The Latin American revolutionary/reform movements of today are developing, in both theory and practice, an alternative world-system.  They have taken the lead in the transformation of the world undertaken by the colonized and neocolonized peoples of the Third World, a process of global transformation that has been unfolding for 200 years, seeking to transform the basic structures of colonialism and neocolonialism.

      The Third World revolution expresses not merely what appears to be true and right from a Third World point of view.  It expresses the most advanced human understanding of the true and the right in the present stage of human social and cultural development.  We who pertain to the North develop our understanding in the limited context of horizons that emerge in positions of privilege that have been established by structures of colonial and neocolonial domination.  But the Third World movements look at the world-system from the vantage point of the colonized and the exploited,  a vantage point that makes possible insights into global structures of domination that are not possible from the vantage point of privilege.  The Third World movements are pushing human understanding of societies to a more advanced stage.  We in the North can learn this advanced understanding, if we engage in sustained encounter with the Third World movements, and if we permit the desire to understand to take priority over other desires.

     The Third World national liberation movements have been anti-imperialist but not anti-Western.  As they sought to formulate understandings that would be integral to their liberation, they appropriated insights from the West, adapting them to the colonial situation.  Thus they took seriously the values of the American and French Revolutions and the insights emerging from the European proletarian movements from 1830s to 1920s, formulated by Marx and Lenin. 

       Therefore, as we seek to understand the Third World Revolution, we must develop an understanding of its perspective on the Western revolutions.  We must ask the question: What were the most important insights of the American Revolution, the French Revolution, the Western European workers’ movement, and the Russian Revolution from the vantage point of the movements of the Third World? 

     Reflections on the insights that emerge from these revolutions and movements will be the subject of future posts.  We begin in the next post with the American Revolution.

     At a later point in time, during the last decades of the twentieth century and the beginning of the twenty-first, the Third World movements also would appropriate and adapt the womanist and ecological ideas that were gaining force in the West.  These issues too will be discussed in relation to the current deep structural crisis of the world-system, which provides the social and political context in which the Third World movements today are developing.

Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective

      Let us take stock of where we are. Drawing upon the Catholic philosopher Bernard Lonergan, I have tried to show that we can arrive at an objective and social scientific understanding of the modern world-system through personal encounter with the social movements formed by the peoples of the Third World (see “Personal Encounter” 7/25/2013 and “Cross-horizon encounter” 7/26/2013).  And in a number of posts that began on August 6, I have tried to formulate the key insights that emerge through such encounter, insights that enable us to understand that the European conquest and peripheralization of vast regions of the world from the sixteenth through the twentieth centuries established the foundation for the present neocolonial world-system.  We who pertain to the peoples of the North, even though we materially benefit from global neocolonial structures, can arrive at this objective understanding, if we have the discipline to engage in sustained encounter, and if we are committed to understanding and not to the defense of particular interests.

      Conquest is not new in human history.  When humans developed food production in seven different regions of the world from 10,000 to 5,000 years ago, the foundation was established for economic and cultural development through the conquest of neighboring lands and peoples. 

     Food production had definite advantages over foraging.  By increasing both the quantity and the reliability of the food supply, it made possible the emergence of social classes not directly involved in food production and able to devote themselves to a wide variety of occupations.  Humans began to live in vibrant cities with markets, streets, temples, and palaces.  They developed crafts such as spinning, weaving, brick making, and metallurgy.  They invented new technologies.  They expanded trade and commerce.  They created sculpture, mural art, writing systems, weights, measures, mathematics, and new forms of political and social organization.

     But there also were clear disadvantages to food production.  It led to social inequality and to systems of social stratification that constructed ideological legitimations of inequality.  Generally those at the bottom were incorporated into the system through conquest.  The conquered peoples formed a lower class of forced laborers that originated from different cultures, ethnic groups, and/or nations.  In this way, class inequality and ethnic/national/“racial” domination have been intertwined throughout the history of domination in human societies.   Meanwhile, alongside class/ethnic domination, gender domination emerged as an important social phenomenon in the system of social stratification, and patriarchal ideologies justifying the exclusion and devaluation of women came into being.  And food production has environmental consequences.  It kills the diverse species of trees and plants of the natural environment, and renders the environment unlivable for a wide variety of animal species. 

     And so for 10,000 years our species has developed with an intertwined duality: on the one hand, great achievements in production, science, technology, literature, art, and music; and on the other hand, structures of domination that devalue the majority of people and that degrade the environment.  But the achievements could not have been attained without the domination, because domination established the material conditions necessary for the development of human resources.  Thus we see that domination and development are dialectically related: domination makes possible development, which in turn makes possible further domination.  Let us give name to this central human tendency since the agricultural revolution:  the dialectic of domination and development. 

