We have seen that the European conquest of the world from 1492 to 1914 was penetrating, transforming the conquered regions into peripheral zones of the developing world-economy, converting them into suppliers of raw materials and cheap labor and purchasers of the surplus goods of the conquering powers.  The European project of global domination established the basic structures of the capitalist world-economy, characterized by a geographical division of labor between core and periphery.  (See various posts on the origin and development of the world-system).

       The flow of raw materials from the periphery to the core can be seen in the case of Latin America and the Caribbean.  From the sixteenth century until the emergence of the structural crisis of the world-system in the 1970s, the natural resources and human labor of Latin America and the Caribbean were used to supply raw materials to the nations of the core, including: gold, silver, sugar, indigo, coffee, rubber, bananas, petroleum, copper, tin, and iron.  Thus, Latin America was characterized by dependent capitalist development, undermining possibilities for an autonomous economic development characterized by the development of industry, strong and independent states, the protection of the social and economic rights of the people, and an expanding middle class.

     There are powerful actors in the world and in Latin America and the Caribbean who have had particular interests in the development of dependent capitalism in the region: the Latin American estate bourgeoisie, owners of plantations and haciendas that have used cheap and often forced labor to sell agricultural products to the core; international owners of plantations that have extracted agricultural products; international and national owners of mines that have extracted minerals for exportation to the core; and national political actors who have been supported by and have represented powerful national and international economic interests.  In contrast to these interests, an emerging industrial bourgeoisie has had an interest in autonomous economic development, since this would entail an expansion of industry.  And the popular sectors, including peasants, workers and the middle class, have had an interest in autonomous economic development, since this would involve a strong domestic market for a diversity of agricultural products, diversity in urban employment, and the protection of social and economic rights.  

      Thus, dependent capitalism in Latin America and the Caribbean unavoidably has been characterized by class conflict, pitting the estate bourgeoisie, their international allies, and their political representatives against an emerging industrial bourgeoisie and the popular sectors. For the most part, the former were able to maintain control of the political process and protect their economic interests from the sixteenth century until the emergence of the structural crisis of the world-system in the 1970s.

       In nineteen posts published in 2013, I describe the flow of raw materials from Latin America and the Caribbean, and the interest of national and international actors in establishing and sustaining dependent capitalism:
“The open veins of Latin America: Gold and silver” 8/16/2013; 
“Contradictions in colonial Latin America” 8/22/2013; 
“Semi-colonial Latin American republics” 8/23/2013; 
“Free trade in the 19th century” 8/26/2013; 
“The punishment of independent Paraguay” 8/27/2013; 
“The open veins of Latin America: Sugar” 8/28/2013; 
“Indigo, coffee, and liberal reform” 9/2/2013; 
“The Open Veins of Latin America: Coffee” 9/4/2013; 
“Liberal reform in 19th century Honduras” 9/5/2013; 
“The open veins of Latin America: Rubber” 9/6/2013; 
“The open veins of Latin America: Coffee, Part II” 10/14/2013; 
“The Open Veins of Latin America: Bananas” 10/15/2013; 
“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; 
“Tin in Bolivia” 10/23/2013; 
“Iron in Venezuela and Brazil” 10/24/2013; and
“The natural resources of the periphery” 10/25/2013.

To find the posts, in the category Latin American History, scroll down.

     In the period 1918 to 1979, a project of developmentalism prevailed in most of Latin America and the Caribbean.  This was forged by an alliance between the industrial bourgeoisie and the popular sectors, and it enabled a degree of industrial development and the protection of social and economic rights.  Developmentalism was a reformist project that did not negate the interests of the estate bourgeoisie or the international bourgeoisie; indeed, the international bourgeoisie cooperated with the project, seeing it as mechanism of social control. During this time, the dream of an autonomous economic project was present in popular hopes throughout the region, inspired by the triumph of revolutions in Cuba, Chile and Nicaragua.

     In the 1970s, the world system entered a structural crisis, prompting a turn by the international bourgeoisie to neoliberalism, displacing developmentalism.  Inasmuch as the neoliberal project undermined Latin American and Caribbean industry, it represented an abandonment of the twentieth century alliance between the international bourgeoisie and the national industrial bourgeoisies of the Latin American and Caribbean nations.  And it represented a reversal of the modest concession that had been made to the popular sectors during the developmentalist project, giving rise to popular rejection of neoliberalism and a renewal of the popular movements beginning in 1994, creating a new political reality in Latin America.

