Friday, January 19, 2007

Does socialism fit into the market globalization? (II)

The key question, whether to stay inside or to move out from global trend, was somehow solved in the mid seventies. Europe lead the way with visionary leaders which anticipated the change lying ahead to build up the new paradigm: Government was part of the problem instead of being part of the solution, so the State should do its job without interfering markets but complementing them .This plain but powerful statement, opened up the door for the Germany reunification ,Spain rise to the new condition of European union member, and England renaissance out if its economic crisis .It was the so called “Third road”. Socialism can coexist wit markets, such that it replaced the hard line view of getting rid of markets , therefore leaving aside the totalitarian notion of State Socialism. From the rightist point of view , it was the renaissance of the market and its capacity to creating wealth .Therefore, from both sides of political spectrum ,there was a transformation which allowed the market globalization to roll over such as ideology was gone , pragmatism was welcome.
Latin America has not been immune to this new trend. The year 2006 was an election year for the majority of its countries. Although the results, suggest that the leftist approach has taken over the control of the economic agenda, it is not the traditional hard line leftist which represents the current real preferences of voters. There is an alternative path which has taken into account the European influence :Chile , Brazil, Uruguay ,Peru even Argentina represent the modern view of the world from the leftist point of view, which is not apart from Europeans leftist views, such as current Prime Ministers of Spain, Italy and Great Britain.
This convergence between market and the state is good for economic growth, poverty reduction, and inequality corrections. It is also good for being part of globalization and its positive side, while at the same time allows consensus to face its negatives bias . Ideological Isolation is not the best alternative to a pragmatic integration. The proposition of more State to fight poverty and inequality, has been ruled out by history, In today´ s world represents the wrong solution. Latin America paid a very high price to overcome the State failure to solve the problem of lacking hope and expectations. It is not just a coincidence that in the seventies, the dictatorship as an alternative for democratic government ,was spread out as the “solution” for creating more favourable conditions for growth . What it seems to fit better into the current trend, is to modernize the State to make it more efficient, and better focused on urgent social problems , keeping as a top priority its complementary role with markets. This is the mix that has allowed Spain to become an economic advanced country in less than twenty years ,and it is shaping the way for more economic integration in Latin America .Private business has done more economic integration, than the Latin America traditional State did in half of a century. New jobs opportunities arising from private investment in Peru, Brazil, Chile, Colombia, Mexico, to mention a few, means that those people can have hopes not because of the State ,but because of private firms.-
On the other hand, the proposition of fostering growth leaving aside high income markets for exporting products is not realistic. Domestic markets do not have the income potential to sustain demand at such a pace, to justify the exclusion of foreign markets.
Latin America leaders must have the wisdom to identifies where is the right path and its main characteristics. One thing for sure, it is not about ideology, it is not excluding private sector, it is not about the traditional colonial State. All of those “solutions” were proven to be wrong. It follows it is about pragmatism ,it is with the private sector ,it is with a modern State.-

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