     In the modern era, the dialectic of domination and development would reach an advanced expression.  Beginning with the sixteenth century Spanish conquest of America, the tendency for more powerful human groups to dominate other human populations became global.  By the beginning of the twentieth century, European nations had conquered nearly all of the American continents as well as most of Africa, South Asia, and Southeast Asia.  Global structures of domination emerged, far surpassing in scope and depth the structures of domination of the earlier empires.  Vast regions of the world became obligated to provide cheap raw materials to feed the consuming and manufacturing center of the world-economy.  With their traditional manufacturing destroyed, the conquered regions were compelled to purchase the goods of the manufacturing center.  Unprecedented levels of human inequality emerged.  The new international elite became far more wealthy and powerful than the elites of the earlier empires that were based on merely regional domination and a primarily agricultural economy.  Meanwhile, the masses of the vast peripheral regions, whose ancestors had formed in many cases great civilizations, were reduced to forced and cheap laborers amidst social conditions of underdevelopment and widespread poverty.

     These modern global structures of domination have become institutionalized in a modern world-economy characterized by a geographical division of labor between core and periphery.  The periphery assumes the economic function of exporting raw materials, on a base of forced and cheap labor, to the core.  The core functions as the manufacturing center, on a base of relatively high wages.  This function has enabled the core to become consuming societies with advanced forms of manufacturing, technology, and science.  There has emerged an unequal exchange between the high priced manufactured goods of the core and cheap raw materials of the periphery, an unequal exchange that is central to the exploitative core-peripheral relation.  

     At the same time, the modern global structures of domination have established the conditions that make possible their negation, in that modern social conditions have provided fertile ground for social movements that envision human liberation from structures of domination. 

     Thus far, we have sought to understand the historic development of modern structures of colonial domination that established the foundation for the present neocolonial world-system.  In subsequent posts, we will seek to understand the historic development of movements that seek human liberation, movements that make evident the essential dignity of our species.

 

References

Diamond, Jared.  1999.  Guns, Germs, and Steel: The Fates of Human Societies.  New York: W.W. Norton.

Kottak, Conrad Phillip.  2011.  Anthropology:  The Exploration of Human Diversity, Fourteenth Edition.  Boston:  McGraw-Hill.

Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, food production, agricultural revolution, Jared Diamond

     In eleven posts beginning August 16, I have drawn upon Eduardo Galeano’s Open Veins of Latin America.  (To find these posts, scroll down to see posts this month, and scroll the archives for August 2013 and September 2013).

     The Open Veins of Latin America was given to recently-elected US President Barack Obama by Venezuelan President Hugo Chávez, an indication of the extent to which it is appreciated in Latin America. Written in 1970, the book formulates the Latin American perspective on its role in the world-economy.  It provides a concrete presentation of the core-peripheral relation as seen from the periphery, organizing the presentation according to the various raw materials that played a role in the development of underdevelopment in Latin America and the Caribbean.  In the sixteenth century, the conquest of the indigenous peoples and the forced labor imposed on them established that silver and gold would be the driving engine of the newly emerging world-economy and world-system, promoting the development of Western Europe as it promoted the underdevelopment of Latin America.  During the third stage of expansion of the world-system (1750-1914), sugar and other agricultural monarchs in Latin America were the driving force of the system, incorporating African slaves as forced laborers.  As the world-system entered a stage characterized by imperialism and neocolonial domination during the twentieth century, Latin American petroleum and minerals, underground sources of power, became integral components of the development of the United States.  
 
     Although the world-system has passed through various stages, there has been continuity in its development, established by the Latin American role as supplier of raw materials for the core of the system: gold, silver, sugar, coffee, bananas, petroleum, copper, tin, and iron have played important roles in the development of a Latin American political-economic system in a distorted form, in dependent relation with the core of the world-system.

     This has given rise to movements that seek, not merely formal independence that is negated in practice by a dependent neocolonial relation, but the full and true independence of Latin America and the Caribbean.  Important moments in this quest for independence from the neocolonial world-system include: the Mexican Revolution; the Cuban Revolution; revolutionary democratic socialism led by Salvador Allende in Chile; the Sandinista Revolution in Nicaragua; and the reform and revolutionary movements that have transformed Latin America today, spearheaded by Hugo Chávez in Venezuela, Evo Morales in Bolivia, and Rafael Correa in Ecuador.  We will be discussing these revolutions that have sought and are seeking to transform the neocolonial world-system in future posts.  
 

References

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.


Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano


 

     In various posts, we have seen the importance of petroleum, copper and tin as underground sources of the power of the United States, and we have seen the aggressive action by the United States to attain control of these natural resources of Latin America (see “The Underground Sources of Power” 10/16/2013, “Petroleum in Latin America” 10/17/2013, “Petroleum in Venezuela” 10/18/2013, “Copper in Chile” 10/22/2013, and “Tin in Bolivia” 10/23/2013) .  Iron also was a part of this dynamic, and it was exploited in Venezuela and Brazil.

     In the classic work, The Open Veins of Latin America, Eduardo Galeano noted the importance of iron:  In 1970, 85% of the industrial products of the United States contained steel, and you cannot make steel without iron.  This explains the interest of the major US steel corporations in the iron of Venezuela and Brazil during the 1950s and 1960s (Galeano 2004:198; 2007:153).

      Galeano also observed that iron and steel reflect the international division of labor between core and periphery.  “Steel is produced in the rich centers of the world, and iron in the poor periphery; steel pays the salaries of the ‘worker aristocracy,’ and iron, day wages of mere subsistence” (Galeano 2004:199; 2007:153).

      US Steel and Bethlehem Steel directly controlled the extraction and exportation of iron from Venezuela.  Since the iron was destined for their own iron and steel works in the United  States, their primary interest was in obtaining cheap iron and not in maximizing profits from the iron-exporting activities.  Nonetheless, in the single year of 1960 they earned more in profits from the exportation of iron than they paid in taxes to the Venezuelan state during the ten years beginning in 1950 (Galeano 2004:198; 2007:153).

     In Brazil, the exportation of iron was a source of conflict.  A 1952 military accord between Brazil and the United States prohibited Brazil from selling strategic raw materials, such as iron, to socialist countries. In 1953 and 1954, Brazilian President Getúlio Vargas ignored the agreement and sold iron to Czechoslovakia and Poland at prices higher than those being paid by the United States.  This defiance culminated in the president being deposed in 1954 (Galeano 2004:200-1; 2007:154). 

      The conflict continued in the early 1960s.  The US company Hannah Mining sought to obtain the rights to mine and export Brazilian crude iron in the late 1950s and early 1960s.  By pressuring the Brazilian government, including the incorporation of high officials of the Brazilian government as directors and advisers of Hannah, the company was able to obtain in 1961 authorization of the right to exploit iron deposits that belong to the government.  However, considering the authorization to be illegal, the President of Brazil cancelled it, restoring the iron deposits to the national reserve. Four days later, the president was forced to resign.  But a popular uprising frustrated the coup d’état, and Vice-President João Goulart assumed the presidency.  The Goulart government put into practice the cancellation of the illegal authorization in July 1962.  However, Goulart was overthrown in a July 1964 coup d’état that was supported by the United States, establishing a repressive dictatorship that adopted economic policies consistent with the interests of the US steel giants.  The decree legalizing Hannah’s authorization was issued on December 24, 1964.  In addition, the military government backed company plans to amplify its port 20 miles from Rio de Janeiro and to construct a railroad for the transportation of the iron. In October 1965, Hanna formed a consortium with Bethlehem Steel for the exploitation of iron.  But US Steel was not left out.  It formed a consortium with a Brazilian state mining company, and by these means it obtained a concession to the iron deposits in the Sierra de los Carajás in the Amazon (Galeano 2004:200-3; 2007:154-56).

      Ultimately, the military government was replaced by civilian governments that cooperated with the United States and US corporations in the implementation of the neoliberal agenda.  And popular opposition to foreign control of natural resources continued. Popular protest led to the overthrow of the neoliberal government of Fernando Collor de Mello in 1992.  And they led to the election of Workers’ Party candidates Luiz Inácio Lula da Silva in 2002 and 2006 and Dilma Rousseff  in 2010.  The Workers’ Party governments have been participating in the process of Latin American unity and integration, which seeks to develop alternatives to the structures that facilitate US control of the natural resources of the region.  The new political reality of Latin America today, established on a foundation of popular movements, will be the subject of future posts.


 References

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.

 
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, iron, Brazil, Venezuela

      In the 1870s, Simón Patiño, in a condition half dead from hunger, discovered in the Bolivian high plains the richest vein of tin in the world. The concentration was so high that the tin could be sent directly to the port, without need for a process of concentration.  Patiño became the “King of Tin” and one of the richest men in the world.  “From Europe he for many years lifted up and overthrew the presidents and ministers of Bolivia, planned the hunger of the workers and organized their massacre, and expanded and extended his personal fortune.  Bolivia was a country that existed in his service” (Galeano 2007:191; 1997:147).

     A popular movement in Bolivia first emerged in the 1930s.  By the early 1950s it had become an advanced social revolutionary movement under the leadership of the Revolutionary Nationalist Movement.  Its social base consisted of unions of mine workers, peasants, and factory workers.  It reached its zenith in 1952, when the Bolivian government nationalized the mines and distributed land to peasants.  
 
