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Since the end of the Second World War, a profound economic, social, and political upheaval has been underway in Latin America. The social turmoil caused by conflict throughout the colonised region could not spare the Latin American subcontinent, which, despite having broken its ancient colonial ties over a century ago, remained and still remains a quasi-colony of imperialist finance capital.

Much has been written about the awakening of Latin America, and very often there is talk of revolution, when the discussion does not even discuss the ‘feudal structures’ that would still be present in the social fabric. In order to determine the actual significance of events in Latin America, their nature and social outcome, it is necessary to understand the broad outlines of the historical evolution of the subcontinent. Faithful to determinism, we know that nothing happens in the present that is not conditioned by events often located in the distant past. Spontaneous generation, proven false in biology, is also completely absent in historical evolution. This truth is particularly striking when studying countries that have lagged behind in the march of progress. In them the structures of society remain crystallised and change with exasperating slowness, because the influences of past upheavals persist stubbornly and the ‘new’ cannot be regenerated by a pure act of collective will.

In Latin American society reigns an obstacle that seems as immovable and eternal as the gigantic ruins of ancient pre-Columbian monuments: large land ownership. The last century of Latin American history, which coincides with the history of the independence of the twenty republics of the subcontinent, can be summed up, without fear of oversimplification, in one sentence: the obstinate struggle against the land-owning oligarchies, holders of the monopoly of wealth and political power. Over the decades, the struggle took on different aspects as the various social strata generated by historical evolution joined the enemy camp of the landed aristocracy: the urban and intellectual petty bourgeoisie (the famous clases medias), industrial and commercial entrepreneurs and, from the end of the last century, the first nuclei of the socialist wage-earning proletariat. The struggle for and against the landed aristocracy represented, in the troubled history of the Latin American republics, dense with bitter political competition, revolts, coups d’état, bloody civil wars, the clash between conservation and progress, between reaction and renewal (attributing, of course, the exact meaning to these terms, which are all part of the analysis of a structure tending towards capitalism).

Such a phenomenon is not unique in the history of capitalism. Indeed, all the anti-feudal revolutions in Europe, including those in England and France, went through a period that saw the rivalry between the two great branches of the sections of the bourgeois ruling class flare up: landowners and industrial entrepreneurs. In each case, the resistance of the landowners was broken, and agriculture became the docile vassal of financial and industrial capital. The works of the classical bourgeois economists, especially in the Ricardian school, which recognises the right of the class of industrial entrepreneurs to social primacy, remain the doctrinal echo of this conflict.

It is necessary then to explain the causes of the exceptional capacity for resistance of Latin American landed property. First of all, we must resist the easy temptation to see it as a feudal remnant. True feudalism in the colonial empire that the Spanish and Portuguese created for themselves in the Americas at the beginning of the 16th century never existed, if only for the fact that feudalism was in decline everywhere at the time of the great geographical discoveries and the introduction of the colonial regime. But the specific reason for the failed transplant into the colonies of the feudal structures still in vogue in the metropolises is to be found in the policy of the absolute Monarchies which, having come into possession of vast colonial empires, were careful not to create in the overseas countries a duplicate of the hereditary landed nobility, which they tenaciously fought in the metropolises. On the contrary, Spain and Portugal imposed on the colonies a bloated state bureaucracy, which, from the centre to the periphery, meticulously controlled every activity of the colonists transplanted to overseas lands.

The encomienda, that is, the concession of large plots of land that the sovereign granted to ‘Creole’ colonists, only repeated, and only in appearance, the feudal system. The encomendero was the absolute lord, not only of the land, but of the Indian population and the Negro slaves who worked like animals on the plantations. However, the right of hereditary transmission of possession, which in European feudalism had as an effect the formation of a hereditary nobility, was not recognised for the fazendiero and the estanciero. In fact, the Crown reserved the right to revoke the concession of the encomienda after a predetermined period, which lasted up to a maximum of two generations.

This infringement of property rights and the exorbitant taxation practiced by the mobilisation of colonial officials of the Crown, who, despite the bonds of race and language, treated the Creole aristocracy with arrogance, the prohibition of trade with any ports other than those of the metropolis, were bound, in the long run, to sow the seeds of revolt among even the ruthless exploiters and oppressors of the indigenous workers and Negro slaves. Thus, it came to pass that a class that was ultra-reactionary towards local workers, to whom every attempt at revolt was paid for with fierce repression, became revolutionary towards the metropolitan colonial power. And when the moment came, it did not hesitate to launch itself into a true civil war, demanding arms against the imperial armies that nevertheless spoke the same language.

Such is, in our opinion, the essential characteristic of the national revolution in Latin America. In Europe, especially the revolution against monarchical absolutism, it meant the liberation of serfs, even if the old serfdom was later replaced by the new modern slavery of wage labour. In Latin America, on the other hand, the class of planters, owners of huge agricultural enterprises and armies of black slaves, rose up against Spanish and Portuguese absolutism primarily to free themselves from the bureaucratic control of the Crown and to be able to possess totally and uncontestedly their own goods, in order to perpetuate slave labour and racial domination for their exclusive benefit.

Having directly and actively participated in the anti-colonial revolution explains the unshakability of positions that the Creole landed aristocracy assumed in the social structure that emerged within the framework of the new Latin American republic. The Latin American national revolution, which followed shortly after the revolt of the thirteen North American colonies against England, was contemporaneous with the French Revolution and the Napoleonic Wars, taking place in the period from 1808 to 1823, with varying degrees of success. The anti-Spanish rebels became enthusiastic about libertarian and democratic ideals and wanted to champion the principles of Rousseau, Voltaire, Montesquieu. But in the end, they were powerless to remove the obstacle of large landed and slave property. On the contrary, it was the Creole landed aristocracy that reaped all the fruits of the great upheaval. And this happens, we repeat, because the democratic and progressive camp, which nonetheless had legendary leaders such as Miranda, Simón Bolívar, José de San Martín, was unable to effectively fight against a class that participated in the revolt against Spain and Portugal. And this represented a real tragedy for Latin America. If the revolution could not ensure the continuation of the political unity of the sub-continentals, this was precisely because of the tenacious and bitter opposition of the class of landowners, which caused the generous plans for a continental federation, supported by Simón Bolívar, to fail, and thus condemned to fragmentation and economic impotence the immense territory of the defunct Hispano-Portuguese empire.

Latin America possesses great mineral and agricultural resources, but the exploitation of natural resources is severely hampered by communication difficulties. Extending over a large part of the territory within the torrid zone, the subcontinent has physical characteristics that condemn vast regions to isolation: the endless blanket of virgin forest covering the territories crossed by the Equator, the arid tropical deserts, the savannahs, the steppes, the water regime of gigantic river arteries, which often flood vast regions. And, from one end to the other, the formidable barrier of the Andes and the Rocky Mountains, which enclose between their mountain ranges vast plateaus rising to 3,000-4,000 metres. It is understandable how, in a region that nature has shaped in such a way as to make communication difficult, if not even impossible, political fragmentation can have the sole certain effect of worsening the conditions in which human labour takes place and making economic progress difficult.

The grand project of the ‘United States of South America’, generously supported by Simón Bolívar, if accepted, would certainly, needless to say, have set Latin America on the path toward a glorious future. But the project displeased the landed aristocracy of Brazil, displeased the North American colonists of Virginia, and above all met with the disapproval of England, which was nevertheless a great friend of the South American insurgents. It is well known that the traditional rivalry with Spain, which had been temporarily silenced by the need to fight Napoleon, prompted England to support the revolt of the Spanish colonies. Weapons, volunteers, ships, and money, generously supplied to the insurgents, concretised British political sympathies. But it was clearly not selfless aid. British capitalism tended to favour the collapse of the Spanish empire for the same reason that drives all states to help the enemies of their imperialist rivals: the desire to create new foreign markets. Now it is clear that the unification of former Spanish America into a great confederation, as Bolívar dreamed, would have placed an obstacle in the way of British economic penetration that would not easily surmountable.

The same class interests, albeit with different objectives, drove the Creole landed aristocracy to oppose the plans for continental unity supported by Bolívar and the political forces he embodied. In the eyes of the slave owners, leaders such as Bolívar, San Martín, and Morales, who carried out their epic revolutionary exploits leading mixed armies that included, together with the Creoles, Indians and mestizos, represented a danger. Would the liberation of the slaves, the raising of the living conditions of the Indian and mestizo populations not subvert the social foundations upon which the economic regime of large landed property and plantations rested? This could not be tolerated by the landed oligarchy, which had rebelled against the Spanish colonial bureaucracy precisely because the monopoly regime and imperial taxation undermined their privileges. The slave owners had reason to fear that the political unification of the subcontinent would entail the strengthening of the democratic and interracial movement.

In this way, the slave-owning interests of Brazil's landowners and the imperialist ambitions of Great Britain coalesced against Bolívar. Not only did the ‘States of the South’ remain an unattainable dream, but even the very state formation that Bolívar had managed to cobble together split in 1821 into the three independent states of Colombia, Venezuela, and Ecuador. The slave-owning landowners of Brazil set an example. Shortly thereafter, the current Central American republics (Honduras, Guatemala, Costa Rica, El Salvador, and Nicaragua) also dissolved a state union they had formed in 1823, completing the process of dismemberment and fragmentation of the former colonial empire.

This is to say that the anti-colonial revolution in Latin America ended with the complete triumph of the landed oligarchies. But not only them. The United States initially took advantage of the dismemberment, albeit briefly, managing to gain some commercial positions in the subcontinent, but they soon had to yield the field to England. This explains how, in the second half of the last century, the management of Latin America’s economic affairs fell completely into the hands of British capitalists, closely followed by the French, Belgians, and Germans. Banks, mines, railways, telephones, power stations, coffee, cocoa, etc. were practically beyond the control of local governments.

Naturally, foreign capital investors did everything in their power to prevent any democratic reforms aimed at taking the country away from foreign industrial monopoly. For European capitalists, especially British ones, every factory that sprang up in areas under their influence meant an attack on their industrial supremacy; at best, a useless copy. Naturally, the interests of the imperialists converged with those of the landed aristocracy, who saw in the reform policies supported by democratic and radical currents a mortal danger to their privileges. Did industrialisation not mean the regression of the agrarian economy?

In this way, the landowning class, which had the Church and the army at its service, accepted that foreign imperialism, in exchange for political and military support, collected a heavy tribute, which ultimately did not affect its profits, being drawn from the sweat and blood of the working classes, oppressed by an appalling poverty that certainly is not over today.

It is understandable how the social structure of Latin America, based on the supremacy and unlimited privilege of the landed oligarchies and their political instruments, and on the absolute lack of rights for the lower classes, lasted so long. A long series of political battles, revolts, coups d’état, and often bloody civil wars could not, and did not, eradicate the hated landowning privilege, because it was supported, not only by its own forces, but also by foreign imperialist powers. Armed intervention in Latin American internal affairs was of no use to the latter, except in a few cases. It was enough to tighten the noose of economic blackmail around the necks of progressive and anti-imperialist governments that dared to question the existing order to bring about their downfall or, as was the case in most instances, to induce them to change sides.

The iron alliance between the landed aristocracy, politically represented by militarism, and foreign finance capital, with the former subject to the latter, is not unique to Latin America. The class domination of capitalism is based precisely on the identification of the interests of agrarian property and entrepreneurial capital in relation to the working classes. Naturally, the agrarian economy and the industrial economy have different rates of development, and this causes friction between landowners and industrial capitalists; but such conflicts disappear as if by magic when it comes to joining the forces of exploitation against the working classes. What has occurred in Latin America for over a century is therefore the rule, certainly not the exception, of the mechanism of capitalist exploitation. What is particular is that the fusion – above and beyond the borders and facile nationalist rhetoric of South American military regimes – of the local landowning oligarchy and foreign finance capital has kept Latin America completely outside the industrial revolution of the last century, throwing it into the condition of a financial colony of imperialism.

We will return to this topic, as well as to the social and political aspects of Latin American backwardness; for now, a few figures will suffice. Well, on the eve of the 1929 crisis, raw products accounted for at least 80%, generally more than 90%, and sometimes almost all of exports in all South American countries, while manufactured articles accounted for an almost negligible percentage in foreign sales. Even today, the value of foodstuffs and raw materials account for 90% of total exports to other parts of the world. From this emerges the purely colonial character of the Latin American economy, which, as a supplier of raw materials to foreign industries and a purchaser of industrial products, is on the same level as Africa.

For something new to mature in the Latin American social structure, there had to be at least a break in the traditional mechanism of exploitation of the subcontinent. And this happened during the Second World War. Already at the time of the First World War, the grip of the imperialist pincer had loosened somewhat, but with the sure effect of allowing the gigantic North American imperialism to wrest important financial positions from its rival capitalists in Europe. The Second World War, on the other hand, abruptly severed trade relations between Latin America and the emporiums of Western Europe. While England had to fight fiercely to save its own existence and was forced to neglect its South American financial vassals, the United States, likewise engaged in the huge conflict between the continents, could only take partial advantage of the situation. In fact, Uncle Sam’s great financial offensive took place in the post-war years and cannot be said to have ended at the present moment.

Taking advantage of the conditions of isolation caused by the war and manipulating North American capital itself, the leading forces of the anti-oligarchic coalition were laying, in some republics, the bases for national industry, especially the most important ones such as Brazil and Argentina. Thus was born the iron and steel industry, something completely new in the absolute kingdom of the haciendas and estancias. And, with the advent of large-scale industry, new political ideologies and new types of political regimes took shape, such as Peron’s ‘justicialism’, which shifted the traditional bases of the anti-oligarchic alliances. Since the end of the last century, the workers’ movement that emerged in those times had vigorously supported all the political battles of the middle classes against the landed oligarchy and the militarism that politically represented its interests. Peronism, an expression of the interests of the nascent entrepreneurial bourgeoisie, which saw itself hampered by the obtuse conservatism of the landed aristocracy, sought to win the support of the working class, and it cannot be denied that it succeeded in doing so.

Today, Latin America is in full ferment. The militarist dictatorships have collapsed everywhere except, in Paraguay and San Domingo. And this means that the centuries-old domination of the agrarian oligarchy is showing clear signs of collapse. But the turning point poses a serious danger to the workers’ movement, namely the danger of justicialism which, under the ideological cover of the struggle against the universally hated agrarian oligarchies, seeks to smuggle in interclassism, a weapon of reformist contamination of the working class.

All American Indians are most likely descended from Mongoloid populations that migrated from Siberia into Alaska around thirty thousand years ago, during the retreat of a glaciation or by exploiting a passage that no longer exists, and spread over time throughout the entire continental territory. So much so that, at the end of the 1400s, the epoch in which America returns to stable contact with Europe, three distinctions can be made:

a) Hunter-gatherer peoples. Nomads who travel across the territory hunting, or populations who periodically settle to cultivate the land (cassava and maize), then move on when the soil becomes depleted. These populations move along the Atlantic coasts of South America or across the northern prairies and are, as Engels says, in the higher stage of savagery.

‘HIGHER STAGE. Begins with the invention of the bow and arrow, whereby game became a regular source of food, and hunting a normal form of work. Bow, string, and arrow already constitute a very complex instrument, whose invention implies long, accumulated experience and sharpened intelligence, and therefore knowledge of many other inventions as well. We find, in fact, that the peoples acquainted with the bow and arrow but not yet with pottery (from which Morgan dates the transition to barbarism) are already making some beginnings towards settlement in villages and have gained some control over the production of means of subsistence; we find wooden vessels and utensils, finger-weaving (without looms) with filaments of bark; plaited baskets of bast or osier; sharpened (neolithic) stone tools. With the discovery of fire and the stone ax, dug-out canoes now become common; beams and planks arc also sometimes used for building houses. We find all these advances, for instance, among the Indians of northwest America, who are acquainted with the bow and arrow but not with pottery. The bow and arrow was for savagery what the iron sword was for barbarism and fire-arms for civilisation – the decisive weapon’ (Engels, The Origin of the Family, Private Property and the State).

b) Settled tribes of farming peoples. They live mainly off the cultivation of cereals (maize, cassava, guanaco), are now settled within a territory, land ownership is collective, they are familiar with worked stone (obsidian) and pottery. They are in the lower stage of barbarism:

‘Middle Stage. Begins in the Eastern Hemisphere with domestication of animals; in the Western, with the cultivation, by means of irrigation, of plants for food, and with the use of adobe (sun-dried) bricks and stone for building. We will begin with the Western Hemisphere, as here this stage was never superseded before the European conquest. At the time when they were discovered, the Indians at the lower stage of barbarism (comprising all the tribes living east of the Mississippi) were already practicing some horticulture of maize, and possibly also of gourds, melons, and other garden plants, from which they obtained a very considerable part of their food. They lived in wooden houses in villages protected by palisades’.

c) Developed political organisations in Central America. The most important are undoubtedly the population concentrations in the three great domains of the Aztecs, the Maya, and the Incas. Despite their differences, they share a number of characteristics:

These three Central American populations, albeit in different forms, cultivated the land in common. Despite having a long independent development from the rest of humanity, they tend to retrace the necessary evolution of the human species. In this we see reconfirmed the materialist interpretation of history given by Marxism. We know well that the period of common ownership of land is a very long phase, which the entire human race must go through:

‘A ridiculous presumption has latterly got abroad that common property in its primitive form is specifically a Slavonian, or even exclusively Russian form. It is the primitive form that we can prove to have existed amongst Romans, Teutons, and Celts, and even to this day we find numerous examples, ruins though they be, in India. A more exhaustive study of Asiatic, and especially of Indian forms of common property, would show how from the different forms of primitive common property, different forms of its dissolution have been developed. Thus, for instance, the various original types of Roman and Teutonic private property are deducible from different forms of Indian common property’ (Marx, ‘Critique of Political Economy’, in ‘India, China, Russia’).

In Mexico, this form of common land ownership is called calpulli. This is a grouping of families organised into villages that refer to a single chief or a series of chiefs, who establish the periodic distribution of land among the individual families. The chiefs have the right to use personal services and the products of the land as compensation for their work in administering the social life of the Commune. The calpulli is therefore nothing other than a gens, or a confederation of gens, or a tribe.

In Peru, however, given the different environmental conditions, the gentile federation, known as ayllu, tends to collectively own not only the land but also a whole range of productive activities: grazing and potato cultivation in the highlands, maize cultivation on the hillsides and cotton in the plains, fishing on the coasts. All these complex activities are managed in common by a single consanguineous group, a gens or a lineage; while the villages and towns are formed on the territory in much the same way as those formed in the Middle Ages by the Germans, who organised themselves into marches or confederations of villages. Part of the land, pastures, and harvest belongs to the Inca. The chiefs of the ayllu establish the periodic distributions of land among the individual families.

‘In India, the household community with common cultivation of the land is already mentioned by Nearchus in the time of Alexander the Great, and it still exists today in the same region, in the Punjab and the whole of northwest India. Kovalevsky was himself able to prove its existence in the Caucasus. In Algeria it survives among the Kabyles. It is supposed to have occurred even in America, and the calpullis which Zurita describes in old Mexico have been identified with it; on the other hand, Cunow has proved fairly clearly that in Peru at the time of the conquest there was a form of constitution based on marks (called, curiously enough, marca), with periodical allotment of arable land and consequently with individual tillage’ (The Origin...).

Such a formal system of tribute labour allows the colonisation of uncultivated areas in the Andes through the displacement of entire groups of families, or accelerates the social division of labour by transforming peasants into artisans working for the Inca, who monopolise the cultivation of valuable products such as coca. Finally, for the construction of social works (roads, temples, public buildings, irrigation works), there is the myta, or periodic, gratuitous, and temporary labour service; in particular, the myta is used to exploit mineral resources. Among the Inca, the already centralised political organisation has great importance as a factor in productive development. Just as in Imperial China, where the state regulated the flow of water by controlling rice cultivation, in the Andes the land is cultivated in terraces, so that every reclamation and cultivation work presupposes a central plan and the collaboration of a large part of the population.

