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Inequality and the Dismantling of Citizenship in Latin America

NACLA Report on the Americas, May/June 1997

According to the most recent estimates of the UN's Economic Commission on Latin America and the Caribbean (ECLAC), there were 209 million Latin Americans living in poverty in 1994, up from 197 million in 1990, an increase of 6%. A decade of neoliberal, market-oriented reforms had brought about the reactivation of private investment and economic growth together with an overwhelming deterioration of living standards and the impoverishment of large numbers of people.

Deep and persistant social inequalities have biased the nature of both econoic growth and recession in Latin America. It is the poor who bear the brunt of recession through job loss, downgraded working conditions, falling real wages, small-business bankruptcies and so on. It is the wealthy, on the other hand, who are the first to benefit from growth through access to credit and foreign exchange as well as tax exemptions and other government benefits. In Argentina, for example, between 1990 and 1994, the so-called "golden years" of the convertibility program of Carlos Menem and Domingo Cavallo, GDP increased by one third-some $100 billion-and labor productivity grew by 50%. Real wages, however, remained virtually frozen and unemployment skyrocketed. By contrast, after the "tequila effect" of Mexico's December 1994 peso crisis rippled through Argentina, the country's GDP shrank by 4.6%, while unemployment almost doubled (see table #1). In the Buenos Aires metropolitan area unemployment increased from 602,718 (12.1% of the labor force) in 1994 to 953,632 (18.8%) in 1995. The 1995 rate of female unemployment was even higher, 22.3%.1 Both growth and recession, then, had clear class implications. Workers gained little during the boom and lost more than their employers during the crisis.

Figure #1 presents a rough measure of social inequality in 17 Latin American and Caribbean countries in the early 1990s, and compares those countries to several in Asia and Africa, as well to the United States. The highest levels of social inequality are found in Latin America, with 14 out of 17 countries ranking higher than much poorer countries in Asia and Africa. In Figure #2, we see that this income inequality has been a feature of the Latin American landscape well before the advent of neoliberal restructuring. In part this is because there is much more cumulative inequality in Latin America than in other regions. Different types of inequality, that is, stemming from class, gender, race, regional and even religious differences, tend to overlap, creating extremely rigid social structures.

This is particularly true in countries where class and ethnic domination combine, as in Brazil and Guatemala. And contrary to the neoliberal idea that "market- friendly" economic growth leads by itself to increased social homogeneity, we see that countries so divergent in size and rate of growth as Mexico, the Dominican Republic and Nicaragua have similar levels of inequality, as is also the case of Ecuador when compared to Argentina.

Figure #3 highlights an additional dimension of Latin American inequality. It compares the after-tax average earnings of chief executive officers (CEOs) of the largest private corporations in 21 selected countries with those countries' per- capita gross domestic product (GDP). Nowhere is income polarization so extreme as in the four Latin American countries shown on the chart. Business elites in those four countries enjoy higher levels of income than many of their colleagues in much more developed countries. Argentina's CEO's, for example, earn 7% more than their U.S. colleagues although Argentina's GDP per capita is one third that of the United States. Mexico's CEOs earn 12% more than those in France, while France's GDP per capita is nearly six times that of Mexico.2 The region's persistantly high levels of poverty and inequality pose some problems for the ongoing celebration of Latin American democracy. The current growth in poverty is taking place in countries that have regular elections and more or less open competition among political parties. These countries are governed by regimes that are considered to be democratic-for their regular elections and open competition-by the so-called "transitions-to-democracy"

literature of the 1980s and by the "consolidating-democracy" discussion in the 1990s.3 But even in the strictly political sphere, these approaches are clearly inadequate, and there is evidence that a number of "democratic transitions" have retreated to traditional caudillo politics or to regimes which combine democratic formalities with authoritarian rule.

