Last year, the New York Times reported that Hugo Chávez, in his speech before the United Nations–the one in which he called George W. Bush the Devil and urged Americans to read Noam Chomsky–expressed regret that he hadn’t had a chance to meet the linguist before he died. A call to Mr. Chomsky’s house, the Times writer quipped, found him very much alive. The Times, though, had to issue a quick correction when, upon review of the original Spanish, it became clear that Chávez was referring not to Chomsky but rather to John Kenneth Galbraith, who had indeed passed away a few months before.
There is something more than a little ironic about this incident, where the press, in a rush to ridicule the controversial Hugo Chávez, lost John Kenneth Galbraith in translation, for it is exactly the Harvard economist’s brand of New Deal social democracy, itself long expunged from public discussion, that would allow for a more honest consideration not just of Chavismo but the broader Latin American left of which it is a vital part.
Chávez has described himself as a “Galbraithiano” and says he started reading the economist, whose books have been available in Spanish in Latin America since the 1950s, as a teenager. Long before he began referring to Chomsky and other currently better-known political thinkers, he cited Galbraith to explain his economic policies; at the beginning of his presidency, in 1999, for example, he urged a gathering of Venezuelan industrialists to support his mild reform program, quoting Galbraith to warn that if they didn’t, the “toxins” generated by “extreme economic liberalism” could “turn against the system and destroy it.”
Galbraith is celebrated not just by Chávez but by a wide range of reformers, including Ecuador’s new president, Rafael Correa, himself an economist. This popularity reflects a growing enthusiasm for the state regulation of the economy that Galbraith prescribed. As Latin America struggles to remedy the damage caused by two decades of failed free-market orthodoxy–which has produced dismal growth rates and widespread social turmoil and misery–politicians are rehabilitating key macroeconomic principles unthinkable a decade ago. Argentina, for example, has generated the region’s most impressive growth by lowering interest rates, maintaining a competitive currency exchange rate, enacting price controls to stem inflation and driving a hard bargain with international creditors, thus wiping out two-thirds of the country’s external debt and freeing up state revenue for social spending and investment.
Galbraith has attracted admirers in Latin America not just for his macroeconomics but for his critique of corporate monopolies. His belief that corporations are political instruments with the incentive and ability to corrupt democracy resonates today in a region where much of the economy is controlled by foreign firms and where corporate TV (which Galbraith believed had little to do with free speech and everything to do with manufacturing consumer demand) has become a bulwark of elite privilege. Galbraith’s solution was to use the state to set up a system of what he called “countervailing power,” enacting aggressive union protection, unemployment insurance, subsidies, welfare and minimum wage guarantees to counter monopolies and force a more just distribution of national wealth.