       For blog posts on the structural crisis of the world-system, see World-System Crisis.  For the new political reality in Latin America since 1994, see blog posts on Latin American and Caribbean unity, South-South cooperation, Bolivia and Evo Morales, and Rafael Correa and the Citizen Revolution in Ecuador as well as a reading on Chávez and the Bolivarian Revolution in Venezuela.  

Posted August 16, 2013

So wrote Uruguayan writer Eduardo Galeano in 1970, giving classic expression to an image that portrays the relation between Latin America and the centers of global power.  For Galeano, it was a question of the relation between the development of some nations and the underdevelopment of others:

     The exploitation of the natural resources of Latin America during the sixteenth and seventeenth centuries was principally an exploitation of gold and silver, which was found in great quantities in the Mexican plateau and in high plateaus of the Andes, and in lesser quantities in the riverbeds of the Caribbean.  The Spanish conquest of the Aztec and Inca empires and the Caribbean peoples established access to the minerals.  

     The gold and silver made possible the economic development of Europe.  “The metals robbed from the new colonial dominions stimulated European economic development, and it even can be said that they made it possible” (Galeano 2004:40-41; 1997:23).  But the gold and silver stimulated the development of northwestern Europe, not the development of Spain, because the Spanish purchased manufactured goods from northwestern Europe.  As Galeano expresses it, “The Spanish had the cow, but it was others who drank the milk” (2004:41; 1997:23).  “Neither Spain nor Portugal received the benefits of the sweeping advance of capitalist mercantilism, although their colonies were those that, in substantial measure, supplied the gold and silver that fueled this expansion” (Galeano 2004:47; 1997:29).

     Gold also was discovered by the Portuguese in its colony of Brazil, and they developed gold mines first in Minas Gerais and later and more extensively in Ouro Preto. During the course of the eighteenth century, the Portuguese colony exported more gold than the Spanish colonies had exported during the previous two centuries.  This was accomplished through imposition of a harsh system of slavery on indigenous and imported African populations.  As had occurred with the Spanish, this process promoted the development of British manufacturing rather than that of Portugal, as the silver was used by the Portuguese to purchase manufactured goods from the English, and in addition, the colony of Brazil was opened to British manufacturing (Galeano 2004:73-81; 1997:51-58).

     The Open Veins of Latin America is a classic work that formulates the role of conquest and colonialism in promoting the development of the West and the underdevelopment of the Third World, as understood from the Third World perspective.  In 2008, Venezuelan President Hugo Chávez gave a copy of the book to newly inaugurated US president Barack Obama.  It was a significant gesture by Chávez, offered at a time in which some had hope that Obama would take US policy in a new direction.  The gesture was an indication of the importance that Latin American revolutionary leaders give to intellectual work in general, and this book in particular, and it also symbolized the enduring hope in Latin America for a future time of cooperation between North and South.

     Eduardo Galeano was a young man when he wrote The Open Veins of Latin America.  His recent articles can be found at Cubadebate:  http://www.cubadebate.cu/categoria/autores/eduardo-galeano/


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, state, gold, silver, Galeano

Posted August 22, 2013

      The expansion of the world-economy after 1750 led to prosperity for the Latin American agricultural and cattle sectors that were tied to the mining industry, giving the Spanish colonies the capacity to export other raw materials in addition to minerals.  Conceding to demands from these sectors, the Spanish government announced reforms in 1778 and 1782 that legalized exports to Spanish markets of sugar, tobacco, cocoa, and leather.  But Spain was lagging behind Northwestern Europe in manufacturing capacity, levels of capital, and standard of living, and it therefore was increasingly unable to adequately supply manufactured goods and investment capital to Latin America and to provide sufficient markets for Latin American raw materials exports.  So the Latin American agricultural and cattle sectors had interest in direct commercial relations with other core nations.  Spain was obstructing the development of such commerce, and it was imposing burdensome taxes in order to sustain the colonial empire (Regalado 2007:104-6; Weaver 1994; Frank 1979:164-71).