I would like to suggest a different approach. In addition to open competitive elections, democracy requires the effective observance of the rule of law and the autonomy of the judicial from the executive branch of government. It also requires accountability of public officials, free access to information and the civilian control of military and security forces. In addition to these minimal political conditions, genuine democracy requires access to certain socioeconomic conditions such as education, jobs, health care and housing, which allow for the effective practice of citizenship. These conditions are sorely lacking in most of our "really existing" democracies.4 Although electoral procedures and party competition may be found in settings of massive poverty and profound inequalities, poverty and inequality tend to distort the effective meanings of democracy and citizenship. In conditions of extreme poverty, formal citizenship may mask a retreat towards patron/client political relations, while democratic institutions frequently house authoritarian power relations. The tensions between inequality and impoverishment on the one hand, and democratic politics on the other, can have a devastating effect on the latter. This can be seen more clearly if we consider the question of citizenship.

Liberal democracy-the purported goal of Latin American political elites and their U.S. supporters-can be thought of as the political regime of citizenship.

Citizenship, in turn, is made up of some basic, interrelated components including, minimally, the following:individual autonomy, involving personal freedom vis-a-vis all other individuals as well as individual freedom and rights vis-a-vis state power and power-holders; equality of rights and obligations of all individuals in a particular polity;efficacy, or the ability (and the perceived ability) to achieve desired outcomes through one's direct or indirect efforts;accountability, or the assumption of responsibility for one's deeds and their consequenses upon others (which must apply to public officials as well as to private individuals);empathy, or the ability to place oneself into settings and situations beyond one's locality or everyday horizon; and finally an idea or assumption of a shared belonging to something that is common to all citizens (the res publica, as the Romans called it, or the English commonwealth). These components of citizenship do not easily coexist with extreme and persistant inequality. Rather, they tend to get distorted in some of the following ways.

Autonomy Personal autonomy refers to physical freedom as well as access to some basic resources that allow for a minimum of self determination: a decently paid job, education and access to information, sustainable living conditions, and the like.

Figures on income disparities suggest that while the elites have abundant and sometimes excesive access to such resources, increasing majorities of the Latin American population are deprived of them. There is certainly a great deal of freedom and autonomy among the richest 20% of the Brazilian households which collectively earn 67.5% of the country's national income, or among their colleagues in Guatemala getting 63% of the pie. They enjoy more than autonomy.

These elites, as the Brazilian sociologist Octavio Ianni put it, "behave not as rulers, but as conquerors." Quite the contrary in the lower floors of the social edifice: what kind of personal autonomy is experienced by the jobless, the homeless, the poorest 40% of the Latin American population getting 5.7% of their country's income in Mexico, or 5% in Venezuela, 7% in Brazil, 4.9% in Chile, 2.7% in Guatemala or 4.9% in Colombia?

The much-discussed crisis of political parties is in part the result of this immense social polarization.5 The inability of political parties to process and respond to the demands and expectations of the impoverished without contesting the overall imprint of market-dominated restructuring reinforces people's alienation from conventional representative democratic institutions. Something similar can be said with regard to the increasing inability of unions to represent and mobilize the growing numbers of the un- and under-employed, and those expelled from formal labor markets because of transnational subcontracting, "flexibilization," and other forms of labor discipline.

In addition to their conventional political and economic objectives, most Latin American parties and unions traditionally performed a number of social- assistance functions with regard to jobs, education, health care and the like.

Because of neoliberal restructuring-including budget cuts and union busting- these social-welfare functions have largely disappeared. It is now the state, through "targeted" social policies, which directly fills the void left behind by the unions' and parties' retreat from the daily needs of their constituencies. Since state resources-compensating for the rigidities and shortcomings of the market-are not sufficient to reach the entire population in need, a poor-against- poor competition develops to get access to much needed resources.