‘[Men] relate naïvely to [the land] as the property of the community, of the community producing and reproducing itself in living labour. Each individual conducts himself only as a link, as a member of this community as proprietor or possessor. The real appropriation through the labour process happens under these presuppositions, which are not themselves the product of labour, but appear as its natural or divine presuppositions. This form, with the same land-relation as its foundation, can realise itself in very different ways. E.g. it is not in the least a contradiction to it that, as in most of the Asiatic land-forms, the comprehensive unity standing above all these little communities appears as the higher proprietor or as the sole proprietor; the real communities hence only as hereditary possessors. Because the unity is the real proprietor and the real presupposition of communal property, it follows that this unity can appear as a particular entity above the many real particular communities, where the individual is then in fact propertyless, or, property – i.e. the relation of the individual to the natural conditions of labour and of reproduction as belonging to him, as the objective, nature-given inorganic body of his subjectivity – appears mediated for him through a cession by the total unity – a unity realised in the form of the despot, the father of the many communities – to the individual, through the mediation of the particular commune. The surplus product – which is, incidentally, determined by law in consequence of the real appropriation through labour – thereby automatically belongs to this highest unity. Amidst oriental despotism and the propertylessness which seems legally to exist there, this clan or communal property exists in fact as the foundation, created mostly by a combination of manufactures and agriculture within the small commune, which thus becomes altogether self-sustaining, and contains all the conditions of reproduction and surplus production within itself. A part of their surplus labour belongs to the higher community, which exists ultimately as a person, and this surplus labour takes the form of tribute etc., as well as of common labour for the exaltation of the unity, partly of the real despot, partly of the imagined clan-being, the god. Now, in so far as it actually realises itself in labour, this kind of communal property can appear either in the form where the little communes vegetate independently alongside one another, and where, inside them, the individual with his family work independently on the lot assigned to them (a certain amount of labour for the communal reserves, insurance so to speak, and to meet the expenses of the community as such, i.e. for war, religion etc.; this is the first occurrence of the lordly dominium in the most original sense, e.g. in the Slavonic communes, in the Rumanian etc. Therein lies the transition to villeinage [Frondienst] etc.); or the unity may extend to the communality of labour itself, which may be a formal system, as in Mexico, Peru especially, among the early Celts, a few clans of India. The communality can, further, appear within the clan system more in a situation where the unity is represented in a chief of the clan-family, or as the relation of the patriarchs among one another. Depending on that, a more despotic or a more democratic form of this community system. The communal conditions of real appropriation through labour, aqueducts, very important among the Asiatic peoples; means of communication etc. then appear as the work of the higher unity – of the despotic regime hovering over the little communes. Cities proper here form alongside these villages only at exceptionally good points for external trade; or where the head of the state and his satraps exchange their revenue (surplus product) for labour, spend it as labour-fund’ (Marx, Grundrisse, IV).

Essentially, the class division of these large barbaric societies is similar. At the top is what historiography usually refers to as the ‘emperor’, but who would be better called a military chief:

‘The leader of the army (basileus). Marx makes the following comment: European scholars, born lackeys most of them, make the basileus into a monarch in the modern sense. Morgan, the Yankee republican, protests. Very ironically, but truly, he says of the oily-tongued Gladstone and his Juventus Mundi: “Mr. Gladstone, who presents to his readers the Grecian chiefs of the heroic age as kings and princes, with the superadded qualities of gentlemen, is forced to admit that ‘on the whole we seem to have the custom or law of primogeniture sufficiently, but not oversharply defined’” (...)

‘In addition to his military functions, the basileus also held those of priest and judge, the latter not clearly defined, the former exercised in his capacity as supreme representative of the tribe or confederacy of tribes. There is never any mention of civil administrative powers; he seems, however, to be a member of the council ex officio. It is therefore quite correct etymologically to translate basileus as Koening, since Koening (kuning) is derived from kuni, kunne, and means head of a gens. But the old Greek basileus does not correspond in any way to the present meaning of the word “king” (...) Like the Greek basileus, so also the Aztec military chief has been made out to be a modern prince. The reports of the Spaniards, which were at first misinterpretations and exaggerations, and later actual lies, were submitted for the first time to historical criticism by Morgan. He proves that the Mexicans were at the middle stage of barbarism, though more advanced than the New Mexican Pueblo Indians, and that their constitution, so far as it can be recognised in the distorted reports, corresponded to this stage: a confederacy of three tribes, which had subjugated a number of other tribes and exacted tribute from them, and which was governed by a federal council and a federal military leader, out of whom the Spaniards made an “emperor”’ (Origin...).

Then there is the class of nobles (or warriors) and the class of priests, generally belonging to the lineage of the ‘emperor’; the village chiefs, i.e. the chiefs of the tribes subject to the ‘emperor’; the peasants who collectively cultivate the land; a class of slaves is also forming, that is, of those born into slavery or captured in war; and there is a class of artisans, both free and enslaved, who serve the nobility. There are also merchants, to be understood more as a class of barterers, as they must keep the various parts of the empire connected through the exchange of simple goods; since in this mode of production commodities are not produced but consumable goods, production is not for the market, but, as we have seen, an insignificant surplus is transformed into commodity:

‘The aim of this work is not the creation of value (...) rather, its aim is sustenance of the individual proprietor and of his family, as well as of the total community’ (Marx, Grundrisse).

Money is known, but it does not have the importance it has in those economic systems where production is for the market; therefore, it exists but has not yet subjugated society.

‘It cannot, indeed, be denied that pre-capitalist societies disclose other modes of distribution, but the latter are interpreted as undeveloped, unperfected and disguised, not reduced to their purest expression and their highest form and differently shaded modes of the natural distribution relations. The only correct aspect of this conception is: Assuming some form of social production to exist (e.g., primitive Indian communities, or the more ingeniously developed communism of the Peruvians), a distinction can always be made between that portion of labour whose product is directly consumed individually by the producers and their families and – aside from the part which is productively consumed – that portion of labour which is invariably surplus-labour, whose product serves constantly to satisfy the general social needs no matter how this surplus-product may be divided, and no matter who may function as representative of these social needs’. (Marx, Capital, Volume III).

These are therefore immense societies that have not yet emerged from extremely advanced forms of gentile organisation. In them, the characteristics of the State, embryonically already present, tend to subjugate society and dissolve the gens, but for this to happen, epochs of social conflict between classes are necessary, which demonstrate the need for an organism that appears to be above the classes themselves, the State, which we know to be a tool of the ruling class. But Marxism does not deny that it presents itself as a form dictated by precise social needs, and that only over time does such a form pass into class oppression.

‘As men originally made their exit from the animal world – in the narrower sense of the term – so they made their entry into history: still half animal, brutal, still helpless in face of the forces of nature, still ignorant of their own strength; and consequently as poor as the animals and hardly more productive than they. There prevailed a certain equality in the conditions of existence, and for the heads of families also a kind of equality of social position – at least an absence of social classes – which continued among the primitive agricultural communities of the civilised peoples of a later period. In each such community there were from the beginning certain common interests the safeguarding of which had to be handed over to individuals, true, under the control of the community as a whole: adjudication of disputes; repression of abuse of authority by individuals; control of water supplies, especially in hot countries; and finally when conditions were still absolutely primitive, religious functions. Such offices are found in aboriginal communities of every period – in the oldest German marks and even today in India. They are naturally endowed with a certain measure of authority and are the beginnings of State power.

‘The productive forces gradually increase; the increasing density of the population creates at one point common interests, at another conflicting interests, between the separate communities, whose grouping into larger units brings about in turn a new division of labour, the setting up of organs to safeguard common interests and combat conflicting interests. These organs which, if only because they represent the common interests of the whole group, hold a special position in relation to each individual community – in certain circumstances even one of opposition – soon make themselves still more independent, partly through heredity of functions, which comes about almost as a matter of course in a world where everything occurs spontaneously, and partly because they become increasingly indispensable owing to the growing number of conflicts with other groups. It is not necessary for us to examine here how this independence of social functions in relation to society increased with time until it developed into domination over society; how he who was originally the servant, where conditions were favourable, changed gradually into the lord; how this lord, depending on the conditions, emerged as an Oriental despot or satrap, the dynast of a Greek tribe, chieftain of a Celtic clan, and so on; to what extent he subsequently had recourse to force in the course of this transformation; and how finally the individual rulers united into a ruling class. Here we are only concerned with establishing the fact that the exercise of a social function was everywhere the basis of political supremacy; and further that political supremacy has existed for any length of time only when it discharged its social function’ (Engels, Anti-Dühring).

In conclusion, although its forms of property and social evolution are known to Marxism and mirror those already experienced by the rest of humanity, the American continent, shortly before coming into contact with Europe, gives the impression of being a planet unto itself; which has embarked on an autonomous technical and social development. In fact, these are forms of society that the rest of humanity has already surpassed for millennia. Do not be misled by the extreme complexity of these pre-Columbian ‘empires’, their high degree of civilisation, and the fact that they can organise millions of people (between 30 to 80 million according to some studies). These were extremely fragile and backward modes of production with respect to the nascent European mercantilism, in which the now established civilised age even heralds the advent of capitalism.

At the end of the fifteenth century, Spain has just been reunified with the marriage of Isabella of Castile and Ferdinand of Aragon, the Arabs having been definitively expelled from Granada. Now the Strait of Gibraltar is controlled by Christians: Spain to the south and Portugal to the north, after the capture of Ceuta and Tangier. The Iberian economic and social structure is backward compared to the rest of Europe. The crowns, especially the Castilian one, base their power on a class of nobles from the highlands, who live off taxes, the Mesta, derived from transhumance grazing: a very profitable activity since there was great demand for wool in Flanders and Italy.

The reconquest of the three major Iberian kingdoms (Castile, Aragon, and Portugal) took place with the granting of the territories seized from the Moors to the warrior nobility and with the expansion and consolidation of the Mesta in the new regions; this led to the outright dispossession of the lands of the small Arab peasants, who were technically among the most advanced in Europe. This is the only explanation for why the reconquest led to an entire era of peasant revolts and rebellions by artisans against the nobility.

With reunification begins that process which will therefore lead to the expulsion of the Moriscos and Jews, who represented the most advanced part of the country, those artisans and small farmers who, in the rest of Europe, will give rise to the bourgeoisie.

During this same period, manufacturing is developing in Italy, Flanders, the Netherlands, France, and England, but it is still an activity subordinated to the great merchant families. The two major Italian maritime republics, Genoa and Venice, have control over the western and eastern zones of the Mediterranean respectively. Genoa controls the gold route, linking the coast of North Africa, Ceuta, and Tunis, where caravans arrive after crossing the desert to connect the Central African empires to the Mediterranean, with Central Europe. Venice controls the spice route, which starts from the Indies and is managed by the Chinese as far as Calcutta, then by the Arabs as far as the Red Sea, and finally by the Venetians, who buy the spices on the Egyptian and Syrian markets to distribute them throughout the European continent. The importance of gold is due to the emerging need for merchants to have a general equivalent valid for all international trade, while the importance of spices is due to the need to preserve meat, through their bactericidal power.

The world, therefore, is an ensemble of closed areas, but at the same time not entirely isolated from one another; they remain in equilibrium because none are able to gain the upper hand over the others, a task that will be carried out in the following centuries by the European bourgeoisie. For its part, America has an independent development, naturally outside these exchanges between continents, which have been painstakingly created in the rest of the world.

Europe is in the phase of formal subsumption of labour to capital. Bankers, usurers, by indebting and ruining large landowners and small producers, appropriate the land and conditions of labour of small artisans and of the peasants themselves. For these reasons, the crowns are forced to take upon themselves the burden of the commercial wars in order to cope with their progressive indebtedness. Ultimately, this is the main cause of the great discoveries of the 15th century. The very Atlantic propensity of Portugal and Spain is, initially, only a sign of weakness: unable to undermine the hegemony of the major Italian maritime republics, an alternative route was sought to reach the markets of the Indies, the fulcrum around which all maritime trade revolved. Even when Asia could be reached by circumnavigating Africa, Venice remained, up until the end of the 17th century, the main supplier of spices to Europe.

Portugal is a typical example of the subordination of the State to usurious and mercantile capital: it has a port on the Atlantic, Lisbon, which allows it to manage the connections between Northern Europe, the crucial market of Amsterdam, and Africa; it controls part of the Strait of Gibraltar; it has a nobility indebted to the great European bankers. This is why, at the beginning of the 1400s, Portuguese merchants customarily attended the annual fairs held by African traders, searching especially for gold to mint coins. In doing so, the Portuguese gradually explored the West African coast, increasingly coming into contact with black peoples.

But the best business came from the discovery of African pepper and malagueta, both cheap spices. Later, armed and fortified strongholds began to be built along the African coast (Cantor, Sao George de Mina) with the aim of defending the emporiums that merchants gradually established under the protection of the army. By the end of the century, the Portuguese had already rounded the Cape of Good Hope, realising that they had entered the Indian Ocean controlled by the Arabs. Portuguese merchants traded manufactures, bought cheaply in Flanders, London, and Lyon, mainly for gold, slaves, and spices. It is clear how in this process capitalist manufacturing consolidates itself: gold passed through Lisbon to end up in the coffers of German bankers, who had advanced capital for the great explorations, or it was used to purchase cloth, canvas, silk, and weapons produced abroad. The crown’s army guaranteed the monopoly of African trade through the Casa de Guinea; then, after 1500, it would attempt to guarantee the monopoly of trade with the East Indies through the Casa de India.

When historical necessities are pregnant with great undertakings, the man of genius emerges. Such is the case with Columbus, who represents the experience of Genoese navigators and the scientific consciousness of his time: that the Earth was spherical was already known to all serious scientists.

To attempt the enterprise, Columbus first turns to Portugal. The refusal he receives was mainly due to the lack of interest the Portuguese have in a western route to the Indies, since the possibility of the eastern route is by now more than evident. Portuguese ships, in fact, regularly connect with the Indian Ocean, using the trade winds and counter-trade winds according to the latitude. Thus, after initial approaches, a commercial war is successfully waged to establish a trading post in Calcutta. The venture was such that Vasco da Gama, commander of this expedition, would return home with a cargo of Indian pepper worth 15 times the costs incurred of equipping the fleet of 20 ships that had set out on the enterprise (1459).

Columbus must therefore turn to another Atlantic power; the political circumstances of the time meant that it was Spain, strengthened by its recent victory over the Arabs, that would provide him with the port, the ships, and the men. Moreover, until shortly before his departure, Columbus also had contacts with England.

From the very first crossing, the correct route is taken, the direct one, which will remain the same for the entire duration of the voyage. This indicates that no random route is being sought, as the technical knowledge required for the discovery of America is now well established. English sailors had been venturing out into the open sea from Bristol for some time already, while nautical charts indicate islands scattered across the Atlantic with names that would become significant, Antilles, Brazil: it cannot be ruled out that some ship reached the American coast before 1492. Moreover, in 1500, Cabral would happen to discover Brazil by chance, having exploited the south-east trade wind too much while bringing reinforcements to Vasco da Gama’s expedition.

It would take about twenty years to understand the real significance of the discovery of the West Indies. During this period, a series of events took place that would have a considerable impact on subsequent historical development. In 1494, the Treaty of Tordesillas is signed, by which Spain and Portugal divide the colonies along a meridian line. In 1503, the Casa de Contratación is founded in Spain, which, following the Portuguese model, is responsible for managing the monopoly of trade with the Indies: the king reserves the ownership of one fifth of what his subjects will be able to obtain from the exploitation of the colonies. By the early 1500s, it is already clear that it is another continent; all the Atlantic coast of America is explored by Vespucci in search of a passage to the East Indies, which would be found in 1519 by Magellan. During this period, the first Spanish settlements have been formed in the Antilles, first in Puerto Rico, then in Haiti and Cuba; the Portuguese have also settled in Brazil; by now there are direct or indirect contacts with the Central American indigenous populations in the Gulf of Mexico.

The Spaniards arrived in America with the intention of appropriating the treasures of the cities and replacing the rule of the Aztec, Maya, and Inca chiefs; in doing so, they reproduce the same relations of production that they had established during the reconquest of the Iberian Peninsula: territories are granted to the faithful servants of the crown.

This was therefore not the same method that would later be used by the English, Dutch, and French; the problem for the Spanish is not to expel surplus populations that have formed as a result of the implantation of the capitalist mode of production, but to exploit the American treasures as much as possible to pay off the growing indebtedness of the aristocracy to the German and Dutch usurer bankers. It was not, therefore, the particular greed of the Spaniards but the particular economic relations of Europe that imposed medieval-style personal servitude upon the Indians, even worse than what they were used to.

How was it possible that expeditions of ‘adventurers’, even if well armed, could have shattered social organisations of millions of people? That this could not fail to happen can be explained by the backwardness of the economic structure of the pre-Columbian ‘empires’ compared to the incipient European capitalism represented by the Spanish. On the other hand, the fact that the conquest took place in just a few years, something that in any case is only partially true, can be explained by the overlapping of causes of a structural order with those of a contingent political order: the internal struggles that, at the beginning of the 1500s, were troubling these Central American populations were opportunistically exploited by the conquistadors.

Cortés conquered Mexico in early 1519. To do so, he took advantage of the rebellion of some populations in the province of Texala against Montezuma II; by virtue of these alliances, Cortés managed to avoid an ambush set up by the Aztec army and counterattacked to destroy the indigenous militias using his cannons; by the time he entered the Mexican capital, Tenochtitlan, he had all the rebellious populations behind him and was able to take the ‘emperor’ prisoner. The Spanish then proceeded to sack the capital, provoking the rebellion among the indigenous populations that had supported them until then; the conquistadors were thus driven out by a revolt, making a second expedition necessary, in which Tenochtitlan was once again besieged, bombarded, and finally taken and sacked.

More difficult was the conquest of Yucatan, where the rule of the Maya was consolidated and it was not possible to turn the indigenous populations against their chiefs. Instead, the opposite happened: the populations rebelled against the Spanish advance. It took a quarter of a century to subdue the Maya in a veritable bloodbath.

The Inca ‘empire’ at the time of the Spaniards’ arrival was in the throes of a serious dynastic crisis: two claimants were vying for the throne. In 1531, Pizarro, after two failed attempts, reached Peru only on the third. He allied himself with the ‘illegitimate’ pretender, having the brother, the legitimate heir, assassinated; then, after appropriating the imperial treasure, he decided it best to eliminate the other one as well. Thus Pizarro had the fratricidal Atahualpa tried as a usurper, idolater, and polygamist and had him executed. The following period was marked by a whole series of rebellions, both among the rabble that had followed Pizarro and among a section of the Indians themselves. The latter would form an Inca community in the Sierra, which would be able to remain isolated from the Spanish until 1572.

In 1535, the conquest of Chile begins, but the Spanish, after their initial successes, suffer a series of defeats at the hands of the Araucanian peoples and are forced to sign a peace treaty, which will be respected for 200 years.

The Spanish voraciously set about plundering the treasures of the Indians; but the spoils of war, however vast, are only one aspect of the conquest, the other is the subjugation of the populations. Thus is born the encomienda, that is, the concession granted by the king to the conquistadors of the right to exploit the lands and the natives residing on them. The land and the natives are placed in the custody of the encomendero, who could dispose of them as he pleased, collecting taxes or imposing personal servitude.

This form of ownership can be traced back to Asiatic or feudal models and presupposes the reversibility of the concession. Ultimately, it is the sovereign who is the owner of the colonies, which are given in trust; the trustee (or encomendero) can exploit them by paying a fifth of the profits to the Spanish State. Initially, the encomienda is used as a reward for the military services of the conquerors and is normally granted for three generations; this is not new, as the same method had been used during the expulsion of the Moors. Cortés, for example, grants some territories in encomienda to his own soldiers and is himself the largest encomendero in Mexico. However, subsequent generations, even though they would inherit immense territories from the conquistadors, will have to increasingly submit to the authority of the colonial bureaucracy, directly appointed by Spain.

At first, the Spanish simply intended to superimpose themselves over the rule of the indigenous chiefs, but soon the demands of the European market dictated their own terms to the colonies.

New techniques unknown to the Indians are introduced, such as the plough, the wheel, and new species of animals such as the horse, the sheep, the ox, and the pig, as well as new crops such as wheat. Soon, typical Indian crops (corn, potatoes) proved to be of little importance to the Spanish, who therefore began to plant more profitable crops, such as sugar cane and tobacco, in high demand in Europe. Mining, especially of silver and mercury, is also intensified. This new production system is implemented at the expense of the Indians, forced into hard shifts of unpaid or semi-unpaid labour.

Historians love to discuss the inhumane and coercive nature of the encomienda and are always embarrassed by the right that the Pope and Catholic kings arrogated to themselves in entrusting the Indians to the barbarous conquistadors; Marxism is certainly not afraid of personal servitude, nor does it consider its transformation into a tax in kind or in money to be less exploitative, if anything, it considers these changes to be signs of an occurred change in the economic structure.

The encomienda immediately posed the question of its heredity, which over time would increasingly mean the possibility of selling the land. It is clear that the encomendero, not being the owner of the land, could not sell it. For its part, royal legislation tended to apply the rule of two or three generations, which meant that long inheritance disputes dragged on between the heirs and the Spanish crown. Legal representatives carefully studied the cases family by family in order to establish for how many generations one had been in possession of the encomienda, because the royal concession varied from case to case without a precise rule. There were even those who were entitled to four generations for special merits or who obtained ownership. However, towards the end of the 1600s, all the large encomiendas had returned into the possession of the crown, which once again gave them in concession for a short time; sometimes, the encomendero was given only the income from an encomienda, without ever taking possession of it, while State officials were responsible for running the enterprise and collecting taxes. Ultimately, until the end of the 18th century, it is the crown that manages the colonial income and establishes the concession rights.

