption facilitating big business contracts.
Despite uprisings, electoral change of regimes, and palace coups, this
immutable system of mutually shared corruption reduces the possibility of
any real working-class based transformations.
Institutionalized corruption turns ‘dissent’ into vehicles for
recycling politicos between progressives and rightists.
The more the kleptocratic regimes ‘change’ the greater the continuity of
class structure and economic ownership. Plus ça change…!
While popular movements and trade unions struggle and organize, searching
for alternatives, their political leaders eagerly anticipate forming elite
consensus and coalitions to share public office and public loot.
Outgoing rightwing regimes leave a legacy of public debts, corruption,
privatized public resources and obligations to powerful domestic and foreign
bankers who control the commanding heights of the economy. The incoming
leftist regimes agree to assume all the debt and obstacles and none of the
assets and gains.
The political decision by left regimes to accommodate this legacy eliminates
the possibility of implementing basic changes and confines their policy to
incremental, symbolic gestures passing as ‘change’.
It is the left’s choice to adapt itself to the kleptocratic legacy and not
their progressive ideology or working class voters, which defines the real
political-economic and class character of the ‘popular regimes’.
To illustrate and document the ‘transitions’ to piece-meal adjustments
forward and backwards in Latin America, it is necessary to outline the
‘political turning points’ and how they were subverted.
The Democratic Option
With the demise of the military and authoritarian regimes between the 1960’s
and 1980’s, the domestic and foreign ruling classes faced the real prospects
of ceding political power and losing strategic ownership and wealth. In
reality, the ruling class gave up very little and gained infinitely more.
Socio-economic changes were aborted: the politicos of the left and right
negotiated a convenient pact with the military and business elite. The left
received political office, patronage and minimal incremental changes. In
exchange, the entire class and property system remained intact.
The authoritarian transition to electoral pacts precluded any democratic
option. Worse, the socio-economy accommodations among foreign and domestic
business elites and the upwardly mobile middle class politicos ensured the
continuation of the onerous and repressive class structure.
Cooption of elected officials opened the door for deeper and more inclusive
forms of corruption and broadened the net of political patronage to include
trade union leaders and the increasingly ambitious operatives from the NGO
The Debt Crises and the Debt Default
Business-military regimes profited from corrupt
multimillion-dollar arms purchases and padded their overseas bank accounts
from the high interest loans they signed with foreign and domestic bankers.
Because these loans were not used for public projects, the debt should have
been reneged as illegal by subsequent popular-leftist regimes. Instead, the
tax-paying workers and employees were left to pay off the loans.
The illegal debts totally constrained the incoming electoral regimes,
precluding policies aimed at domestic growth, including increases in
investments and consumption.
Numerous investigations have demonstrated the corrupt nature of the debt
process: Loans, borrowed by the Treasury, were transferred to overseas
private accounts. This should have served as the legal bases to reject
payments to the lenders. However, the business-military borrowers, who were
responsible for the illicit debt, were exonerated by successive right-left
The left-right political pacts quickly rejected any idea of defaulting on
the debt because of their eagerness to take office. The possibility of
ending the onerous debt payments was shut down. Instead, these regimes
adopted more austerity programs, prolonged debt payments and the
intensification of the neo-liberal agenda.
The Golden Age of Rightist-Imperial Plunder: the 1990’s
The elected left-right ‘coalition’ regimes, the continued payment of illegal
debt and the ruling class austerity programs quickly led to hard rightwing
Inflation, accompanying the policies of the combined popular-right
‘consensus’ governments led to the collapse of the ‘electoral left’ and the
rise of the neo-liberals.
Thousands of the most lucrative banking, manufacturing, transport and
extractive national industries were ‘privatized’ to foreign and domestic
oligarchs, often in corrupt crony-ridden deals.
Bankers, landowners, real estate and media moguls prospered.
Meanwhile, landless peasants, industrial workers and debtors were exploited
Western imperial centers, led by the ‘Bill’ Clinton regime, pushed for Wall
Street-brokered regional trade and investment pacts.
In the United States, the decade of the 1990’s would be celebrated as the
‘golden age’ of imperial plunder of Latin America’s agro-mineral wealth, the
exploitation of its labor and the dispossession of its rural communities. A
mega-wave of financial swindles and IMF-imposed ‘stabilization pacts’ wiped
out the savings of millions of small business-people and salaried employees,
while consolidating the political and economic power of the oligarchy.
