The discovery of America completely revolutionized the European imagination. Here, to their astonishment, the Europeans found -- or thought they found -- societies living in solidarity free of arbitrary authority and accepting of diversity within the community. Such forms of social life the Europeans had thought of as myths relegated to a golden age in the remote and shrouded past. In America, that golden age appeared as a possibility to be conquered or constructed. Regardless that parts of this vision were purely imaginary and others exaggerated, the supposed American utopia inspired the Old World to struggle for modernity, understood as a freer and more rational social order based on reciprocity and solidarity.
At the same time, the conquest was the first step in the formation of the world market, in which capitalism and its logic were to emerge as the material foundations for European modernity in another sense. The version of modernity, in which reason was associated with ever more efficient material production, would come to obscure that headier vision of modernity as liberation from feudalism, despotism, and religious obscurantism. Today, that capitalist logic is in crisis throughout the continent, and the utopian vision of solidarity and reciprocity may be our only hope.
In the Enlightenment that unfolded in Europe in the eighteenth century, America was no mere bystander. Circles of reformers emerged in both the Old and New Worlds, debating the same topics and exploring the same scientific questions. Everywhere, the desire took hold to reform society and its institutions, paving the way for political and intellectual freedom.
In Latin America, however, the stagnation of the mercantile economy undermined the ideological and social demands of modernity, particularly from the last third of the eighteenth century onward. Those groups most closely associated with inequality and arbitrariness, despotism and obscurantism, were able to take political power. While in Europe, the principles of modernity developed in the Enlightenment became incorporated into the accepted way of life, in Latin America, until well into the twentieth century, modernity became an ideology whose social practice was either repressed by the authorities or given only lip service, while actual practices ran directly counter to it. From the nineteenth century onward, modernity in Latin America came to be accepted as an intellectual attitude, but not as a day-to-day social experience.
The concept of reason, essential to modernity, was not understood in the same way in all parts of Europe. In simplified terms, the Saxon countries viewed reason first and foremost as a way of fitting means to ends, a useful tool for increasing power. This, I call the instrumental rationale. The southern countries, in contrast, linked reason to the ends to be pursued: to free society from inequality, arbitrariness, despotism and obscurantism. In short, to oppose the ruling power. This, I call the historic rationale.
This difference became crucial in determining the fate of modernity and of the hopes it held out. Power in Europe shifted toward the British in the eighteenth and especially the nineteenth centuries, and the Anglo-Scottish version of the Enlightenment and of modernity came to dominate the bourgeois rationale as a whole. Its world-wide dominion became even more entrenched as Britain's imperial hegemony gave way to that of the United States after the end of the First World War.
Under Pax Americana, the pressure to "modernize" fell with full force on Latin America. The United States' extreme version of the instrumental rationale had by then been divested of any connection to the promises originally held out by modernity. It was instead based solely on the exigencies of capital, productivity and the effectiveness of means for achieving the ends dictated by capital and the empire.
In broad sectors of Latin America, this instrumental view of modernization nourished the beguiling chimera of a modernity somehow achieved without a social revolution. The consequences of this deception are still with us. We have yet to completely emerge from the dark tunnel of militarism and authoritarianism.
The most comprehensive example of successful "modernization" in Latin America is perhaps the changeover from oligarchic to modernized states throughout the region. The state's institutional apparatus has grown and become more professionalized; the state is less of a prisoner to society, and in one sense is more national. This, however, has not made it more democratic or more capable of meeting the needs of the population. Nor has it made the state more legitimately representative, or even, perhaps, more stable.
Even socialism -- which arose as an alternative to the bourgeois vision as a vehicle for reaching the aspirations of modernity -- gave in to the instrumental rationale, and was unable to establish itself as anything but "existing socialism," i.e. Stalinism.
This is the modernity which is in crisis according to the new prophets, almost all of whom are apostates of socialism or, at the very least, radical liberalism. On both sides of the Atlantic, these prophets of "post-modernity" (the most blatant form of anti-modernism) want to persuade us that modernity's hopes of liberation are not only unattainable now, but always were so. That, after Nazism and Stalinism, no one could still believe in them. And that the only thing that is real in this world is power, the technology of power, the language of power.
One blind alley into which the instrumental rationale leads is the conflict between private and state ownership of productive resources. Couched in these terms, the debate is hopelessly deadlocked, because both sides accept the same assumptions and categories: for both, “private" refers to private interests in a capitalist society, and "state" or "public" to the state/public facet of such private interests. The state may be the rival of the private sector, but cannot be its opponent.
Those favoring state ownership of production and distribution and state orientation of the entire economy believe this to be central to "modernizing." In Latin America, this idea influenced socialist thinking as well as diverse versions of populism, nationalism and developmentalism. However, this approach will not carry us very far along toward the liberation promised by modernity. Under state ownership, the economy can only be developed up to a point, after which it is paralyzed by the weight of bureaucracy. Equality, social solidarity and freedom, and democracy for producers cannot flourish under such a system.