     However, the nationalization of the tin mines did not change the situation.  In the first place, the tin mines had been exhausted.  In the mountain where the rich vein had been found by Patiño, the degree of purity was reduced 120 times from what it had once been.  For every 156,000 tons of rock, only 400 tons of tin were obtained (Galeano 2007:191; 1997:147).

     Secondly, Antenor Patiño, son of Simón, charged considerable compensation for the nationalization, and he continued to control the price and the distribution of Bolivian tin.  The nationalization “had not modified the role of Bolivia in the international division of labor.  Bolivia continued exporting the crude mineral, and nearly all the tin is refined still in the ovens of Liverpool by Williams, Harvey and Co., which is owned by Patiño.  The nationalization of the sources of production of any raw material, as is taught from painful experience, is not sufficient”  (Galeano 2007:192; 1997:148).

     With Bolivian mining after nationalization continuing to conform to the peripheral role in the international division of labor, the Bolivian workers continued to suffer wages of superexploitation and to live in social conditions characteristic of underdevelopment.  They lived in one-room shacks with dirt floors, with 60% of male youth sharing a bed with a sister.  They lacked bathrooms, having instead small public sheds with latrines; the people preferred the garbage dumps, where at least there was open air.  They had to wait for the delivery of water, collecting it in containers when it arrived.  Meals were limited, consisting of potatoes, noodles, rice, maize, and occasionally tough meat.  During dinner, the minors chewed coca leafs, which function to dull hunger and to mask fatigue (Galeano 2007:194-95; 1997:150-51).

       The worst was the dust, which condemned the minors to death by asphyxiation (Galeano 2007:195; 1997:151).  “The slow and quiet death constitutes the specialty of the mine.  Vomiting of blood, cough, and a sensation of a lead weight on the back and an acute oppression in the chest are the signs that announce it.  After the medical analysis come the never ending bureaucratic pilgrimages.  They give a period of three months to vacate the house” (Galeano 2007:196; 1997:151-52).

     Tin mining destroyed the environment, leaving tunnels as well as accumulated grey mounds from the residue that is left after the tin is separated from the rock.  Rains washed the residual tin and deposited it everywhere.  Everything had the dark color of tin, from the mountain streams to the walls of the minors’ shacks (Galeano 2007:194).   
 
     The exhaustion of tin meant that its exploitation could not remain profitable, so the tin industry in Bolivia declined, to be replaced by the exploitation of natural gas, just as tin had previously replaced silver as the principle raw material for exportation from Bolivia.  But as the exported raw material changed from silver to tin to natural gas, the structures remained  intact: the raw materials export industries were owned and operated by foreign companies who paid hunger wages to Bolivian workers, with the cooperation of the Bolivian government.    The core-peripheral structures contributed to the economic development of the nations to the North even as they guaranteed underdevelopment and poverty for Bolivia.

          But as in Venezuela and Chile (see “Petroleum in Venezuela” 10/18/2013 and “Copper in Chile” 10/22/2013), the people formed movements that sought to take control of the natural resources of the nation and thus to make possible the true and full independence of the nation.  During the course of the twentieth century, the popular movements had significant gains, but they did not accomplish the definitive social transformation that they sought.  The struggle of the people continues today, as we will see in future posts.


References

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.

 
Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, tin, Bolivia


 

      We have been observing what Eduardo Galeano has called the “open veins of Latin America,” the flow of agricultural products and minerals from the region for the benefit of others.  In the twentieth century, the petroleum and minerals flowing from the region were essential for the US armed forces, inspiring Galeano to refer to them as the “underground sources of power.”  In the posts of 10/17, 10/18 and 10/21/2013, we have observed the aggressive pursuit of petroleum in Latin America by the transnational oil companies, supported by the US government, and the efforts of some Latin American governments, supported by popular movements, to take control of their petroleum resources.  This dynamic has been most fully expressed by the Bolivarian Revolution in Venezuela, led by Hugo Chávez, which today constitutes a significant challenge to the neocolonial world-system.

      Conflict between Latin America and the neocolonial power to the north also has expressed itself in Chile, which has the largest copper reserves in the world. During the Great Depression, with the consolidation of US neocolonial domination of Latin America and the final displacement of Britain, Chilean copper fell under the control of the United States.  The two largest reserves were owned by the Anaconda Copper Co. and the Kennecott Copper Co., “two companies intimately tied with each other as part of the same world consortium” (Galeano 2007:187; 1997:144).  And “the owners of copper were the owners of Chile” (Galeano 2007:188).

