A rather damning chronicle of the way that Latin America was systematically exploited throughout its colonial history and into the modern era.
In 1920…Cuba beat the world record in per capita export – even surpassing England – and had Latin America’s highest per capita income. But in December of that year the price fell…and a crisis of hurricane force descended in 1921…The 1921 disaster had been brought on by the fall in sugar prices on the U.S. market, and from the United States came a prompt credit of $50 million. ON the heels of the credit came General Enoch Crowder who, under the pretext of controlling the use of the funds, became Cuba’s de facto governor (69-70)
The above is part of a discussion of how enforced sugar monoculture ruined Cuba, (one of the richest places in agricultural resources in the Western hemisphere.) Even when the price of sugar was high, most of the people still lived in abject poverty. Contrast with the state of affairs after the revolution:
The Revolution proceeded to turn its promises of social justice into solid facts. It built 170 new hospitals and as many polyclinics, and made medical care free. It multiplied by three the number of students enrolled at all levels and also made education free…but now that everyone has education and shoes, necessities multiply geometrically and production can only grow arithmetically…The essential cause of scarcity is the new abundance of consumers: the country now belongs to everyone, consumption is by all, not just a few…The Revolution is forced to sleep with its eyes open, and in economic terms this also costs dearly. Constantly harassed by invasion and sabotage, it does not fall because – strange dictatorship! – it is defended by a people in arms. The expropriated expropriators do not give up. (76-77)
The exploitation of the colonies began with the human cost of extraction of silver and gold in places like Potosí in Peru, but by the 20th century it had moved to bringing other resources out of the ground:
Every day Venezuela produces 3.5 million barrels of petroleum to move the capitalist world’s industrial machinery, but four-fifths of the concessions owned by Standard Oil, Shell, Gulf, and Texaco are untouched reserves and over half the value of the exports never returns to the country. Creole (Standard Oil) publicity brochures point with pride to the corporations Venezuelan philanthropies, much as the Royal Guipuzcoan Company proclaimed its own virtues in the eighteenth century; the profits milked from this wonderful cow, in proportion to capital invested, are only comparable with those obtained by old-time slave merchants and pirates. (166)
Galeano relates the story of the Paraguyan war, fomented by British banks. (His explanation is evidently controversial, wikipedia says ‘discarded by a majority of historians’) It certainly rings true; the British basically controlled Latin America in the 1800s, having taken over from Spain and before the USA was really capable of enforcing the Monroe doctrine. They had first unleashed ‘free trade,’ which is really just code for economic domination by foreigners upon Mexico first, and then later turned their attention to South America.
The invaders came to redeem the Paraguayan people, and exterminated them. When the war began, Paraguay had almost as large a population as Argentina. Only 250,000, less than one-sixth, survived in 1870. It was the triumph of civilization. The victors, ruined by the enormous cost of the crime, fell back into the arms of the British bankers who had financed the adventure. The slave empire of Pedro II, whose armies were filled with slaves and prisoners, nevertheless won more than 20,000 square miles of territory–plus labor, for the Paraguayan prisoners who were marched off to work on the São Paulo coffee plantations were branded like slaves…the financial bankruptcy of the three countries deepened their dependency on Britain. The Paraguay massacre left its mark on them forever (193)
Galeano does provide some documentation for the theory of British influence:
René Chateaubriand, France’s foreign minister under Louis XVIII, wrote in presumably well-informed disgust: “In the hour of emancipation the Spanish colonies turned into some sort of British colonies.” He cited some figures. Between 1822 and 1826, he said, Britain had extended to the liberated Spanish colonies ten loans for a nominal value of around £21 million, but after deduction of interest and middlemen’s commissions scarcely £7 million had actually reached Latin America. At the same time, more than forty limited stock companies had been created in London to exploit Latin America’s natural resources…Their public services in British hands, the new states from their inception faced a flood of military expenditures and also had to cope with external payment deficits. Free trade involved a frenzied increase in imports, especially of luxury articles; governments contracted debts, which in turn called for new loans, so that a minority could live fashionably…Except in Paraguay (whose contrary effort was crushed), the process was similar throughout Latin America -and still is…(197-8)
Of course the exploitation of less politically (and militarily) sophisticated is part and parcel of ‘free-market’ capitalism (cf. that passage in Human Action, I’m sure I cited it.)
The U.S economy cannot, as we have seen, do without the vital supplies from the south and the juicy profits they bring…Latin America continues exporting its unemployment and poverty: the raw materials the world needs and on whose sale the regional economy depends. Unequal exchange functions as before: hunger wages in Latin America help finance high salaries in the United States and Europe. (206-7)
As Galeano points out, part of the largely successful strategy of exploitation involves getting a segment of the victim society to play along, and even to internalize the ideology:
according this brief but meaty “Capitalist Manifesto,” the law of the jungle is the natural code governing human life; injustice does not exist, for what we know as injustice is merely an expression of the cruel harmony of the universe; poor countries are poor because…they are poor; our fate is written in the stars and we are born only to fulfill it. Some are condemned to obey, others are appointed to command. Some put their necks out and others put on the rope. The author of this theory was the creator of International Monetary Fund policy in Brazil. (220)
Sadly, most of the book was written before the coup that ousted Allende in favor of the fascist dictatorship of Pinochet. For all of their talk of ‘liberty,’ the fascist dictatorship is really the corresponding political form to modern ‘free market’ capitalism. This last citation comes from the post-script written a decade after the book’s initial publication, and is a further indication of the totalitarian nature of modern neoliberalism and its consequences for Latin America.
In these lands we are not experiencing the primitive infancy of capitalism but its vicious senility. Underdevelopment isn’t a stage of development, but its consequence. Latin America’s underdevelopment arises from external development, [kind of like one of those libertarian ‘unintended consequences?,’] and continues to feed it…it pretends to be destiny and would like to be thought eternal. (285)
ianuaditis 