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L AT I N A M E R I C A N C L A S S S T R U C T U R E S Their Composition and Change during the Neoliberal Era1 Alejandro Portes and Kelly Hoffman Princeton University Abstract This article proposes a framework for the analysis of social classes in Latin America and presents evidence on the composition of the class structure in the region and its evolution during the last two decades corresponding to the years of implementation of a new economic model in most countries The paper is an update of an earlier article on the same topic published in this journal at the end of the period of import substitution industrialization Relative to that earlier period the present era registers a visible increase in income inequality a persistent concentration of wealth in the top decile of the population a rapid expansion of the class of micro entrepreneurs and a stagnation or increase of the informal proletariat The contraction of public sector employment and the stagnation of formal sector labor demand in most countries have led to a series of adaptive solutions by the middle and lower classes The rise of informal self employment and micro entrepreneurialism throughout the region can be interpreted as a direct result of the new adjustment policies We explore other less orthodox adaptive strategies including the rise of violent crime in the cities and migration abroad by an increasingly diversified cross section of the population The impact that changes in the class structure have had on party politics and other forms of popular political mobilization in Latin American countries is discussed During the last decade of the twentieth century Latin America experienced a momentous change as country after country abandoned the autonomous industrialization path advocated by its own intellectuals of an earlier period and embraced a new model of development based on open economies and global competition Neoliberalism as this model is dubbed is actually a throwback to an earlier era when Latin American countries participated in the world economy on the basis of their differential advantages as producers of primary goods while importing manufacturers and technology from the industrialized world It was the vulnerability of those export economies to the ups and downs of external markets that the 1 We thank Emilio Klein for assistance in our preliminary assembling of data for this paper and Peter Evans William Smith and Susan Eckstein for their comments on an earlier version of the paper Responsibility for the contents is exclusively ours Latin American Research Review Vol 38 No 1 February 2003 2003 by the University of Texas Press P O Box 7819 Austin TX 78713 7819 03 Portes Rev 6 5 41 7 16 03 2 49 PM 42 Latin American Research Review neo Keynesian import substitution policies of the mid twentieth century were designed to overcome Prebisch 1950 Furtado 1970 2 The policies advocated by the resurrected liberal orthodoxy and the Washington consensus that gave it ideological momentum have been described at length in the contemporary social science literature Sunkel 2001 Robinson 1996 Portes 1997 So have the consequences of these policies in terms of both economic growth and social equity Filgueira 1996 Roberts 2001 de la Rocha 2001 Less studied have been the effects of this profound re orientation of Latin American countries on their social structures and in particular their long term patterns of social stratification The class structure of these societies could not and has not remained impervious to these major changes in their productive organization and global trade patterns While international organizations such as the International Labour Office ILO and the United Nations Economic Commission for Latin America and the Caribbean ECLAC have tracked the evolution of poverty and inequality in the region their analytic approach has precluded them from analyzing these trends from a systematic class perspective ECLAC 2000 ILO 1999 The concept of class is commonly excluded from these official publications because of its Marxist origin and consequent evocation of notions of conflict privilege and exploitation Grusky and Sorensen 1998 Wright 1997 Yet its omission obscures significant aspects of contemporary social dynamics and deprives us of a valuable analytic tool In this paper we seek to correct this shortcoming by re introducing an explicit class framework in the analysis of contemporary Latin American societies providing empirical estimates of its various components and examining how they have varied across countries and over time This analysis can be read as an explicit extension and revision of an earlier article published in this journal eighteen years ago that sought to map the class structure of Latin American societies at the very end of the import substitution period Portes 1985 CLASS STRUCTURES IN CENTER AND PERIPHERY The concept of social class refers to discrete and durable categories of the population characterized by differential access to power conferring resources and related life chances In capitalist societies such class2 In addition to the raw materials and foodstuffs that were Latin America s basic export commodities in an earlier era the contemporary export model highlights industrial exports generally produced by multi national subsidiaries and other foreign owned firms in export processing zones The forms adopted by this novel insertion of peripheral countries in global commodity chains have been discussed at length by Gereffi 1989 1999 Castells 1998 Castells and Laserna 1989 and Korzeniewicz and Smith 2000 03 Portes Rev 6 5 42 7 16 03 2 49 PM LATIN AMERICAN CLASS STRUCTURES 43 defining resources are explicitly tied to markets and the ability of individuals to compete effectively in them Weber 1922 1965 Veblen 1899 1998 Mills 1959 While orthodox Marxist theories commonly constrained class resources to the possession of capital and the means of production versus ownership of raw labor recent theories have adopted a more flexible approach encompassing other power conferring resources such as control over the labor of others and possession of scarce occupational skills Grusky and Sorenson 1998 Wright 1985 Carchedi 1977 Poulantzas 1975 The common advantage of class analysis both classic and contemporary is its focus on the causes of inequality and poverty and not just its surface manifestations as commonly done in standard official publications Classes are also central for understanding the long


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