As good thieves, the Spanish did not have much regard for the forms of exploitation of the Indians. Everything was lawful: from domestic service to extortion of corvée, forced labour in artisanal workshops, to servile labour in the mines. For example, in Guatemala, repartimientos were used, whereby village chiefs (the caciques) had to provide the Spanish with a certain number of Indians according to the colonists’ requests. The Indians had to present themselves with their work tools and enough food for a week, which was the time they had to work, the reward was little more than symbolic. It was a kind of corvée already in use under the Maya, in this case the Spanish did nothing other than replace the old masters.

But this enslavement took on aspects much more brutal in the case of labour in the mines of Potosí, in Peru. Here, forced labour was still called myta, as in the time of the Incas, only that now it meant working for 40 days in the mercury mines and 4 months in the silver mines.

During this period, the large latifundium began to form through the establishment of sheep and cattle breeding, and if they had been able to, the Spanish would have reintroduced also the Mesta, but instead had to limit themselves to depopulating the lands of the indigenous people, as they had done in the past with those of the Arabs. Thus is formed a class of impoverished peasants, the peons, forced to live on the latifundium as serfs by birth or by debt.

Since there are no spices in the American colonies, the Europeans’ interest turns to precious metals and crops such as sugar and tobacco, which were in high demand in the Old World. Large silver deposits are discovered immediately, especially in Peru, near the ancient capital Cuzco. In Huancavelica, on the other hand, there is mercury, which in turn serves in the silver extraction process.

Very important are the repercussions of colonial activity in Europe. This gave rise to the Spanish carrera, the trade link between the mother country and the West Indies, through the Casa de Contratación, which was supposed to ‘secure the gold, silver, jewels, and other things coming from the Indies’, the monopoly on American trade was exercised, which departed from Seville and Cadiz and arrived at only three American ports: Veracruz, Cartagena, and Portobelo. Immense fortunes in silver flowed into Spain, but they served to pay the interests to German bankers, the Fuggers, or to purchase commodities to be taken to America from the nascent manufacturers of Flanders, Holland, and England. The Casa de Contratación itself, like its Portuguese counterpart, was increasingly dominated by Dutch, Flemish, French, and Venetian merchants.

Industrial capital is the real winner of the commercial wars of the late Middle Ages. The mercantilist delusion that wealth consists in the simple accumulation of precious metals is cruelly disproved as gold and silver lose in value due to their excessive quantity. An inflationary period begins in Europe, centred in the Iberian countries, to the extent that Spain, which in the meantime has absorbed Portugal, is forced to declare ‘bankruptcy’ in 1577.

At the same time, new crops imported from America allow for an increase in the yield of lands until then not very fertile because it is unsuitable for growing cereals: the classic example is the introduction of the potato in Germany.

And yet we are in the phase of maximum Spanish power in the world, which dialectically prepares the rise of the bourgeois nations, for whom the exploitation of colonies will be of fundamental importance.

The consequences of the arrival of the Spanish on the indigenous populations are truly catastrophic. The inability of the peasants of the pre-Columbian communes to adapt to work in the mines or on tropical plantations, the new dietary habits imposed on the mytayos, based on spiced pork, at a time when the collapse of the old production system causes agricultural production to plummet and, above all, the intensification of exploitation at all levels, are the factors that lead to the spreading of a whole range of infectious diseases, already known in Europe, but which the Indians were unprepared to confront.

The worsening living conditions weakens the indigenous people’s immune systems, so that in less than a century more than half of the Central American population dies of typhus, smallpox, or measles. This is the cause of the beginning of the importation of black people, better suited to surviving the diseases, the privations, and the slavery. Thus, sugar production in the Antilles intensifies through the slave labour of Negroes. The slave trade begins, which will last until the end of the eighteenth century, tearing from Africa some 50 million people.

If, as is true, the history of the Americas from the first moment was directly linked to the development of European capitalism, then we can only explain the development of colonialism in a global sense. It is therefore necessary to recall some historical concepts in order to better organise the analysis of the economic and social structure of Latin America at the end of the eighteenth century.

The emerging nations of the seventeenth and eighteenth centuries in Europe are Great Britain and France. The former has already undergone its bourgeois revolution (Cromwell), subjugated the nascent commercial power of Holland, and then began to dismantle the great Spanish power, which, throughout the seventeenth century, remains the world hegemon. It is with the destruction of the Invincible Armada (1588) that the beginning of the Atlantic inclination of Great Britain and the decline of Spain is dated.

France, for its part, through the policies of Louis XIV and Louis XV, of support to the great financial and mercantile bourgeoisie, increasingly replaces Spain in the predominance of Central and Mediterranean Europe. In fact, trade between Spain and America is in the hands of merchants of Lyon and Bordeaux.

As we saw, Spain’s takeover of the American colonies does not mark the beginning of a bourgeois development of its economy; but, although, throughout the sixteenth and seventeenth centuries, Spain is the most important power on the globe, its strength is purely military and is based on debt to the great European bankers. Spain takes possession of the colonies in the name of the nascent European bourgeoisie, this process subsequently does not stop and comes to an end with the total downsizing of Spain in the nineteenth century.

This state of affairs is also reflected in the method of exploitation that Spain adopts in its territories beyond the Atlantic. The warrior caste, which intends to dominate Europe, only needs money to finance its armies. Gold and silver are in Latin America; therefore, for two hundred years, the colony will be organised solely for the purpose of mining. Once a year, a convoy of ships departs for the Americas from Seville, then from Cadiz. A fleet loaded with manufactures, mostly from France, and with foodstuffs, requested by the Spaniards in the colonies. After calling at the three American ports authorised for trade (Cartagena, Veracruz, and Portobelo), where the metals extracted from the mines are collected, the ships return to the homeland laden with coins of silver and gold. The king has the right, as tax, to one fifth of the value of the commodities transported and one fifth of the value of the amount of silver extracted in the Americas.

Within these rigid canons of economic exploitation, Latin America could only develop the mining sector. In particular, the nerve centres of the empire are Peru and Mexico, where huge silver deposits are discovered. The mines are exploited through forms of personal servitude such as repartimiento and encomienda, whereby the Indians provide forced labour to the white rulers.

Smuggling, especially by the English, Dutch, and French, develops on the borders of the pachydermic empire. Piracy – so dear to early twentieth century novelists – is merely the first attempt by the young Atlantic commercial powers to undermine Spanish monopoly in Latin America. Piracy aims to achieve two objectives. The first is to get their hands on the enormous loads of silver which come back from the colonies every year (we are in the era where the bourgeoisie uses precious metals as an international general equivalent). The second is to connect directly to new markets, without the intermediation of the Spanish royal bureaucracy.

For these reasons, pirate and buccaneer bases in the Antilles are often commercial centres. Merchant-smugglers stop outside territorial waters to trade with ships coming from the continent. All this is possible because Spain is, in terms of production, backward compared to the two leading European states on the Atlantic. The episodes of this advance in the seventeenth century seem insignificant compared to the Spanish mastodon, but in the eighteenth century they would prove to be fundamental.

Already towards the middle of the 16th century, French pirates arrive to conquer Cuba and demand from it a ransom; in the same period, Francis Drake is commissioned by the English crown to organise piracy in the Antilles: his capture of the Spanish convoy from the mines of Peru during the attack on Panama in 1573 remains famous. In 1604, the French settle in Guyana. In 1620, the English settle in Barbados; in the same period, the French conquer Martinique and Guadeloupe. By 1625, the French and the English have now occupied the Lesser Antilles. In 1628, it is the Dutch who capture the annual convoy of Mexican silver, coming from Veracruz. In 1630, the buccaneers establish their base on the island of Tortuga. In 1634, the Dutch take possession of Curacao. Great Britain conquers Jamaica and makes from it the centre of piracy. Morgan was the governor of Jamaica, but the anti-Spanish European nations were all implicated in his ‘illegal’ trades and profited from them. In 1697, France and Great Britain agree to divide Santo Domingo.

Throughout the seventeenth century, however, these advances fail to substantially undermine the power of Spain in Latin America. The system, organised by the conquistadors upon their arrival, remains fundamentally intact until the 18th century. Encomienda and repartimiento are the bases of the exploitation of the indigenous population’s labour: repartimiento imposes the exploitation of the mines, while encomienda organises livestock farming and agriculture to support the same mines.

Even in the relatively slow development of agricultural production, one observes the concentration of land in the hands of a few families of landowners, while it is always the crown to guarantee the property, understood as a personal concession. The large hacienda is formed, a phenomenon that initially originated in Mexico but tends to spread to the rest of the West Indies. The haciendas presuppose the expropriation of village community lands, actual confiscations carried out in the name of the crown under the most varied pretexts: for example, villages that cannot prove a right of ownership of the land are expropriated.

Beyond the brutality and inherent contents of backwardness of the methods used by Spanish landowners, we see in these processes of land concentration not a return to the Middle Ages, but a gradual takeover of the colony by the world market. The overcoming of the village commune – given the capitalist relations that already existed in the seventeenth century – was posed either in the sense of its transformation into large-scale personal servitude or the outright decimation of the Indians. Latin America could only retrace the necessary path of the brutal history of humanity.

The Spanish introduced the encomienda and repartimiento, progressive forms with respect to pre-Columbian communitarianism. With the development of the productive forces, the encomienda turned into peonage, an already bourgeois form of land exploitation. Peonage would form that mass of propertyless slaves who are the basis for the introduction of capitalism under every sky. The Yankees of North America instead – once the dispute with the Southern States was resolved – chose the more radical path of the annihilation of the indigenous communities: they wiped the Red Indians off the prairies in order to organise the capitalist mode of production.

The 18th century is the century that anticipates the definitive affirmation of the bourgeoisie on a European and global scale. In Latin America, it is the century that paves the way for the definitive destruction of the Spanish colonial system, which will have its end in 1825 with the wars of national liberation. The superiority of the colonial development model of the Anglo-French bourgeoisie over the Spanish landowners is now evident. The Antilles are the centre of this confrontation: from a hub for smuggling and piracy, they are transformed into lands producing precious raw materials. Sugar, cocoa, coffee, and indigo are produced in the Caribbean regions for consumption in Europe. Plantations are, therefore, introduced to meet the demands of the European market with European capital; trade is managed by the Europeans; black labour power is supplied by the Europeans; the commodities exchanged for raw materials are supplied by the Europeans. It is a huge business in which the wealth accumulated in capital is always controlled by the bourgeois metropolises. The entire economy of the Antilles is organised around sugar production.

The famous triangular trade is organised. Slave ships set sail from Bristol, Liverpool, or Bordeaux loaded with manufactures, especially cloth and weapons, which were in high demand in Africa; according to their needs or the political favours they enjoy, they go to the African coast of the Atlantic, where the first deal is made with indigenous merchants, controlled by some recognised local authority. The stowage of the black people could take up to four months. Then they set sail for the Antilles, where the sugar cane plantations require a continual replenishment of slave labour: on average, a slave does not live in captivity for more than ten years, so every year the owners must write off a tenth of their human capital, every ten years the black population is completely replaced by other slaves. This gives an indication of the dramatic nature of the phenomenon.

Slave Trade and Commerce in the Antilles in the 18th Century
(R.Anstey, The Atlantic Slave Trade and British Abolition, 1760-1810, London 1975)

Although no more than 10 or 15 million Negroes arrive at the ports of the Americas, the devastation of the trade in Africa causes the loss of 40-50 million lives. Many Negroes die from illness or suicide on the ships, but, above all, it is the African internal wars, to procure slaves for the slave traders, that cause the decimation of entire populations. Once they set sail for the Antilles, the slaves are sold and sugar, which is in great demand in Europe, where the possibility of extracting it from beetroot has not yet been discovered, is loaded onto the ships.

In the eighteenth century, the European market for sugar and other colonial products is tacitly divided between England and France. The former, in addition to being a major consumer, manages the northern market, with the Netherlands, Denmark, and the Scandinavian countries, as far as the cold lands of the tsars, while the latter, the central European market through Bordeaux and the Mediterranean market through Marseille. If everything appears to be done in the interests of the commercial bourgeoisie, which dominates the alliance with the industrial bourgeoisie, it was ultimately the latter that sees in the strengthening of trade with Africa and with consolidated America its manufacturing framework. The commercial companies directly manage the economic organisation of the plantations by advancing capital to the planters – chronically indebted to Europe and constantly seeking letters of credit, cashable on the London Stock Exchange. Nevertheless, it is the factories of London and Liverpool that are preparing the great leap of the industrial revolution.

The Caribbean sugar business caught the Spanish economy unprepared. Cuba, for example, is a supplier of meat to the rest of the Antilles islands up until the first half of the eighteenth century. However, although less dynamic compared to the rest of America, the Spanish colonial economic structure is also evolving towards capitalism.

In Peru, the silver mines once used by the Incas are running out, but at the same time, livestock breeding is developing in the Argentine Plata, originally established to supply meat to Peruvian miners, then organised to meet the demand for leather in Europe. It seems that in the eighteenth century, the value of an ox’s hide in Buenos Aires was equal to that of its meat. In the Orinoco area, around the cocoa plantations – which do not allow for the same business opportunities as sugar plantations – extensive livestock breeding is also organised. In Mexico, on the other hand, mining is much more profitable, especially in Potosí, and it is around it that subsistence farming and livestock breeding are organised. Trade is managed through the Spanish monopoly, with the leather, cocoa, and silver merchant guilds enriching themselves and maintaining the imperial administrative structure and the crown itself.

A Creole ruling class is forming, made up of Spaniards now settling in America and who do not always share the same interests as the imperial administration. The age of piracy is now over, England has imposed the Treaty of Utrecht (1713) on Spain, obtaining a monopoly on the slave trade with the Spanish colonies, the Asiento, and the possibility of adding its own convoy of merchant ships to the Spanish fleet. The annual fairs of the three ports of Central America and Buenos Aires are thus legally opened to European trade. On the other hand, smuggling is effectively institutionalised in some Spanish viceroyalties. We shall see how the Spanish crown’s attempt to oppose this historical trend will represent one of the causes of the war with Great Britain and the beginning of the national revolutions in Latin America.

Latin America at the end of the 18th century

From the point of view of social relations, we witness, especially in Mexico, the transformation of village communities into haciendas owned by the latifundists, who use peonage as a method of exploiting peasants. Since 1609, Indians are forced to work the lands of their conquerors, except that they can ‘freely’ choose the master they want. Subsequently, in a process very similar to that experienced by European peasants, the landowners indebt their own peasants with the aim of binding them to the hacienda. The owner advances the peons part of their wages and part of the operating capital in seeds to cultivate the small plots of land that the peasants need to survive. The peon could leave the hacienda on condition that he pay his debt, but this would never happen: the law stipulated that indebted Indians had to remain on the property. The large latifundists thus have absolute power over their boundless territories: they have the right to judge the peons and have militias to maintain order over the labourers and the villages.

The figure of the peon is similar to that of the poor peasant: indeed, he owns a small plot of land and is also forced to work for the landowner in order to survive and pay off the debt he has incurred. It could be argued that, in fact, the type of servitude that is created is similar to that between feudal lords and peasants in the Middle Ages, but this is not accurate in light of the economic categories: the relation of servitude is mediated by money and interest, that is, by the advance of capital to the small producer, albeit in a most rudimentary form.

This way of managing the haciendas is therefore entirely based on the capitalist mode of production, although one cannot fail to note that it is a backward form: both with respect to the large-scale management of farms through wage labour, and to the parcelled management of the latifundium through the division into small plots given in tenancy to free peasants. This is transitional form between a stage of slavery – such as the encomienda or the large tropical plantation – and the management of the countryside through the modern capitalist method with the labour of the agricultural wage-earner.

Such a system would lead the haciendas to create a mass of peasants who, in times of famine, would prove desperately incapable of surviving. They would form the basis of the peasant revolution from below, which would repeatedly shake the foundations of Mexico. They would not be proletarians, therefore would not move in a socialist direction, but during the revolts they would divide up the land of the latifundists: this would have been the quickest way to introduce capitalism into the countryside and, consequently, into the whole of society. The Latin American bourgeoisie and landowners were well aware of this state of affairs, so much so that their greatest concern – once the Spanish empire had been defeated – would be to avoid being overtaken by the poor peasants of the large haciendas.

We are thus able to ‘take a snapshot’ of the political organisation on the eve of the Latin American national revolutions, while simultaneously attempting to assess the fundamental characteristics of the economic and social structure, which we know to be the cause of historical developments.

We can divide Latin America into four bands.

a) Half of the thirteen million inhabitants of the Spanish Indies are concentrated in Mexico, because it is the richest region, most interesting for trade with the metropolises. Silver mining is the basis of this relative economic progress, throughout the northern belt, the discovery of new mines adds to the exploitation of older ones. In these mines, the repartimientos increasingly gives way to mixed and wage-based forms of remuneration. Livestock farming has long been widespread in the inland provinces, while agriculture sees the organisation of the haciendas and the exploitation of the peons.

Food products have their consumption centres in the mining towns, where there is a relative subsistence-level artisanal development (copper, textiles, ceramics). The central plateau and the South are areas of great agricultural expansion (wheat and sugar), linked to European export. A guild of wealthy merchants, scheming with the crown, profits from these two major trades, with the port of Veracruz and its annual fair at the heart of their transactions. Mexico provides two-thirds of the crown’s revenue, is its most important colony, has enormous monetary resources, concentrated in the hands of a few families.

b) All of Central America and the rest of South America experience a similar condition of social and economic development. The Viceroyalty of New Granada is linked to livestock farming, while the first cocoa, indigo, cotton, and coffee plantations were introduced in the Atlantic part of the Captaincy General of Caracas. Trade with Spain is organised around Caracas; while smuggling took place on the borders with Jamaica and along the coast. Peru is going through a period of crisis. Since the silver mines were depleting, a slow economic decline began, culminating in the break-up of the original viceroyalty and the formation of the Viceroyalty of La Plata. Chile itself, located at the edge of the Empire, has in the concentration of large subsistence farms its most marked characteristic.

Trade and livestock farming are more advanced in the Viceroyalty of La Plata. Around Buenos Aires, trade throughout the South Atlantic region is being organised: silver from Upper Peru, livestock for the export of leather and foodstuffs. An industrial activity linked to cattle slaughtering begins: tanning and salting. From this economic organisation arises a social structure which, despite its peculiarities, makes this area a homogeneous whole. Backward compared to Mexico, this enormous strip of land has large estates mired with exploitation in the encomienda, where the Andean village economy often dominates.

A stagnant bourgeoisie is linked more to trade than industry. Large cattle ranchers need endless pastures, while planters have the problem of selling their surplus products, which Spanish merchants are unable to absorb. The populations still live in an archaic reality, often linked to pre-Columbian traditions, Negro slavery is not widespread. The most advanced areas are the Venezuelan and Argentine viceroyalties, where groups of vaqueros, wage-earners linked to an extremely dispersed form of capitalism, are formed.

c) Brazil, not straying far from the rest of the South American continent, follows its own independent modes of development. Linked to the fate of the Portuguese dynasty, the Viceroyalty of Brazil will begin to separate from the rest of South America in the early 18th century, when Portugal enters the orbit of Great Britain. A country morphologically suited to tropical plantations, Brazil finds in Portuguese commercial incapacity the fundamental limit to the expansion of its sugar cane plantations. On the periphery of the plantations are areas of extensive cattle raising, roamed by hunters of Indians, who are resold to the planters at a lower price than the Negroes.

At the beginning of the eighteenth century, the discovery of gold in the south brought about a turning point in the Brazilian economy. The mining industry produced wealth, facilitating the introduction of slaves and agricultural improvements. With the Methuen Treaty of 1703, Portugal, in exchange for the free export of its wines to England, guaranteed the free trade of English products in all its possessions. By virtue of this, Brazil was flooded with commodities from the flourishing English manufacturing industry, while the gold largely ended up in the coffers of City bankers. However, sales in Great Britain gave the planters some breathing space, even though the English always preferred to favour sugar from the Antilles.

The sugar and mining economies were linked to the possibility of using slavery. Along the Atlantic coast, plantations were forming around the mills for refining sugar cane. Manufactures were arriving from abroad, there was only trade in commodities. In a certain sense, class relations are simplified: landowners, slave breeders, primitives. All trade is in the hands of English companies.

d) The Antilles, although insignificant in terms of territory compared to the rest of America, represent one of the key areas for understanding future developments in the history of Latin America. In the eighteenth century, they experience their heyday, thanks to the sugar boom. Perfectly integrated into the colonial market of the two major European powers, the Antilles constitute the deal of the century. French crops cover almost twice the territory of the English ones.

French sugar is produced in Santo Domingo, Martinique, and Guadeloupe. Trade is organised by the merchants of Bordeaux, future homeland of the Girondins. England has plantations in Jamaica and in its half of Santo Domingo. In the second half of the 18th century, coffee also begins to be introduced. All the colonies are controlled by metropolitan merchants. Half of the English fleet sails the Atlantic, calling at the Antilles, and the French are no less active.

