Bolivia’s Neoliberal Labyrinth

Jeffery R. Webber

Book Review of Benjamin Kohl and Linda Farthing Impasse in Bolivia: Neoliberal Hegemony and Popular Resistance. London and New York: Zed Books, 2006.

In Impasse in Bolivia, Benjamin Kohl and Linda Farthing examine neoliberal economic restructuring and the popular resistance it generated in Bolivia. They offer what is undoubtedly the most thorough and devastating critique available in English of neoliberalism as it unfolded in that country. For this reason and others it will be required reading for students and scholars of Bolivia, Latin America, political economy, and development more generally.

Kohl and Farthing argue that on the international scale a “global hegemonic neoliberal regime” has been constructed mainly through international financial institutions, private investors, and (especially in Latin America) the U.S. state. The long-term viability of this international regime, however, is called into question by the fact that “even though national governments have largely been unable to imagine alternatives to the onerous conditions laid down by international financial institutions (IFIs) and private investors, the sacrifices neoliberalism demands from the poor majorities of the global South increasingly propel them to rebel against its premises and policies” (12). Southern states, therefore, cannot always guarantee the necessary political stability to allow neoliberal markets to flourish.

Among the great contributions of Impasse in Bolivia are the authors’ discussion of how neoliberalism from above interacts with resistance from below and their emphasis on the complexities of the neoliberal project at both the international and the nation-state level. Kohl and Farthing show that in the first stage of restructuring, between 1985 and 1993, the Bolivian government employed a complex combination of consent and coercion in its dealings with the popular classes in order to implement the radical neoliberal content of its New Economic Policy. Pressures from the World Bank, the International Monetary Fund, and the United States were especially intense. Other ingredients of the success of the neoliberal assault were the deliberate, near-total destruction of the Bolivian Workers’ Confederation and the economic cushions provided to dislocated and unemployed workers by the growing informal economy, migration to Argentina, and the emergent coca-cocaine sector. Despite the fact that 20,000 miners lost their jobs, along with 35,000 workers in the manufacturing sector, in the first year of economic restructuring and income distribution worsened, the international financial institutions heralded Bolivia as a success story for having stabilized the economy, increased exports, tamed inflation, and increased gross national product (GNP) per capita during the late 1980s and early 1990s.

The authors also provide an incisive account of “capitalization,” or privatization Bolivian-style, under Gonzalo Sánchez de Lozada’s first presidential administration from 1993 to 1997. Sánchez de Lozada promised that his privatization package would “attract international investors to Bolivia, fuel economic growth, and create hundreds of thousands of jobs” (102). The outcome was rather different. The informal sector continued to be the primary survival tool of poor Bolivians searching to eke out a basic livelihood, privatized state enterprises laid off workers, and the economic growth and new jobs never materialized. Between 1999 and 2004 gross domestic product (GDP) rates bottomed out at 1 percent and hit a ceiling of only 3.5 (113). Corruption, far from being eliminated through the privatization of state-owned enterprises, reached new heights. Kohl and Farthing document asset-stripping in the privatized railroad and airline sectors, widespread transferring of profits in the privatized telecommunications sector, and selling of the hydrocarbons industry at massively discounted prices. Also illustrated are the steep revenue losses stemming from the privatization of previously profitable state enterprises, particularly in the hydrocarbons and telecommunications sectors. Impasse in Bolivia is an informed and well-documented indictment of the neoliberal experiment in Bolivia, with lessons for the global South more generally.

The authors’ discussion of resistance is, however, significantly less compelling. First, Impasse in Bolivia does not convey the revolutionary potential of the 2000–2005 cycle of popular contention that overthrew two neoliberal presidents (Hylton and Thomson, 2005; Webber, 2005). Rather, the new movements at the heart of the insurrectionary wave are juxtaposed against the workers’ movement earlier in the twentieth century, led by the powerful and centralized Bolivian Workers’ Confederation, and described as ad hoc and relatively spontaneous. In fact, however, the radically transformative potential in the various sectors and regions of the country that constituted the 2000–2005 protest cycle was real and predicated on a vast web of pre-existing social-movement networks (Yashar, 2005), including the peasant trade-union federation in the case of the Aymara peasantry, the coca growers’ peasant unions in the case of peasant resistance in the Chapare region, the Regional Workers’ Central of El Alto, and El Alto’s slum-based neighborhood federation.