At the other extreme are the "neoliberals," for whom private capitalist ownership of production and the "invisible hand" of the market are the sine qua non for the creation and widespread distribution of wealth, and for the full expression of political democracy. Yet the experience of Latin America has shown beyond all doubt that this approach, also fails to lead to equality, social solidarity or democracy. The private sector's interests are compatible with such values only up to a point. The state or public sphere is the expression of that limited compatibility: It imposes its authority precisely when the logic of domination is threatened.
In Latin America today, few people harken to the songs of these "neoliberal" sirens. At the same time. after the region's recent experiences, it is very likely that the proponents of state control have also declined in number. This disillusionment is reflected in the virtual paralysis of purposeful economic action in the countries of the region. All are marking time as they concern themselves with short-term (and frequently extremely short-term) measures. It has become clear that "neoliberalism" and what could be called "neodevelopmentalism" are two sides of a dead-end street.
The history of modernity in Latin America, however, contains elements of an alternative -- elements which are taking shape once again. Because the logic of capital never fully developed here, it was unable to completely override the insights which, once they entered the consciousness of an astonished Europe in the early sixteenth century, had given birth to the historic rationale -- focusing on ends rather than means, and on liberation rather than on power.
The capitalist private sector is not the only possible form of private economic activity, and the state is not its only possible "public" counterpart. Another concept of what is private and what is public was part of Latin America's earlier history and is still with us today. For want of a better term, I will refer to it as a "socially -oriented" form of private activity, differentiated from self-seeking types of private endeavor.
Let's take the Andean community as an example. Before its subjugation by the Spanish and throughout the colonial era, it represented a unique environment, one characterized by reciprocity, solidarity, democracy and their corresponding freedoms. Later, it continued to function despite attacks by Lima and the caciques. It still exists today despite the best efforts of the “modernizers." And it is private.
I am in no way proposing a return to an agrarian communal life. Present-day society is undoubtedly too complex. However, it could serve as a basis for a noninstrumental rationale. After all, was it not this type of society that inspired Europeans with the utopia of a rational society, marking the beginnings of modernity?
A socially-oriented private sector like that of the Andean community presently exists in Latin America, within today's highly complex and diversified society. A vast portion of the urban poor organize their day-to-day activities in just such a way. They band together to form soup kitchens, community schools, housing and production cooperatives, and a host of other organizations. To survive, to withstand the crisis, and to defy the logic of underdevelopment, they use solidarity, collective effort and reciprocity as the foundation of democracy.
In Peru, what are known as barriadas -- neighborhoods of the urban poor -- contain around 70% of the urban population, which in turn is 70% of the population of the country. It is no overstatement to say that the barriada has been the primary form of social and cultural experience in Peru over the past 30 years. And socially-oriented private activities are a central element of this experience.
Of course, capitalist private enterprise is by far the predominant form of activity, in the country as a whole and in the barriada. Moreover, capitalist logic not only exists alongside reciprocity, solidarity and democracy, but also intermingles with it and alters it. The institutions formed in the barriada are not islands in a capital-dominated sea. They are part of that sea and they, in turn, alter its logic.
Nor are these institutions scattered and unconnected. On the contrary, especially during the past two decades, they have formed links with one another, setting up vast networks which in many cases cover the entire country. But such linkages have not necessarily involved the establishment of an apparatus apart from or above day-to-day life. In other words, the socially-oriented private sector tends to generate its own public institutional sphere, but without acquiring the characteristics of a state.
The expansion of this process in Peru is probably due to the severity of the crisis there. A large part of the population has been pushed into rediscovering and reestablishing -- within a more complex historical context- -- one of the most deeply-rooted, longest-lasting and richest elements of Peruvian culture: the Andean community. But this process has occurred in the barriadas of virtually every Latin American city. If this new socially-oriented private sector and its public, non-state network have been able to function under such adverse conditions, they might also serve as a foundation for a genuinely democratic integration of society -- a real opportunity for the true and differentiated self-fulfillment of the individual.
Within the traditional private/public framework, personal freedom has been possible for some people only at the expense of others. But the relationship between personal freedom and the needs of society as a whole ("order") are radically different in the socially-oriented private and non-state public sectors. There, society's need for collective solidarity, reciprocity and democracy do not conflict with the individual's need for differentiated self-fulfillment. "Order" in such relations can result only from the personal freedom of all -- and this is precisely what it can not be within the existing state and society.
The same is true for production and distribution. The capitalist concept of private endeavor is based on the market, an idea which has acquired almost mystical qualities. But the market is nothing less than an alignment of forces, apower-based relationship and a component of the power structure. This is why the market is incapable of accommodating any type of reasoning other than the most blatant sort of instrumental rationale.