     So there emerged conflicts of interest at the end of the eighteenth century, as has been explained by the Cuban scholar Roberto Regalado.  On the one hand, there was an emerging conflict between the Latin American elite and Spain.  The Latin American elite had an interest in free trade with European and American markets, whereas Spain (and Spaniards in America) had an interest in maintaining the monopoly of the Spanish crown over trade with the Spanish colonies.  At the same time, there was emerging another conflict of interest between the Latin American elite and the popular sectors.  The former had an interest in maintaining its economic and social control of the colony, whereas the latter had an interest in fundamental changes in the colonial system of class and ethnic stratification (Regalado 2007:106-7)

     By the early nineteenth century, these conflicts of interest gave rise to independence movements in Latin America.  The movements were formed by planters, farmers, small and medium-sized producers, merchants, intellectuals, and artisans; and they were influenced by the Enlightenment, American (U.S.) Revolution, the French Revolution, and the Haitian Revolution.  As a result of the two simultaneous conflicts of interest, there were in the Latin American independence movement two ideological tendencies that Regalado has called oligarchic and progressive.  The oligarchic orientation sought to attain independence while maintaining the socioeconomic status quo, and this approach was favored by the elite participants in the independence movement.  On the other hand, the popular sectors had a progressive orientation, envisioning independence from Spain as establishing the possibility for fundamental socioeconomic change, including the abolition of slavery as well as other measures in defense of the poor (2007:107-8). 

     The independence movements resulted in the establishment of independent Latin American republics, but the new republics were not truly independent, as we will discuss in the next post.

References

Frank, Andre Gunder.  1979.  Dependent Accumulation and Underdevelopment.  New York:  Monthly Review Press.

Regalado, Roberto.  2007.  Latin America at the Crossroads: Domination, Crisis, Popular Movements, and Political Alternatives.  New York: Ocean Press.

Weaver, Frederick Stirton.  1994.  Inside the Volcano:  The History and Political Economy of Central America.  Boulder:  Westview 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, capitalism, peripheralization

Posted August 23, 2013

     To be genuinely independent, the new American republics of the early nineteenth century would have had to follow an autonomous road to economic and social development, one that was not shaped by the interests of the core powers.  This would have required that the Latin American republics unify politically and integrate economically, in order that they would have the political and the economic capacity to resist the efforts at penetration by the world´s most advanced economies.  Such unity and integration was advocated by Simón Bolívar, the leading figure of the progressive tendency in the South American independence struggle.  However, it was not possible to accomplish the union and integration envisioned by Bolívar, because, as Cuban scholar Roberto Regalado has observed, “the Americas lacked a level of capitalist economic development and social structure that could serve as a basis for their integration” (Regalado 2007:108), that is, they lacked sufficient manufacturing capacity and capital as well as finance structures and a transportation infrastructure oriented toward regional integration.

      The global powers of the era did not immediately penetrate Latin America, due to limitations in the availability of capital, so the new republics enjoyed a brief period of true independence from 1825 to 1850.  British economic penetration began after 1850 and grew considerably after 1880.  British domination of Latin American economies continued until the Great Depression of the 1930s, when British capital was displaced by that of the United States.  U.S. economic penetration of Mexico, Central America, the Caribbean, and South America emerged as a policy goal after 1850, and it was effectively accomplished by the 1930s (Regalado 2007:111-18).

     The Latin American republics of the nineteenth century were in some respects neocolonies of Great Britain.  However, the Cuban scholar Jesus Arboleya considers them to have been semi-colonies rather than neocolonies, because not all of the characteristics of neocolonial domination were present.  The capitalist world-economy had not yet arrived to the stage of finance capital, and thus British penetration was commercial rather than financial, involving an exchange of manufactured goods for raw materials without control of banking and financial institutions.  In addition, competition from the United States, also seeking economic penetration of Latin America, prevented Great Britain from establishing full economic control (Arboleya 2008:8-9, 42).   In the twentieth century, the United States would establish neocolonial domination in all of its aspects with respect to Latin America, forging an exemplary neocolonial system, a theme that we will explore in future posts.

     The emergence of the Latin American republics as semi-colonies during the nineteenth century was a consequence of political action taken by key actors that had an interest in the preservation of the core-peripheral relation: the Latin American estate bourgeoisie, whose raw materials products were sent to the core; Latin American merchants tied to the core-peripheral trade; and the industrialized and industrializing nations of the core that utilized peripheral raw materials, especially Britain and the United States.  The embryonic Latin American urban industrial bourgeoisie, which had an interest in an autonomous development that would strengthen the domestic market, lost out (Regalado 1997:109-10).

     Among the losers also were the popular classes and sectors.  The core-peripheral relation depended on low prices for Latin American exports based on low-waged labor.  A social and economic transformation that would benefit the popular classes could not occur without a rupture with the peripheral role, consciousness of which would general anti-neocolonial popular struggles during the twentieth century.

