Kingstone Neoliberalism Latin America

Kingstone's Neoliberalism In Latin America

Kingstone would argue that neoliberalism has not lived up to the expectations for spurring development in Latin America. Right from the outset, Kingstone acknowledges that the issue is complex, and that there are a number of contributing factors to this failure. The book attempts to delve into why neoliberalism has failed. Kingstone notes that in particular, solutions attempted during the past few decades have not paid enough attention to the role of the state in the development of the economy. The role of the state is critical, and the unique nature of Latin American states means that even if neoliberal strategies work well in other parts of the world, they may not work in Latin America. Neoliberalism, thus, needs to be adapted for the conditions of Latin America, rather than imposed upon the region with any consideration for its uniquenesses.

A supporter of neoliberalism would not argue with the contention that it has worked, unless they wanted to point out some of the anecdotal success stores. But more reasonably, a supporter of neoliberalism would argue that the approach to economic development should not take into account the nature of government in Latin America, because that nature is part of the problem. The neoliberal system is not what needs adjusting, but rather the state systems. Issues like the lack of infrastructure, corruption, and lax enforcement of laws all contribute to the development issues that Latin America faces.

1b. Opponents of neoliberalism will point less towards the institutions that get in the way of economic development. They might agree that issues such as corruption and crime are problems, but will more likely shift the blame for these problems back towards the wealth distribution issues that neoliberalism has. They will note that even when neoliberalism raises an economy, there are wealth distribution issues that will inevitably sow discontent among populations. There is no buy-in from the people with respect to neoliberal policies, and the system will never truly work until it demonstrates that it can actually solve problems, instead of just enhancing the wealth of those who already hold the wealth and power in the region.

2. Neoliberalism is neither an elitist project, nor is it a base for economic renewal and democratic governance, in particular the latter. Democratic governance is not a precondition for success with neoliberalism, but wealth distribution systems are. At its heart, neoliberalism seeks to reduce barriers to trade, and thereby improve the efficiency of an economy. This should, if resource exploitation rates hold steady and the population remains the same, result in economic growth. But economic growth does not mean that living standards will improve. In countries where there are few mechanisms for wealth distribution (i.e. low taxes, low penetration of land ownership, minimal public education or health care), then the new wealth generated will tend to accumulate at the top. There is little doubt that in most countries, neoliberalism essentially allows the rich to get richer, and only where the mechanisms or economic conditions for distribution are strong will the poor be able to rise up. Yet millions have, indicating that when the underlying conditions are right, neoliberalism can work. Neoliberalism does not imply democracy, however, as economic growth is related to a number of factors, democracy not necessarily of them. The highest per capita GDP nations have no democracy, and long-term fast-growing nations like China do not either, yet all participate in some way in the neoliberal economic system. Democracy would, in theory, help result in better wealth distribution.

3. The impact of neoliberalism is that the global economy has become much bigger. The distribution of that wealth, however, has been uneven at best. Neoliberalism, as current implemented, tends to weight considerable power in corporations. The reliance on legal systems to adjudicate disputes gives those with money advantage. Further, as long-lived organizations, corporations can continue to battle for the policies they feel will be most beneficial -- a government or even a populace is hard-pressed to win such wars of attrition. These and other elements of the neoliberal system mean that it will only succeed in increasing living standards where governments are both strong and have taken in interest in raising living standards. Sadly, that is not the case in many countries.