Latin America

Can Peru's Constitution Survive a Marxist Onslaught?

Election winner Pedro Castillo plans to end the country’s successful free market reforms.

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On June 6, Peruvians voted in a presidential runoff between Pedro Castillo, a previously obscure teachers union leader with a neo-Marxist agenda, and Keiko Fujimori, a former congresswoman and daughter of former-president-turned-dictator Alberto Fujimori.

Although Castillo won the official count with 50.1 percent of the totalby a margin of just 44,000 votesFujimori has tried to have around 200,000 ballots invalidated. Her efforts to overturn the election's result, however, are likely to fail. If anything, Fujimori's desperate tactics, which have elicited comparisons to former President Donald Trump's claims of voter fraud to justify his 2020 electoral defeat, have lent credence to Castillo's claims that he faces a political establishment that is not only corrupt—Keiko Fujimori spent time in jail due to a notorious corruption scandalbut also clings to power by any means necessary.

The battle in Peru is no longer about who won the election; it's about preserving the country's constitution. Drafted in 1993, the current constitution underpins the free market policies that helped the country reduce its poverty rate by roughly one-half, nearly triple its per capita income, and even slash inequality (as measured by a 12-percentage-point reduction in the Gini coefficient between 1998 and 2019). As Ian Vásquez and Ivan Alonso write for the Cato Institute, during the last decades, "Peruvians have experienced dramatic and widely shared improvements in well-being."

Peru's economic success is a rather new development. As recently as August 1990, the country experienced a 397 percent monthly inflation rate. Previously, dictator Juan Velasco Alvarado, a military officer who led a coup d'état in 1968, had nationalized key industries, creating state monopolies in oil and mining, fisheries, and food production, among other key sectors. He also expropriated large tracts of land and severely restricted imports, all according to a five-year plan of national production. Economists César Martinelli and Marco Vega argue that Velasco Alvarado's statist program cost Peru "sizable losses" in economic growth during two decades, leading to the hyperstagflation of the late 1980s.

Once in power, Alberto Fujimori, who won the presidential election in 1990, took drastic measures to stabilize prices, mainly by restricting the money supply and government deficits. Meanwhile, he deregulated markets and shrank the state's size by privatizing state-owned companies.

The 1993 constitution strengthened Fujimori's free market reforms, but it was approved a year after the infamous self-coup or "fujimorazo," when the strongman dissolved the legislative branch, where opposition parties held a majority, and ruled by decree until he had a new, pro-government Congress elected. Nevertheless, since Fujimori's resignation and subsequent impeachment in 2000, a series of democratically elected governments have upheld the constitution. In fact, Peru's Supreme Court tried and sentenced Fujimori for human rights abuses during the war against the Shining Path, a communist guerrilla group, under the existing constitutional framework.

Today, the constitution is the only obstacle in the way of President-elect Castillo's party platform, which praises Vladimir Lenin and Fidel Castro while promising a back-to-the-past agenda of nationalizing the mining sector and other major industries, expropriating land, and getting rid of Peru's successful private pension system, which administers approximately USD $40.7 billion in citizens' savings. Much like Velasco Alvarado, who nationalized news media companies, Castillo's "Free Peru" party plans to "regulate" the press, claiming that a "muckraking" media is "fatal" to democracy.

The Peruvian Constitution, however, declares private propertyincluding that held legally by foreignersto be inviolable. It also guarantees free enterprise, foreign investment, market-based competition, and press freedom. Tellingly, Castillo's "Free Peru" party calls for a new constitution to replace the one in place, which it rejects as "individualist, mercantilist, privatizing, and defeatist" in the face of foreign interests.

Since the election, both Castillo and his allies have insisted on the supposed need to summon a new constitutional assembly once they are in power. However, certain elements in the current Congress, which was elected in 2016 and whose term ends on July 26, have acted to protect the constitution. On June 23, the Constitutional Commission issued a verdictwhich still has to be approved by a plenary sessionstating that the executive could not use a defeat in a no-confidence vote, which allows the president to dissolve Congress, to carry out constitutional reforms. This method was suggested by Castillo's political mentor, Vladimir Cerrón, a Cuba-trained doctor who was forced to resign as governor of the Junín province due to a criminal conviction.

According to a recent poll, 77 percent of Peruvians are against doing away with the current constitution. As YouTuber Mirko Vidal remarks, this suggests that a good portion of Castillo's vote wasn't pro-Marxist as much as anti-Fujimori.

It remains to be seen whether Peru's institutions can withstand Castillo's certain onslaught once he is in power. It would be no surprise if he tried to get rid of term limits, a classic recipe of 21st century socialists such as Venezuela's Hugo Chávez and Bolivia's Evo Morales, caudillos who, like Alberto Fujimori, won an election and changed the rules of the game so as to hold on to power. Another similarity with Chávez and Morales is Castillo's blend of anti-capitalist dogma with a strong sense of social conservatism; he opposes same-sex marriage, a "gender-focus" in education, and large-scale immigration. Repeatedly, he has promised to expel all illegal immigrantsmeaning many of the 1 million Venezuelans who arrived in the country as they fled from Chavista socialismjust 72 hours after taking office. While these stances are electorally savvy, they make Castillo an odd bedfellow of the foreign progressives who praise him with titles such as son of the soil.

