Amazingly, the Left has finally won in Peru and it’s about time. Things had really come to a head there. The Shining Path insurgency had not taken place in a background. Peru spawned the worst leftwing insurgents because it had one of the worst systems on Earth. Similarly, few countries were more feudal or unequal than Cambodia in the 1970’s. People were distributed into five economic castes depending on income. People of lower castes were virtually forbidden from speaking to the higher caste people. The city people viciously exploited the rural areas, and the rural people hated the city people. Cambodia had one of the worst societies on Earth. So of course it spawned the worst Leftwing movement ever.
The Right, of course, in the form of the party of former dictator Fujimori’s daughter, is already screaming fraud. There was no fraud. Anyway, the election was run by the center-right former government, and they were dead-set against this Leftwing guy winning. The US government and media can be reliably predicated to chime in quickly that the election was fraudulent. You just wait. The rich in Lima are trembling and threatening to pull all their money out of the country. The Lima Stock Exchange (which probably should be shut down) is having conniptions. We will see how this plays out in coming days, but I’m not optimistic.
Thing is, every time the Left wins, the US insists that it’s automatically a dictatorship. Meanwhile, the US does everything it can to provoke the state into overreacting with constant coup threats and regular coup attempts and even actual coups, huge street riots that turn into virtual counterinsurgencies, a vicious rightwing opposition that is downright seditious and takes all of their money from the US, lockout strikes by the bosses, currency warfare by currency traders, economic warfare (make the economy scream a la Henry Kissinger) when businesses refuse to produce goods or simply stockpile them to drive prices up, creating inflationary crises.
That’s in addition to the capital strikes and mass capital outflow, which has to be stopped. Problem is the only way to stop it is with currency controls and sooner or later currency controls cause a currency black market and dual currencies, usually effecting the real currency badly. The black market currency rate is often deliberately tinkered with to create inflationary crises. This is what the treasonous Venezuelan rich did with their currency firms in Houston that set the black market rate at crazy prices that caused wild inflationary spinouts. Eventually the real currency has to be floated, which wipes out everyone’s saving and drives the cost of the currency down to a very low number.
14 thoughts on “Alt Left: The Left Won in Peru!”
I’ll bet you could have counted on the fingers of one hand the number of people who knew Peru had a stock exchange before you just mentioned it!
Nearly every capitalist country has a stock exchange. Where else would the shares of public corporations be traded.
But if you had to guess, would the vast majority of the public have known about the Peru exchange? That’s the question.
Yes but in Germany, all of the shares are owned by ~3 huge banks. I think this is a much better system. Why do corporations have to be public anyway? It’s a shitty idea.
LOL! I think a lot of countries should dismantle their stock exchanges or do like the Germans. Yeah, there’s a German stock exchange, but all the stocks are owned by ~3 huge banks. That’s so much better.
I wish Pedro Castillo good luck. He’ll need lots of it. All leftist presidents in Latin America face disloyal opposition. Does Castillo have a majority in Congress? If not, he won’t be able to get his program accepted. Castillo’s victory was very narrow, and that doesn’t enhance his legitimacy. The fact that he is racially Amerindian probably won’t work in his favor either.
Unfortunately, it has to admitted that many leftist presidents in LA are bad economic managers. Evo Morales was a clear exception, but it didn’t endear him to the economic elite.
Does Castillo have a majority in Congress?
Nope. He faces a very hostile Congress which may try to remove him from office!
Whites are 15%. The rest are mestizos and Indians and the mestizos are pretty Indianized. Nevertheless there is a lot of mestizo self-hatred. But most mestizos are proudly mestizo, especially the whiter ones.
Castillo’s victory was very narrow, and that doesn’t enhance his legitimacy.
I’m not sure it matters. The Sandinistas and Chavistas routinely win by ~70% but the opposition and the US regard them as just as illegitimate. Aristide won by 92% and they and the US regarded him as illegitimate. In fact we organized a coup to throw him out! P
roblem is they are illegitimate if they just barely won because then they for sure cheated to eke out a win. But when they win by huge margins, most American liberal Democrat dipshits say, “No way could he have possibly wont by 70-92%. That’s obviously a stolen election. It’s not possible to win by such a huge margin. Has any US president ever won by such a margin?”
So you’re screwed one way or another but with a larger majority at least you have more staying power.
I don’t believe this at all. This is just CIA propaganda. However, Maduro should have floated the currency for a long time, and his failure to do so prolonged the inflation crisis. This is because they thought floating the currency was an inherently rightwing or neoliberal act. They felt that a fixed currency was inherently Left or progressive.
To me it’s nonsense. Neither fixed nor floated currencies are inherently right or left.
The Chavistas also decided to put oil rents into social programs instead of upkeep on the oil fields. And this turned around to bite them on the ass. Not that rightwing economics ever works anyway, except for a minority.
If Castillo faces a hostile parliament, I can only fear the worst for him.
What makes many leftist populists bad economic managers is their excessive generosity, which can lead to very high inflation, as was the case in Salvador Allende’s Chile.
The classic case of excessive generosity was Argentina under Juan Perón, who can be regarded as a leftist populist. His policies led to high inflation and to a large trade deficit. Mind you, the poor masses benefited from his policies, but only in the short term.
You are quite right in pointing out that many neoliberals are bad economic managers too. The Chicago Boys in Chile caused the worst depression in Chilean history in the early 1980’s.