     The Latin American semi-colonial republics of the nineteenth century came to be characterized by military dictatorships or authoritarian civilian governments, supported directly or indirectly by the Latin American estate bourgeoisie.  The military provided to some extent an escape valve, in that it was a mechanism for upward mobility for the impoverished rural masses.  But the mechanisms of force used by the military were instrumental in maintaining control over the popular sectors, whose basic rights and needs were denied (Regalado 2007:109-10). 


References

Arboleya, Jesús.  2008.  La Revolución del Otro Mundo: Un análisis histórico de la Revolución Cubana.  La Habana: Editorial de Ciencias Sociales.

Regalado, Roberto.  2007.  Latin America at the Crossroads: Domination, Crisis, Popular Movements, and Political Alternatives.  New York: 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, capitalism, peripheralization, estate bourgeoisie, military dictatorship

Posted August 26, 2013

     The penetration of foreign capital in Latin America during the semi-colonial republics of the nineteenth century destroyed what had been, prior to independence, an emerging industrial development, which had been developing in spite of the limitations imposed by Spanish and Portuguese colonial rule.  At the beginning of the nineteenth century, a significant textile manufacturing industry had developed in Mexico, Peru, Chile, Brazil, Bolivia, and Argentina.  But it was newer than British textile manufacturing, and its transportation infrastructure was not sufficiently developed.  It therefore could not compete with British manufacturing. Under the control of the landlords and the merchants, the newly independent Latin American republics adopted a policy of free trade, rather than protecting infant Latin American industry through tariffs and other mechanisms (Galeano 1997:173-81).

      Thus the economic relation that emerged between Britain and the Latin American republics in the nineteenth century was a core-peripheral relation.  Britain exported textiles and other manufactured goods to Latin America and imported cattle products from Argentina, guano and nitrates from Peru, copper from Chile, sugar from Cuba, and coffee from Brazil (Galeano 1997:174, 177).  This core-peripheral relation benefitted the Latin American estate bourgeoisie, because it provided markets for the Latin American raw materials, and because it was an arrangement that provided for the landlords cheaper manufactured goods than would be possible under protected national industry.  And it expanded business for merchants connected to the core-peripheral trade.

       But the core-peripheral relation undermined Latin American industry, and it thus weakened the emerging urban industrial bourgeoisie, which was in an embryo stage of development and did not have sufficient influence over political structures to defend its interests. Ultimately, for a project of industrialization to be successful, the domestic market would have to be expanded, and this would require raising the standard of living of the superexploited rural masses, which formed the majority of the population.  However, such an improvement in the standard of living of the rural peasantry and the working class would undermine the position of the Latin American estate bourgeoisie, whose exportation of raw materials was based on an international standard of superexploited low wage labor.  The Latin American estate bourgeoisie therefore always has been opposed to the development of a “genuine national capitalism” (Galeano 1997:185).

       The core-peripheral relation and free trade policies were integrally connected.  Free trade rejects tariff protection of national industry.  The defenders of free trade claim to be promoting a free market, but they ignore a fundamental fact: the prevailing social and economic conditions of underdevelopment and mass poverty were not established by a free market, but by brute force, in the form of conquest and forced labor.  In the context of these social and economic conditions, a newly independent government that seeks true independence would have to act decisively in the economy, seeking to promote autonomous industrial development and an improvement in the standard of living of the masses.  The protection of infant national industry would simply be one measure in a comprehensive plan for autonomous national development.  But free trade negates this possibility, and it promoted the deepening of the core-peripheral relation during the semi-colonial republics of the nineteenth century

       The free trade policies of the nineteenth century did not emerge from a political vacuum.  They were promoted by particular social classes, namely, the landed estate bourgeoisie and successful merchants of the periphery, which acted in alliance with the core.  These classes defended their particular interests at the expense of the well-being of the nation as a whole in the long term.  They disseminated ideologies that confused and divided the people.  It could be said of them that their conduct was self-interested and unpatriotic.  Indeed, such would be said of them and their contemporary kindred spirits by the popular anti-neocolonial movements that emerged during the twentieth century and that continue today.


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.