The grossly corrupt ‘presidential troika’ of Carlos Saul Menem in Argentina,
Henrique Fernando Cardoso in Brazil and Gonzalo Sanchez de Losada in
Bolivia, replaced the stable demand-side economic policies, including
import-substitution industrialization, with supply-side programs,
emphasizing agro-mineral exports and imperial-centered integration policies.
The neo-liberal, imperial-centered, privatized politico-economic regimes
lasted less than a decade, but the damage of such pillage to the national
economies would last much longer.
The multiple economic imbalances and the institutionalization of large-scale
entrenched business-state corruption have undermined competition,
efficiency, innovation and any chance for sustained growth.
Vast outflows of profits and interest (pillage flowing to US bank accounts)
have undermined production and savings needed to finance growth.
The predictable collapse of this criminal ‘new order’ of agro-mineral
exports (pillage), tax evasion and the business-political kleptocracy led to
sharp socio-political polarization, state repression and eventually the
popular overthrow of these klepto-imperial regimes – Clinton’s ‘Golden Age
Mass struggles arose, led by grassroots movements linking the urban
unemployed, rural farm workers, the downwardly mobile public and private
sector employees, bankrupt small business people and middle class debtors
and mortgage holders. These broad based movements directly challenged the
The catastrophic economic consequences of the ‘neo-liberal’
imperial-centered rule led to the possibility of left regimes riding on the
back of mass protest.
Popular Uprising and the Left-Business Pact
The downfall of the neo-liberal regimes of the 1990’s brought
left political parties and leaders to the foreground. These emerging
leaders of the ‘progressive left’ would replace the ‘old neo-liberal’ right
as the new partners of the business, agro-mineral and banking elite – while
the academic world celebrated the ‘rising red tide’.
The ‘new pact’ promised to preserve the power of the big
business firms and the holdings of national and foreign banks. Most
important, the social class hierarchy was unchanged. The ‘left’ took the
reins of the kleptocratic networks to finance their own elections and
facilitate the upward mobility of a rising left political and NGO elite.
The marriage of incremental reforms and populist ideology (21st
century ‘revolutionary’ demagogy) with oligarchic klepto-capitalism led to
both the election of leftist leaders and the demobilization of the populace.
A new left political oligarchy was born to enrich itself at the public
Parasitical rentiers continued to evade taxes as ‘left’
bureaucrats looked the other way. The public-private petro-swindlers
stuffed the pockets of the new political leaders. The left would secure
needed parliamentary votes, as well as allies from the technocratic elite,
united in a common goal of rapidly plundering the public treasury.
The global commodity boom, which lasted from 2003 to 2011,
fueled the left’s largess in the form of poverty programs and other
minimalist measures. Business elites prospered, minimum wages increased and
social expenditures, especially ‘survival baskets for the poor’ surged with
great fanfare. Worldwide, left academics performed victory dances in this
greatly over-rated ‘red tide’.
The left political pact with capital did not lead to the growth
of new productive forces to sustain rising incomes for workers and farmers.
There were no new technological inputs in the economy. Instead they mounted
flashy pharaonic ‘prestige projects’ linked to corrupt contracts to crony
capitalists which devoured the growing public revenues from the commodity
boom. The patronage machine had never functioned more smoothly!
Predictably, the uncritical left academics celebrated these new
‘radical’ regimes while ignoring mass corruption and right-left alliances.
The critics who identified the precarious nature of the regimes’ economic
foundations were dismissed or ridiculed.
The collapse of the commodity boom, the growth of massive fiscal
deficits, the reversal of the small consumer gains , the loss of access to
cheap credit and the visible entrenched corruption within the public-private
partnerships provoked mass discontent and protests.
This gave the rightwing political parties the opportunity to
‘clean house’ by ousting their erstwhile partners from the left, reverse the
minimalist social pacts and bring back the ‘Golden Age of the 1990’s’.
Striking a moral posture against leftist corruption, they abandoned the
coalition and took power.