Equality In such polarized social settings, to speak of equality is plain mockery. There is, of course, a constitutional framework of legal equality, yet when socioeconomic and cultural disparities reach extreme levels, effective inequality tends to dominate legal equality. In these circumstances, the egalitarian democratic principle of "one person one vote" is devoid of any relevant meaning. In the upper levels of the social order it is quite obvious that "one person" has access to much more than one vote: we are dealing there with corporate power. Take the case of Carlos Slim, the wealthiest man in Mexico, whose estimated $6.1 billion of assets include controlling interest in the Mexican telephone giant Telmex as well as major shares of the nation's largest bank and most profitable financial firm.6 Are Slim's political power and efficacy are restricted to just the ballot he casts every two or three years? Hardly. On the lower levels, of course, "one person"

does mean "one vote" although post-electoral pirouettes by government officers frequently empty voting of its ability to achieve the goals the majority of the electorate is pursuing; cheating "the sovereign people" looks like standard operating procedure in market-friendly democracies.

Efficacy These inequalities in personal autonomy have a powerful impact upon efficacy. Patron/client relations of domination and subordination tend to substitute for relations among equals. Personal ties substitute for impersonal institutional loyalties. This is particularly clear on the lower rungs of the social ladder, and increasingly present among segments of the middle class. Having a friend or a relative who holds some powerful position tends to be more conducive to the achievement of specific goals-getting access to a health clinic or a job, having the roads paved, or garbage collected-than the entitlements granted by citizenship rights. The very vulnerability of people in poverty reinforces their search for someone else's efficacy, and personal relations take precedence over entitlements.

This is what the Mexican anthropologist Guillermo de la Pena calls "negotiated corporatism." Efficacy here refers to the ability of subordinate individuals to manage themselves in non-democratic power structures and social networks.7 In a recent survey conducted in the Dominican Republic, for example, the demand for strongmen and for authoritarian solutions was most common in the most vulnerable segments of population: among lower-income respondents, among the less educated, among women more than among men and among blacks much more than among whites.8 A direct, non-mediated political relationship tends then to develop between the impoverished masses and the power holders.

In this relationship, power becomes unrestricted, and the masses look for some basic security and the fantasy of a future. We have seen this develop in a number of countries. In Peru, for example, a vast majority of the most deprived population re-elected Alberto Fujimori in 1995, while in Brazil the poor opted for Fernando Collor de Mello in 1990, and for Fernando Henrique Cardoso in 1995.

In none of these cases was the succesful candidate backed by full-fledged political parties nor by labor unions.

Loss of efficacy takes place in at least two interrelated senses or levels: with regard to one's individual ability to achieve personal goals, and with regard to politics as a way to cope with collective conflicts and troubles. There is then a frequent overlap of electoral support for strongmen or caudillo-type candidates, and electoral absenteeism. According to a nation-wide survey conducted at the Institute of Social Research of Mexico's National University (UNAM), 29% of the Mexicans interviewed never talk about politics. Political indifference, however, is higher among people with no schooling (52%), among elementary-school dropouts (49%) and among those in the lower economic strata (47%).9 A similar disdain for politics has been found in surveys on political culture in both Nicaragua and El Salvador.10 Consequently, high electoral absenteeism should come as no surprise: 60% in the Salvadoran congressional and municipal elections in March 1997 and 40% in the first round of the so-called "elections of the century" in 1994.

Mexico's very high electoral absenteeism, on the other hand, receded sharply in the July 1994 presidential elections when electoral competition grew, opposition parties gained more room for conducting their campaigns, international observers were allowed to watch over the polls, and there was a feeling among the public that the coming elections could bring a change in their lives. Electoral participation went up to more than 73%, a historical record.

Loss of political and social efficacy is neither a spontaneous nor a "natural" phenomenon. It is a dimension of political power, nurtured by escapist fare from most of the media networks, and neoliberal assistance programs like Mexico's once-celebrated PRONASOL which oscillate between repression and the cooptation of independent popular organizations. In this context, one of key- and most difficult-steps of political organizing is the process of convincing people that their own efforts can be fruitful in putting an end to their daily suffering.

