These are interesting and progressive times for Bolivia, and for Latin America as a whole. Indeed, it can be argued that the continental logic of governance informed by the 19th century "Monroe doctrine" which sought to establish the region as the United States's protectorate, is dissolving at an accelerated pace.

This dissolution is symbolised by the effective burial of the Free Trade Area of the Americas (FTAA), and the US's reluctant return to its historical strategy of signing bilateral free-trade agreements with "friendly" administrations; currently these cover nine of the thirty-six countries, including the three Andean states of Peru, Colombia and Ecuador.

The oppressive nature of this hemispheric alliance or bloc is well documented: US elites, in their global struggle against the "red threat" of communism in the cold-war era, have consistently supported (by financial, logistical and ideological means) military dictatorships in the region. A notorious example is the multinational "Operation Condor" organised with CIA support in the 1970s, Bolivian dictator-turned-elected-president Hugo Banzer was an active participant in this extensive covert operation.

Also on Evo Morales and Bolivian politics in openDemocracy:

John Crabtree, "Bolivia's retreat from civil war" (June 2005)

John Crabtree, "Bolivia on the brink"
(October 2005)

Nick Buxton, "Revolutionary times in Bolivia"
(December 2005)

John Crabtree, "Evo Morales's challenge" (January 2006)

John Crabtree "Bolivia stakes its claim"
(May 2006)

The challenge to US supremacy

Since the 1990s, the veneer of hemispheric "stability" under the US's aegis has begun to wither under three fundamental constraints:

• a historic convergence of national social struggles in Latin America (in Venezuela, Bolivia, Peru, Ecuador, Brazil, Argentina, Uruguay, Mexico, among others) in reaction to the neo-liberal ideology legitimising ‘democratisation’ processes dominant since the early 1980s
• the decline in the power of national elites in relation to organised labour, because the former, attempting to contain more radical labour demands, have counter-posed neo-liberal restructuring against the illegitimate dictatorships that supported their own rule (and overarching US supremacy) in the region since the 1960s; a wider factor here is the end of the cold war, which deprived a powerful rationale for coercive rule
• a shift in the nature of domestic rule within the United States, which presents terrorism and its agents as the principal emergent threat to US supremacy, and which have led to the forging of an aggressive, nationalist foreign policy which implies military action beyond its historic spheres of influence. This nationalist project, by shifting large financial and military resources to the middle east and central Asia, reduces the institutional and military presence of the US in Latin America. The US has therefore become vulnerable to “imperial overstretch”.

Nationalism, regionalism and class

Evo Morales's election in Bolivia in December 2005, the culmination of five years of violent street and political struggles, can be understood in the context of these three large-scale shifts. The indigenous Quechua and Aymara majority in the country have long suffered the double oppression of "foreign" imperialism (Spanish, Chilean or Brazilian, as well as from the United States) and "endogenous" exploitation (by white/criollo Bolivian elites), and have sought to assert their historic right to self-determination with the support of a majority of mestizo ‘middle classes’ harmed by fifteen years of neo-liberal reforms. The nationalisation of extractive industries, announced by Evo Morales on 1 May 2006 in one of his first acts after being inaugurated as president, symbolises such assertiveness.

At the same time, indigenous nationalism runs against two forces embodying considerable social power on their own account. The first is Bolivian nationalism, which is historically a criollo construct serving to repress indigenous identity and organisation, especially since the 1952 "national revolution". The second is the regional economic power of countries with an extensive stake in Bolivia – Brazil chief among them, because its interest in sustaining a cheap, steady supply of gas depends on the extended exploitation of Bolivian gasfields by the state-owned Petrobras company.

Here, Morales's nationalist logic of emancipation sets itself against forces enjoying higher levels of development and hence far greater economic, institutional and military power. In this sense, it has the effect of reinforcing the fragmentation of a social struggle that should develop at least at a macro-regional level.

As it stands, therefore, Evo Morales's nationalisation is a nationalist endeavour of the kind that has proved to be the wrong remedy for profound social ills. In Bolivia, nationalisation – whether in its 1938, 1952 or 1969 guises – has not and will not be able to resolve the social contradictions which have twisted Bolivia out of shape ever since its invention by a criollo bloc almost two centuries ago. The condition of Bolivia's working class (including indigenous campesinos) was not improved by nationalisation. The social problems of instability, poverty, inequality and "underdevelopment" remained after the country's energy resources were taken into state hands.

Indeed, nationalisation not just failed to "revolutionise" Bolivian society as intended; it ultimately consolidated its integration in the global capitalist production structure. The new nationalised industries, the Yacimientos Petroliferos Fiscales Bolivianos (YPFB) and the Corporacion Minera de Bolivia (Comibol) were established as capitalist corporations, ever more deeply integrated in the competitive world market. Nationalisation thus reinforced Bolivia's dependent development instead of providing the economic means for its "national liberation".

Arguments that state ownership of key industries through ‘nationalisation’ constitute a qualitatively distinct form of production (potentially providing a transitional platform towards socialism) fallaciously assume that state and market are two separate and contradictory entities. Nationalisation does not essentially change the ‘logic’ of capitalist exploitation and the class relations arising from it; it merely changes its form.

The nationalisation of hydrocarbons by Morales’s new administration will stringently reduce the involvement of western transnational corporations in Bolivian production; but there is, from a historical perspective, more doubt regarding his (and indeed Chavez’s) alleged use of nationalisation as a tool in the transition to socialism. In socialism, the market value of labour products should no longer discipline labour and its organisation. Morales, far from establishing ‘proto-socialist’ relations, is restoring pre-1985 ‘state capitalism’ (capital restructuring under state ownership within the world market) under admittedly better conditions.

A regional path

Evo Morales's nationalist ideology has to confront the obstacle of Bolivia's continued integration in the global capitalist production structure and membership in global governance institutions, which legally constrain national policy-making along neo-liberal lines. A straightforward "delinking" would be both impossible and undesirable. The new Bolivian leadership inherits a landlocked, predominantly poor society, with a technologically backward industrial sector, and highly dependent on extracting raw materials whose value is dependent on variable world-market conditions.

These constraints imply that the best way forward for Bolivia in current conditions would be through a new regionalism of the kind pioneered by Hugo Chavez's "Bolivarian federation", as a clear alternative to the FTAA. The impetus of the Bolivian and Venezuelan administrations provides an unprecedented opportunity for progressive movements to build a macro-regional institutional bloc that can potentially channel their professed socialist ambitions by constitutional means to challenge economic imperialism backed by global regulatory institutions in Latin America. The formation of such a macro-regional, integrated web of nationalised industries – on which rich western societies depend for their own growth – is both conceivable and desirable.

Evo Morales's government will undoubtedly provide institutional support for the emancipation of indigenous communities suffering from a combination of class and racial domination since the colonial era. So Bolivia's poorest strata will probably live a little better under Morales's administration, and the new constitution to be put to the vote in July. But this will be no revolution. It may even open the way to further radical projects and arguments, as capitalism in Bolivia learns to wear a Quechua or Aymara mask.