Although Castillo is not yet in office, his electoral success has already dented Peru's economy and its financial markets. The day after his election, the sol, Peru's currency, sank to its lowest historical level against the U.S. dollar, while Lima's main stock market index dropped more than 7 percent. As the market opened on June 30, the iShares MSCI Peru ETF, which tracks the country's underlying index and is heavily weighted toward the copper mining sector, was down more than 20 percent since April 8, three days before the first round of voting. JPMorgan warned about possible capital flight from Peru if Castillo is confirmed as president, but one Miami-based wealth manager noted "significant outflows [of money] from the country" even before the June 6 runoff.

The press has noticed how the Lima elite has begun to withdraw its money from Peru, but this is a familiar story. When Marxists came to power in both Cuba and Venezuela, the rich were the first to remove their assets before emigrating themselves. Under socialism, it's only a matter of time before the middle class is stricken and, eventually, the desperate masses follow in their wake.

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  1. LOL

    Yea, Peru is totes the most relevant place this is happening…

    1. By all means, let’s ignore everything except what Nardz thinks matters.

      1. Shhhh! You might distract him from his Twitter rage…

        1. Lol, what the hell, buddy.

          1. He’s broken.

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      2. You mean like the marxist onslaught happening here in the US?

        1. You must be referring to the reaction against Kleptocracy looter prohibitionism. Nothing makes communism look more attractive than pushing narcs kicking down doors, shooting dogs and kids and confiscating homes and bank accounts as “THE” only possible alternative. The Biden, Bush, Obama and Trump Administrations are admitted to the record as Exhibits A, B, C, D and Ecch!

          1. What is this? A fellow realist? Someone who dare be anti-partisan?

            Let me just categorically state that there’s no hope for us whatsoever. This country has no use for non partisans.

  2. In most of Latin America the concept of zero sum reigns strong, probably because of the Spanish establishment of feudal rule for centuries. No matters who wins and what they espouse, they will seize whatever is not nailed down and share it among supporters and relatives. This is expected. Consider Castro’s many homes and mistresses. Maduro and his cronies also share the public funds among themselves, even the pitiable amount left by now. Seizure of farms that were distributed among non-farming supporters goes a long way toward explaining the shortages of food. They stole from the oil industry and now must ration and import.
    Let’s hope immigrants to the US don’t bring this aspect of their culture with them.

  3. Interesting parallels – one party wins by a very slim margin and then attempts to steamroll the opposition and push a radical, transformative agenda.

    1. I’m sure glad that can’t happen here!

    2. Bipartisan!

  4. After the last 100 years, anybody who advocates Marxism is just too stupid for their own good.

    1. Stupid is being charitable, they are evil. Most of these people aren’t ignorant, they know what their policies will do and they want to do it anyways.

      1. After all, they are going to be the ones crafting 5 year plans in their dachas.

  5. Great question, Mr Raisbeck. Too bad it was published here in a fornerly libertarian rag that excuses and promotes Marxism, because Orange Men

  6. “ Can Peru’s Constitution Survive a Marxist Onslaught?‘ only if they start shooting Marxists.

    1. That need to happen here. We have an unworkable surplus of marxists. The numbers must be reduced.

  7. Can Peru’s Constitution Survive a Marxist Onslaught?

    If ours can’t, I’m not sure Peru’s can.

  8. According to a recent poll, 77 percent of Peruvians are against doing away with the current constitution. As YouTuber Mirko Vidal remarks, this suggests that a good portion of Castillo’s vote wasn’t pro-Marxist as much as anti-Fujimori.

    Where have we seen this before? Good luck with that.

    1. As if a true Marxist gives a shit what 77% of the population thinks.

      I did business in Peru in the 90s and met several people who were at the end of the gun during overthrows. There’s a history of it down there.

      Not to mention the two Maoist terrorist groups.

      1. The Peruvians should purge their marxists as fast as they can. As should we.

  9. Repeatedly, he has promised to expel all illegal immigrants—meaning many of the 1 million Venezuelans who arrived in the country as they fled from Chavista socialism—just 72 hours after taking office.

    To be fair, if he’s going to nationalize everything and create a pan-welfare state…

    1. While these stances are electorally savvy, they make Castillo an odd bedfellow of the foreign progressives who praise him with titles such as son of the soil.

      To the left, things like open borders and pro-immigration are tools, a means to an end. They don’t give a damn about immigrants.

      1. There is an ideological side, such as Marxism [no matter how bad its history, it just keeps reeling ’em in] and a practical side, as in they need to be in power to make it happen. And of course the person in power doesn’t have to experience the down sides of all their central planning for the prols.