Accountability In settings of perceived powerlessness, impunity substitutes for accountability.

The belief that there will be no punishment for violations of the law is not just a subjective or psychological feeling; it is nurtured by the objective evidence that there are no legal sanctions for lawbreaking. When impunity exists, it tends to permeate the entire social structure, even while manifesting itself in quite different forms: pervasive tax evasion particularly in the upper levels of business corporations; "flexible" labor relations that enable business firms to fire workers with neither advance notice nor compensation; drivers passing through red lights and bribing police officers; the omnipotence of bureaucrats; police brutality in their dealings with the poor and the political opposition; open or poorly hidden corruption at all levels of government administration.

Poverty is usually accompanied by a feeling of powerlessness which in turn is reinforced by the objective insecurity pervading everyday life in poor neighborhoods. In this setting, voting may harbor quite a different meaning from that involved in conventional political theory. For most educated and concerned citizens voting may be associated with general proposals of how to run the country, what to do with foreign trade, how to manage the foreign debt, what strategy of poverty alleviation is best suited to the situation, and so on. As field research has found, this is not the case in the world of poverty. Here, voting is an ingredient of an overall system of tradeoffs between the haves and the have-nots, an instrument to achieve specific resources like schooling, jobs, personal security, land titles, and the like.11 In this environment, the ballot becomes something like the credit card of the poor.

It would be misleading to conclude that authoritarianism lies deep in the hearts and minds of the poor. In the recent past the Latin American poor have been active participants in revolutionary struggles in Central America, as well as in democratization processes in South America and the Caribbean. It is the authoritarian nature of post-adjustment settings which, in the absence of viable and credible progressive alternatives, biases the options of the masses toward a variety of authoritarian options.12 When there is no foreseeable long-run and inclusive alternative, people have no option but to seek immediate, short-run solutions, particularly when these solutions provide tomorrow's food or today's job.

Empathy Under conditions of extreme inequality, empathy recedes to close direct affective ties: the family or kin group, locality, religious or ethnic groups. It becomes extremely difficult, if at all possible, for the poor to decipher landscapes beyond their daily lives and troubles and their immediate localities. A retreat to "primordial ties"-as anthropologist Clifford Geertz termed them-takes place which substitutes for the "imagined communities" of nation, state, or anything falling beyond the frontiers of everyday life.

Under the conditions of neoliberal restructuring, the processes and institutions that can foster a broader social empathy-education, accessible information, community-based organizations-are becoming smaller and less accessible.

Public education is shrinking due to privatization; shrinking public budgets are driving museums and libraries into complete disarray; and the "global superhighway" is out of the reach of people not having access to a home phone-not to speak of the cost of equipment. Cross-country mobility is curtailed by privatization of transportation, increasing fares and decreasing family income, and even state-sponsored "social tourism" is a phenomenon of the past due to cutbacks in social spending.

Shared Belonging "Everyone for her or himself" now substitutes for the commitments to shared belonging to the polity. Huge and usually increasing social distances between the richest and the poorest conspire against solidarity. The commonwealth is no longer common: it has been privatized and belongs to the wealthiest. As the German political scientist Herman Heller stressed, the very idea of a shared code of meanings involving everyone in the polity usually retreats when confronted to structural inequality and exclusionary development.13 Like empathy, shared belonging is learned through processes and institutions. It is hard for people expelled from formal education, from access to basic social resources such as health care, a decent house-even a decent room-because of joblessness and poverty, to feel members of the same social setting than those having them in excess.

In turn, allegiance to an international governing class and to the corporate world has replaced citizenship in the ranks of the very wealthy. Elites have loosened their material and symbolic links to any particular country, any particular polity or any particular citizenship, becoming increasingly committed to corporate interests and goals and even to the country that houses the headquarters of the corporations they work for. Democratic acountability has been eroded even further with the growth of the national elites' political accountability to the global financial community and to multilateral agencies like the International Monetary Fund (IMF), World Bank and the Inter-American Development Bank (IDB). Due to the politically conditioned support from these financial agencies, many government officials consider themselves no longer accountable to their citizens but to the lending agencies themselves. The relation of representation which is central to any electoral democracy has moved from a link between government and citizens, to a link between government and the financial institutions.