The enterprise is such that it stimulates the first commercial exchanges between colonies: the English colonies of North America trade with the Antilles, exporting grain (a historical habit) and other foodstuffs, importing sugar and molasses. The Yankee commercial bourgeoisie and the farmers give no small impetus to the ‘sugar fever’. But the Antilles remain an unattainable mirage for Spanish-speaking landowners until they escape the Spanish monopoly. In the tropical belt, nature has provided everything necessary for sugar cane cultivation: climate, land, and Indians; only the incompetence of the Cadiz merchants prevents the development of the plantation economy.

The tendency of the Latin American economy is to open up fully to the English and French markets; the countertendency, represented by the Spanish crown, would like to see the reconfirmation of State power and, above all, of the commercial monopoly. The Spanish kings intend to pursue a policy similar to that of Louis XIV, relying on big financiers and merchants to reduce the role of the nobility; but in fact, there are no social classes so strong in Spain, indeed, finance and commerce are controlled from outside Spain.

The administrative shift, in itself not unwelcome to the Creoles, has no counterpart for the business of the bourgeoisie and the landowners. Restrictions on free trade and smuggling leads to a resurgence of English piracy in the mid-18th century, similar to that seen in the previous century: Portobelo is occupied and Cartagena besieged. The conflict in the colonies is also an open conflict in Europe. By now, the British, to safeguard their economy, are increasingly convinced of the need to take over the Spanish empire, and in this they receive signals of approval from most of the Latin American landowners. Moreover, the new centralising turn of the crown once again highlights the entire dispute over land inheritance rights. The crown returns to acting as a dispenser of personal favours, as if intending to deny the bourgeois right to land ownership.

Taking stock of what the alignments in the national wars will be, we deduce that, in general, they benefit the interests:
     a) of England, which would like to replace Spain in the exploitation of the colonies and, in doing so, also undermine France (guilty of having helped the North Americans in 1776), which profits from monopolistic trade;
     b) of the large landowners, who could finally free themselves from the shackles of Spanish administrators and taxes, asserting their right to bourgeois land ownership and, above all, the possibility of developing the plantation system, in line with English mercantilism;
     c) of the national Creole bourgeoisie, which, although weak and certainly unable to prevail over English imperialism and the latifundists, has an interest in the creation of the national state and the national market, conditions historically necessary for the accumulation of industrial capital.

In contrast, opposing these ‘three emerging forces’ are:
     a) The Spanish crown and the entire pachydermic body of parasitic State officials and priests, who were of considerable importance in the colonial economy;
     b) The large corporations of merchants dependent on Cadiz, linked to the monarchy and to French capital, which, with the invasion of English commodities on the Latin American market, would be ruined.

It is clear that, although progressive, the path chosen for the introduction of capitalism is against the interests of the poorest masses, the slaves and the peons, who would bear the brunt of exploitation by the national and international bourgeoisie. The care with which the ‘three emerging forces’ will seek never to push the revolution to the extreme explains much about the phases of the anti-Spanish war of liberation.

It is impossible to understand the events that lead to the long campaigns for national liberation without analysing the economic and social structure and considering the issues of European politics and the historical conflict between Spain and Great Britain for global hegemony. The four war crises (1761, 1779, 1793, 1796) between Spain and England, which upheave the entire Spanish colonial system, always result in a British victory, which means an intensification of European commercial penetration in Latin America.

Following the events, one notes that in 1778 the most important Spanish ports are able to trade with all the most important ports in the West Indies. In 1785, trade between Asia and America opens. In 1795, merchants are authorised to send to foreign colonies (the Antilles and the USA) the surpluses that Spain does not absorb. This is a more than a partial opening up which, combined with the institutionalisation of smuggling, further integrates the Spanish colonies into the large international trade network.

Also in 1795, after the Spanish king allied himself with the French Directory in an anti-English move, Great Britain, master of the Atlantic, imposes a blockade on French-Spanish trade, forcing Madrid to use neutral cargo ships, largely controlled by the British themselves. In 1805, with the British victory at Trafalgar, the Atlantic is virtually closed to trade with France and Spain. In 1807, when Spain and France decide to divide Portugal between them, the Lisbon court takes refuge, thanks to the protection of the British navy, in Brazil: Rio de Janeiro becomes the new capital of the Portuguese empire. In 1808, the Spanish royals, Charles IV and his son Ferdinand, are arrested by Napoleon and taken to Paris. Joseph Bonaparte, Napoleon’s brother, is proclaimed king of Spain. In the colonies, news arrives of King Charles IV’s abdication in favour of Ferdinand VII, who becomes the ‘legitimate’ ruler of all Latin America.

The Creole landowning classes, in the name of the loyalist and anti-Napoleonic banner, begin to revolt against the power of the mother country, subdued by the French. In September 1808, Montevideo rises up, and at the same time New Granada proclaims itself independent. At the beginning of 1809, it is the turn of the Viceroyalty of La Plata. In May of the same year, it is Peru’s turn. Much of America, between the equator and the Tropic of Cancer, is shaken by an anti-French and legitimist revolutionary ferment, from Caracas to Quito and as far as Guatemala. In 1810, the Confederation of the United Provinces of Colombia is proclaimed. Finally, it is Chile’s turn.

Up to this moment, events have been confined to the South American continent, with the exception of Brazil, already dominated by the British. The clashes, some of which are bloody, between the armies have never led to genuine popular uprisings and have always been confined to a framework of a ‘revolution of merchants, landowners, municipal councillors, and local authorities’.

This was not the case in New Spain, where the peasant masses represented an explosive mixture of the first order.

Years of bad harvests, the penetration of English trade, which was ruining small family-run artisanal production, led, around 1810, Mexico into a general economic crisis of vast scope. The reaction of the peons was quite radical; two revolutionary attempts, one from the north and the other from the south, shook the viceroyalty. Two priests led the revolt.

In the north, Hidalgo organised, in the name of the image of the Most Venerated Virgin of Guadalupe, a column of Indians and mestizos, beggars and starving people, bandits, mostly former miners and poor peasants. Their goal was a piece of land large enough to support their families. In September 1810, Hidalgo decreed the abolition of slavery, the confiscation of the haciendas and the death penalty for counter-revolutionaries. It is clear how such a bourgeois-peasant revolution from below called into question the power of the latifundists and wealthy merchants of the cities, so it is not surprising that Creoles and Spaniards, who were gutting each other elsewhere, made common cause to quell the insurrection. In January 1811, Hidalgo was taken prisoner and six months later he was shot while his guerrilla groups were falling apart.

But this did not mean the end of the revolution, which moved south, led by the mestizo priest Morelos. Morelos’ agrarian programme was simple and effective: abolition and division of the haciendas into small plots. In 1813, the Revolution took control of Acapulco, forming a sort of peasant republic in southern Mexico. A congress was convened in Chilpacingo, where Mexican independence was sought. But once again, the Creoles and Spaniards joined forces and the counter-revolution crushed the rural indigenous movement. Morelos was defeated and put to death in 1815.

The experience of the Mexican Revolution left a mark on the consciousness of landowners throughout the rest of Spanish America. National liberation armies would be careful to stay away from the borders of New Spain; preferring to limit the range of their operations to South America alone. The same lesson was drawn from the Haitian events.

In the French Antilles, the repercussions of the Great Revolution are not slow to make themselves felt. In 1791, the slaves rose up in Santo Domingo and quickly overthrew, in a bloodbath, all colonial institutions. The repression by the National Guard, born of the revolution of equality, fraternity, and liberty, was violent, and a fierce massacre of the rebellious Negroes followed. The next twelve years of bloody clashes saw the formation of the revolutionary Negro republic of Toussaint-Louverture, the black Spartacus of the Antilles.

France re-established ‘order’ and slavery in 1802. Two years later, the independent republic of Dessalines was proclaimed. It was a compromise which, while abolishing slavery, did not modify the subjection of the peasant to the land, did not abolish the castes nor the brutal repression of the guerrillas. Lacking a political outlet, the slave revolts that followed after the assassination of Dessalines created a black elite tied to the export of sugar, that is, to imperialism. If the white colonists had gone back to France, the land was occupied by Haitians who aspired to call the slaves back to the plantations. The racial revolts concealed the clash between the classes. The slaves, amidst clashes and violence, were transforming themselves into small peon landowners, a process which, after an era of internal strife, will only begin to take shape in 1883, under the presidency of Solomon.

Napoleon’s defeat should have resolved the problems of Spanish America, but this was not the case. The return of Ferdinand VII to the Spanish throne brought with it a new absolutist turn in the colonies. Once again, there were plans to restrict free trade with England, and the bourgeois right of large landowners to privately own land was called into question. It is the epoch when, in Latin America, liberal politicians were imprisoned or deported, the Inquisition was being restored, the theatres, newspapers, and universities, considered hotbeds of the Creole revolution, were being closed down. It is the end of the first phase of the revolution. In 1815, 10,000 Spaniards landed in Venezuela, royal order was then re-established throughout the entire territory. It is the time when Simón Bolívar, future liberator of America, placed himself under the protection of the British fleet in Jamaica.

Great Britain’s actions in this phase were also contradictory. Having defeated Napoleon, who had threatened the global hegemony of English trade, it was now a matter of facing with the deleterious effects of the Holy Alliance, of which the Spain of the Restoration was an anti-historical result. There was no open conflict between Spain and England in this period. London hesitated, preferring not to officially ally itself with anti-Spanish revolutionaries such as Bolívar and San Martín, although it would never skimp on its support, expecting from them the definitive collapse of the Spanish Empire in the West Indies.

At the same time, it should be noted that there was no widespread popular participation in the national revolutions. This is the case of the laneros – cattle herders from the boundless Venezuelan plains of the Orinoco – a manoeuvring mass in the pay of the best buyers. In 1813, the laneros made up the bulk of the army that drove Bolívar out of Caracas, but in 1816 they formed the backbone of Bolívar’s cavalry, which unified the north into the Republic of Colombia. In 1818, Bolívar began his military campaign, occupying Caracas. By the end of 1819, the entire former Viceroyalty of New Granada was under revolutionary control, the Republic of Gran Colombia (Colombia, Venezuela, and Ecuador) was formed.

San Martín, on the other hand, had moved from the South. In 1817, having liberated Chile, he proceeded – thanks to British naval aid – to conquer Peru, centre of royalist resistance. With an army of 5,000 men, also organised by British officers, he liberated Lima from the predominant army of La Serna, numbering 23,000 men; but did not defeat it definitively.

In 1821, the two revolutionary armies were now gaining the upper hand over the Peruvian royalists. Bolívar and San Martín met in Guayaquil, where the liberator of Colombia ordered his colleague to retreat to Peru so that he could continue the anti-Spanish campaign himself. In August 1824, on the Ayacucho plateau, the decisive battle was fought, where Bolívar’s laneros definitively crushed the last resistance of the counter-revolutionaries.

In Mexico, after the Morelos experience ended, it was precisely a Creole general, Agustín de Iturbide, who had made his career by massacring the peasants, who proclaimed independence. The pretext was the Spanish Carbonari uprisings of 1820, which had driven Ferdinand VII from the throne: in the name of royalist loyalty, a free Mexico was formed. The ‘Army of the Three Guarantees’ organised in the South, in Iguala, marched towards the capital, conquering it without firing a shot. Thirty of Mexico City’s notables formed a provisional ‘revolutionary’ government, which appointed Iturbide as regent and convened a Constituent Assembly. The Captaincy of Guatemala adhered to the new state.

Even less traumatic was the conquest of Brazilian independence. Having become the capital of the Portuguese Empire in 1808, Rio de Janeiro found itself increasingly integrated into the English market. After the Restoration – following the suppression of a republican revolution attempt in Pernambuco – Emperor John VI returned to Lisbon in 1821 to regain possession of the throne. He left his son Pedro, Prince Regent, in Brazil. Less than six months later when, under the threat of being involved in the Peruvian wars of San Martín, Pedro I preferred to have himself proclaimed constitutional emperor of Brazil and to convene a constituent assembly. The Portuguese garrisons swore allegiance to the emperor, while everything took place under the control of the British navy. Independence was achieved almost without a fight.

Immediately after 1825, once the wars of liberation were over, the national structure of Latin America was still unclear. The echoes of the anti-Spanish wars had not yet faded when a series of states and confederations were created: Mexico, the United Provinces of Central America (from Guatemala to Panama), Gran Colombia, the Bolivian and Peruvian Republics, confederated under the influence of Gran Colombia, the United Provinces of the South (Argentina, Paraguay, and Uruguay), and Brazil.

Following the paths of individual nation-states will be the task of subsequent work. However, it is very interesting to look at the Latin American Confederation project, based on the North American model, attempted by Bolívar at the Panama Conference in 1826. A number of fundamental points had to be addressed, among which were the self-determination of the future Confederation vis-à-vis European influences, the democratic structure of regional governments, their new laws, bureaucracy, police, army, and federal fleet. This would have meant the possibility of forming an immense nation stretching from the Mexican desert to Tierra del Fuego. Over time, this would inevitably have come into conflict with the world dominance of England and the emerging power of the United States itself.

Such a project was more in line with the interests of the Latin American commercial and industrial bourgeoisie than with those of the landowners, tied to the English cart. It would have been possible to unite a vast territory into a large national market, capable of closing itself off to British and French commodities in order to develop the national industry, then in an embryonic state. The landowners and large ranchers were totally opposed to it, as they needed to be able to sell their products on the European market, even at the cost of holding back the development of the domestic economy.

Therefore, already in the year 1830 – when Bolívar, politically defeated, was leaving Venezuela for his final exile – Latin America had almost reached its current structure. And shortly thereafter – thanks to the ‘mediation’ of England – Gran Colombia would even split into three, as would the United Provinces of Central America. The entire area gradually took on its present-day geopolitical appearance.

Some lessons must be drawn on the class nature of the states that have now formed in the former Spanish Americas, projecting us into what will be the analysis of contemporary Latin America.

It is now clear that two classes are clashing for control of political power in these nations: the landowners and the commercial and industrial bourgeoisie. It is in the clash between these two ‘models of development’ that the future history of these troubled countries can be read. On the one hand, the line from above of the haciendas and plantations – directly promoted by British imperialism and then controlled in the 20th century by US imperialism – represents what the ideologues of neo-capitalism call underdevelopment. This is not, however, non-development, as they understand it, but relatively slower capitalist development. On the other hand, the line from below of the bourgeoisie, which, in order to assert itself should sever outright its relations of subordination to imperialism. It is more progressive for capital, but no less bourgeois than the other; it is socially represented, as in early 19th-century Mexico, by the peasants (middle class, poor, and landless) and by the guerrilla, a typical form of rural struggle.

But from this one should not confuse – as the theorists of underdevelopment do – such a bourgeois movement with the revolutionary proletarian one. If it is not the proletariat, led by the Communist Party, that ‘uses’ the peasants, particularly the poor ones, in an anti-imperialist sense – with the aim of emancipating all classes and thus abolishing the ownership of land and its products – then they cannot go beyond their bourgeois limits. And it is no wonder that they sometimes prefer, at the decisive hour, to fire upon the proletarians, in order to take refuge under the protection of the big bourgeoisie. Subsequently, with the development of modern capitalist relations in agriculture as well, they go on to constitutional a social reserve of the counter-revolution.

We wrote in our 1969 press release:

‘When it comes to the role of the peasants, all Guevarists and Castroists create enormous confusion by lumping together the small farmer-owner, the sharecropper, and that pure proletarian who is the farm labourer. Now, there is no doubt that in Latin America, as in all “underdeveloped” areas (and partly also in so-called developed countries), the poor peasantry, understood as a non-proletarian peasantry but subject in a thousand ways to exploitation by large national and international capital, as well as that of the old landed and latifundist classes allied with the new masters, is destined to play an essential role, as a potential rebel always ready to express its fury at the usury to which it has been subjected for centuries, both as a small producer and as a representative of a defeated and indignantly subjugated race (as the Indians). But this observation has nothing to do with the judgement on the actual political weight that the peasantry will necessarily have in a proletarian revolution.

‘The peasantry can be and is rebellious, but it is not and nor can it be the bearer of socialism, because its existence and its aspirations are bound to a mode of production even more backward than the fully capitalist mode of production; it lives, moves, and struggles within the sphere of small commodity production, and its dream is not to emerge from it toward a regime of social ownership, production, and distribution, but to remain within the regime in which it finds itself today, even if made more tolerable by possible reforms. Either its rebelliousness merges with the revolutionary resurgence of the proletariat, the only one that can lead to a socialist revolution, that is, having as its objective a regime of social production and distribution, or the “revolutionary” peasantry will conform (...) and become an objectively counter-revolutionary force’. (Il Programmma Comunista, ‘More on the Proletarian Movement and Latin America’, No. 6, 1969).

In conclusion, we can say that those that emerged from the Latin American wars of national consolidation were bourgeois states balanced upon two classes, against the rural plebs and the nascent proletariat. A phenomenon that in modern history has numerous parallels and in no way contradicts our theory, which affirms that the State is normally a bludgeon in the hands of the ruling class.

‘As the State’, writes Engels in Origin of the Family..., ‘arose from the need to keep class antagonisms in check, but also arose in the thick of the fight between the classes, it is normally the State of the most powerful, economically ruling class, which by its means becomes also the politically ruling class, and so acquires new means of holding down and exploiting the oppressed class. The ancient State was, above all, the State of the slave-owners for holding down the slaves, just as the feudal State was the organ of the nobility for holding down the peasant serfs and bondsmen, and the modern representative State is the instrument for exploiting wage-labour by capital. Exceptional periods, however, occur when the warring classes are so nearly equal in forces that the State power, as apparent mediator, acquires for the moment a certain independence in relation to both. This applies to the absolute monarchy of the seventeenth and eighteenth centuries, which balances the nobility and the bourgeoisie against one another; and to the Bonapartism of the First and particularly of the Second French Empire, which played off the proletariat against the bourgeoisie and the bourgeoisie against the proletariat. The latest achievement in this line, in which ruler and ruled look equally comic, is the new German Empire of the Bismarckian nation; here the capitalists and the workers are balanced against one another and both of them fleeced for the benefit of the decayed Prussian cabbage Junkers’.

Unlike the English and French, who in North America encountered populations that were still primitive, organised into small groups and still partly nomadic, Spanish colonisation in Central and South America had to contend with important and advanced civilisations.

In the first case, the colonised territories were simply seized from the primitive inhabitants, who were exterminated or driven from their lands. A social organisation and a mode of production were imposed that mirrored those of the metropolis of origin, so foreign to the societies and cultures of the indigenous populations that their integration into the colonial system was impossible.

This did not happen in the territories conquered by Spain, where the colonial structure was placed alongside and superimposed on the social organisation and mode of production of the autochthonous populations. In Central America, these were the ‘Civilisations of Corn’, based on a cereal with high productive yield and nutritional characteristics, sufficient to sustain numerous populations and provide the surplus for the rise of a new civilisation.

The oldest societies of which traces remain are those of the Maya in the Southern part of present-day Mexico, extending to Guatemala and Honduras, and the Olmecs in the central zone of the country. Traces of this civilisation can be found as far back as 1000 B.C.E. Next in chronological order is the surprising civilisation of Teotihuacan, a city on the plateau which, around 500 C.E., extended over a territory of 20,000 square kilometres and comprised about 200,000 inhabitants, making it perhaps the most populous city in the world at the time. It was sacked and destroyed around 700 C.E., it is not known by which populations. They were succeeded by the Toltecs, from whom the Aztecs, or more properly the Mexicas, were directly descended. The latter settled in the early 1300s in the valley where Mexico City now stands and, over two centuries, built the powerful city of Tenochtitlan at the centre of an immense empire that stretched as far as the territories of the Maya, a civilisation now in decline.

The first Spaniards, amazed by its beauty, described the city built on the archipelago of islands in the large lake, today almost completely drained. On them neighbourhoods were built, and were used as gardens and orchards, connected by movable bridges for defensive reasons (Cortez himself was trapped in this way). The urban structure was laid out according to straight lines, a sign of careful planning. At the centre of the city stood the palace of the Tatloani, the supreme political and religious authority of the Aztecs, the main temple and the great market square, centre of social life. The lake was intersected by dams and barriers with sluices to control flooding during the rainy seasons and to separate fresh water from salt water, while two aqueducts carried potable water. Along the shores of the lake and beyond into the immense valley stretched other flourishing urban agglomerations.

With regard to the social structure of the Mesoamerican civilisations, the original basic productive unit was the community, made up of several family units, holder of rights to the land. The land, owned in common, called calpulli, was distributed to families in usufruct in quantities sufficient to meet their needs. This allocation remained in force as long as the land was worked and made productive within the limits of the family’s needs, otherwise it lapsed and the land was redistributed. Obligations to the community consisted of a tribute in products and labour service for common activities. These were administered by hierarchies of elders and by an elected chief who also had the duty of periodic redistribution. The pre-Hispanic man identified himself completely with the community, avoiding any individual conception of life; the highest expression of this sentiment was the sacrifice of one’s life to the gods to ensure their protection over the community.