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, capitalism, peripheralization, estate bourgeoisie, free trade

Posted August 27, 2013

    Paraguay was an exception to the nineteenth century Latin American norm of the retardation of national industry by the Latin American estate bourgeoisie and merchants in alliance with the global powers.  In Paraguay, the government of Gaspar Rodriguez de Francia (1814-1840) appropriated rural land, thus taking power away from the estate bourgeoisie and the merchants.  The government of Francia and two successive governments successfully pursued a policy of independent economic development, investing economic surplus from agricultural production in the development of industry.  By 1865, “Paraguay had telegraphs, a railroad, and numerous factories manufacturing construction materials, textiles, linens, ponchos, paper and ink, crockery, and gunpowder….  From 1850 on, the Ibycui foundry made guns, mortars, and ammunition of all calibers; the arsenal in Asunción produced bronze cannon, howitzers, and ammunition.  The steel industry, like all other essential economic activities, belonged to the state.  The country had a merchant fleet, and the Asunción shipyard turned out many of the ships flying the Paraguayan flag….  The state virtually monopolized foreign trade….  The trade balance produced a big surplus.  With a strong and stable currency, Paraguay was wealthy enough to carry out great public works without recourse to foreign capital.  It did not owe one penny abroad, yet was able to maintain the best army in South America” (Galeano 1997:189-90).

     But from the point of view of British commerce, the only truly independent nation in Latin America in the nineteenth century was a “dangerous example” (Galeano 1997:191) that could demonstrate to its Latin American neighbors an alternative road.  Paraguay was destroyed in a genocidal war of 1865 to 1870 conducted by a Triple Alliance consisting of Brazil, Uruguay and Argentina and financed by British bankers.  By 1870, the population of Paraguay was one-sixth what it had been in 1865 and significant parts of its territory were ceded to the members of the Triple Alliance. 

     The country was subsequently turned into a typical example of foreign domination and free trade.  “In defeated Paraguay it was not only the population and great chunks of territory that disappeared, but customs tariffs, foundries, rivers closed to free trade, and economic independence.  Within its shrunken frontiers, the conquerors implanted free trade and the lafifundio.  Everything was looted and everything was sold: land and forests, mines, yerba maté farms, school buildings.  Successive puppet governments were installed in Asunción by the occupation forces….  National industry never came back to life” (Galeano 1997:194). 

      But nineteenth century independent Paraguay has come back to life in spirit, symbolized by the new efforts at Latin American autonomy being forged today by Cuba, Venezuela, Bolivia and Ecuador, with the support and participation of Brazil, Argentina, Uruguay, and Nicaragua.  Similar to the mobilized effort to destroy independent Paraguay in the nineteenth century, today the neocolonial power seeks to destroy the new manifestations of Latin American autonomy.  But nowadays, the world-system is suffering from a profound systemic global crisis, the neocolonial power is no longer the dominant power that it once was, and the anti-neocolonial movements are more advanced; the destruction of the independence projects forged by the peoples of the world is more difficult.

 
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.


Key words: Third World, revolution, colonialism, neocolonialism, imperialism, democracy, national liberation, sovereignty, self-determination, independence, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, capitalism, peripheralization, Paraguay

Posted August 28, 2013

     During the stages of the origin and development and consolidation of the world-economy (1492-1815), sugar was developed as an important raw material for export.  “The search for gold and silver was, without doubt, the central motor of the conquest.  But on his second voyage, Christopher Columbus brought the first roots of sugar cane from the Canary Islands, and he planted them in lands that today are located in the Dominican Republic. . . .  In a little less than three centuries after the discovery of America, there was for European commerce no agricultural product more important than the sugar cultivated in these lands"  (Galeano 2004:83; 1997:59).

     The Portuguese colony of Brazil was the first to develop sugar production on a large scale, developing it on the coastal northeastern region of the colony.  By the middle of the seventeenth century, Brazil was the principal producer of sugar in the world, and it was the largest market for African slaves.  The financing of sugar production in Brazil was undertaken by Dutch capital, and Dutch companies owned the sugar mills and managed the importation of African slaves (Galeano 2004:85-88).

      The production of sugar in the Caribbean islands became so extensive that they came to be known as the “Sugar Islands.” Barbados was the first Caribbean island to establish sugar plantations on a large scale, and the Dutch were the first to develop them on the small British colony.  The sugar plantations on the island displaced the production of a variety of agricultural and animal products by small-scale producers; and it devastated the dense forests and exhausted the soil.  Sugar production also was developed on the Caribbean islands of the Leeward Islands, Trinidad-Tobago, Guadalupe, Puerto Rico, Haiti, Santo Domingo, Cuba, and Jamaica as well as Guyana on the South American coast  (Galeano 2004:90-91).