The self empowerment of the people, moving from clientism to a full-fledged citizenship, is the only way out of these authoritarian democracies-the only escape from authoritarianism in general. Most of the agenda for the enlargement of effective democracy has been prompted by the efforts of people to organize themselves in the face of repression from governments and scorn from conservative intellectuals. From these efforts have come the movements for human rights, labor rights, freedom of information, women's rights, ethnic and racial pluralism, peasant access to land, the rule of law and environmental protection.

In its very beginings, citizenship was accessible to just a tiny proportion of individuals-free, literate, adult, propertied, native-born males. It has been the task and the success of a whole range of social movements to open up the rights and obligations of citizenship to larger proportions of the adult population, emancipating both citizenship and democracy from class, gender and racial boundaries. Yet this move from subordination to citizenship is neither spontaneous nor inevitable. As with everything in politics-and in human life- it has to be brought about by need, desire, and commitment.

1. International Labor Organization, Yearbook of Labor Statistics 1996 (Geneva: ILO, 1996), p. 389. 2. Research on CEO salaries conducted by the consulting firm Towers Perrin, Pagina 12 (Buenos Aires), February 16, 1997. GDP figures are from World Bank, World Economic Report 1996 (Washington, D.C.: World Bank, 1996).

3. See Guillermo O'Donnell, "Illusions About Consolidation," Journal of Democracy, Vol. 7, No. 2, April 1996, pp. 34-51.

4. See Carlos M. Vilas, "Participation, Inequality, and the Whereabouts of Democracy," in D. Chalmers, C.M. Vilas, et. al., eds., The New Politics of Inequality in Latin America (Oxford: Oxford University Press, 1997), pp. 3-42. See also Steven Volk, "'Democracy' Versus 'Democracy'," NACLA Report on the Americas, Vol. XXX, No. 4, January/February 1997, pp. 6-12.

5. See Claus Offe, Contradicciones en el estado de bienestar (Madrid: Alianza, 1990), pp. 151-167.

6. See Carlos Marichal, "The Rapid Rise of the Neobanqueros," NACLA Report on the Americas, Vol. XXX, No. 6, May/June 1997, pp. 27-31.

7. Guillermo de la Pena, "Estructura e historia: La viabilidad de los nuevos sujetos," in Transformaciones sociales y acciones colectivas (Mexico City: El Colegio de Mexico, 1994), pp. 141-159.

8. Isis Duarte, et. al., La cultura politica de los dominicanos (Santiago de los Caballeros: Pontificia Universidad Catolica Madre y Maestra, 1995).

9. Institute of Social Research/UNAM, Los mexicanos de los noventas (Mexico City: IIS/UNAM, 1996).

10. Mitchell Seligson, Political Culture in Nicaragua: Transitions 1991-1995, Monograph, Washington, D.C., December 1995; Jack Spence, et. al., Chapultepec Five Years Later: El Salvador's Political Reality and Uncertain Future (Boston: Hemispheric Initiatives, 1997).

11. See Francisco Weffort, Qual democracia? (Sao Paulo: Schwarcz, 1992). See also Mercedes Gonzalez de la Rocha, The Resources of Poverty: Women and Survival in a Mexican City (Oxford: Basil Blackwell, 1994).

12. See a lengthy discussion of this point in Carlos M. Vilas, "Are There Left Alternatives? A Debate from Latin America," in Leo Panitch, ed., The Socialist Register 1996 (London: Merlin Press, 1996), pp. 264-285.

13. Herman Heller, Escritos politicos (Madrid: Alianza, 1985), pp. 257-268.