Acton Commentary

Corporatism Redux: Latin America, the Left, and the Church's Challenge


On May 1st, President Evo Morales of Bolivia ordered the army to assume control of Bolivia's natural gas fields and announced their nationalization. Not coincidentally, Morales' command came after his return from a meeting in Havana with two other self-identified leftists, Presidents Hugo Chavez of Venezuela and Fidel Castro of Cuba.

Many observers commented that Morales' decision reflects Latin America's shift to the left. “Left” in this context does not mean mildly center-left policies. “Left” in the case of Morales and Chavez involves embracing aggressive class-struggle rhetoric and a classically socialist political agenda.

Up to a point, this is a fair depiction of affairs. But a more accurate description would be to say that Bolivia and Venezuela are experiencing a resurgence of “corporatism.”

Strongly associated with policies pursued by interwar fascist regimes, corporatism blends state-authoritarianism, populism, nationalism, and anti-foreign xenophobia. This is combined with extensive nationalization and regulation of the economy, the militarization of much of society, and the creation of state-controlled civil organizations that gradually suffocate any autonomous free associations.

In Latin America's case, the most thorough-going attempt to implement corporatism occurred during Juan Perón's first presidency of Argentina. Like Chavez, Perón came from a military background. An admirer of Mussolini, Perón rose to power on a wave of populism in 1946.

Perón's subsequent policies were based on eliminating freedom of association and exchange, which were replaced by state-directed cooperation between state-manipulated businesses and state-dominated unions. Government control of economic and political life was enhanced by nationalization of key industries and expulsion of foreign firms and capital. The rhetoric of Perón's regime was nationalistic, militaristic, and strongly anti-Western.

Sound familiar? The parallels between Perón's corporatist agenda and the present policies of Morales and Chavez are uncanny. It was not accidental that Morales involved the Bolivian army in his nationalization scheme or that Chavez is slowly militarizing Venezuelan society by creating “people's militias.” The anti-American language employed by both leaders is reminiscent of Perón's tirades against foreign investors. Morales and Chavez have also underlined their commitment to rewriting their nation's constitutions so as to juridically enshrine their agenda. Perón did precisely this in the late 1940s.

There are growing signs, however, of disquiet at this revived corporatism, most particularly from the Catholic Church. Earlier this month, the Bolivian bishops criticized Morales' government for using coercion to implement its policies and its disrespect for human rights. Speaking on the episcopate's behalf and referring to Morales' nationalization program, Cardinal Julio Terrazas Sandoval stated: “It is dangerous to think that the new Bolivia is going to be created by ignoring the basic principles of respect for laws and agreements. Only through interior change and renewal in each individual will we be able to reverse this situation of inertia, desperation, slavery and death.”

These are brave words. Evidently Bolivia's bishops are aware that Morales' unilateral repudiation of freely-made agreements will do nothing to encourage the respect for contracts and rule of law essential for sustained wealth-creation. No doubt, they are also conscious that nothing is surer to create disincentives for direct foreign investment--the same foreign investment that creates employment in recipient countries--than governments usurping property rights and breaching solemn commitments.

But perhaps the most remarkable feature of the Bolivian bishops' statement was its insistence that nothing will change in Bolivia until people alter their moral habits. This echoes Cardinal Jorge Bergoglio of Buenos Aires who declared in 2002 that the corruption marring Argentine society would only diminish when individuals stopped engaging in corrupt acts.

Such words are important because they reflect many Catholic bishops' new willingness to stop blaming everyone except Latin Americans for the region's difficulties. Though few take liberation theology seriously any more, Catholic leaders in the region have remained hitherto reluctant to acknowledge that many Latin American problems emanate from their own governments' bad decisions, mercantilist economic policies, and social behaviors that undermine the practices and institutions that sustain wealth-creation and rising living-standards for all.

The next step is for Catholic leaders throughout Latin America to offer real alternatives. Here they may wish to study insights offered by the late John Paul II in his 1991 encyclical Centesimus Annus . With its emphasis on the benefits of free trade, entrepreneurship, private property rights, and the rule of law, it is difficult to imagine a document offering Catholics a path more different from the dead-ends of corporatism, liberation theology, or the increasingly racially-charged populism of Chavez and Morales.

Will Catholic Latin Americans take up this challenge? Let's pray they do. Latin America's future and the well-being of millions depend on it.