By its nature, the market rules out reciprocity, or allows for it only as a means to its own ends. Reciprocity is a special type of exchange, based on the usefulness of the objects involved. It is not a question of an abstract equivalence of objects, as in the market, but rather their diversity. The market leads to the fragmentation and differentiation of interests within society; reciprocity requires their linkage.
Historically in the Andes, reciprocity did not prevent the exercise of power and domination. But it did act at both the base and the apex of the ruling structure as a mechanism of solidarity, a form of exchange between equals and, also, a mechanism for solidarity between rulers and ruled. Within the framework of reciprocity, objects are symbols of people themselves.
A new system of democracy, built on solidarity, equality and personal freedom, would not imply the dissolution of all power. Democracy, no matter how demos, is also cratos. However, in this new type of structure, power regains its social dimension; it becomes a direct form of political democracy, not necessarily channeled through the state.
In fact, these new types of public and private practices can gain ascendancy only if they represent an alternative sort of power. Private enterprise, together with the state, will not cease trying to obstruct, divide, distort or eliminate these new institutions. Unlike other options, this alternative power is not only a goal in itself, but also a path to that goal, and we are currently travelling down that path.
When the concept of modernity arose in it, seventeenth and eighteenth centuries on both sides of the Atlantic, its protagonists in America were members of the ruling class, descendants of Europeans. Their social status blinded them to the fact that the culture of the "Indians" contained elements which would inspire Europe's vision of the connection between reason and liberation. When this connection became obscured, the oligarchic Creole culture in America became even blinder still.
The supremacy of this oligarchy is now coming to an end throughout Latin America. At one time, it appeared to be making way solely for a cultural "modernization” that is, for the primacy of the instrumental rationale. And this might have occurred, if the expansion of international capital had not entered into a severe and prolonged crisis. As it is, the crisis has reinforced the region's social, ethnic and cultural diversity, and the one-track, one-way transition from "traditional" to "modem" envisioned by ideologues is not taking place.
After 500 years of false "modernization," the question before Latin America is not to choose between statism and control, on the one hand, and the freedom of the market and of profit-making, on the other. In the final analysis, both paths lead to the same thing: vertical corporate structures which become, or are closely linked to, the state. The private/state dichotomy is no more than a distinction between two aspects of the same instrumental rationale, whose ascendance has brought us an extremely protracted crisis, disorder and confusion.
The socially-oriented private sector and its non-state public sphere show us a way out of the blind alley into which the ideologues of capital and power have led us. The liberation of society is more than an enlightened vision of utopia; in Latin America, its weft is already apparent in the threads of our daily life. The tapestry may be unraveled, perhaps even destroyed, but new hands will return to the ancient loom.
ABOUT THE AUTHOR: Peruvian social scientist Aníbal Quijano has written extensively on Latin American development and Andean history and culture, most recently Modernidad, Identidad y Utopía en América Latina. He is a professor at the Universidad de San Marcos in Lima.
NOTES: This article was adapted from ''A Different Concept of the Private Sector, A Different Concept of the Public Sector,” which appeared in CEPAL Review, No. 35 (Aug. 1988).
1. A Peruvian, Pablo de Olavide y Járegui, was a friend of Voltaire and was deeply involved with the French Encyclopedists and in the Spanish Enlightenment. When Olavide was persecuted by the Inquisition, it was none other than Diderot himself who launched a campaign in his defense, taken up in virtually all the European centers of the Enlightenment. And in 1810, at the Cortes of Cádiz, the Latin American delegates were among the most consistent in upholding a modern ideology and in defending liberal radicalism, playing a prominent role in drafting the liberal constitution. 2. In simplifying the differences between the southern and northern European concepts of modernity and rationality, I am not attempting to absolve Southern Europe of its sins, which may be just as serious as those of Northern Europe. While the distinction drawn here may be a simplified one, it is not in my opinion overly arbitrary. 3. It is surely not a mere coincidence that the leaders of today's anti-modernist "neoconservative" movement in the United States stress their rejection of the "Franco-Continental Enlightenment" and their adherence to the "Anglo-Scottish Enlightenment" of Locke, Hume and Smith, in attempting to vindicate the privileged position of some groups over others. Nor is it mere happenstance that the spokespeople for this school of thought do not hesitate to state that modernism is nothing more than a utopia inthe pejorative sense of the word. 4. State capitalism, "real socialism" and the welfare state all belong to the same family, but act within different contexts and in response to different sorts of specific needs. Complete state control over the economy may be seen as representing the interests of the society as a whole vis a vis private interests. But it neither eliminates domination and inequality, nor even tends to do so. Under these circumstances, the private sector eventually re-emerges when the suffocating weight of bureaucracy entailed by state control causes production to stagnate. 5. See "The Homeless Organize," NACLA Report on the Americas, Vol. XXIII, No. 4 (Nov/Dec 1989).