     By the second half of the eighteenth century, one of the leading producers of sugar was the French colony of Haiti.  In 1791, a slave revolution erupted.  The insurrectionist slaves pushed the French army to the sea and burned the sugar plantations, leaving sugar production paralyzed.  The newly independent nation, under the leadership of insurrectionist General Toussaint-Louverture, immediately suffered a blockade imposed by an international coalition of global powers, facilitating the end of the revolutionary process launched by the slaves, although the nation remained formally independent (Galeano 2004:91-92).

     The destruction of sugar production in Haiti led to the rapid expansion of sugar production in Cuba, which became the world´s leading sugar producer.  The expansion of sugar production in Cuba led to an expansion in the importation of slaves and the displacement of other land use patterns, including production by small farmers of tobacco and vegetable products.  The extensive sugar plantations reduced the forests and the fertility of the soil (Galeano 2004:92-95).

      Sugar production promoted development of the nations of the core, where it was marketed and consumed, and underdevelopment for Brazil and the Caribbean, where it was cultivated.  Galeano writes:  “Sugar not only produced dwarfs.  It also produced giants, or at least, it contributed intensely to the development of giants.  The sugar of the Latin American tropics gave great impulse to the accumulation of capital for the industrial development of England, France, Holland, and also the United States, at the same time that it mutilated the economies of northeastern Brazil and the Caribbean islands and sealed the ruin of the history of Africa” (2004:106).

     As Augusto Cochin has written, “The history of a grain of sugar is above all a lesson in political economy, politics, and morality” (quoted in Galeano 2004:106).


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, independence, socialism, Marxism, Leninism, Cuba, Latin America, world-system, world-economy, development, underdevelopment, capitalism, peripheralization, open veins of Latin America, Galeano, sugar

Posted September 2, 2013

     Prior to 1850, indigo was used for the production of blue dye for textile manufacturing.  Indigo haciendas were developed in Central America during the second stage (1640-1815) of the world-economy.  The haciendas were characterized by mixed economic activities, including small parcels of land for subsistence production for indigenous and ladino families.  In some cases, labor on the haciendas was "voluntary," as families looked for some measure of protection in the aftermath of the sixteenth century conquest.  In other cases, the labor was coerced, utilizing strategies such as labor tributes imposed on indigenous villages and debt peonage.  The indigo haciendas were developed throughout Central America, but they were particularly concentrated in El Salvador.  

     Not all of the land of Central America was devoted to indigo production.  A good proportion of the land in Central America continued to be under the ownership of indigenous villages during the seventeenth and eighteenth centuries.  In the indigenous systems, the land was communally owned by the village as a whole.  The land was distributed to families, to use but not to own, on the basis of need.  In addition to indigo haciendas and indigenous villages, other land use patterns existed.  In some areas of Central America, cattle ranching for the export of hides and leather emerged.  Also, silver mines were developed in the mountains of Western Honduras, using a combination of voluntary labor, indigenous forced labor, and African slaves.

     By 1850, the German chemical industry developed synthetic means for producing dyes that were less expensive, thus causing the total collapse of the market for indigo.  The Central American elite advocated utilizing strong state action to modernize the Central American economy, so that it could more effectively participate in the peripheral function of the expanding global economy.  Their philosophy, which came to be known as liberalism, became the dominant political philosophy in nineteenth century Central America.  Liberals modernized the economy by taking land away from the Church and the indigenous villages, both of which had used land to produce a variety of products consumed locally rather than to develop a raw materials production economy oriented to markets in the core of the world-economy.  Liberals developed ideas such as the secularization of society, the separation of church and state, and general notions of progress to justify these actions against the Church and the indigenous villages.  Liberals were particularly effective in implementing their policies beginning in the 1870s.  There emerged coffee plantations under Central American ownership and banana plantations and silver mines under U.S. ownership, so that by 1913, coffee comprised 63% of Central American exports; bananas, 18%; and metals, 10%.  Thirteen products were exported from Central America in 1913, and all were raw materials destined to the core. 

     The conversion of the land from indigo haciendas to coffee plantations deepened and expanded the peripheralization of Central America.  Multi-purpose haciendas were converted into single-product plantations, and land previously functioning beyond the structures of the world-economy was transformed to the peripheral role.

     Thus the collapse of the indigo market provoked a liberal reform that increased underdevelopment and poverty in Central America by consolidating its peripheral role, a process facilitated by the decisive action of the Central American elite, which protected its particular interests, sacrificing the economic and social development of Central America in the long run.  The Central American elite formulated and disseminated ideological distortions which confused and divided the people, and which functioned to hide the true nature of its conduct.