      From the 1930s through the 1960s, Chilean copper expressed the extreme inequalities that pertain to the world-system.  On the one hand, during this time the two principal companies had remitted four billion dollars from Chile to their corporate headquarters, even though they had not invested more than 800 million dollars, and nearly all of this investment came from profits earned in Chile.  On the other hand, “Chilean minors lived in narrow and sordid cabins, separated from their families, which inhabited miserable hovels on the outskirts; separated also from the foreign personnel, which in the large mines inhabited a universe apart, a mini-state within the state, where only English was spoken” (Galeano 2007:189-90).  “The average salary in the Chilean mines was one-eighth the basic salary of the refineries of Kennecott in the United States, even though productivity was at the same level" (Galeano 2007:189; 1997:145).  The taxes paid by the companies to the Chilean state did not begin to compensate for the exhaustion of this non-renewable resource.  In 1965, the government signed an agreement with Kennecott that supposedly established the government as a partner, but in fact established a new tax scheme that enabled the company to triple its profits (Galeano 2007:190; 1997:146). 
 
      In the 1970 elections, Salvador Allende was elected president.  He had been the candidate of the Popular Unity, a multiple-party coalition consisting of the Socialist, Communist, and Radical parties as well as former members of the Christian Democratic Party who, influenced by liberation theology, had formed a separate organization.  Nationalization was central to the Popular Unity program, and in its first year, the Allende government nationalized copper, iron, and nitrate industries, all of them previously owned by US corporations (Cockcroft 2000; Hart 2009). 
 
     The government of Salvador Allende was brought to an end by a coup d’état on September 11, 1973, during which Allende died.  Army Commander Pinochet was named President, beginning a brutal and repressive dictatorship that lasted nearly 20 years, before it was cast aside by the“transition to democracy” that swept Latin America in the 1980s and 1990s.  Under Pinochet, Chile was the first country in Latin America to impose the neoliberal project.  Much has been written over the role of the United States in trying to prevent Allende from assuming the presidency in 1970, in seeking to destabilize the Allende government, in supporting the September 11 coup, and in supporting the Pinochet dictatorship.  
 
      Salvador Allende will always be with us. He is present in the popular movements that today seek a just and democratic world.  We will write more on Allende and his vision of “revolutionary democratic socialism” in a future post.


References

Cockcroft, James. D., Ed.  2000.  Salvador Allende Reader: Chile´s Voice of Democracy.  Edited with an introduction by James D. Cockcroft.  With translations by Moisés Espinoza and Nancy Nuñez. New York: Ocean Press.

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.

Hart Dávalos, Armando. 2009.  “Sobre Salvador Allende” in Fidel Castro, Chile y Allende: Una mirada al proceso revolucionario chileno. México D.F.: Ocean Sur.


Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, copper, Chile, Salvador Allende


 

     Interrelated with control of the production and commercialization of petroleum by the Venezuelan state (see “Petroleum and Venezuela” 10/21/2013), there is the issue of Venezuelan participation in OPEC. Venezuela (along with Saudi Arabia, Iraq, Iran, and Kuwait) had been one of the five founding members of OPEC in 1960.  At that time, government income from oil production in the oil producing countries represented no more than 6 or 7% of the final price for a barrel of oil. OPEC was formed with the intention of establishing a just price for the producing countries petroleum and facilitating their economic independence.  During the 1960s, OPEC was able to become stronger by incorporating new members.  Using a strategy of controlling production in order to protect prices and conserve petroleum reserves, OPEC declared higher prices in 1973, generating the first oil price shock, as oil prices nearly quadrupled during 1973 and 1974 (Pichs 2006:152-54).

      However, the OPEC strategy did not break the neocolonial relation. The transnational petroleum companies, which control the refining and commercialization of the final product, passed the higher prices to the consumers.  And the governments of OPEC deposited the new funds in the banks of the North.  As we will explore in future posts, this generated a surplus of capital in the banks of the North, becoming a source of an expansion of Third World debt, which also would become, through the payment of interest, a mechanism for the flow of capital from the impoverished nations of the Third World to the wealthy nations of the North (Pichs 2006:154-55).

      At the same time, the nations of the North were able to rapidly adjust to the higher petroleum prices by adopting energy conservation programs and searching for alternative sources of energy.  The underdeveloped nations of the Third World, by virtue of their limited resources, were less in a position to make these kinds of adjustments. As a result, the higher oil prices had a negative impact on the non-oil producing and exporting nations of the Third World (Pichs 2006:154-55).  
 
