Left-Wing Democracy in Action, Ecuador Edition

As you surely know, Ecuador is in the process of putting together a new constitution. And this week’s report on Ecuadorean politics and economics from Analytica Securities in Quito (you are on their email list, right?) outlines few of the things which are likely to go into it.

Top of the list is "the

principle of conditional property rights". What does that mean?

Individual property rights would be guaranteed

by the new Constitution, but property rights

would have to be consistent with public

welfare and the upkeep of the environment… Expropriation

could take place not just to build public

infrastructure, but also to guarantee food

security, promote equality or to conserve the


Yes, that means what you think it means:

The committee on food security

within the Constituent Assembly intends to

classify the unequal distribution of agricultural lands as a threat to the food security of peasant and indigenous communities. And it

wants to guarantee peasants access to

agricultural lands. The upshot of these

principles could be to render agro-industrial

assets, prominent in both the coast and the

highlands, vulnerable to expropriation in the

context of a new land reform designed to

replace agro-industry with a peasant based

subsistence agriculture.

And let’s not forget the "strategic

sectors of the economy":

According to this notion, the

government should control key public

services and natural resources and harness

them for national development. Included

are oil and mining, telecoms, electricity,

water and radio and television frequencies…

The definition of banking as a "delegated

public service" has met with stern opposition

from the private banking sector.

Yes, that means what you think it means too: that banks would essentially stop making their own credit decisions, and simply become vehicles by which the government outsourced top-down lending decisions. Oh, and the government is likely to strip the central bank of its independence, too, which means the end of reliable statistics or arm’s-length banking-industry regulation.

All of this, incidentally, comes from president Rafael Correa, who still has a popularity rating of 60% despite having been in power for a year and a half. (Fun fact: his vice-president is named Lenin.) And all of this, too, is coming from an oil-exporting country which has done really rather well by global capitalism of late.

I think it’s fair to say that the Washington Consensus is dead.

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