References

Booth, John A. and Thomas W. Walker.  1993.  Understanding Central America, Second Edition.  Boulder:  Westview 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.

Weaver, Frederick Stirton.  1994.  Inside the Volcano:  The History and Political Economy of Central America.  Boulder:  Westview 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, state, indigo, coffee, silver, cattle, open veins of Latin America, Galeano

Posted September 4, 2013

     In his classic work, The Open Veins of Latin America, Eduardo Galeano comments on the impact of the liberal reforms and the development of coffee production in Central America.  “As everywhere, the cultivation of coffee discouraged, in its expansion without limit, the cultivation of food destined for local markets.  These countries as well were condemned to suffer a chronic scarcity of rice, beans, maize, wheat, and beef.  A miserable agriculture of subsistence scarcely survived, in high and broken lands where the plantations had corralled the indigenous population, having appropriated the lower lands of greater fertility.  In the mountains, cultivating in miniscule parcels the maize and beans necessary to survive, the indigenous people lived a part of the year providing labor, during the harvests, to the plantations.  They are the labor reserve of the world market.  The situation has not changed: the plantation and the small parcel of land constitute together the unity of a system that is based upon the ruthless exploitation of indigenous labor” (2004:140-41; 1997:106).

     In the case of El Salvador, with the expansion of the global market for coffee, the elite converted their indigo haciendas into coffee plantations in the latter half of the nineteenth century.  In addition, the Liberal government acted to ensure that more lands would become available for coffee production.  In the 1870s and 1880s, indigenous communal ownership was abolished, and much of this land was converted into coffee plantations.  Many of the new plantation owners were foreign, but they married into and merged with the traditional elite of indigo estate owners to form a single class of coffee plantation owners.  Due to the population density, the acquisition of indigenous land by coffee plantations created many landless people.  The desperate circumstances of the people made unnecessary the use of coercive labor measures.

      In Guatemala, the Liberal government abolished indigenous communal ownership of land in the 1870s, paving the way for the acquisition of indigenous land by individuals seeking to develop coffee plantations.  By displacing indigenous people from their land, the government was helping to make labor available for the new plantations.  The government also made labor available by rounding up people and requiring them to work at low wages on public works projects (such as roads and buildings) and on privately owned plantations.  The government also had military conscription, and exemption from military service was granted to persons in debt to a landholder, thus stimulating a system of labor based on debt peonage. 

     In Nicaragua, coffee emerged as the most important export activity in the second half of the nineteenth century.  However, Nicaragua also had significant mining activity in the North and East and cattle ranches and sugar plantations in the South.  Thus Nicaragua was characterized by competing elites with somewhat different interests, giving rise to political conflict within the elite class.  Moreover, due to the low density of the indigenous population, elites in all sectors had difficulty acquiring necessary labor, in spite of the efforts of the liberal state, which utilized measures of labor coercion common in Central America, such as alienation of indigenous communal land and debt peonage.

      Coffee production also was developed in Brazil during the nineteenth century, utilizing both slave labor and European immigrant labor.  After the abolition of slavery in 1888, a system that combined feudal-like servitude with salaried work was developed and continued to exist in the twentieth century.  The land in the Brazilian river valley of Paraíba “was rapidly annihilated by this mortal plant that, cultivated in a destructive system, left in its wake devastated forests, exhausted natural reserves, and general decadence” (Galeano 2004:129-30; 1999:97).

      Like sugar, coffee illustrates fundamental structures of the world system:  forced labor in the periphery; the production in the periphery of raw materials for export; and peripheral elites that act decisively to promote its particular interests, without concern for the consequences for the nation.  These structures promote underdevelopment and poverty in the periphery and contribute to the development of the core.

      The semi-colonial Latin American republics of the nineteenth century would evolve in the twentieth century to a more sophisticated form of domination: neocolonialism.  And neocolonial structures of domination would give rise to popular anti-neocolonial movements, such as the Frente Farabundo Martí de Liberación Nacional (FMLN) in El Salvador and the Frente Sandinista de Liberación Nacional (FSLN) in Nicaragua.  The Latin American popular anti-neocolonial movements today have reached their most advanced stage, as we will discuss in future posts.

 
References

Booth, John A. and Thomas W. Walker.  1993.  Understanding Central America, Second Edition.  Boulder:  Westview 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.

