During the fourth stage of the modern world-system, coinciding with the emergence of monopoly and finance capitalism and facilitated by the development of imperialist policies and neocolonial structures, Latin America continued to play a peripheral role in the world-economy, supplying cheap raw materials to the core on a base of low-waged labor. Natural resources flowed from the region, as though it were destined to have open veins, as expressed by the imagery of Eduardo Galeano.
The reader is invited to review various posts that are relevant here. On the four stages of the world-system, see “Immanuel Wallerstein,” 7/30/2013; on monopoly and finance capital, see “Lenin on Imperialism,” 9/10/2013; on imperialist policies, see “Imperialism as basic to foreign policy,” 10/10/2013; on neocolonial structures, see “The characteristics of neocolonialism,” 9/16/2013; on the peripheral role in the world-economy, see “The modern world-economy,” 8/2/2013; and on previous discussion of the open veins of Latin America and coffee, see “The open veins of Latin America: Gold and silver,” 8/16/2013, “Indigo, coffee, and liberal reform,” 9/2/2013, and “The Open Veins of Latin America: Coffee,” 9/4/2013, which are found in the section on Latin American history..
Coffee, as we have seen in the post of 9/4/2013, was first developed as a significant export in the nineteenth century, and it became an important commerce during the twentieth century. By the 1950s, Latin America produced four-fifths of the coffee that was consumed in the world. Brazil, El Salvador, Colombia, Guatemala, Costa Rica, and Haiti were the principal producers. The plantation workers were salaried, but their wages were at the level of superexploitation (see “Unequal exchange”8/5/2013), and the forms of social control had in some respects feudal characteristics (Galeano 2004:129-41).
A general tendency during the twentieth century was declining terms of exchange for raw materials exports. Galeano notes, for example, that in 1967, Colombia had to pay the equivalent of fifty-seven bags of coffee in order to buy a jeep, whereas in 1950, sixteen bags had been enough. In 1967, Brazil needed 350 bags of coffee to pay for a tractor, but in 1953 seventy bags had been enough (Galeano 2004:132).
Galeano also observes that as the price of coffee fell, a greater quantity of dollars was taken by the consuming country, the United States. But these dollars did not go directly to US citizens, as the price to the consumer continued to increase. The dollars were usurped by US companies that managed its distribution in the United States. But US citizens benefited indirectly, as the distribution and sale of coffee provided jobs for hundreds of thousands of persons, and the usurped capital may have had other positive secondary effects for the US economy (Galeano 2004:132-34). Galeano writes: “Coffee benefits much more those who consume it than those who produce it. In the United States and in Europe it generates income and employment and generates a high level of capital; in Latin America it pays hunger wages and accentuates the economic deformation of the countries placed in its service. In the United States coffee provides work to more than 600,000 persons: the North Americans who distribute and sell the coffee earn salaries infinitely higher than the Brazilians, Colombians, Guatemalans, Salvadorans, or Haitians that plant and harvest the grain on the plantations” (2004:134; 1997:101).
Brazil developed an industry for the production and export of instant coffee. It produced cheaper and higher quality instant coffee than a younger US industry dedicated to the fabrication of the same product. But the core countries, preachers of free trade, imposed taxes on Brazilian imports of instant coffee, establishing a protectionist obstacle to the development of the Brazilian industry (Galeano 2004:134). Instant coffee, a manufactured product developed on a base of higher wages, is a core-like activity, beneficial for the development of a nation’s economy. The cultivation and export of coffee beans or ground coffee beans is a peripheral activity based on low-waged labor, promoting underdevelopment of the regions where it is produced, particularly when the region is characterized by mono-production rather than a diversity of production.
Like a grain of sugar, a coffee bean provides a lesson in political economy, helping us to understand the structures of domination that are integral to the modern world-system.
Galeano, Eduardo. 1997. The Open Veins of Latin America: Five centuries of the pillage of a continent, 25th Anniversary Edition. Translated by Cedric Belfrage. Forward by Isabel Allende. New York: Monthly Review Press.
__________. 2004. Las Venas Abiertas de América Latina, tercera edición, revisada. México: Siglo XXI Editores.
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