Agricultural production generated significant surpluses: over time, the architecture of great civilisations was built on this basic productive core, the peasant communities. Non-peasant social groups emerged, military and priestly castes with clearly defined ranks and privileges, organised into pyramidal structures endowed with a strong bureaucracy.

The most rigidly and centrally structured societies were able to build strong armies and subjugate others. Military conquests allowed the acquisition of new territories, the flow of additional tributes from the subjugated populations and caused the enslaved population to grow, destined for production.

Gradually, part of the arable land passed from the hands of the peasants to those of priests, the military chiefs, the bureaucracy, and the nobility linked to the Tatloani family. Thus large landed estates, called Billali, were being formed, where slaves or subjugated workers were employed. This process was accompanied by a progressive increase in the tributes imposed on the peasant communities and ended up creating a significant concentration of wealth in the hands of the upper classes, while completely impoverished social strata were emerging.

When the Spanish arrived, not only were the Aztecs opposed by the hatred of the subjugated populations and by those fierce and hostile populations who resisted on the margins of the empire, but everything suggests that a strong element of weakness came from within that society itself, given the strong contradictions, discontent, and social tensions, and that the situation was therefore rapidly evolving, perhaps even towards an incipient decline, as had happened to previous civilisations, despite the splendour and wealth that was ostentatiously displayed.

Certainly, a major limitation in terms of progress towards more advanced forms of social organisation was posed by the fact that, being a predominantly agricultural civilisation, it remained stuck in the development of other fundamental crops besides maize due to the absence of animals suitable for work, and important for livestock, such as cattle, pigs, and sheep, while they were still at the dawn of the discovery of the wheel. Furthermore, although the use and working of metals was known, these regions were lacking iron, which, due to its characteristics of hardness and resistance, has everywhere constituted one of the fundamental factors in the development of human civilisation.

In any case, any evolution of Aztec civilisation was halted by the arrival of the Europeans.

Driven by the need to find new trade routes and discover precious metal deposits to finance their imperial power, the Spanish colonisers who arrived in Mexico did not hesitate to attack the populations and ally with others hostile to the Aztecs in order to conquer and then completely destroy the Montezuma empire, taking possession of a vast territory. Spain, already a country economically dependent on other European powers, found in its overseas colonies a considerable resource that would postpone its decline by a century.

During the first period of conquest, massacres and pillaging prevailed, and the conquistador military leaders ruled with an iron fist. The indigenous people attempted in vain to resist such a brutal war that very nearly led, as in the Antilles, to the extermination of the entire population.

The conquistadors occupied the lands by virtue of rights granted by the Crown, which encouraged personal interest in expanding and consolidating the Empire. The source of subsistence for the overseas colony was mainly the agricultural production of the Indians. For this reason, as soon as the Crown began to take control of it through its military and bureaucratic-administrative apparatus, it turned towards a policy of protecting the communities and the land they owned. This brought an end to the excessive power of the conquistadors, some of whom ended up in disgrace, such as Cortez himself. Provisions and laws were repeatedly enacted to punish mistreatment, looting, and abuse of the Indians and, at the same time, to introduce into the legal systems of the Spanish colony the institution of communal ownership of land intended for the indigenous populations. An ordinance of 1567, creating the ‘legal fund of the communities’, defined the extent of land to which the peasant community was entitled to by law and set the distances from the villages at which the boundaries of private property were to be maintained. This communal property was called Ejido, an institution subsequently abolished, then re-established after the peasant revolution of 1919, and is today again threatened by the ‘neo-liberal’ policies of the most recent governments.

It can be said that the Spanish Crown, primarily interested in exploiting the resources of the New World, was predisposed from the outset to preserving the economic status quo, inheriting and adopting the ‘despotic-tributary’ system of pre-Hispanic society based on the rural economy of the peasant community. Alongside this, the private latifundium, known to the Aztecs, was maintained, but the Spanish Crown, already in conflict with the nobility and aristocracy in the metropolis, attempted to prevent the emergence of a powerful landed class in the colony. The Crown thus opposed every initiative by the colonisers that could escape its control and endanger the tributary and monopolistic structure of production and commerce. The emergence of feudal lordships, as well as capitalist centres of production and commerce, was hindered by every means possible.

Characteristic was the establishment of the encomienda, which predominated during the 16th and 17th centuries. This consisted in the assignment of a specific territory, together with the indigenous communities that occupied it, to a coloniser appointed by the Crown, who thus acquired the right to the tribute deriving from these communities, part of which would have to flow into the coffers of the colonial administration. With this assignment, the encomendero became the absolute lord of that territory and the population that inhabited it was subject to him. He had the task of suppressing the revolts of the Indians, political and administrative functions, and also military ones of defence and to realise new conquests. In this way, the Crown was relieved of the costly burdens necessary to maintain a military and bureaucratic apparatus too vast for territories that were very distant from the centres of the colony. The encomienda differed from the European fief mainly in that land ownership was not hereditary and the Crown could revoke the concession when the agreed period of time had elapsed.

Despite the fact that colonial policy was aimed at preventing the formation of a landed class, the concentration of land in the hands of rich and powerful proprietors occurred slowly but surely, through various more or less legal means. When the encomiendas were abolished in 1720, they de facto existed only on paper, having given way to the large latifundium. The basic unit of the agricultural economy, which in the encomienda was always the indigenous community, was now flanked by the hacienda. This emerged at the expense of the indigenous communities, expropriated of the land, and with the rising of an army of semi-free workers: the peons.

The hacienda was a structure still pre-capitalist, albeit far removed from the characteristics of the European fief. Intended to replace the indigenous community in supplying the colony’s internal market and in trade with the metropolis, its functioning tended towards autarky, bringing together as many activities as possible within itself: carpentry, woodworking, weaving, etc. Consumption was tied to an internal shop of foodstuffs and manufactures, called a tienda de raya, managed by the hacendado, who set the prices as he saw fit, to which members of the hacienda were obliged to turn, both because they had to and because of the distance from other commercial centres. Through this mechanism, the peons ended up in debt to the master, binding themselves to him for life. The debt was passed on from father to son, so that the peons, formally free wage-earners, became true serfs bound for life to the landowner.

In the hacienda there was the master’s house, the administration, the church, a prison to punish rebellious peons and those who failed to fulfil their obligations, and the countless hovels and huts where they lived.

The land was divided as follows: a large portion, generally consisting of the less fertile areas, was intended for tenancy: these were not tenants in the capitalist sense of the term: they cultivated the land under unwritten contracts, had no capital of their own and were constantly in debt to the owner; the rent was almost always paid in kind or in days of labour or other services and prestations. A large number of tenants were at the same time wage-earners of the farm; they often worked on the master’s land, first as prestations in payment of the rent, then to pay off the contracted debts, finally as wage-earners, while the wife and children cultivated the rented land.

The most fertile land was managed directly by the hacendado with the help of the peons. These could be divided into two categories: 1) The ‘free’ peons were Indians from the communities or small proprietors who, lacking sufficient land, sold their labour to the hacienda as wage-earners. They worked there for part of the time and spent the rest of their time on their own plots or left this task to their families. 2) The ‘accasillados’ peons were those stationed on the haciendas: they received a wage in kind, in part or in full, and, in exchange for the ‘right’ to settle on the haciendas, they or their families were required to provide free services and prestations; as mentioned above, they were regularly in debt to their master and bound to him for life and for generations in a state of semi-serfdom.

The landowning class grew increasingly powerful from the mid-17th century onwards, eventually becoming the predominant economic and political force in the country. The growth of a bourgeois class, on the other hand, was greatly slowed down by Spain’s colonial policy. In the industrial field, mining predominated, conducted with semi-slave labour under the control of colonial officials. Manufacturing, on the other hand, had a very limited development, given a series of constraints designed to prevent the development of productive branches competitive with commodities imported from the metropolis. Trade was totally monopolised by Spain and under the strict control of the Crown. To this end, the Casa de Contratación was established in Seville which controlled all commercial relations with the countries of the New World. There, the entire system of transport of commodities and passengers to and from the Americas was organised and authorised.

In fact, until 1700, the economy of New Spain still stagnated in conditions of backwardness, caught in the grip of a colonial system that aimed to strip it of all its resources. But during the second half of the century, the grip loosened as Spain’s decline worsened, and the Mexican economy took a significant leap forward. In agriculture, productions such as cotton and sugar cane began to develop, intended not only for export but also for Mexican industry, which grew considerably. The mining industry was modernised, and new deposits were discovered. By the end of the century, production had increased tenfold and silver production equalled that of the rest of the world.

The territory had doubled in size, encompassing Texas and reaching the borders of the English and French colonies of North America, while the fertile coast of California was being colonised. The population had tripled, with the Indian and European races intermixing, the mestizo population developed, which today constitutes the majority of Mexicans.

Due to the strong concentration of land ownership at the expense of the indigenous communities and their consequent disintegration and devastating famines, a significant part of the population found themselves without resources to live on. Dispossessed and landless Indians, peons who had fled the hacienda, as well as poor mestizos rejected by the indigenous communities and white society, Negroes and mulattos who had escaped from the plantations or from the hell of the mines, wandered through the countryside in search of occasional work or turned to banditry. Squadrons of terrible bandoleros raged and threatened the communication routes, attacking the haciendas and mining centres.

These masses of hungry and dispossessed people gathered on the outskirts of the cities, which began to populate enormously. In the meantime, a small petty-bourgeois class had developed here, predominantly composed of mestizos. The bourgeoisie, although limited in their rights and by the strict rules imposed by the colonial administration, made its way into small trade, crafts, and small-scale manufacturing. This class had its intellectual representatives and naturally opposed the upper classes of Spaniards linked to the army and the colonial bureaucracy, to the Church hierarchy and the landed aristocracy.

The powerful landowning class also harboured interests opposed to the Crown and the colonial administration due to the limits they imposed on their excessive power, the heavy taxes, the monopoly on trade and the customs duty system, the constraints on the growth of a national market on which to pour their own products. Nevertheless, the wealthy latifundists denied any connection with the anti-Spanish movement that was emerging among the lower classes and identified itself with a demand for social transformations that would have challenged even the land privileges. And what they feared most was the uprising of the impoverished masses, which would have reckoned not only with the colonial system but also with the landowners, their direct oppressors.

The end of the 1700s marked de facto the end of the colonial system. Spain, engaged in war with England, suspended exports of manufactures to Mexico. This opened up markets to the best and most affordable products from other countries, but also to local industry, which proved capable of advantageously replacing a number of imported products. Spain was forced to ease its pressure on the colonies as the echoes of the French Revolution reached Mexico. Thus began the troubled path that would lead to independence.

As described in the first part of the treatment, in the second half of the 1700s there was a phase of strong economic, demographic, and territorial growth in Mexico. This was accompanied by a clearer definition of the interests of the landowning class, hegemonic in Mexico, and the nascent bourgeoisie in favour of independence from Spain.

Already for some time, groups and circles of intellectuals from the bourgeois strata had identified with the affirmation of the existence of a Mexican nationality, which resulted from the intersection of indigenous race and culture, rooted in the ancient Mesoamerican empires, with European and Catholic culture. The birth of this young nationality therefore represented the overcoming of the bipolarism between colonised Indians and colonising Spaniards. It asserted its sacrosanct right to sovereignty over the territory, whose beauty and natural resources were emphatically extolled.

Part of this movement were the young Jesuits, founders of thriving farms, importers and advocates of modern and specialised agricultural techniques, promoters of intensive geographical research and ethnological studies on Mexico. The young Jesuits were expelled from Mexico in 1767 by decree of the King of Spain.

In the mid-1700s, Spain was still able to maintain firm military and bureaucratic control over its colonies, but by the end of the century, with its imperial power in sharp decline, its grip began to loosen.

News of the French Revolution and, above all, the victorious outcome of the War of Independence fought by the neighbouring North American colonies brought the positions of the independents to the fore.

Meanwhile, in the countryside, strong social conflicts began to erupt between latifundists and poor and semi-proletarian peasants (peons), partly as a result of devastating famines that recurred at the turn of the century and which, especially in rural areas, sowed hunger, misery, and death. Numerous local revolts and insurrections flared up. Some became widespread, such as the one led by Hidalgo in the regions north and west of Mexico City. A country curate, he had harangued the parishioners, who had risen up, arresting and executing the authorities and confiscating the latifundia. In a short time, a veritable army of peasants was formed, which ruled the regions for some time, successfully fighting the army sent from the capital on several occasions before succumbing. The insurrection suppressed, Hidalgo was executed.

Shortly afterwards, the regions south of the capital were rising up. Once again, the peasant army was achieving brilliant successes. At the head of the movement, Morelos, also a country priest, established links with the most radical circles in the capital. Independence was proclaimed, the Indians were granted the right to Mexican citizenship, but above all, the large properties belonging to the Church and to the latifundia were confiscated and the land divided among the peasants. The revolutionary impetus coming from the peasant world did not find a counterpart in a consistent and radical bourgeois movement in the cities, and the insurrection thus ended by being crushed by the regular army and Morelos sent to the gallows.

To quickly and definitively stifle these insurrectionary movements and avert the revolutionary prospect, the colonial apparatus obtained unconditional support from the landowners. Despite the truly favourable moment, given also the weakness of Spain, engaged in the Napoleonic Wars, the propertied classes, facing and opposing the peasant movement, closed ranks around the colonial system. Any movement of revolt from below had to be crushed before the demand for independence could be raised again. In 1820, at the time of the Restoration in Europe, the Mexican landed classes, which now controlled a large part of the army, finally decided to take action. It was Colonel Iturbide who proclaimed Mexico’s independence in the ‘Plan of Iguala’, through the establishment of a constitutional monarchy with a sovereign who would have to be chosen from among the members of the ruling Houses in Europe.

There was no programme of transformation and social reform, save for the proclamation of legal equality and the free sale of land. The wealthy proprietors were particularly keen on the latter measure, a prerequisite for dismantling all those forms of protection for the Indian communities that the colonial system had instituted. The land belonging to them would be seized by the latifundists, and the population, communities having been broken up, destined to work on the large haciendas.

Almost without a fight, the part of the army that remained loyal to the Spanish crown was overwhelmed and Mexico’s independence was ratified in 1821.

With independence, Mexico’s landowning classes had gained direct power.

Far from interpreting the need for social and productive forms to transition to capitalism, the only desire they expressed was the strenuous defence of their own privileges. Lacking any perspective and therefore any programme on which to base political action, this resulted in fragmentation and conflict between centres of power linked to the particular interests of military groups and factions more or less influenced by the agencies of the imperialist powers, which in Mexico had a field day in weaving their plots. For most of the 1800s, Mexico was therefore prey to internal struggles within the ruling class. Mercenary armies furiously contended for power in a continuous succession of governments overthrown by force, military leaders who proclaimed themselves presidents or puppet presidents who were soon deposed and executed, constitutional charters churned out repeatedly to seal each new coup d’état, and constant military revolts and conspiracies.

In general, we can identify two trends within the ruling class, factions which are in turn divided into groups at war with each other: the more conservative wing, which called itself ‘centralist’, closer to the positions of the Church and the old landowners, long supported by Great Britain; the wing with liberal, federalist, and anti-clerical tendencies, closer to the positions of the bourgeoisie and supported by the USA.

This permanent state of internal warfare not only prevented the consolidation of the state apparatus but also depressed economic development for a long time. The economy as a matter of fact, unable to absorb technical progress and faced with a communications and trade infrastructure which, rather than developing, was deteriorating more and more ended up closing in on itself and stagnating in isolated islands tending towards autarky after the leap forward made at the end of the 1700s. Meanwhile, Mexico became increasingly indebted to the great foreign powers, now masters of the country’s destiny.

Under such conditions, it was impossible for Mexico to defend its borders from the appetites of the emerging and expanding North American capitalist power. The army itself, still organised along colonial lines, was poorly armed and structured for internal wars, completely incapable of withstanding the onslaught of its powerful neighbour. Thus, the game that began with the Texas War of Independence ended in a disastrous defeat that led to the loss of almost half of the immense territory.

In 1845, the USA, rushing to the aid of North American settlers long settled in Texas and were in revolt against Mexican rule, declared the annexation of that region, prompting Mexico to declare war. Immediately the North American army invaded New Mexico, pushing into Arizona and California. At the same time, it penetrated Mexican territory from the north-east, while a third expeditionary corps landed at Veracruz and, routing all defences, occupied Mexico City. In 1848, the Mexican government, having retreated to Querétaro, ended up accepting the harsh conditions imposed by the enemy: the cession of Texas, New Mexico, Arizona, and California, which were definitively annexed to the USA.

The conservative wing, which, together with General Santa Anna, had suffered so ignominious a defeat nevertheless remained in power until 1854, when the liberal wing, supported by the USA, rose up, bringing Benito Juárez to government.

La Reforma and Benito Juárez are still celebrated in Mexico to this day as they marked the beginning of the transition to a secular and modern State. In fact, Juárez aimed to reorganise the State, the central organ of political power to which the various factions of the ruling class were to submit, ending the long period of internecine strife that had been so disastrous for the country.

The fact remains, however, that the apparatus of power that was intended to be consolidated was that of the landed classes, according to whose interests Juárez’s policies were carried out, interests at odds with development in a capitalist and modern sense. The power system that Juárez had reorganised, and which his successor Diaz deployed, was the obstacle that only the revolution was able to remove.

Inspired by the principle of the ‘freedom of the individual’, particularly that of the latifundist to acquire land and cheap labour, the Reforma attacked all forms of monopoly over land ownership. One of the main measures was therefore to abolish land ownership by religious corporations and indigenous communities. Church property was to be put up for sale, but faced with opposition from the religious authorities, Juárez confiscated all their real estate and dissolved the monastic orders. The lands belonging to the indigenous communities were instead to be divided and assigned in property to the usufructuaries. However, the majority of these were declared to have no legitimate title to ownership, and the lands confiscated from the community were therefore requisitioned by the State.

This measure was therefore not aimed at the formation of the small peasant farm, but rather at the strengthening of the latifundium, since the new lands that became available were easily appropriated by the wealthy proprietors rather than the peasants, who, lacking the culture of private ownership and, above all, the economic resources to acquire and maintain it, were not only unable to obtain new land but were forced to dispose of the land assigned to them.

As a consequence, in addition to land, a large amount of labour became available, free from the constraints and protection of the disintegrating communities, which inevitably flowed towards the latifundium (the haciendas). This corresponded, among other things, to the needs of mining and the nascent industry, awaiting cheap labour.

Thus began, albeit belatedly, in Mexico, that process of demolishing the traditional agricultural system that accompanies primitive capitalist accumulation. The dismantling of Indian communities, which Porfirio Díaz subsequently completed, was inscribed in the inevitable process of the evolution towards capitalism, however marked by a powerful contradiction: it did not undermine, indeed it went on to strengthen the traditional latifundium. It was this contradiction that led to the subsequent revolutionary development of events.

The work undertaken by the Juárez government was interrupted by an interval in which Mexico seemed to be thrown back into the dark ages. In 1861, England, France, and Spain, allied with Juárez’s conservative opponents, prepared an expeditionary corps for the purpose of intervening in Mexico. The declared motive was to secure the recovery of credits, in reality it was to counter the expansionism of the USA, allies of Juárez’s liberals, who were meanwhile engaged in the Civil War.

The expeditionary corps landed at Veracruz, the traditional gateway to the capital, which was quickly conquered. While Juárez’s government took refuge across the border in the USA, Maximilian of Habsburg, sent from Europe, was appointed ‘Emperor’ of Mexico.

This one deluded himself into thinking that he could represent something more than a puppet held up by the reins of imperialism and began to pose as an enlightened ruler determined to pursue important reforms. Soon afterwards, the European contingent, supported mainly by France, withdrew, partly as a result of energetic pressure from the USA, which had meanwhile emerged from the Civil War. Poor Maximilian, left to his own devices, ended up being executed by firing squad in 1867.

Upon returning to Mexico and re-installing himself in government, Juárez immediately set about the work of purging in the State apparatus and the army, in order to proceed then to the consolidation of governmental action in line with the Reforma.

The stage was set for the subsequent arrival of General Díaz (a change of power which, according to Mexican tradition, occurred after a series of intrigues and coups), who initiated the decisive transformation in the economic and social field which the Reforma had anticipated.

Mexican historiography and the view of many petty-bourgeois democrats celebrate Juárez as a ‘progressive’ and condemn Porfirio Díaz as a ‘reactionary’. However, Díaz’s regime was in continuity with that of Juárez, the one having paved the way for the other.

The policy pursued during the Porfiriato period, from 1877 to 1910, is not one of restoration or reactionary terror, it instead lies along the path of the affirmation, through undemocratic, violent, and dictatorial means, of Mexican capitalism in its phase of primitive accumulation. This, however, was within the narrow limits dictated by the interests and privileges of the landed class and the high bourgeoisie, of which the Díaz government was the interpreter and bearer. Limits and contradictions that would bring the revolution to the fore.