The Left Catastrophe: 2015-2018
In Brazil and Argentina, ‘democratic electoral’ transition meant
simply that the klepto-left would be replaced by a more ‘efficient’
klepto-right. Brazilian President Dilma Roussef was ‘impeached’ by a
Congress of thieves and her kleptocrat supremo Vice-President Michel Temer
assumed power. Argentine President Cristina Fernandez Kirchner was
succeeded by Mauricio Macri.
Throughout these changes, the banking, petroleum, construction
and meat-packing klepto-oligarchy manages to operate with the same mafia
principles regardless of the ‘tint’ of the presidency: Lucrative contracts,
captured markets and record profits continue to allow the flow of illicit
payoffs to the rightwing presidents, without interruption.
Left academics have ignored the nature of the klepto-state and
its pervasive networks of corruption. Many held their noses and dived right
into the lie-factories, in exchange for privileged access to the mass media
(publicity, talk shows, intellectual and cultural ‘round tables’, etc.),
invitations to fancy gatherings at the presidential palace, speaking
engagements abroad and an ever-expanding source of side-line income as
professors, columnists, advisers, and publicists.
The oligarchs’ marriage of convenience with the left, and their
prolonged honeymoon, was financed by million-dollar bribes to the left-right
political allies. In exchange, the oligarchs received billions of dollars
of lucrative state contracts.
When the Left agro-mineral model collapsed, many of their voters
turned to street protests.
The oligarchs and the rightwing parties knew the time was ripe
to dump the left presidents. They deftly seized total political power to
further concentrate their economic wealth, property and social control over
Kleptocracy in Transition: From ‘Progressive’ to Rightwing
In the last few years, the ascendant rightwing political parties
and leaders have implemented their most retrograde agenda: This includes
raiding pension funds, raising the retirement age and cutting the budget for
social security, public education, and housing and health programs. The
oligarchs and the Wall Street bankers seemed too eager to strip the public
In Brazil, the rightwing alliance’s ambitious plan to seize
power by ‘criminalizing’ the left may have backfired.
The right relied on the judiciary for its peaceful return to
power. This began successfully with the prosecution and ouster of the left
regime through the courts. However the courts did not stop there: They
proceeded to investigate, arrest and jail elected politicians from the right
creating a crisis of state.
Over one thousand nine hundred congress people, senators,
cabinet ministers, public sector executive officers, governors and mayors
from right to left have faced or are facing investigation and arrest,
including the newly-imposed rightist president Michel Temer in Brazil and
the mega-swindler, President of Argentina Mauricio Macri.
Initially, foreign and domestic bankers, speculators and investors, as well
as the financial press celebrated the return of the right. The stock
markets soared and all made ready for the grand privatizing fiesta of the
public sector. When the courts continued to pursue the rightwing politicians
and bureaucrats, the pervasive nature of state klepto capitalism was
exposed. Members of the business elite joined their politico-partners in
jail, and investors pulled out their capital. The press’ celebration of the
‘return of the free market’ faded to a whisper.
As the rightist regimes’ elected leaders went on trial, the
klepto ‘market’ economies collapsed. The ‘reformist’ (regressive) business
agenda, which had depended on effective presidential power linking
klepto-patronage to legislation, retreated. Without their accustomed diet
of corruption, elected officials fled. Judges and prosecutors investigated
and undermined the authority of the new rightist regimes.
Faced with weakened and discredited presidential authority, the
urban trade unions, rural social movements, students and the unemployed woke
up and marched on the presidential palace.
The validity of the elections by rightist majorities has been
undermined. Faced with jail for large-scale bribery and fraud, leading
executives of the largest conglomerates bargained with the courts,
implicating their business partners, party leaders, congress-people and
The right wing’s rapid rise and demise has sown consternation
among the kleptocratic oligarchy. In just two years, the courts have done
more to undermine the power of the oligarchy-business-rightist political
nexus than an entire decade of leftist klepto-political rule during the
celebrated ‘red tide’!
While in power, the elected left did nothing to dismantle the
large-scale kleptocracy they had inherited from the previous rightist
regimes of Menem,and De La Rua (Argentina), Cardoso (Brazil) and Sanchez de
Losada (Bolivia). This was because they expected to take control of the
network and profit from the existing system of business-political pacts.