Weaver, Frederick Stirton.  1994.  Inside the Volcano:  The History and Political Economy of Central America.  Boulder:  Westview 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, state, coffee, open veins of Latin America, Galeano

Posted September 5, 2013

​     In the case of Honduras, the central figure in the liberal reform was Marco Aurelio Soto, who became chief of state in 1876.  The Soto government used the state apparatus to remove obstacles to economic development and to promote sustained capitalist development, especially the development of mining and agricultural production for export.  Obsolete Spanish laws, incompatible with capitalist economic development, were replaced with new laws that stimulated credit, agriculture, commerce, and industry and which encouraged foreign investment.

     The Soto government adopted a number of policies to promote the production of coffee, sugar, indigo, and cocoa for export.  An 1877 law granted free land to agricultural producers.  According to the law, enterprisers wanting to form a plantation on national lands were able to solicit the government to obtain free title to the land, with the size of the grant to be judged according to the importance of the enterprise.  In regard to common lands of villages, which were legacies of pre-conquest Native American societies, villages were required to sell or lease any land not being cultivated permanently.  In addition, the law exempted agricultural producers from payment of taxes on tools, machinery, fertilizer, seed, and housing construction materials.  It defined an agricultural producer as someone who had enclosed land with a drainage system and who cultivated at least five manzanas of coffee, ten of sugar, eight of indigo, or eight of cocoa.  In order to facilitate the sale of these products in the world market, the government constructed systems of transportation and communication.  Moreover, the Soto government took measures to ensure the availability of cheap labor on agricultural plantations:  it forced the rural masses to work by requiring villages to provide day laborers to agricultural plantations.  In order to ensure control over the rural population and the coerced labor force, the government modernized the army and increased its size.

     As a result of liberal policies, Honduras experienced a tremendous growth in the production of coffee in the 1870s and 1880s. 

     The liberal reform also facilitated a revival of mining activity in Honduras, which had declined after an initial growth during the sixteenth and seventeenth centuries.  The 1880 constitution eliminated restrictions that had prohibited foreigners from owning and exploiting mines.  In addition, concessions and privileges to national and foreign companies were granted.  These included free rights of exploitation of silver, gold, copper and other minerals; exemptions from taxes and tariffs on machinery, equipment, and any material necessary for the exploitation of the mines; the free use of wood and water on national and common lands; the construction of highways; and coerced labor that villages were mandated by law to provide.  As a result of these policies, mining exports comprised fifty-five percent of Honduran exports during the 1880s, with silver being the most important.  By 1888-89, Honduras had become the most important exporter of minerals in the region.  There were 300 silver, gold, lead, and copper mines in Honduras, with silver being the most important.  The silver mining companies were almost entirely North American owned.  In the 1890s, the international market for silver declined, due to the fact that most countries abandoned silver as a base for the monetary system.  This decline in the world market, in conjunction with the relative inaccessibility of the mines due to the undeveloped transportation system and the mountainous terrain, led to a decline in the production of silver, such that by 1900 it virtually came to an end.

      The liberal reform in Honduras at the end of the nineteenth illustrates what would become a fundamental characteristic of peripheral and semi-peripheral regions in the neocolonial world-system of the twentieth century: a government policy of attracting foreign investment by giving away the natural resources of the country.  This policy was not only demanded by the core, but it also was actively supported by the peripheral elite, which took decisive action in defense of its particular interests, at the expense of the interests of the nation.  The anti-neocolonial Third World movements of the twentieth century would seek to end this give-away of natural resources, and they would seek to develop policies that protect the natural and human resources of the country from the avaricious forces of the core, seeking to promote the true independence and the economic and social development of the nation.


Bibliography

Booth, John A. and Thomas W. Walker.  1993.  Understanding Central America, Second Edition.  Boulder:  Westview Press.

Meza, Victor.  1982.  Honduras: La Evolución de la Crisis.  Tegucigalpa: Editorial Universitaria, Universidad Nacional Autónoma de Honduras.

Molina Chocano, Guillermo. 1976.  Estado Liberal y Desarrollo Capitalista en Honduras.  Tegucigalpa: Banco Central de Honduras.

Murga Frassinetti, Antonio.  1978.  Enclave y Sociedad en Honduras.  Tegucigalpa: Editorial Universitaria, Universidad Nacional Autónoma de Honduras.

Weaver, Frederick Stirton.  1994.  Inside the Volcano:  The History and Political Economy of Central America.  Boulder:  Westview 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, state, coffee, silver, open veins of Latin America, Galeano, Honduras, liberalism