The ruling oligarchy surrounding Díaz consisted of the so-called científicos, who also called themselves ‘scientific positivists’, elements from the enlightened sectors of the ruling class connected to foreign companies operating in Mexico: a ‘technical government’, as we would call it today. All of them were firmly convinced that Mexico’s march towards capitalism could no longer be hindered and that it was necessary to clear the way.

In the agrarian field, the Diaz government’s intervention was characterised by the massive destruction of communal land ownership, with the consequent private appropriation by large farms and the expropriation of a considerable mass of peasants. This process, already initiated by Juárez, had proceeded slowly because, given the uncertain political situation and the conflicts he had had to endure, he had been unable to overcome the strong resistance he encountered and, above all, feared the social consequences. Clearly, a reorganisation and strengthening of the State apparatus and the realignment of all the forces representing the ruling classes were needed to allow the exercise of open dictatorship and organised and systematic violence, necessary to take decisive action.

From 1883 onwards, a series of laws were enacted aimed at destroying communal property. The first authorised Mexican and foreign companies, in which Mexicans nevertheless were to have a strong stake, to identify, carve up, and cultivate the uncultivated land. These were then granted to them as property under extremely favourable conditions. Such companies were called deslindadoras (those of the enclosures). Not only virgin land was affected, but also land belonging to the indigenous communities, most of whom were unable to produce title deeds. By 1889, these companies had already seized 27,500,000 hectares, or 13% of the entire surface area of Mexico. In 1889, water laws were passed. Companies that undertook hydraulic regulation and irrigation works were granted concessions on land adjacent to watercourses. The companies ended up depriving the fields near the rivers of the use of water, forcing the owners to give up even more new land. Some companies even secured control of entire river basins or entire provinces of Mexico.

In 1902, a new law made it possible to enter into contracts whereby the State granted private individuals a portion of State land in exchange for a modest rent.

While limits had been initially set on the amount of land that could be acquired by a single owner, these limits were completely abolished in 1893, and it then became clear how much land ownership had become concentrated in the hands of a few latifundists. On this subject, we quote Gutelman, author of the useful Agrarian Reform in Latin America, the case of Mexico: ‘For a European mindset, it is difficult to imagine land empires created in this way: as a shareholder in a surveying company, the American press magnate Hearst had received 7 million hectares in the state of Chihuahua. A single person owned 2 million hectares near Oaxaca, while two others had seized 2 million hectares in the state of Durango. Ultimately, eight people alone owned 11.5 million hectares. Vera Estañol noted that in Baja California, the hectare had become too small a unit of agricultural measurement: work was carried out with triangulations and astronomical surveys. Properties were delimited by meridians and parallels’.

The data from a study reported in Wolf’s Peasant Wars of the Twentieth Century gives an idea of the extent to which the Indians were stripped of their lands:

‘It turns out that in six states, over 90% of the inhabited areas were located within the boundaries of the haciendas, and in eight states, 80%. Furthermore, in ten states, 50-70% of the rural population lived on the latifundia, and in five, 70-90%’.

Gutelman cites a study by Giraldo Magana, an old agrarian revolutionary, according to which the distribution of land in 1910 was as follows: 120 million hectares were in the hands of the hacendados; of these, only 276 owned about 48 million (for comparison, the total area of Italy is 30 million hectares).

These figures do not immediately indicate the degree of proletarianisation of the rural population, since a large part of the peasants were absorbed by the haciendas along with their land, becoming their tenants.

As we have noted when describing the structure of the haciendas, they were not tenants in the modern sense of the term, but workers closely bound to the hacienda.

‘They cultivated plots of land granted to them by the hacendado under unwritten contracts, in accordance with the customs of ancient Spanish law. Rent was generally paid in kind or in days of labour, and was combined with all kinds of obligations and services that in reality made this form of tenure a kind of serfdom. In most cases, the tenants had no capital of their own. They often lived, or even merely survived, solely thanks to the advances granted to them by the hacendado within the framework of the famous tienda de raya, the hacienda’s store. The land they cultivated was the least fertile on the hacienda: the owner considered it more profitable to have it worked by tenants, thus obtaining an indirect rent, rather than taking care of it directly (...) A very large number of tenants were at the same time peons, i.e. wage-earning agricultural workers. Very often, in the same season, they worked on the master’s land, first as unpaid labour, then as wage-earners, while their wife and children cultivated the rented land (...) In the absence of statistical data, it is impossible to determine the number of tenants living in Mexico at the beginning of the 20th century. It is likely that it was very high’ (Gutelman, pp. 36-37).

Certainly, we may deduce that this was the case, since it is unthinkable that the enormous amount of land appropriated by the haciendas in such a short time could have changed its form of management, even if this had been the owners’ intentions. Furthermore, the very size of the estates that had been established suggests that, given the agricultural techniques of the time, a large part of the land was left uncultivated, much of it remained divided into small plots worked by peasants, while only a small portion, certainly the most fertile one, was managed directly by the hacendado through wage labourers.

Much of the agricultural population had been completely or almost completely deprived of land to cultivate for themselves. They were peons directly dependent on the estate. These were divided into peones libres and peones alquilados, that is, those hired by the estate but living outside it, employed full-time or part-time for seasonal work and harvests. Their numbers increased significantly following the expropriations that had deprived the peasants of enough land to survive. As Gutelman notes, these expropriations often corresponded more to the need to secure cheap labour than to add more hectares to their already immense and partly uncultivated estates.

Then there were the peones accasillados, that is, housed on the estate, in theory free wage-earners, in reality in conditions of semi-serfdom. Their labour was only partially remunerated, often in kind, the peon being forced to perform unpaid labour in exchange for the ‘right’ to settle on the hacienda. In addition, he was normally indebted for life to their master through the mechanism of loans taken from the estate’s store or tienda de raya. Such debts were rarely repaid but grew steadily, and the peon was permanently bound to the hacienda and forced to every kind of servile labour because the law forbade him from leaving his employment without having first paid off his debts. These debts were then passed on from father to son, and the peon became a de facto true lifelong serf, even though he formally received a wage.

The rural figure that in reality disappeared during the Porfiriato era was that of the community member who earned his subsistence from the land assigned to him and had little or no need to submit to the hacienda.

At this stage, small peasant property, the so-called rancho, became established to a limited extent, mainly in the north and in the livestock sector, following the allocation of State land to settlers from North America and Europe, an immigration that the Porfiriato sought to promote, as it brought with it new agricultural techniques and new types of crops.

It is easy to understand how, in order to carry out a policy of such decisive interventions, which in a short time disrupted the agricultural world, Díaz had to equip himself with an apparatus of power capable of exercising an iron dictatorship. Elections were regularly rigged and parliamentarians were appointed by the ruling clique. The judiciary was under strict control, as was the press. Opponents were imprisoned, assassinated, or forced into exile. Strikes were forbidden.

In the countryside, a special police force was created, the rurales, recruited from among criminals and bandits, who patrolled the territory, threatening the population, slaughtering opponents of the regime and ruthlessly repressing any opposition or attempt at revolt. At the same time, in the villages, the regime’s henchmen managed to obtain, through threats and corruption, the favour of the representative leaders.

The immediate effects of the Porfirian regime’s policies were widespread impoverishment of the population, not only in rural areas. The measures that disrupted the peasant world initially caused a significant decline in agricultural production. From 1894, production began to rise again, a trend due to the increase in crops intended for national industry and for export, such as cotton, sugar cane, sisal, coffee, and livestock. However, production intended for domestic consumption, more tied to traditional agriculture (maize, beans, chillies, staple foods of the Mexican diet), continued to decline. This led to a rise in the prices of basic necessities, particularly maize, which Mexico became an importer of for the first time. Also as a result of this, the standard of living of the entire Mexican population, not just the peasantry, dropped significantly.

In this regard, it is interesting what Gutelman notes (pp. 45-46):

‘These figures, however, only apparently contradict the hypothesis of the development of the internal market, in reality, the extent of the latter is not a function of the potential demand for products nor of the actual volume of consumption, but of demand expressed in monetary terms. Now, if the overall level of consumption of the Mexican peasant tended to decline sharply during the Porfirian era, the portion of his individual consumption expressed as monetary demand tended instead to increase, in parallel with the process of proletarianisation, i.e. in parallel with the increase in the number of wage-earners. It was the monetisation of a growing part of consumption (even if this was decreasing in absolute value) that allowed the formation of the Mexican internal market. And, naturally, this is also the only phenomenon that matters to the capitalist in the phase of capitalist primitive accumulation’.

Regarding the development of the market, of primary importance was the impetus given to the communications network, both telegraph and railway which grew from a single 460 kilometre line in 1877 to 20,000 kilometres of railway in 1910 (since then, the railway network has hardly progressed at all). One can imagine the importance that the arrival of the railway in remote provinces had on the conditions of their economic development and also on social relations. The flow of commodities broke the system of self-sufficiency in the indigenous villages, as well as the static economic autarky of the haciendas. What’s more, it undermined the system of semi-serfdom relations that existed within them when it became accessible to peons and Indians driven from their lands as an alternative escape route to the inevitable submission to the master-lord of that province, ‘free’ to go and sell their labour in other labour markets.

During the Porfiriato period, industry took a significant step forward, a genuine industrial structure for large-scale production in the textile sector took shape, the sugar industry became mechanised and developed enormously, the metallurgical industry was born, all branches of production linked to the internal supply of raw materials. In addition, the production of soap, beer, cigarettes, and other light industry products developed. Finally, the first oil wells were drilled in the Gulf of Mexico, and the first power plants were built. Progress was also significant in the mining sector, with the discovery of new silver and gold deposits, boosted by very strong demand on the international market.

This drive towards industrialisation was undoubtedly aided by the availability on the labour market that had been freed up in the countryside following land expropriations, with the consequent proletarianisation of the peasantry. For this reason, in an initial phase, the industrial bourgeoisie and foreign companies operating in Mexico gave their full support to Díaz’s policies.

The transformations brought about mainly in the agrarian field by the Porfirian regime allow us to understand the subsequent revolutionary developments in Mexico.

The violent and massive expropriation of land belonging to the indigenous peasant communities did not lead to the formation of small property, but rather to the expansion of the latifundium. We have seen that estates were formed reaching millions of hectares, but this new landholding structure did not entail a change in the methods of cultivation. Millions of peasants were now subject to a few landowners who had seized their land, but the way of working them and obtaining its product had not changed: simply, part of it was now given to the landlord in the form of rent.

The availability of new fertile land for the haciendas to cultivate, millions of cheap peasant labourers who had been deprived of their land, new rents to collect, as well as new and more adequate means of communication and new commercial outlets to the domestic and foreign market, all these factors could have served as a stimulus to carry out new investments, introducing new techniques and specialised crops, mechanising farms and making them more competitive, thus setting them on the path towards transformation into modern agro-industrial enterprises.

Certainly, some more forward-thinking landowners, capitalist investors, or foreign companies set out down this path. But, in the majority of cases, the attitude of the latifundist, who lives off his rent and remains deaf to the call for renewal unless forced by dire necessity, inevitably prevailed. The latifundium and large haciendas remained for the most part a static and lifeless mass, an insurmountable bulwark against the entry of vibrant capitalism into agriculture.

The Diaz regime’s policy could not fail to break with this state of affairs. As an emanation of the landowning class, it could only follow what Gutelman, referring to Lenin, calls the ‘Prussian model’ for the development of capitalism in agriculture, which presupposes, in Mexican form, the expropriation of small peasants from their means of production and contrasts with the ‘peasant model’, which instead presupposes the expropriation and division of the latifundium.

However, as our 1921 text on the agrarian question states, the transition from the latifundium to the modern agro-industrial farm is not, generally speaking, within a historical continuity of development:

‘Without ruling out that it is possible and even frequent for large agricultural estates to transition to modern estates through successive improvements and transformations, especially when it begins to be achieved through an agricultural industry of assured success, such as livestock breeding, dairy farming, etc., it can nevertheless be said that in many cases, indeed in the majority of them, agricultural practice will not emerge from its medieval stagnation unless the large body, rather, lifeless agglomeration, of the latifundium breaks up into the fertile cells of small-plot production’.

This is the case in Mexico. The massive expropriation of the peasants had not brought about the dynamic evolution of the latifundium towards capitalism, at least not quickly enough. Instead, it had led the rural masses into a state of such misery and oppression that revolution had become an absolute necessity for them.

The policy adopted to ensure the vitality and prospects for the large haciendas instead became the premise for their dismantling by revolutionary means. The stagnation of the traditional Mexican agrarian world was irreparably disrupted, but its new mode of existence could not become the one desired by Diaz, but rather the one determined by the long process that began with the revolution of 1910.

Colonial period – From the Iberian conquest to political independence, which ended around 1825.
     The wealth extracted is divided between the bourgeois stratum transplanted to Latin America (L.A.) and the European mother country.

Transition period between colonialism and imperialism – From 1825 to 1870.
     The European bourgeois class rooted in L.A. feels strong enough to decide to manage the wealth it produces on their own, breaking political ties with the mother country.
     It is supported by England, the hegemonic capitalist power in full development, which, from the rupture of those political ties, aims at massive capital penetration. Given the balance of forces, the economic ties that are established lead to complete external domination. This originates in the foreign trade sector, but obviously reverberates on the economic, political, and social structure of Latin American (l.a.) countries, with disastrous effects on their development.

Period of imperialism – Stage of the capitalist system in the monopoly phase, with the preeminent role of finance capital operating through the export of capital and the control of sources of raw materials.
     The subjugation of L.A. to England is accompanied by other imperialist powers, among them the United States, which, with the First World War, assumes the role of leading power of world capitalism.
     With the great crisis of 1929, the United States rises to first place in the economic domination of L.A., confirming that major crises lead to the death or strengthening of the most powerful.

With independence, l.a. countries enter into the international division of labour as producers of raw materials and consumers of industrial products, especially English ones.

The new l.a. states must immediately turn to England, both for the granting of loans to pay off the debts incurred with the English during the war of independence and also for the sale of raw materials produced on the main market, which is precisely the English one. The now merely formal Spanish colonial dependence is replaced by ruthless English financial dependence.

Bolívar’s attempt to unify the former Spanish colonies into one large state fails. The British desire for many small and weak states prevailed, thanks in part to loans granted between 1818 and 1825 totalling over £18 million.

This marks the beginning of the abnormal expansion of the primary sector and the growth of the tertiary sector. Monoproduction is reinforced. Of the weak industries from the colonial period, only those serving the inaccessible interior regions were able to withstand the onslaught of British products.

Until the ‘Great Depression’ of 1873, in countries where capitalism is undergoing a phase of intense development, there are few incentives to invest capital abroad, given the numerous opportunities for investment at home.

The need for a supply of raw materials being guaranteed by the new l.a. countries that have inherited the productive base from the colonies, British foreign investments turn to sectors that the local economies are unable to develop: transportation and, to a lesser extent and for strategic reasons, mining. With the banking system in the hands of foreign (British) banks, credit is granted to the sectors considered profitable for the dominant powers, all this with obvious distorting effects on l.a. economies.

Initially, foreign capital takes the form of long-term loans. The interest accrued is paid by the l.a. countries with new loans, institutionalising their dependence.

Foreign capital flows into trade, shipping companies (eliminating local merchant fleets), mines (first as a monopoly of international mining trade, then by putting local producers out of business), railways (immediately denationalised), ports; monopolising the gas, water, electricity, and urban transport sectors.

The period beginning in 1870 sees the emergence of monopolies, which need to find areas outside their countries of origin in which to invest their capital, with investments in L.A. shifting from the commercial and financial sector to primary production.

At the same time, one witnesses a deterioration in the terms of trade: the quantity of industrial products obtainable with a given quantity of raw materials, set at 100 for the period 1876-80, falls inexorably and steadily to 62 in 1931-35. Foreign capital openly appropriates a share of the surplus value generated within each l.a. economy.

The sectors into which it penetrates are structured as enclaves (especially mining), detached from the local national economies. The increase in the wage bill is lower than the profits that migrate abroad.

There are countries where foreign capital, despite penetrating deeply into the local economy, fails to prevail over national producers (Brazil, Argentina, and Uruguay), countries where it surpasses them in importance (Venezuela, Guatemala), countries where it completely absorbs national production (Cuba); a fourth group of countries only then comes into contact with the world market.

In countries where foreign capital becomes dominant, it deprives the oligarchies of economic power and leaves them with only political power. Their revenues are made up of royalties and taxes, the only part of the surplus generated by exports that remains in the country, most of which is spent on imported goods.

The countries in the first group, where foreign capital does not control all export-oriented sectors of production, accumulate a surplus which, when invested in sectors linked to domestic consumption, allows the creation and development of industrial cores for the production of goods that the dominant countries are no longer interested in exporting.

The 1880 to 1910 period is one of considerable expansion for the l.a. economy; foreign investments succeed each other, exports increase at a dizzying pace, and likewise imports. The agricultural economy becomes completely monetised. The tertiary sector expands and allows the growth of the middle class. It is necessary to resort to European labour immigration, forming the basis of the first phase of urbanisation (the second is carried out by internal migration), giving rise to the nascent factory proletariat.

After 1910, European (British) demand contracts, foreign investment shrinks just as abruptly, and the expansion process comes to a halt.

The bourgeoisie and the urban popular classes unite against the ruling oligarchies, whose failure to be defeated (thanks to the support of foreign capital) will later lead to their alliance with the bourgeoisie against the urban and rural proletariat. Having ended in failure, the bourgeois revolutionary nationalist phase will follow the fierce anti-proletarian counter-revolutionary phase.

The period 1870 to 1930 therefore sees a change in the type of investments from abroad and within L.A., a limited circulation of the profits derived from activities controlled by foreigners. When depressive cycles occur in the imperialist countries, the flow of investments is interrupted and the export of profits increases.

Until 1880-1910, US influence is limited to the commercial field. Even in 1913, half of total British investment abroad went to L.A. More than 70% of US direct investment was limited to Mexico. After 1910, British investments begin to decline and in 1929 are equalled by those of the United States. England is also weakened by the replacement of railways with motor transport, to the advantage of the USA.

US investments are directed not only towards production for export, but also for local consumption; a practice that will become dominant after the Second World War.

Although the crisis of 1929 accelerates the l.a. industrialisation process (at least in the countries of the first group, where foreign capital is not predominant), it reverberates on l.a. countries up to the Second World War. The balance of trade worsens until 1960.

In the 1950s there is a massive penetration of foreign capital into the l.a. industrial sector. In the period that opens with the end of the Korean War, foreign investments also involve the newly formed industrial sector. At this stage, the largest flow of investment is directed towards the most industrialised l.a. countries; within the industrial sector, the most dynamic branches are preferred.

Since 1953, there is a series of government measures and concessions aimed at attracting foreign capital. The famous Instruction 113 of the Brazilian government after Vargas’ suicide stipulates that foreign companies may import machinery freely, while Brazilian ones could only do so with the exchange licence; foreign companies may import used machinery, while Brazilian ones must purchase new machinery, and those that cannot compete with foreign companies must merge with them.

During this period, large monopolies evolve into multinational forms. Their vast capital reserves force them to invest abroad as internal outlets become saturated; in turn, technical progress requires that obsolete machinery, not yet amortised, be sold to underdeveloped countries.

In recent years, the constant balance of payments deficit, a phenomenon that had never occurred before and is linked to the growing re-export of profits to investor countries, forces l.a. governments to finance the deficit by attracting new investment and contracting new foreign debts, with the inevitable political and economic obligations that this entails.

In the formation, configuration, and development of l.a. societies, there is always a situation of dependence on the hegemonic centres of capitalism, which condition its economic structure.

In the 19th century, l.a. countries had no choice but to base their economies on exports. Despite this limitation, some countries gained independence before others and established different political systems, the republic or the empire (Brazil). Some began to industrialise at the end of the 19th century, while others did not.

The ‘backwardness’ of the l.a. dependent countries is a consequence of the development of world capitalism and, at the same time, a condition of that development in the great imperialist powers. Advanced and backward countries historically constitute a unity that allows the development of some and the backwardness of others. l.a. capitalism is part of global capitalism. It has taken specific forms in response to the laws and dynamics of the capitalist system. Its characteristics and mode of operation reflect the needs of the world centres of capitalism, first British, later USA. l.a. societies can therefore only be studied as an integral part of global capitalism, in the context of its expansion.

The Second World War leads to an enormous growth in the productive forces in the USA and accentuates the process of monopolisation, centralisation, and concentration of production in multinational companies.

The monopoly system acquires characteristics of global integration as early as the end of the 19th century, but only in the second post-war period does it fully develop and become dominant through an accelerated process of integration of large multinational corporations, the military subjugation of entire continents and, finally, the expansion of State monopoly capitalism. The second post-war period marks the beginning of a new phase in the process of integrating dependent l.a. structures into the global monopoly capitalist system.

These phenomena cause substantial changes in l.a. countries, giving a new direction to industrialisation in countries where it had already begun and triggering its onset and determining its direction in others.

