Towards the cancellation of external debt in Latin America

Abstract

Neoliberal globalization exalted the “society of growth”. Growth became the central policy that supposedly would sustain consumption, investment, employment and social well-being.
The underlying assumptions of ad infinitum growth had, as a result, “collateral effects” (both human and ecological) but it was assumed that the free market and technological advancements would have a counter effect. And if neither provided a solution, then there would not be any kind at all: progress demanded “sacrifices”.
Neoliberal economic theory gave an 180-degree about face:  “today’s savings” would no longer be the source for consumption or investment “for tomorrow” (the Keynesian theory). Consumption for the sake of consumption (consumerism) became the motor of growth and productive investment fell in terms of increasing “productive capability” in order to be considered almost exclusively in terms of its profitability in the short run. Between 1970 and 2007, this was interpreted as normal hiccup in the frenzy of “irrational exuberance”.
Unbridled consumption and financial investments were strongly directed towards credit: to homes, businesses and Government-States, dismantling, as well, the policies of State well-being. Something was generated, namely, the addictive dependence between economic growth (the accumulation of capital) and limitless debt.

* This op-ed has been published by Franz Hinkelammert (Germany-Costa Rica), Orlando Delgado (Mexico), Yamandú Acosta (Uruguay), Henry Mora (Costa Rica), William Hughes (Panama) and Jorge Zúñiga M. (México) in different print media and sites on the web throughout Latin America.