The left regimes did not end alliances among corrupt bankers and
the agro-business elite because it might undermine their own ‘development
Instead, the left appointed its own pliable functionaries to key
ministries to mediate and ensure co-operation within the system of
Only when the business-rightist pact emerged to undermine and
eject the elected leftists from power, were they charged with corruption.
To avoid prosecution for business-rightist corruption, the
oligarchs gladly shifted their bribe machinery from the right to the left
(and vice versa).
The business-left alliance, based on corruption and demagogy,
ensured the continued success of neo-liberal extractive capitalism – until
the global financial crisis and the collapse of commodity prices ended the
As the commodity bubble collapsed and the left regimes were
forced to borrow heavily to finance their own political survival, deficit
spending, corruption, economic stagnation, unemployment and rising deficits
which provoked a broad array of opposing forces. These ranged from bankers
and investors, to trade unions and informal workers. At no point did the
left consider the alternative of fundamentally transforming the agro-mineral
economies. Instead they borrowed from the international and domestic banks,
slashed social programs and imposed regressive austerity programs – all to
maintain their political power.
Corrupt capitalism is the only functional form of capitalism in
Latin America to day. It is based on exploiting public resources and
government contracts to promote ‘accumulation’. The ‘class struggle’ has
been replaced by tri-partite kleptocratic alliances among business, trade
unions and the state. In this era, elite deals have replaced class
The Return of the Class Struggle and the Demise of the Klepto-Left
Class struggle returned with the arrest and discredit of the
klepto-capitalists and their klepto-left allies.
The rightists’ return to power exploded in their own faces
because they reproduced and deepened kleptocratic economies. Their brazen
boasts, which seemed to pronounce “all power to the biggest swindlers and
political bribe takers”, quickly radicalized the populace.
Beyond the Demise of the Right: Fake and Real Alternatives
The demise of the right and its ‘premature’ departure from power
are not the product of a class uprising or mass protests. The judicial
system has led the way and forced their retreat.
For this reason, the replacement of the right is an open
The business, banking and imperial elites clearly favor a
reshuffle of personalities and the trotting out of a new ‘honest face’ to
pursue their rightist agenda.
An electoral ‘free-for-all’, where popular left kleptocratic and
charismatic leaders emerge, is the left’s choice.
A third alternative would be the recently discredited left
returning to office, crippled by ongoing investigations and tied to the old
business and political alliances.
None of these ‘alternatives’ will end klepto-capitalist power
and practice. None will satisfy mass discontent.
In the wings, there is always the possibility of a ‘moralizing
military coup’, led by a military-business-imperial junta, to clear the
streets and impose temporary stability. Such a ‘coup’ would be unable to
revive economic growth and reverse the socio-economic slide into
klepto-capitalism. Moreover, it would unify the unemployed kleptocratic
politicos and NGO executives into a ‘peoples’ coalition of ‘democratic
opposition forces promising prosperity and freedom’ to buy and sell votes
The real alternative in Latin America can only emerge and
succeed if it begins by rejecting the klepto-left and turns to new ways of
selecting leaders and building parties and movements. Direct action,
workplace and street occupations, confrontations and the encirclement of
banks and MNC headquarters and the implementation of debt and mortgage
defaults – all linked to the immediate demands of workers, employees and
professionals – can build the foundations of alternative power.
Democratic leadership depends on electoral politics under the
control of popular constituent assemblies. They must reject corporate
funding. Elected officials’ salaries must be turned over to the movements,
which will pay office holders at a scale close to the wage and salaried
workers they represent.
Left transformations begin with agrarian reforms and continue
through the modernization of production, marketing, processing and linkages
to socialized banking and credit systems. Indigenous communities should be
incorporated in popular assemblies with rights and representation.
Left programs, which center on nationalizing banks and foreign
trade, should build community-controlled banks and credit agencies.
Productive and commercial employment should be based on
Community-based alliances with employees and workers
associations must link up with multi-issue, class-based, gender and ecology
Military industries should be reconverted to domestic production
and linked to environmental protection.
Robust investigations and prosecution of corporate tax evasion,
capital flight to tax havens by speculators and hedge funds should proceed
with due speed.
Convicted bank swindlers and bribe-taking politicians should be
punished with mandatory maximum sentences.