Since all this is related to investments in the manufacturing sector by large foreign companies, primarily US companies, the material basis and orientation of industrialisation in L.A. increasingly depends on foreign capital. Previous economic and social contradictions worsen, and others are emerging, hence the deep and widespread crisis still ongoing at all levels.

What are these contradictions? How did they arise? What consequences have they had and continue to have? Is it possible to overcome them?

At the outset, the specific economic foundations of l.a. countries condition the different ways in which they integrate into metropolitan centres; so that some countries are in better conditions than others for development.

It is necessary to keep in mind the development of typically capitalist relations of production in order to explain the origins of the fundamental types of l.a. socio-economic structures, which, based on historical data, we will divide into two:

Type A – Countries where industrialisation is the result of the expansion and transformation of the raw materials export sector, which is predominant. These are Argentina, Mexico, Chile, Uruguay, Brazil, and Colombia.

Type B – Countries that industrialise in the second post-war period under the direct control of foreign capital. Industrialisation is a consequence of monopolistic integration. There the primary export sector predominates. There is craft industry. It includes all the other l.a. countries except Paraguay, Haiti, and perhaps Panama, which share an agricultural export structure without industrial diversification.

     ARGENTINA – Significant at the end of the 19th century. Between 1900 and 1905, industrial production accounted for 18% of domestic production. 1920 census: 13,000 plants with 310,000 employees.
     MEXICO – Significant at the end of the 19th century. Between 1900 and 1905, industrial production accounted for 14% of domestic production. Early 20th century: textile industry with 700,000 spindles and 20,000 very modern looms, 30,000 employees. Steel production began in 1903.
     CHILE – First attempts in the last quarter of the 19th century. Imported consumer goods: 1870 (89.6%), 1907 (48.5%) due to the growth of the national manufacturing industry. During the War of the Pacific (1879-1884), industry increased 10, 20, and even 100 times the production of clothing, footwear, saddlery, gunpowder, chemicals and pharmaceuticals, gun carriages, boilers, and ships. From 1908 to 1928: industrial production +84%.
     URUGUAY – Began at the end of the 19th century. 1875: protectionist laws. A craft industry develops, tending to monopolise domestic consumption in some sectors. 1926: 6,329 industrial establishments and 65,700 employees (81% in Montevideo), employing 10% of the working population.
     BRAZIL – Significant in the last two decades of the 19th century. 1886: iron and steel imports account for 12% of total imports. 1904: the Industrial Centre is founded with 338 members. 1906: in 30 widely consumed manufactured goods, national industry meets 78% of domestic needs.
     COLOMBIA – Began in the second half of the 1920s. After 1930, levels of industrial development were quite high. Before the crisis, industrial production grew by less than 3%; in the 1930s, by 11%.
     PERU – In the 1930s, a number of industries developed; however, without history.
     GUATEMALA – Industrialisation began in the 1960s.
     EL SALVADOR – Industrialisation began in the 1960s.

In 1958, l.a. industry accounted for 3.7% of Western production; by sector: extractive industries 8.4%, light industry 5.3%, and heavy industry 2.7%.

– TYPE A countries

External causes that reduced or interrupted imports have imposed local production and the establishment of an industrial apparatus. First, fast-moving consumer goods are replaced, then durable goods, and then intermediate production goods. However, heavy industry, of machines to make machines, did not develop, with the exception of Brazil.

Foreign currency obtained through the export of raw materials (agricultural or mineral) was used to import the equipment and raw materials needed to set up factories on the national territory to produce goods that were previously imported.

The First World War and the crisis of 1929 also contributed to this process, which had already begun some time earlier in Argentina and Mexico, partly due to the increased availability of foreign currency resulting from the rise in exports of products needed by the countries at war.

The development of capitalist relations of production, which gradually become predominant in key sectors of the raw materials export economy, leads to the development of a domestic market, already present in Brazil, Chile, and Uruguay; less so in Colombia.

The class divide between private ownership of the means of production and the free supply of labour characterises the second half of the 19th century in the livestock breeding sectors of Argentina and Uruguay, the mining and agricultural sectors in Mexico, the coffee sector in Brazil, the saltpetre and copper sectors in Chile.

The second industrial revolution (mass production of machines to make machines), especially in England, opens up a new cycle of capitalist expansion that requires increased raw materials and agricultural products from dependent countries, leading to the modernisation of their production systems and the expansion of domestic markets to absorb more industrial products.

Modernisation primarily affects the social organisation of production. In key sectors, capitalist relations become widespread and predominate with the purchase of wage labour on the free labour market. This is facilitated by the process of land monopolisation in the most important regions by an elite of landowners. Subsistence and self-sufficient economies shrink, freeing up proletarianised labour.

This process does not revolutionise the situation of the ruling classes nor touch their actual economic and political power; on the contrary, with the expansion of exports, the oligarchies (landowners, miners, merchants, exporters) strengthen their dominance. The proletariat develops. The middle classes emerge. Thus the conditions are produced for the growth of the industrial bourgeoisie.

At the level of the productive forces, then, technical changes occur. With the introduction of new tools and methods of production and transportation, increasing the possibilities for capitalisation and, therefore, also production in the export sector, which absorbs more labour at higher wages, expanding the domestic market. Sectors complementary to exports (agriculture, trade, transport and communications, services) emerge and expand.

If the demand for industrial products is met by imports from England, with proletarianisation, workers and labourers turn to the national market for low-cost products. Those industries that meet this demand, and on which they develop, are in a better position than foreign industries, which have to take transport costs into account. The demand for domestic industrial products (consumer goods such as textiles, food, shoes, beverages, and household items) is an important stimulus to industrialisation, in addition to the demand for complementary products concentrated in large urban centres.

With urbanisation, urban capitalism will in the long run prevail within the system. Industrial development will then shape and expand a market in its own image (Argentina and Uruguay).

The process of capitalist accumulation extends. Industry develops to meet the demand of the middle classes (bureaucrats, professionals, employees) and farmers. Construction material, textile, and food industries spring up, along with furniture factories. The internal l.a. wars themselves stimulated the establishment of industries, considerably satisfying the demand of the armies (including for certain types of weapons, supplies, etc.).

This process intensifies with the two world wars and the crisis of 1929: due to import restrictions, demand is unsatisfied and the availability of foreign currency is abundant (during wars there is always an expansion of exports from L.A.).

All this was made possible by the simultaneous presence in these countries of a structured national market and an industrial sector already organised on the basis of capitalist relations.

The weak, yet significant, industrialisation of the late 19th century takes place within the global capitalist system, which assigns to these countries the productive role of exporters of raw materials; for all of them, the most important economic sector is exports, in which (and in complementary sectors) the dominant oligarchies (landowners, miners, merchants, financiers) operate, controlling the economy and manipulating the State apparatus for their own interests. The industrial bourgeoisie, and with it the proletariat, arises and develops within this oligarchic system of domination, which is part of world capitalism.

Industrial development is the result of the system that establishes the international division of labour. The mechanics of global capitalism, by forcing peripheral economies to specialise as single-product producers, causes their modernisation, which in turn generates the elements that allow for the diversification of production through industrial development. The development of exports ends up stimulating industry, which, as it develops, becomes independent and, over time, tends to subordinate exports to itself, which it nevertheless needs in order to survive and expand.

L.A. after conquest is a peripheral area, subordinate and dependent on the expansion and consolidation of world capitalism in its commercial and industrial forms. The development of l.a. capitalism does not imply the radical elimination of pre-existing modes of production. It passes from a dependent form of colonial export to a form of capitalist export, finally arriving at one dependent on industrial capitalism; however, these forms are all internal to the process of global capitalist development.

For these reasons, L.A. did not experience a bourgeois revolution or a revolutionary seizure of power by the new classes; precisely because l.a. capitalism arises and develops primarily in the export sector, and even in its mature phase remains subordinate to it.

There is a close interdependence between the export sector and industrial sector, with general characteristics imposed by global capitalism. The capital generated by exports goes to industry, directly or indirectly (through the banking system or State subsidies), making its expansion possible. The interests of the oligarchies and industry are intertwined and complementary. Their economic and political-social conflicts lead to compromise. The l.a. industrial bourgeoisie is born with many limitations, which it is still entangled in today for reasons connected to the interests of global capitalism.

Nevertheless, the industrial bourgeoisie, an expression of a moment in l.a. history, aware of the power granted to it by the control of a more advanced force of social organisation of production, has demanded hegemonic control of power, putting forward its own plans for economic and social development. It had to do so through political-social movements imposed under the impetus of the middle classes, the petty bourgeoisie, and even the peasants, and which expressed in their content the real interests of these sectors (‘Tenentismo’ and ‘Varguismo’ in Brazil, the peasant revolution in Mexico, Irigoyen and ‘Peronism’ in Argentina, ‘Batlismo’ in Uruguay, the Popular Front in Chile).

The middle classes are groups in the tertiary sector, not directly linked to the production process, situated at intermediate levels between the direct holders of surplus value and the working class: professionals, bureaucrats, military personnel. They lack historical perspective. Having developed under the impetus of the expansion of raw material exports and industry, they initially fluctuated between the traditional oligarchies and the new industrial bourgeoisie; with subsequent modernisation, which lead to the expansion and creation of new jobs and improved living standards, they take a position in favour of the industrial bourgeoisie.

The petty bourgeoisie, initially expanding, identifies its interests with those of the industrial bourgeoisie. The contradictions of interests will explode in the monopolistic phase.

The peasant class declines following a slow but progressive process of proletarianisation caused by the spread of capitalism to the countryside. It reacts in a petty-bourgeois manner, insofar as it demands land. It can only find support and guidance from the proletariat, but so far the encounter has not occurred.

The industrial bourgeoisie, which has an interest in transforming the agrarian structure in order to expand the domestic market, has been unable to fundamentally challenge the existence of the landowning oligarchy, which it needs for industrialisation. The primary sector provides industry with capital and the countryside with cheap labour pushed into the cities. For industrial capitalism it has been convenient to intensify the exploitation of urban markets.

With the proletariat absent as a class, all peasant revolts fail. Only in Mexico did the strength of the armed peasant movement play the role of the bourgeoisie in the countryside (in this sense, one can speak of revolution), eliminating vast sectors of the landowning oligarchy, expanding the domestic market, and opening up channels of development for local capitalism.

The proletariat, at the beginning of the 20th century, is weak; its percentage of the total workforce is low. Its organisation is difficult due to the artisanal nature of some of its important sectors and the peasant origins of others. The workers’ struggles in the first two decades are oriented in an anarchist direction due to the influence of European immigrants. Due to the inherent limitations of anarchism, no general strategy of struggle was outlined, whereby particular struggles could acquire tactical coherence. In the early 1920s, the first communist parties affiliated with the Third International begin to form, whose degeneration overwhelms them completely.

The industrial bourgeoisie, driven by favourable conditions after the 1914-18 war and the crisis, is the only class that can profit from the antagonisms between all these sectors and the oligarchies, in order to impose itself and claim an important share in the control of power. Being socially a minority as a class, it uses the other classes and the most diverse social sectors as bridgeheads to make its way along the paths of the institutional order.

The governments of Calles and Cardenas in Mexico, Vargas in Brazil, Alessandri in Chile, Battle and Ordonez in Uruguay, and Peron in Argentina have all represented the culmination and consolidation of the interests of their respective national industrial bourgeoisies.

But the interests of industrialists, even if they conflict with the oligarchic system, cannot radically challenge it because they need it to survive, insofar as their class was born as a by-product of that system.

The major obstacles to industrialisation are called into question; flexibility of the State is demanded and participation in the use of power is sought. The oligarchy is not definitively sidelined. Even while opening the doors of the State to the bourgeoisie, the oligarchy retains its fundamental privileges. The result of this process is bourgeois-oligarchic power at the level of compromise, which expresses itself in the survival:
     a) – of the oligarchies within the ruling classes;
     b) – of oligarchic economic power with its political forms, which are not called into question, although weakened by the loss of their hegemony, continuing to have importance.

Until 1950, land ownership remains untouched, the privileges of the financial, commercial, and export oligarchies are essentially maintained and, in periods of export crisis, the State intervenes adopting a series of measures that safeguard their interests. But it also safeguards the interests of the system as a whole, indeed, as long as exports represent the fundamental economic sector of society, it determines the possibilities of expansion of other sectors and, on the basis of its expansion, the conditions are generated that allow industry to develop; it finances the State sector, which expands into the tertiary sector.

The oligarchies, i.e. all sectors of the ruling classes directly or indirectly tied to the export of raw materials, and the latifundists, maintain their economic and political power through compromise, even if subordinated to the hegemonic interests of industrial development.

The bourgeoisie also makes concessions to the working class; without renouncing its own interests. Indeed, labour and trade union legislation and the recognition of ‘communist’ parties are concessions internal to the game of bourgeois democratic politics, conditions functional to the control of the working class. It is the proletariat that, allowing itself to be led by the bourgeoisie (see ‘Varguismo’), renounces its own interests. The strength of the working class in support of populist governments has always been used as a driving force for bourgeois development. The middle classes also benefit from this ‘bourgeois revolution’.

Nothing has ever been granted to the peasant class.

The corresponding political form is populism, i.e. the ideological-doctrinal conception that presents the interests of the industrial bourgeoisie as united with those of the entire nation and the entire people, summarised in Vargas, Perón, Cárdenas, with the well-calibrated use of oligarchic paternalism and the bourgeois modernising character, which controls and utilises the great masses as instruments for the realisation of the policy of capitalist development.

On the economic level, this situation is matched by a protectionist policy that seeks to boost industrialisation. However, the agrarian question shows that there has never been a reform that removed the land monopoly from the landowning oligarchies and opened the way for the expansion of the domestic market.

On the social level, there has been a significant step forward of an exclusively bourgeois stamp.

With regard to their national character, the entrepreneurial sectors of industry have had the opportunity to establish themselves as a national bourgeoisie during the period in which the ‘bourgeois revolutionary process’ develops, from the last years of the 19th century to the end of the Second World War, which corresponds to the period of disputes among the most advanced capitalist countries over the redistribution of areas of domination.

The l.a. industrial bourgeoisie develops and acts as a national class because its interests are linked to a national development project that has been brought to completion throughout an entire historical period. As this period corresponds to the second industrial revolution, in which the developed countries needed raw materials and agricultural products from the backward countries, which they are forced to compete for by any means necessary, imperialist domination focuses primarily on the primary sectors, allowing national entrepreneurs to exploit industrial activities; while the wars for the redistribution of the world, passing through the great crisis of ‘29, generate the conditions that allow the start of industrial activity in the l.a. countries.

National character is identified in the ability to chart a course for the nation and follow it during a given historical period. This does not imply the elimination of imperialist domination, which remains part of the power coalition, respecting its interference in exports, but excluded from the right to decide on the country’s industrial policy, sometimes in conflict with imperialist interests (protectionist tariffs, nationalisation of energy sources such as oil).

In the second post-war period then, along with the denationalisation of the property of the means of production, the bourgeoisie itself is denationalised.

The industrial bourgeoisie, since the 1930s, has controlled State power, even if its management is carried out by the oligarchies and the bourgeoisie together. It is not necessary for a class to hold political power ‘exclusively’ in order to hold hegemony. Political power is usually divided among the various ruling classes. Only in very special historical circumstances is it possible for a class by itself to gain exclusive control of it. The State as such enjoys relative autonomy during this period; however, as an institution, it can never oppose the interests of the ruling classes as a whole.

In the 1930s, the fundamental economic sector of l.a. societies is generally primary exports. This is the source of the main resources that allow the maintenance of the State apparatus and a good part of the capital for industry. Development policy undoubtedly follows a path functional to the same industrial interests. That is the whole solid foundation of the State.

The State in bourgeois society is an instrument of domination in the hands of the ruling classes, and no specific or particular form of it (populist, social democratic, labour governments) can hide the fact that the fundamental interests it serves and represents are those of the owners of the means of industrial production.

– TYPE B countries

The conditions that allow the development of industrialisation in Type B countries are realised after the Second World War and with characteristics different from those seen in Type A countries.

Especially in the last three decades of the 19th century, a modernisation process of the economic system is developed due to increased demand for products from the major capitalist centres (in Central America, this happened more quickly in Guatemala, El Salvador, and Costa Rica, and in South America in Peru). As a consequence, more or less profound liberal reforms occur, expression of the expansionary needs of commercial capitalism.

The modernisation process, which follows as fundamental axis the coffee economy, arrives in El Salvador with the 1860 law extinguishing common lands and dividing up large estates, in Guatemala in 1871 with the expropriation of Church lands, which are divided up along with State-owned ones, common and those of the indigenous communities. Violent struggles (Costa Rica excluded) expressing the decline of the indigenous sector of latifundists and merchants, whose interests were closely linked to those of the Church, that is, of the only ancient aristocracy of landowners in Central America.

The process marks the decline of some groups of the old ruling class, but, breathing new life into foreign trade, it leads to the emergence of new groups (merchants, intermediaries, exporters) that give rise to a new expansion and a new strengthening of the latifundium. The failure of the parcelling, attempted by liberal agrarian reforms, leads to the new concentration of land ownership. Thus the credit institutions increase, bank capital is strengthened.

In Guatemala, the first national textile factory employing 600 workers is established in 1833. In 1874, the first National Bank is founded with money deriving from the goods of the clergy. Between 1878 and 1890, three-quarters of the interoceanic railway is built with national resources.

In Ecuador, with the expansion of export agriculture, a much more dynamic economy develops in the coastal countryside than in the Sierra, with new characteristics (payment of wages, capital investment, and generalised production for the market). This leads to the development of foreign and domestic trade, which in turn leads to the formation of an important financial sector. The first signs of industrialisation appears on the coast. The attractiveness of wages causes significant internal population movements, the rapid development of trade lays the foundations for the future growth of cities. The liberal revolution of 1895 gives control of the State to the agrarian exporting bourgeoisie, significantly altering traditional power relations and breaking the political dominance of the conservatives and the clergy. However, the industrialisation process comes to a halt almost immediately.

The effects of liberal reform in Nicaragua are limited by the absence of a productive economy formed during the colonial period. The country is ideally suited to be a battleground for the British and US imperialisms, given the excellent geographical position, favourable to the construction of an interoceanic canal.

Foreign entrepreneurs organise and exploit the three phases of Honduras’ economy: the silver age dominated by the Spanish; the cattle age, better than leather, which comes to an end in the late 19th century; and finally the banana age.

The systematic and intensive control of foreign entrepreneurs over key productive sectors means that the history of these societies develops in close dependence on the imperialist countries; which prevents the formation of a well-structured internal market and the expansion of industry. The unbridled greed of imperialism for raw materials and agricultural products limits the start of the industrialisation process, as does the inability of the local ruling classes to carry through the structural transformations they have initiated to their logical conclusion.

Foreign control of primary exports, in whatever form, prevents this sector from articulating itself in the national economy except in a very limited form; stimuli and conditions necessary for the dynamisation of the secondary and tertiary sectors are not generated.

In Bolivia, there are national proprietors in the primary export sector, but they must affiliate with foreign consortia due to the existence of an already stable and controlled global market. Simón Iturri Patiño represents an isolated case of special interests (which do not affect the national ruling class) that are oriented towards the demands and operating model of global capitalism.

In these countries, imperialist penetration takes the specific form of an enclave: the local ruling classes do not exercise genuine control over the various sectors. Profits are channelled directly toward the metropolises. The portion that remains in the country serves to pay State taxes, most of which are diverted to benefit the enclave (railways, port facilities, loans for works). The enclave does employ national labour, causing an expansion of employment and therefore of the market, but it functions in fact as a direct extension of the metropolitan market, since the products consumed come from there. The form of wage payment is often replaced by vouchers, which workers use to obtain commodities from the company warehouse for their consumption needs, often domestic agricultural products; the voucher system is a form of super-exploitation of labour. With the enclave, the conditions necessary for the functioning and expansion of a national market are not created. If such a market already exists, it is barely surviving.

The benefits of the modernisation process brought about by the enclave are capitalised by the enclave itself. Within the very narrow limits of State initiatives (always promoted with funds obtained from the enclave), everything functions according to a dynamic whose driving centre is not national. There are no sectors complementary to the enclave economy that could potentially expand the national market. Due to their limitations, they do not stimulate the creation of industries to meet their own needs.

The higher incomes of the local dominant groups (landowners, merchants), wage-earners, higher public and military administration, professionals create a demand met by imports and, to a lesser extent, by national agricultural, and craft products.

Capital accumulation in these countries is reduced to the metropolitan accumulation process. The capitalist mode of production develops in the primary sector (as a result of industrial expansion in the metropolitan countries), but is practically isolated from the social complex, and therefore does not expand, that is, it does not generate the conditions for the development of the industrialisation process within the national economy; it coexists with and keeps alive non-capitalist modes of production.

In these countries, the national industrial bourgeoisie has never existed as a group of owners of the national means of industrial production. The existence of ruling classes is a prerequisite for imperialist super-exploitation: they are the immediate guardians of the system of domination, making its realisation possible. For these reasons, there is no ‘bourgeois revolution’.