     The Venezuelan government of Hugo Chávez developed new policies in relation to OPEC.  During the 1970s, although Venezuela had played a central role in the development of OPEC, PDVSA was functioning as a state within a state (see “Petroleum and Venezuela” 10/21/2013), and it tried to avoid OPEC quotas by investing in production outside of Venezuela.  During the neoliberal era, the government of Venezuela had been cooperating with the Washington policy of breaking OPEC by flooding the oil market.  Meanwhile, succumbing to the pressure of the Washington consensus toward the “free market,” OPEC had abandoned control of production and prices in 1985, leading to a period of low oil prices from 1986 through 1998.  In response to this situation, the Chávez government cut back on production, and Chávez visited OPEC leaders, informing them that Venezuela would respect OPEC quotas and asking them to also reduce production.  This produced results, and by the end of 1999, there began a period of higher prices for petroleum (Pichs 2006:157-58, 162; Guevara 2005:24, 36).

      But unlike OPEC nations in the 1970s, the Chávez government invested the petroleum income in the development of Venezuela.  Other nations of OPEC also are beginning to take steps in this direction, in part as a consequence of the impact of the Islamic Revolution. Moreover, the Chávez government sought to develop mutually beneficial social and economic accords with the nations of the South in accordance with the concept of South-South cooperation.  Venezuela sells oil to nations of Latin America and the Caribbean with terms more favorable than those of the international market: ninety-day credit for a payment of 75% of the international market value, with the remaining 25% financed over fifteen years at a fixed rate of 2% annual interest, with payments to begin after two years and with the option of making payments in goods or services, such as rice, corn or maize.  And Venezuela has formed Petrocaribe, dedicated to addressing the energy needs of the nations of the Caribbean (Chavez 2006: 149-51).  
 
       The story of petroleum in Venezuela and the efforts of the Bolivarian Revolution in Venezuela to control the petroleum industry and to resurrect OPEC illustrate an important dimension of today’s Third World revolutions: they seek to control the natural resources of the nation with the goal of promoting the economic and cultural development of the nation and with the intention of cooperating with other Third World nations in mutually beneficial exchanges.   We will be exploring this Third World effort to break the neocolonial relation in future posts.


References

Chávez Frías, Hugo. 2006. La Unidad Latinoamericana. Melbourne: OceanSur.

Guevara, Aleida. 2005. Chávez, Venezuela, and the New Latin America. Melbourne: Ocean Press.

Pichs Madruga, Ramón.  2006. “Petróleo, Energía, and Economía Mundial, 1964-2004” in Libre Comercio y subdesarrollo.  La Habana: Editorial de Ciencias Sociales.


Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, petroleum, oil, Venezuela, OPEC


 

     Venezuela has the largest oil deposits in Latin America and the Caribbean.  Prior to 1960, the governments of Venezuela for the most part granted to foreign oil companies the rights to extract the oil, with terms that were favorable to the oil companies and that undermined the potential to use the petroleum to promote the independent economic development of the nation.  The government of Juan Vicente Gómez, a dictator who ruled from 1908 to 1935, was particularly known for granting favorable terms to Shell, Standard Oil, and Gulf, and for enriching himself and his family and friends as a result of the shares granted to him in exchange.  The Venezuelan petroleum law of 1922, edited by representatives of three US firms, established a separate police force, which prohibited entrance to oil lands by anyone not authorized by the companies.  During the period of the initial penetration by foreign oil companies, indigenous communities were dislodged from their lands, and independent family farmers lost their property (Galeano 2004:218-19; 1997:168).    

      In response to this situation, popular movements demanded greater national control of this natural resource, giving rise after 1960 to what came to be called petroleum nationalism, where the state seeks to maximize its income from the exportation of petroleum.  The era of petroleum nationalism culminated with the nationalization of the petroleum companies in Venezuela in 1976.  A state petroleum company, Petróleos de Venezuela, Sociedad Anónima (PDVSA), was formed.  
 
      Ironically, nationalization had the consequence of creating more autonomy for the petroleum industry and more influence for the international petroleum companies.  Distinct from the nationalization of the petroleum industry in Mexicoin 1938, the nationalization in Venezuela was gradual, and it occurred with the cooperation of the international petroleum companies in Venezuela.  By the time of the nationalization in Venezuela in 1976, the management of the companies was Venezuelan, as a consequence of Venezuelan pressure during the era of petroleum nationalism.  So the nationalization had the effect of changing ownership from international petroleum companies to the Venezuelan state, but the companies continued to be managed by Venezuelans who had been socialized into the norms and values of the international petroleum companies and had internalized the perspective of international capital.  
 
      After nationalization, the Venezuelan state relaxed its oversight of the petroleum companies, believing that the industry was now securely in Venezuelan hands. But the Venezuelan managers did not seek to utilize petroleum income to promote national development.  With the intention of reducing payments  to the Venezuelan state, PDVSA adopted a strategy of channeling surpluses to investments in production and sales, in order to minimize profits and corresponding payments to the state.  PDVSA bought refineries and distributorships in other countries in order to transfer surpluses out of the country, beyond the reach of the Venezuelan state.  An example is CITGO, a Venezuelan owned company in US territory that consisted of eight refineries and 14,000 gas stations.  Yet the Venezuelan state never received any income from CITGO; all of the profits remained in the United States. Hugo Chávez estimated that Venezuela gave to the United States billions of dollars through “the perverse business of the CITGO Company” (Chávez 2006:142, 321).