The demands and programs, tactics and strategies flowing from a
growing educated work force can transform ‘free time’ into learning,
leisure, family and friendships.
Local and national defense forces guarding national borders from
imperial penetration, drug cartels and criminal gangs should replace the
bloated security state and corrupt oligarch-linked military elite.
Technological innovations, including artificial intelligence and
robotics, should reduce working hours and increase workplace safety while
retaining workers to manage, monitor and innovate the productive process.
Left governments should focus on direct people-to-people
diplomacy over and against the elite-led diplomatic deceptions that lead to
Elite ethno-religious groups expressing loyalty to foreign
powers and acting as agents against the interests of their homeland should
leave and resettle in the country of their chosen loyalties.
Throughout Latin America, left corruption reflects the deep
continuities of ownership by the banking, industrial, agro-mineral elites.
Left regimes, which choose to link economic growth and investment to the
corruption of public agencies and dubious public-private partnerships, are
doomed to crisis and defeat.
The illegal enrichment of left political decision-makers
results in greater social inequalities because they distribute the pillaged
public funds and potential tax revenues into the accounts of private and
Costly competitive election campaigns are based on corrupt
deals. Illicit contracts lead to criminal profits, which lead to the
illegal flight of capital to foreign bank accounts.
There is no difference between corruption through ‘bribery’, as
in Latin America, and corruption through ‘legal’ multi-billion dollar
lobbies in North America: Both purchase politicians and legislation and
subvert the interests of the people.
In conclusion and to re-phrase Fidel Catro: ‘You cannot build
radical social democracy with dollar signs in your eyes.’ Free market
capitalism can only operate through klepto-capitalist, not popular
Corruption flourishes in the context of a monopolized elite mass
media and high cost elections under the dictates of capital. Kleptocratic
rule is fundamental to capitalism because it promotes the dispossession of
small farmers and businesses and the exploitation of workers. Behind and
accompanying all great fortunes are enormous and ever growing swindles
involving the degeneration of public officials. Corruption is the driving
force and very heart of capitalism!
Billion-dollar corruption payoffs by just one giant Brazilian construction
multi-national, Odebrecht, involved at least eleven Latin American
countries, including both left and right regimes.
Brazil’s giant multi-national meat packer, JBS, and the public-private oil
company, Petrobras, bribed at least a dozen regimes in Latin America.
Rightwing kleptocracies bribed by Odebrecht
Brazil (1993-2002) and (2016- )
Argentina (1990-2001, 2016-)
The United States leads all the world’s kleptocracies in terms
of bribes by lobbies, and financial swindlers and money-laundering banks and
illegal payoffs by oil and gas companies to politicians and officials.
Brazil’s largest oil (Petrobras), iron ore (Vale), and meat
packing (JBS) multi-national corporations financed their overseas
acquisitions and markets through bribes financed by low interest loans from
the state development bank (BNDES).
Close to one hundred Petrobras officials and political leaders
have been convicted and jailed for taking bribes from contractors and
developers, including the Treasury Secretary of the ‘Workers Party’.
JBS, the worlds’ second leading beef and pork processor and
leading cattle feeder, paid a 3.4 billion dollar fine because it bribed
regulators to allow the shipment of contaminated meat products to the US
(Walmart), China and throughout Latin America. In a deal with prosecutors,
Joesley Batista, CEO of JBS released recordings of Michel Temer, Brazil’s
current right-wing president, demanding bribes from the conglomerate to
avoid federal prosecution.
During the rightwing Cardoso regime, the initial privatization
of Vale, the world’s largest iron mine, was accomplished through grotesque
bribes and money laundering.
Leftwing President Lula da Silva allowed klepto-privatization of Vale to
move forward. Lula even called for more and bigger Brazilian multi-national
swindles. Upon taking office in 2003, President Lula da Silva unrolled the
‘red carpet’ for the business elite, stating that “it is time for Brazilian
businessmen to abandon their fear of becoming multi-national businessmen”.
The newly emboldened kleptocratic Brazilian conglomerates proceeded to
‘fearlessly’ bribe their way throughout the markets of Latin America, Asia
and US. Lula subsequently served as overseas emissary to promote corrupt
Petrobras oil contracts with Angola, Venezuela and Ecuador.