James Petras, Morris Morley and A. Eugene Havens
Peru: Capitalist Democracy in TransitionThe writing of this article greatly benefited from discussions with numerous friends and colleagues in Peru: An¢al Quijano, Rodrigo Montoya, Orlando Plaza, Otto Flores, Helan Jaworski, José Matos Mar, Ricardo Letts, Carlos Urrut¡, Victor Villanueva, Edmundo Murragara, Alberto Grana, Jaime Giannella, Hugo Blanco, Armando Pillado, Baltazar Caravedo, Carlos Tepia, Janier Diez Caneco, Guillermo Rochabrun, Jonathan Cavanagh, Fernando Sánchez, Alfonso Barrantes, researchers at cedal, desco, the taller de cojuntura agraria, taller de autogestión, Alberto Pontoni, trade-union leaders from the light and power and waterworks, Ricardo Napuri, Andrés Luna Vargas, and many others. None of the above bears any responsibility for the shortcomings and interpretations contained in this article.
In 1980 the Belaúnde government, elected with a 43-percent plurality of the popular vote, embarked on the path of an unfettered ‘free market economy’—adopting an orthodox developmental strategy tied to the influx of foreign investment, the promotion of primary goods exports and the dismantling of state-owned enterprises.  The formulations and specific meanings are described in The Andean Report (henceforward ap), Lima, August 1980–July 1981. The new administration banished the populist rhetoric that characterized Belaúnde’s earlier tenure of power (1964–1968); in Peru today there is no longer any discussion of agrarian reform, income redistribution or national industrialization.  See J. Petras and R. LaPorte Jr, Cultivating Revolution, New York 1971. Yet unlike the Southern Cone dictatorships, where Friedmanite laissez-faire economics was installed following military coups against parliamentary regimes, Peru is novel in combining neo-liberal economic retrenchment with the re-emergence of a parliamentary regime. This anomaly is the result of the deepening economic crisis which affected the nationalist-statist regimes that ruled during the previous twelve years (1968–1980).
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