Closed or Global - is that the only choice? South America's political tides hold an important lesson for Europe

Mauricio Macri, Argentina's new globalising President, casting his ballot in 2015. Photograph: Mauricio Macri vota by Mauricio Macri (License) (Cropped)

Europe, after nearly a decade of economic turmoil, seems to find itself on a precipice. Behind lie the shattered ruins of the social democratic consensus and the overbearing shadow of its failing replacement globalisation. Ahead in the darkness is sectarianism: populist, nationalist and authoritarian.

Populism in South America

While wrestling with this seemingly polarised and precarious position, Europe should look to South America. After its own struggles to shake off America imperialism, the Regan-Thatcher neoliberal doctrine, a crisis of poverty and, in parts, conservative authoritarianism, South America saw a popular electoral revolt in favour of populist parties offering social rights.

In obviously varying circumstances, but with some common discontents, from Hugo Chavez's Bolivarian Socialists in Venezuela 1998, to Nestor Kirchner's Peronist Justicialists in 2003, and Evo Morales' Campesino Socialists in 2005, and others in between, a so-called pink tide overturned the neoliberal status quo.

Despite the obvious allusions to socialism, the popular campaigns for social rights where fought within an increasingly closed state system, with overtly nationalist overtones - and frequently at the cost of political rights and transparency. Those who began as reformers faced accusations of endorsing narrow and unshakeable parties of power, with the "typical vices: personalism, clientelism, corruption, harassing of the press" (Bosoer & Finchelstein, 2015).

Populist-Globalist Revolving Door

As social conditions have undermined the globalist response to Europe's crisis, economic conditions have undermined South America's closed populist system. Weak exports have led to a continuing downturn (The World Bank, 2016) - exposing the fact that it is easier to maintain repression if social rights keep being extended along with the money to fund them.

As Europe is increasingly turning from globalism to find populism ahead, South America is doing the opposite. Mauricio Macri, for Republican Proposal party and Cambiemos coalition, presented Argentina with an open globalised alternative to the closed populist nationalist government of the Justicialists in 2015 and was elected President.

But there is little reason to believe that South America's new open global option is likely to meet any less dissatisfaction than it has in Europe, where the 2008 financial crisis, and the sovereign debt accrued in managing it, was seen as an opportunity by the globalised financial sector - ostensibly pressing the idea that governments are not above the law, in order to effectively claim rent on state debt.

Argentina itself already has long experience of wrangling with this system, that has used American courts to try and force state policy on repayment of national debts, accumulated through bond sales. The power of that global finance sector and its power to shape fiscal policy, in effect essentially shaping the economics of entire states, is all too familiar a subject of exasperation in Europe.

The Role of Social Democracy

While South America has struggled for stability between populism and globalism against a back drop of military juntas, in Europe, for a time, there was shelter to be found within social democracy. The social democratic project provided safeguards against either extreme, closed and global, while trying to include the benefits - like social rights and widespread access to capital and investment.

However, the 2008 crisis undermined social democracy. Its adherent parties have been severely weakened, perhaps fatally. Too many times, social democracy chose to back the alienating establishment instead of reforming it and the moderate left, in Europe and South America, found itself shackled to neoliberalism as part of a desperately defended mainstream.

South America's leaders responded to economic pressures by advancing a closed system. Leaders in Europe, after 2008, embraced the global system to overcome its problems. Now, with both under pressure, they seem ready to swap. But neither have proved to be a sound solution.

What is needed is a 'new' social democracy, a replacement for the old and worn out system. But a new balance has to be found. It isn't enough to be a part of the establishment, to be an insider, taking the edge off of its worst extremes. A consensus that recognises the demand for political liberties, civil rights and pluralism alongside social rights, that embraces an open society through internationalism rather than globalism.

Right now, the choice presented to the people of South America and Europe is between closed and global. But it doesn't have restricted to these exclusive polar positions. It is a false and exclusionary dilemma. A better consensus is possible.

References

Fabian Bosoer & Federico Finchelstein's 'Latin America, the populists vs the people: From Venezuela and Argentina to Bolivia and Ecuador, a political cycle is showing signs of exhaustion. But Latin American democracies have the resources to move beyond it'; on Open Democracy; 9 September 2015.

'Overview: Latin American and Caribbean'; from The World Bank; 13 April 2016