      PDVSA, therefore, had emerged as a state within the state, with significant autonomy and with limited effective control by the state.  In 1999, Hugo Chávez became President of Venezuela, bought to power by a popular movement in reaction to the neoliberal project.  Chávez sought to reduce the autonomy of PDVSA and to incorporate its resources into a project of national development.  The Chávez government appointed new directors of PDVSA, replacing the directors appointed by previous governments.  With the new leadership of PDVSA, the income to the state from petroleum became significantly higher, and these funds were directed toward various social projects and toward elimination of the foreign debt.  As Chávez has expressed, “We have stopped being a petroleum colony. . . .  We have begun to sow the petroleum, to utilize the petroleum wealth as a lever for social development and for economic development” (Chávez 2006:318-19).  
 
      The measures taken by the Chávez government generated conflict. The US government and the international petroleum industry as well as the Venezuelan petroleum management were opposed, inasmuch as the measures sought to eliminate control of Venezuelan oil by the international petroleum industry.  To some extent, workers in the Venezuelan oil industry were resistant to change, since their wages reflected international levels in the industry, far above the wages earned by workers in other industries in Venezuela.  From the outset, the US government has engaged in a persistent ideological and destabilization campaign against the government of Hugo Chávez and his successor, Nicolas Maduro.

      The story of petroleum in Venezuela illustrates that nationalization in and of itself does not necessarily contribute to the autonomous development of the nation.  State control of the Venezuelan petroleum industry became an effective tool when it was integrated into a program of national development implemented by a government that was brought to power by a popular movement and that was committed to govern in the interests of the popular sectors.  
 
      At the same time, strategies other than nationalization can be effective, such as the formation of joint ventures, cooperatives and self-employment, if implemented as part of a national plan for the autonomous economic and cultural development of the nation, as the case of Cuba illustrates.  So we learn from experience that various forms of property can be developed along the road to true independence, and that each form of property ought to be an intelligent response to the concrete situation in which the nation finds itself.  The key is not the form of property, but the integration of the various forms of property into a plan for autonomous development, implemented by a government that seeks to promote and defend the rights of the majority, struggling to keep at bay those powerful sectors that act aggressively  in pursuit of their particular interests.


Bibliography

Chávez Frías, Hugo. 2006.  La Unidad Latinoamericana. Melbourne: OceanSur.  
 
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.

Guevara, Aleida.  2005.  Chávez, Venezuela, and the New Latin America.  Melbourne: Ocean Press.


Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, petroleum, oil, Venezuela

     In 1970, Eduardo Galeano wrote of petroleum:  “No other magnet attracts foreign capital as much as ‘black gold’ . . . .   Petroleum is the wealth most monopolized in the entire capitalist system.  There are no companies that enjoy the political power that the great petroleum corporations exercise on a universal scale. Standard Oil and Shell lift up and dethrone kings and presidents; they finance palace conspiracies and coups d’état; and they dispose of innumerable generals and ministers; and in all regions and languages, they decide the course of war and peace. . . .  The natural wealth of Venezuela and other Latin American countries with petroleum in the subsoil, objects of assaults and organized plundering, has been converted into the principal instrument of their political servitude and social degradation. This is a long history of exploits and of curses, infamies, and defiance” (Galeano 2004:203-6; 1997:156-59).

      During the twentieth century, the transnational petroleum companies exploited the petroleum of Latin America in an abusive form that did not recognize the right of Latin American governments to control their natural resources and to utilize them for the long-range economic and cultural development of the nation.  The oil companies defied efforts of Latin American governments to apply national labor laws to the foreign petroleum companies operating in their countries.  In addition, the foreign companies drained oil deposits rapidly, without concern for the long-term development of the industry.  And they sold Latin Americans their own oil at prices higher than those for consumers in the United States and Europe.  Any effort by governments of Latin America to control their petroleum resources were greeted with aggressive resistance by the companies and the US government.  
 