In 1963, the last full year of João Goulart’s government, inflation in Brazil was 78%. In 1984, the last full year of the military regime, inflation was over 200%. No neoliberal regime in LA has delivered high economic growth for 2 decades in a row. The so-called miracle years of the military regime in Brazil lasted 6 years. Since it was partially financed by massive foreign borrowing, it led to a debt crisis.
That’s not what caused the inflation in Allende’s Chile. The US and the business class sabotaged the economy. The capitalists simply stopped producing goods. And they set off a lot of very bad strike, like a truckers’ strike for instance. Kissinger said, “We are going to make the Chilean economy scream.”
This is exactly what they did to Venezuela, Iran, Nicaragua, Zimbabwe, and some other countries. The inflation in Venezuela was caused in part by the state not floating the currency, but that was just a failure to implement a cure. The inflation in the first place was caused 100% by the capitalist class, who have been waging a 20 year war against their own government. I’ve yet to see any credible claims that the Chavistas or any Left government in Latin America ruined their economy. Also if social programs cause inflation, why not in Europe.
I do not know about Juan Peron’s economic policies. How do social programs cause inflation?!
The very idea of neoliberalism fails right out the starting gate and the very existence of the Chicago Boys is an affront to humanity. Neoliberalism produces the same result everywhere on Earth. The top 20% gain money, often a lot, and the bottom 80% lose money, often a lot. This has occurred in many places, perhaps just about everywhere that neoliberalism has been tried.
Also in the 1990’s, neoliberalism killed millions of people, possibly over 10 million or in the tens of millions. All through the decade and into the 2010’s, the neoliberals kept saying, “You just wait. It will trickle down.” It never did. And that’s why you see this movement to the Left in Latin America. Neoliberalism failed badly down there everywhere it was tried.
Nobody disputes that the right tried to undermine Allende by wrecking Chile’s economy. Still, to get very high rates inflation, you also need excessive aggregate demand, which causes demand-pull inflation, and/or excessive wage increases, which cause cost-push inflation. Both occurred in Chile, as they did in Perón’s Argentina. Inflation will of course wipe out much or most of the wage increases.
Generous social programs aren’t inherently inflationary, otherwise Sweden and Denmark would have high inflation. They become inflationary only when too much of them are financed by monetary expansion. The welfare state should be a transfer state, which transfers income from the haves to the have-nots. If instead too much social expenditure is not covered by taxes, there is no longer transfer but inflation pressure.
Suppose there are 100 people in a room. There are 300 sandwiches. 10 people get 6 sandwiches and 10 get none. If the ruler takes 10 sandwiches away from the richest 10 and then gives them to the poorest 10, then we have transfer. If instead money is given to the poorest 10, so that they can buy 3 sandwiches each, then there is inflationary pressure because there is now a demand for 330 sandwiches while only 300 are available.
I will have to look into that. The inflation in Chile was caused by the capitalists simply shutting down their operations and refusing to produce any products. I know nothing about Peron. I’m not aware of any Left critique of Allende.
The whole thing was exactly like Venezuela. In fact the disaster of the Venezuelan economy was modeled precisely on Kissinger’s “Make the Chilean economy scream” project. When business stops producing and starts hoarding goods, shortages occur, and inflation ensues. There was also a truckers’ strike that was caused by the US and this led to even more shortages.
I have been reading about Allende forever, and I have not seen one single critique that says he screwed the economy. Maybe he did. But I’d like to see it. I’ve also never seen a critique of Peron that says he screwed the economy. Maybe he did. I’d like to point out that even if he did, he’s still awful popular.
I’d like to get an honest critique of both Allende and Person from anyone on the Left. No lying. I get enough of that already.
When the rich are very rich and the poor are very poor, then only a small share of the income of the rich will suffice to significantly increase the income of the poorest of the poor. Suppose that the riches 10% have 40% of national income, and the poorest 10% only 1%. Then the income of the poorest 10% could be doubled by transferring only 2.5% of the income of the richest 10% to them.
That is essentially what Lula did in Brazil. His policies didn’t affect income distribution that much, but they lifted a lot of people out of extreme poverty. The first priority of a leftist government should be to combat extreme poverty.
Suppose that in a country the minimum wage is 10. The government wants it to be 15. So, in July they announce that next January the minimum wage will be 12. Then they increase it by 1 on each of the following 3 Januaries. That is likely to be successful.
Now suppose that they simply decree that the minimum wage will be 20 six months from now. That’s not a realistic policy, and it is likely to cause massive disruption in the low-wage sector, resulting in severe job losses. It is not enough to have good will. Realism is also required.
Many years ago, I read a book called The Macroeconomics of Populism in Latin America, in which it is explained how leftist populists in LA, despite their unquestioned commitment to improving the economic lot of the poorest segment of the population, often fail because they overreach.
Wikipedia has an article called Macroeconomic Populism, which explains briefly how overambitious economic populism can backfire.
Perón came back from exile, and then won the election with a landslide. Unless the Argentines are complete political idiots, this demonstrates that he tried to accomplish something for the masses. Ordinary voters may not understand much about economics, but they usually sense who is on their side and who is not.
I hate to criticize Salvador Allende, but I think that he acted too fast and too soon. Bear in mind that he was elected with only 36% of the votes. Of course, even if he had been more realistic, he still would have been hated by the reactionary economic elite.
Yes, I think that book is not good. One man worked for the World Bank. Their basic attitude is “Don’t rely on government to try to fix economic problems and help the poor. It fails every time.” In other words, it’s hopeless. Massive inequality a problem? Sure. What to do? NOTHING! Because everything you do is going to fail. I dunno.
Here is a critique of the book:
I would agree that acting too fast too soon isn’t a great idea and a slower approach might work better.