US should form Marshall Plan for Latin America

The clear rejection by Venezuelan voters of the recall effort against leftist President Hugo Chávez is both a testament to democracy and a warning of the dangers of class polarization throughout the hemisphere, including the United States.

In Venezuela, where a chasm divides the rich and the poor, the only place everyone is reasonably equal is in the voting booth. Not surprisingly, the poor have marshaled their voting power to elect populists who promise to address their needs.

Naturally, that frightens the rich and the middle classes.

A couple of years ago, Venezuela's elites backed a military coup against Mr. Chávez. Having failed in that attempt, they organized the recall effort. Now the Chávez opposition has made it clear that it will not accept the outcome of the vote, even though it has been certified as accurate by the Organization of American States and by former President Jimmy Carter. In other words, the better-off are saying that if democracy jeopardizes their net worth, it is expendable.

They have powerful allies in this confrontation.

The Bush administration initially endorsed the unsuccessful coup against Chávez, and it has been accused of backing the recall effort. Most political commentators in the US - Democrats as well as Republicans - are harshly critical of Chávez and his objectives.

They argue that Chávez used Venezuela's oil revenues - swollen by high oil prices on world markets - for social programs to buy votes among the poor. But US presidents and members of Congress routinely use public revenues in a similar way. Americans call it pork-barrel politics. And no one argues that it invalidates the outcome of US elections.

Another argument against leftist populists like Chávez is that their initiatives inevitably lead to a decline in per capita income.

There is no question about that. Many of the rich flee with their wealth to places like Miami. Others send their capital abroad to safer havens. Foreign investors understandably steer clear of the country.

Still, Chávez's use of oil wealth to offer some measure of relief to the poor can hardly be blamed for his country's economic inequality. The real cause lies with unfettered free markets.

Acting by themselves, free markets generate a lot of wealth, but they also concentrate that wealth.

The relatively egalitarian advanced democracies in Europe, North America, East Asia, Australia, and New Zealand came about only through such government interventions as guaranteed minimum wages, quality public education and, in many cases, medical care, antitrust legislation, and other means of ensuring that the benefits of economic development were widely distributed.

Postwar Europe became prosperous and democratic because the Marshall Plan's massive investment was aimed not just at rebuilding after the war but also at supporting social structures like labor unions, which in turn helped create middle-class majorities and a bulwark against Soviet communism.

The US has never made a similar investment in Latin America. Instead, it has in the past chosen to prop up military dictators who kept the poor in check while giving free rein to US multinational corporations.

Today, it pretends that free markets and free trade are the answer to all of the region's problems, when it is clear that laissez-faire globalization acts to increase the gap between rich and poor.

It is therefore disingenuous to accuse Chávez of polarizing Venezuelan society. Chávez is a symptom of polarization, not the cause.

In fact, much the same polarization, different only in degree, is now being seen in the US itself. Job flight abroad and the transfer of tax burdens onto those who can least afford it are thinning the ranks of the American middle class.

As that happens, the US is gradually becoming Latin Americanized. Not surprisingly, political discourse in the US is becoming more strident, and elections are more hostile and disputed.

Instead of attacking Chávez, or aiding and abetting his opponents, Washington should recognize that stable democracy is the fruit of societies in which the middle class thrives.

The free market alone cannot guarantee that, but a Marshall Plan for the Americas could - were we not so blind to the threats posed by widening gaps between rich and poor at home and abroad.

• Andrew Reding is senior fellow for hemispheric affairs at the World Policy Institute. ©Los Angeles Times