Second, the indigenous liberationist component of the latest wave of protest is not sufficiently developed with regard to its organizational bases, its ideological currents, and its political aims. Third, and most serious, when discussing the “limitations of national resistance in a global market” Kohl and Farthing are, at times, almost fatalistic in their pessimism, elaborating at length on the “costs” of protest and social unrest for “national development” (191–192). The costs associated with capitulating to capital, so clearly elucidated earlier in the book, seem often to fade from view when the authors reflect on strategies of resistance. Too stark an opposition is depicted between the possibilities of anti-neoliberal resistance in the poorest country in South America and international levels of resistance in “global civil society.” Possible synergies of simultaneous resistance at all levels are therefore underestimated. Regional dynamics of resistance within Latin America as a whole are conspicuously absent from the discussion, as is the ongoing importance of contesting territorially based state power on the part of popular struggles in the current epoch of neoliberal capitalism. The authors present an ambiguous, underdeveloped praxis based on the idea that a “strong global civil society capable of re-embedding the economy into social life needs to flourish” in order for national-level resistance in countries like Bolivia to succeed. What would such a civil society look like?

Rather than confronting capitalism, and not simply its neoliberal form, the authors seem implicitly to adopt an increasingly popular reading of Polanyi in which the capitalist market can be “reembedded” in society with more humane results for global humanity. A number of powerful critiques of this perspective have emerged in recent years, with far more compelling, revolutionary, and, to my mind, realistic strategies of anticapitalist resistance (Saul, 2005; Hart-Landsberg and Burkett, 2005; McNally, 2002; IIRE, 2006; Petras and Veltmeyer, 2005).

First published at Latin American Perspectives


Hart-Landsberg, Martin and Paul Burkett 2005 China and Socialism: Market Reforms and Class Struggle. New York: Monthly Review Press.

Hylton, Forrest and Sinclair Thomson 2005 “The chequered rainbow.” New Left Review 35: 40–64.

IIRE (International Institute for Research and Education) 2006 Change the World Without Taking Power? or Take Power to Change the World? Amsterdam: International Institute for Research and Education.

McNally, David 2002 Another World is Possible: Globalization and Anti-Capitalism. Winnipeg: Arbeiter Ring Publishers.

Petras, James and Henry Veltmeyer 2005 Social Movements and State Power: Argentina, Brazil, Bolivia, Ecuador. London: Pluto Press.

Saul, John S. 2005 The Next Liberation Struggle: Capitalism, Socialism, and Democracy in Southern Africa. New York: Monthly Review Press.

Webber, Jeffery R. 2005 “Left-indigenous struggles in Bolivia: Searching for revolutionary democracy.” Monthly Review 57: 34–48.

Yashar, Deborah J. 2005 Contesting Citizenship in Latin America: The Rise of Indigenous Movements and the Postliberal

Challenge. Cambridge: Cambridge University Press.

1 comment:

Cameron said...

Kohl and Farthing's new book "Impasse to Bolivia" reflects yet another sociological analysis that concentrates its critique on neo-liberalism as the source of economic inequality. the result, almost invariably, is that the 'solution' is posited to be the alteration of exchange-relations, based on an accumulation of state resources.

However 'neo-liberal shock therapy' (as Naomi Klein puts it), although devastatingly draconian, is not the cause of economic inequality but rather a consequence of capitalist production relations.

The analysts that are currently perpetuating the belief in Polanyi's misguided theory, albeit under varying frameworks (i.e. dependency theory) include
Vice President Garcia Linera (2005, 2006, 2007) with his insistence in "capitalism with a strong state presence" as a solution, and Petras (2006, 2007) with his insistence that the MAS could have effected change through the 'social movements' via the Constituent Assembly.

Rather than posing real solutions to economic inequality, these elaborate and sophisticated analyses ultimately manage to avoid a revolutionary confrontation with capitalist production relations that must begin from below with the trabajadores and campesinos playing the lead role.