     In Uruguay, in response to the history of abuse of petroleum resources by foreign companies, a state-owned company was established in 1931, which was dedicated to the refining and sale of petroleum.  It was the first state-owned refinery in Latin America.  Along with the refining of Uruguayan crude oil, the government contracted with the Soviet Union the purchase of cheap Soviet crude oil for refining in the Uruguayan state-owned refinery.  The oil cartel reacted swiftly and aggressively, threatening to impose an embargo on Uruguayan purchase of crude oil or machinery.  In March 19933, a coup d’état occurred, and the new dictator annulled the right of the state company to monopolize the importation of crude petroleum.  The country eventually became obligated to buy forty percent of its crude oil from Standard, Shell, Atlantic, and Texaco, at prices set by the oil cartel (Galeano 2007:208; 1997:160-61).

      In Mexico, twenty years of foreign ownership of the oil industry had left the country with exhausted fields and antiquated refineries by the 1930s.  In response, Mexican president Lázaro Cárdenas “converted the recuperation of the petroleum industry into a great national cause.” In 1938, he nationalized the foreign companies and formed Petróleos Mexicanos (Pemex), which assumed control of the production and marketing of Mexican petroleum.  The global powers reacted by imposing an international embargo from 1939 to 1942 on Mexican petroleum exports and on the importation of supplies necessary for wells and refining.  The dispute was resolved by the Mexican government paying compensation from 1947 to 1962.  In spite of these penalties, Pemex became a successful company during its first thirty years (Galeano 2007:207).

     Coups d’état, like the one in Uruguay, were common.  From 1930 to 1966, seven coups d’état occurred in Argentina as governments were about to sign a petroleum agreement in which the interests of the international cartel were at stake.  In Peru as well, one year after nationalizing the reserves and refinery of an affiliate of Standard Oil of New Jersey, the nationalist general Alfredo Ovando was overthrown by a military junta (Galeano 2007:210-14; 1996:162-65).  
 
     The war between Bolivia and Paraguay from 1932 to 1935 was provoked by competition between Standard Oil of New Jersey and Shell.  Standard financed the Bolivian Army, and Paraguay was backed by Shell.  Since Paraguay and Bolivia were among the two poorest countries of South America, the war came to be known as “the war of the soldiers without clothes” (Galeano 2007:210-14; 1996:162-65).

     The US government supported the international petroleum companies in their aggressive pursuit of interests in Latin America.  “The
North American government always makes their own the cause of the private petroleum companies” (Galeano 2007:212).  In 1950, the US ambassador in Bolivia, in his report to the White House, expressed pride in his accomplishing the denationalization of Bolivian petroleum industry, which he described as “nationalization in reverse” (Galeano 2007:212-13; 1997:164).

    In our next post, we will discuss the Latin American country that has the largest petroleum reserves, Venezuela.


 References

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.


Key words:  Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, petroleum, oil


 
 

     Since the conquest and peripheralization of vast regions of America by Spain and Portugal in the sixteenth century, the exportation of raw materials to the core has been constant.  But there has been an evolution in the characteristics of the peripheral role.  During the sixteenth century, gold and silver were central, and their exportation played an important role in the economic development of northwestern Europe. During the sixteenth through the nineteenth centuries, agricultural products emerged as the most important exportations: sugar, indigo, coffee, and rubber.  During the twentieth century, sugar, coffee and bananas continued to be significant, but petroleum and mineral resources also came to be essential exportations, integrally tied to the technological development of the United States

      In his description of the open veins of Latin America, Galeano describes the increasing dependency of the United States on the petroleum and minerals of Latin America during the twentieth century, including copper, tin, iron, bauxite, magnesium, and nickel.  Given their importance in the development of the economic and military power of the United States, Galeano refers to them as the “underground sources of power” (2004:175-221).  Writing in 1970, he notes that petroleum, copper, zinc, bauxite, iron, manganese, nickel, and tungsten were necessary for the US Armed Forces, which at the time were engaged in the Vietnam War.  He writes:  “The growing dependency with respect to foreign supplies causes a growing identification of the interests of North American capitalists in Latin America with the national security of the United States.  The internal stability of the world’s greatest power appears intimately linked to North American investments south of the Río Grande.  Nearly half of these investments are dedicated to the extraction of petroleum and the exploitation of mineral wealth, ‘indispensable for the economy of the United States as much in peace as in war’” (2004:175-76; 1997:134-35; quoting Edwin Lieuwen).  By the 1960s, Latin American governments had granted generous concessions to US companies providing access to: iron, manganese, and radioactive elements in Brazil; lead, silver, and zinc in Bolivia; petroleum in Venezuela; copper in Chile; nickel and manganese in Cuba (prior to 1959); and bauxite and manganese in British Guiana (Galeano 2004:175-81; 1997:135-39).

      We will be exploring in subsequent posts the efforts of the United States to ensure its access to Latin American petroleum and to copper in Chile, tin in Bolivia, and iron in Venezuela and Brazil.  


References

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.


Key words:  Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, colonial, neocolonial, blog Third World perspective, open veins of Latin America, Galeano, petroleum, minerals