      2. I was amused by the plan to restrict immigration. I don’t think that’s going to be a huge issue. How many people move to North Korea voluntarily?

      3. If it wasn’t glaringly obvious when the administration that was so committed to taking in refugees was promptly deporting any refugees from communist countries then it never will be.

  10. “claiming that a “muckraking” media is “fatal” to democracy.”

    Fact check: True!

    “We love our Constitution. That’s why we’re voting for the guy who wants to tear it up.” Sounds very familiar.

  11. So… Short the Peruvian market?

    1. If your short a Peruvian company, and it gets nationalized, I suppose that’s 100% return on investment.

  12. Get your valuable assets out of Peru if any because that mutherfucker is gonna confiscate any wealth. Rand predicted all this and here it comes good and hard.

  13. this suggests that a good portion of Castillo’s vote wasn’t pro-Marxist as much as anti-Fujimori.

    “Useful Idiots” for $200, Alex Current Guest Host.

  14. You vote for Marxists, you get Marxism. What a surprise. But I’m sure they’ll get it right this time, and learn from the mistakes of previous Marxist governments. Sorta like fission energy has been just 10 years away for the past 70 years.

    1. That assumes they want to learn from the mistakes. They like the mistakes.

    2. Fission energy has been with us for over 50 years.

      Fusion energy on the other hand is, as you say “just 10 years away” for as long as I have been alive.

      1. I always get those two confused.

    3. This is true. But the Kleptocracy predicts that its Other Half will do Bad Things unless you help by voting against individual rights and for the initiation of force. They spew such idiocy here all the time.

      1. Oh fuck off. You’re a raving idiot. And you have no problem ‘initiating force’ against an infant. You really are a detriment to libertarianism.

  15. The timing could not be more perfect. The net result will be an increase in Peruvians seeking to relocate to the United States; the wealthy ones already have houses and accounts here, anyway. The poorer ones will come any way they can.

    Now VP Harris can study *in real time* the root causes of why people are seeking a better life here in the US by abandoning their home countries.

    1. So look for Peruvian mail order brides?

    2. I wonder what will happen when Harris realizes that she is the root cause of migration.

      1. She’s so cunty that maybe if she keeps talking to illegals they will go home just to get away from her.

  16. What is the projected timeframe of Abimael Guzman’s release and pardon?

  17. Can America’s Constitution Survive a Marxist Onslaught?

    1. It did in 1895 and again during the FDR and Truman Administrations. People’s Party and Prohibition party policies wrecked us, but the Liberal Party repeal plank saved the day in 1932.

  18. “a presidential runoff between Pedro Castillo, a previously obscure teachers union leader with a neo-Marxist agenda, and Keiko Fujimori, a former congresswoman and daughter of former-president-turned-dictator Alberto Fujimori.”

    Their constitution was doomed the minute it ended up in a binary choice between these two candidates.

    1. Peru’s Constitution is the third shortest in the hemisphere, and could be repaired by deleting some taxes and adding the Atlas Shrugged Amendment. Measured by per capita GNP, Peru is right in the middle. The only poorer countries (ignoring Cuba) are other coca-producers likewise economically crushed by the violence of gringo Kleptocracy prohibitionism and puppet fascist dictatorships.

      1. All true, but the repair to their constitution that you suggest is not going to happen under the moron who won their presidential election, and it wouldn’t have happened if his opponent won either.

  19. Because if there’s one place communism definitely works, it’s South America.

    Leave.

    Leave now.

    While you can eat.

    1. On the plus side, if you stay the Rolling Stones will write a catchy song about your horrible demise.

      And the leftists will blame it on imperialism.

  20. Peru’s collapse occurred when Holy War Bush took over Reagan/Biden shoot-first prohibitionism. Exported violence repeated the usual prohibition/crash pattern. Fascist mercantilism packages in substance prohibition as a mission from God. America’s prohibition of alcohol in 1920 made heroin and communism seem attractive. The 1923 smackdown triggered hyperinflation in Germany (the leading exporter of smack), and by 1929 the U.S. economy collapsed completely and communist party membership soared sixfold and hampered the FDR Administration. (search: “Republican Crashes Bring Communism”) Shining Path communism is that the Biden, Reagan and Bush War on Fun delivered in Peru while pushing Hirohito-Duterte-style fascism. The Bush collapse of 2008 was another demonstration that asset-forfeiture prohibitionism wrecks economies.

  21. I wonder if Peruvian gun owners are making any preparations?

  22. It’s interesting to me that reason refuses to ask the same question about the U.S. Constitution. Sad!

    1. It is not a question here.
      Have you read the last batch of rulings by the supremes?

  23. Can Peru’s Constitution Survive a Marxist Onslaught?

    No.

  24. Interesting how you’re convinced that anti-Marxists are clinging to power for the sake of power itself while also sounding the alarms on how deadly Marxist ideology is. It’s almost like people don’t want Marxists in power.

  25. I’m gonna guess the upshot here is that Peru’s industries would be better managed in the hands of Charles Koch.

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