In these countries, the conditions necessary for the industrialisation process have not been met. During periods of international crisis, they fall into states of fatigue and crisis.

Social movements, especially those of the 1930s, take the form of peasant uprisings (Sandino in Central America) and ‘Aprismo’ (Peru), without ever representing moments of a ‘bourgeois revolutionary process’.

In rural sectors, the most important of these countries, the crisis causes unemployment, lower wages, and an exodus toward the cities, where the process of marginalisation accelerates and riots break out (Ecuador), which challenge the imperialist oligarchic system.

The ruling classes respond with an openly repressive policy: economically, with wage controls; politically, with dictatorial governments; militarily, with brutal repression and even US intervention (Nicaragua).

The numerical, organic, and political precariousness of the proletariat does not yet have the possibility of opening up a truly revolutionary process.

The middle classes and petty bourgeoisie have raised the banner of bourgeois development (Peruvian ‘Aprismo’), a movement with no chance of historical existence, marching towards ruin and the negation of its own anti-imperialist aims (APRA). All the social movements of this period are in tow behind the petty bourgeoisie and the middle classes, but their leadership proves insufficient due to the absence of a real programme for economic and social development that can be implemented.

In these countries, ‘populism’ does not represent clear and coherent bourgeois interests; it is defensive, seeking to put the nation above imperialism, yet it asserts itself more by denying imperialism than by offering an actual alternative for development; it is oligarchic in that it is manipulated by the oligarchy to blackmail imperialism and at the same time contain the popular movement.

Coups d’état are a constant in the history of many of these countries. This allows the oligarchies to control the mechanisms of power.

These general conditions lasted until the end of the Second World War.

The process of monopolistic integration of the capitalist system on a global scale begins at the end of the 19th century; but it was only after the second post-war period that it is completed and consolidated. The Second World War was the great accelerator, further stimulating the development of US productive forces.

The hegemony of the US superpower consolidates industrial, commercial, financial, political, military, and cultural integration with the proliferation of ‘multinational’ companies, which are established everywhere, with regional trade agreements, with the creation of international financial systems and institutions and bodies for coordinating political and military decisions.

The transformations in L.A. during the last three decades of the 19th century, which mark the first four decades of the 20th century, take on a new and specific configuration as a result of the new phase of development and expansion of imperialism.

In the period 1951-1955, L.A. records the highest net capital inflow, 33 billion dollars (equal to 30% of revenue), which rise to 57 billion in 1956-1960, surpassed only by the 80 billion of Southeast Asia. Imperialism, having secured control over sources of raw materials and markets, moves to search for investments in the manufacturing sectors that could ensure maximum profit.

The effects produced by the intensification of capital inflows into L.A. are:
     a) the control and domination of foreign capital over new sectors and production branches that begin to develop;
     b) the intensification of monopolisation, concentration, and centralisation of the economy with the establishment of large enterprises, which absorb national enterprises through acquisitions, mergers, and associations;
     c) the process of progressive denationalisation of private ownership of the means of production in industrial sectors still controlled by domestic entrepreneurs;
     d) the increasingly intricate integration of the interests of foreign companies with those of the indigenous ruling classes, expressed both in national economic policies and in the integration of the foreign policies of dependent countries with US policy, accompanied also by military integration.

As a result, the l.a. ruling classes realistically abandon their reformist projects for autonomous national development, provoke the decline of populist methods of manipulation and control of the proletarian and petty-bourgeois masses, and adopt, in the economic, political, and military fields, measures increasingly dependent on the US hegemonic centre: with concessions granted to the penetration of foreign capital; by adopting guidelines recommended by the US through the International Monetary Fund to ‘order’ economic life; through ‘reform’ attempts supported by the Alliance for Progress (ALPRO) aimed at expanding the market in favour of multinational consortia and containing social discontent in specific areas; with alignment through the Organisation of American States (OAS) with US foreign policy aimed at blocking attempts at self-determination and opposition and facilitating the manipulation and introduction of imperialist policy in L.A.; through various aid, cooperation, and police and military assistance agreements aimed at preparing the police and armed forces to efficiently repress attempts to subvert the established order.

Thus, nationalistic schemes and ‘concessions’ to the popular classes are abandoned, whose movement tends to radicalise, raising demands irreconcilable with bourgeois legality.

Starting in 1963-1964, one witnesses the collapse of legality and the adoption of increasingly repressive measures, often following military coups.

– TYPE A countries

With the new phase of imperialist expansion, foreign capital increasingly penetrates into the manufacturing sector of Type A countries. It opens up and dominates new productive sectors and, in many cases, takes control of traditional productive sectors away from national entrepreneurs.

Since the 1950s, the l.a. national bourgeoisies are integrated and subjugated as a class to imperialism and abandon their nationalist ambitions and autonomous projects.

At the root of imperialism’s interest in expanding its control and domination over the industrialisation process in l.a. countries are economic factors that make the export of capital necessary and factors that push it towards dependent countries:
     1) The great development of productive forces in the centres of imperialism generates a growing economic surplus and forces large companies to open up new markets, including for the placement of outdated machinery due to intense technical renewal.
     2) The national bourgeoisies resist competition from foreign commodities with protectionist measures that encourage the establishment of industries abroad. Customs duties, high for consumer goods, grant considerable exemptions for machinery. Foreign companies expand by setting up branches in l.a. countries, thus facilitating the problem of technical renewal at home. Furthermore, protectionism on commodities allows high prices, which increase profits.
     3) Availability of an abundant and cheap labour force, which increases the rate of surplus value.
     4) Availability of dollars, marks, etc., resulting from primary exports, which foreign industries, in exchange for giving earnings in l.a. currency, collect to repatriate profits.
     5) The existence of material and human resource infrastructure, there is a formed, well-structured, and expanding domestic market; and also natural resources and raw materials.
     6) The political factors are related to:
a) – new incentives for foreign investment with the removal of fiscal barriers: tax, customs, and exchange incentives;
b) – facilities for the re-export of profits;
c) – the adoption of International Monetary Fund schemes aimed at a minimum of monetary stability in order to ensure a higher level of accumulation and stimulate the concentration and centralisation of capital;
d) – repressive policies against the labour movement to ensure a high level of the rate of surplus value.

The conditions for foreign capital penetration in industry

Capitalism is an international system; it is not possible to promote national development in isolation from the global development of the system, especially for countries that are ‘lagging behind’.

The l.a. countries depend on the importation of machinery, equipment, and raw materials (processed or semi-processed) from developed countries for industrialisation. In L.A., the demand for machinery and raw materials for production in department 2 (consumer goods) is met by department 1 (capital goods) of the economies of developed countries: in the various phases, the need to import machinery is indispensable for the maintenance and continuity of the operation and expansion of the industrial base.

The dependence of the l.a. countries could have been overcome, from an economic point of view, if the technical level of the national heavy industries had been able to meet domestic demand. But no l.a. country was able to achieve this. The establishment of an industrial base has only just begun, and the developed countries have seen their market for department 1 grow.

Until the 1940s, there were no conditions for direct and intensive foreign capital investment in the manufacturing sector of the l.a. countries. In the post-war period, large foreign companies were no longer interested in selling their machinery, but in using them directly as capital. The export of commodities becomes the export of capital; buying and selling became foreign investment. How? Through the establishment of branches; through the purchase of a majority stake in a company paid for with the contribution of machinery; through agreements with private or State capital for the exploitation and opening of new production sectors.

Large foreign companies, holding ownership of the patents, can impose the terms of their use on l.a. countries. When new technologies are not within the reach of l.a. countries, domestic demand for their products is met by foreign production, whose high prices (foreign prices + customs duties) facilitate and make it more advantageous to set up branches of foreign companies. Originally created to defend the interests of national industries, protectionist barriers now favour foreign branches and contribute to frustrating the possibilities of autonomous industrial development; as national entrepreneurs are unable to compete with foreign companies for control of the domestic market.

The superior competitive conditions of foreign companies render their production costs much lower than those of national companies in l.a. countries. However, by reducing the use of labour, new technology restricts the market, hindering the country’s economic development.

The development of foreign industries creates the mechanisms that deepen control over l.a. capitalisms. Most of the profits of large companies go abroad. The l.a. economy is decapitalised. To make up for the balance of payments deficit, ‘aid’ is requested from abroad in the form of loans, which increase foreign debt, which in turn increases the deficit even more, making it necessary to increase foreign capital even further. Like a drug addict, the drug kills him, but he needs it to live.

Turning to political dependence, it is the imposition of foreign interference in national life, by which the ruling classes of the l.a. countries are conditioned. They have never enjoyed real autonomy: after independence, they became liberal-oligarchic due to the convergence of their interests with those of the British; they then transform into liberal-democratic, opening themselves up to the middle classes in order to adapt their modernist and industrial aspirations to the interests of US capital exports when they took the place of the British in the domination of L.A.

In situations of crisis, the national ruling classes have sometimes asserted some of their specific interests even when they contradicted imperialist interests; and if the popular movement presses forward with its demands, they have used it to blackmail imperialism in various ways and obtain concessions and benefits, and expand their room for manoeuvre. The post-Vietnam crisis shows us Brazil’s resistance to total US control over the petrochemical industry; Brazil succeeded in securing State participation. The same Brazil prevented the implementation of the project for the creation of a system of seven large lakes in L.A., which would have handed the Amazon over to direct US administration. Brazil and Argentina also launch relatively autonomous military policies.

But these moves do not jeopardise the functioning of the complex of imperialist companies that have penetrated key sectors of the l.a. economies, nor do they create conditions for truly independent policies.

The need for the accumulation process to be realised through foreign channels will only cease when heavy industry and department 1 are internal to the l.a. economies. The establishment of department 1, already quite advanced in Mexico, Brazil, and Argentina, has not yet completed its fundamental stages in any l.a. country. The international division of labour, which reserves monopoly control of new productive sectors, the leading sectors, for the developed capitalist countries, and industrialisation and the export of raw materials and labour-intensive products for the dependent countries, is the factor that is holding back this tendency.

The new direction of industrial development creates a critical situation, resulting from the following factors:
     1. The creation of a production structure specialised in certain sectors, which satisfies global demand more than the internal needs of these countries;
     2. The increase in the rate of labour exploitation and greater remittance of earnings abroad, with an increase in foreign currency obtained;
     3. Failure to implement the reforms necessary for the expansion of the domestic market, allowing traditional structures, such as land ownership, to survive.

Only the petty bourgeoisie continues to believe in the possibility of an autonomous development without contradictions and without struggle between the exploiting and exploited classes. The l.a. bourgeoisies, on the other hand, have understood that they cannot question imperialism without questioning their own existence as a class. They adapt to being junior partners of imperialism and, in order to maintain this situation, they repress the lower classes with all the means at their disposal and adopt openly repressive regimes, as seen in Brazil. The end of the l.a. countries’ dependence on imperialism can only be imposed by the working class through a revolutionary process.

In Chile, Colombia, and Uruguay, industrialisation has reached relatively high levels, but still has a long way to go before becoming self-sufficient. The development of the capital goods sector has, in fact, been rather precarious up to now, and that of durable consumer goods has not yet been completed. Imperialism, having penetrated the manufacturing sector, has mainly promoted the development of industries such as household appliances and car assembly, and only recently has it begun to establish some heavy industry, such as petrochemicals in Chile.

Imperialism preferred to concentrate investments in Brazil, Mexico, and Argentina, both because of the larger size of their markets and because of the existence of a more developed infrastructure in more complex economies.

– TYPE B countries

At the end of the Second World War, foreign capital, seeking profitable markets for its investments, found the doors of the Type B economies wide open.

In these countries, bourgeois anti-imperialism, sometimes taking the form of nationalism, does not represent the objective interests of the industrial bourgeoisie, the only class capable of promoting the development of the capitalist system, as it does not exist. There is a small group of entrepreneurs, but since industry is weak at the outset, it does not manage to form a social class or, rather, a specific sector of the ruling classes called the industrial bourgeoisie; instead, it forms a small, restricted petty bourgeoisie. Nationalism is the politics of the petty bourgeoisie and the middle classes. They attempt to mobilise the popular sectors; but, except in Bolivia, the attempt is unsuccessful.

Petty-bourgeois nationalism is a farce; it arises from the rejection of imperialism, but stops there, incapable of offering a real, capitalist alternative for economic and social development. It is a nationalism frustrated from the outset; those who advocate it have no objective possibility of carrying it forward. Expressed in political-social movements, it is destined to fail because it is incapable of offering concrete possibilities for countering the domination of foreign capital, which increasingly penetrates the most profitable sectors; both by extending its control over primary export products (such as Venezuelan oil) and by opening up new sectors through industrial investment. These were, in percentage terms, much smaller than in Type A countries, heading towards Peru and Venezuela, which already had a minimally developed industry. Even if the industry in these countries develops – very little – under the direct control of foreign capital, its main source of exploitation is always the traditional one: production for primary export.

The Peruvian APRA (American Popular Revolutionary Alliance) and the Bolivian MNR (Revolutionary Nationalist Movement) are the best expressions of the conception of a bourgeois-democratic revolution advocated by the petty bourgeoisie and the middle classes. APRA has won elections several times but has never seized power; the MNR seized power through a revolutionary process; but failed in its anti-imperialist and modernisation policies, despite having nationalised the mines and implemented an agrarian reform. The coup by the oligarchy, supported by imperialism, restored the most reactionary forces to power.

In the second post-war period, the MNR tended towards radicalisation only on the surface; APRA tended towards reconciliation with the oligarchies and imperialism, despite 45 attempts to overthrow Pardo’s dictatorship, culminating in the Callao uprising in 1948: the movement’s first congress was held in 1931. So much petty-bourgeois rebelliousness led to legalisation, which compromised it irreparably.

It should be emphasised that Peru, along with Venezuela, is the most developed of the Type B countries; and that, since the Second World War, it enjoyed a period of relative prosperity, derived from the variety and importance of its primary exports (sugar, fishmeal, silver, lead, copper, cotton, and also oil), a wealth that enabled the ruling classes to launch a modernisation policy which, while doing little to accelerate the development of the productive forces, brought a relative calm to the political struggle.

Bolivia, on the other hand, despite the great wealth of its mines, is one of the poorest Type B countries. The revenues from its products are almost entirely channelled abroad. It is completely neglected by investment. Mine workers are super-exploited and the peasants, mostly indigenous, live in abject poverty. The land, largely concentrated in the hands of latifundists, is poorly cultivated and the resulting food shortages forces even the import of essential foodstuffs. The MNR, founded in 1941, capitalises on the climate of constant discontent; shares power in 1943 with the Villaroel government following a coup against the oligarchies, which regained power in 1946 with the approval of imperialism, losing it again in 1951 when the elections resulted in the victory of Paz Estenssoro, leader of the MNR. Another upheaval; then in 1952 the revolution breaks out; but Paz Estenssoro fails to complete the process of economic and social emancipation because, despite striking a blow against imperialism by nationalising the mines and against the oligarchy by carrying out agrarian reform, he fails to establish a national industry.

International sabotage intensifies and hits export products hard; political radicalisation increases foreign companies’ disinterest in industrial investment. The agrarian reform, while introducing a wide variety of forms of ownership (indigenous communal, collective, large capitalist), de facto leads to the generalisation of smallholdings and a process of reconcentration of large estates. In both cases, it fails to solve the problem of poor peasants, nor does it raise productivity or expand the domestic market.

The Bolivian revolution was just a frustrated attempt at petty-bourgeois nationalism. It never questioned foreign investment; on the contrary, it considers them as an indispensable condition for industrial development. It brought the oppressed classes under its influence, especially the working class, which mobilised more than any other against imperialism, but for purposes antithetical to its own vital interests.

The phenomenon repeated itself in other Type B countries. Democratic Action in Venezuela, Averalism in Guatemala, nationalist and anti-Velazco movements in Ecuador. Foreign industrial investment encounter no real political obstacles and are not hindered when they wish to dominate any production branch. Therefore, the industrialisation of these countries in the post-war period develops primarily under the direct control of foreign capital.

Factors that allowed foreign capital to penetrate Type B countries in the post-war period

1. Traditional control of enclaves over exports. If exports are in foreign hands, they bring little currency into the national economy and, in the form of taxes, to the State. The scarcity of currency and the lack of entrepreneurs with national capital means that only foreign capital can set up industries. However, machinery does not arrive as commodities but as foreign capital investment, whose presence is a given fact of industrialisation, one of its initial components. The few existing national industries are merely only able to survive; no modern foreign company has any interest in sinking them because of the superior competitive conditions in which it finds itself. The strategy of foreign capital leaves the few traditional branches of production to the precarious local industries and focuses on opening new industrial branches, especially those intended for the production of durable consumer goods. Most of the items that begin to be produced are unknown to the national markets, either because they were not imported or were imported in small quantities for consumption by a tiny part of the population, or because they are innovative (electronics, plastic products).

2. The growing indebtedness of these economies, a product of the stagnation they have experienced for some time, requires foreign ‘aid’ in the form of loans and new foreign debt negotiations that intensify dependence. The establishment of new foreign industries increases remittance of earnings abroad, decapitalises the economy, and renders any bourgeois policy ineffective.

3. The alliance between the interests of the enclaves and the oligarchies, complementary in perpetuating exploitation: the oligarchy needs foreign capital for national development, foreign capital needs the oligarchy in order to operate.

In the absence of an industrial bourgeoisie, the preservation of the system fell to the oligarchies which, by crushing popular movements, grew increasingly stronger. Velasquismo in Ecuador; Jiménez, Betancourt, and Caldera in Venezuela; Peru; Central America.

Something changes only in the 1960s (Cuba and then Peru), as the survival of the oligarchy as the national ruling class increasingly depends solely on its close connection with imperialist interests.

A common feature of all Type B countries is that industries are established under the direct control of foreign capital; starting from a very high technical level, the penultimate level achieved by development in advanced capitalist countries; with strong monopolistic control over markets; in the most profitable branches of production, ignoring social and national priorities.

This is a process of industrialisation that increasingly accentuates anarchic and disruptive elements and deepens the latent structural crisis. Decapitalisation, the inability to absorb labour power, market restrictions, their intensive exploitation, and the subjugation of the population to the consumption of certain goods all combine to exacerbate a series of irresolvable contradictions.

– TYPE A countries

Primary exports, long the most important sector, enable the industrial development of Type A countries. The compromise between the landed oligarchies and the industrial bourgeoisie does not allow for any questioning of the way the agrarian structure functions. Industrial development has therefore been based mainly on the growth of urban markets. This limitation on expansion has led to:
     1. the intensification of market protections to support prices, corresponding to the high production costs of a low-productivity industry;
     2. the containment of wages, through a more intense exploitation of the working class;
     3. a continued push toward exports;
     4. a reliance on State subsidies and credit.

The necessity for capitalism to open up national markets does not cease.

However, the survival of the latifundia, with extensive underutilisation of land (Brazil, Colombia, Uruguay, Chile), hinders the development of capitalism in the countryside. While land is monopolised by a few owners, there is an abundant supply of labour. Thus:
     1. agricultural wages are at subsistence levels, excluding the consumption of industrial goods;
     2. the use of machinery is limited to a few modern agro-industrial complexes for standardised consumption (exports, large cities) with high entrepreneurial profits given the use of high-productivity techniques and the employment of low-cost labour.

The structure and interests of rural classes become more complex and diversified. The condition of the latifundist is tied to the rent from large tracts of land; that of the capitalist entrepreneur to the use of land as a means of capitalist production, whether or not they own it. The income of the latifundists is tied to the maintenance of a form of property incompatible with the full development of capitalism. Capitalist entrepreneurs consider agriculture a field for capital investment, but the appreciation and rising price of land, granted on lease, lead to the progressive enrichment of landowners.

In order to challenge or eliminate the latifundia, it would be necessary to mobilise the extremely proletarianised peasant class: but the process, once triggered, could turn against its own instigators. Moreover, the solution is unfeasible due to the historical compromise established between the agrarian oligarchies and the industrial bourgeoisie. Indeed, the currency needed to fuel the industrialisation process comes from the agrarian sector. Furthermore, as long as the traditional agrarian structure remains in place, urban industry can count on a large reserve of labour which, acting as a ‘reserve army’, serves to keep workers’ wage levels down.

Around the 1960s, the bourgeoisie limited itself to gradual reformism, also recommended by the US government, in order to expand the market and contain social discontent in the countryside, which erupts in radical forms, unfortunately not widespread. A series of measures to facilitate the expansion of capitalism in the countryside are resorted to. In areas of social struggle, attempts are made to redistribute land to reduce the dominance of unproductive latifundia. The fundamental objective is the expansion of the middle classes in the countryside, which is important for the national economy because it expands the market and, from a political point of view, because it eases social tensions. This is what Christian Democracy did with Frei in Chile, Carvalho Pinto in São Paulo and Miguel Arraes in the state of Pernambuco, both in Brazil. However, the fundamental contradiction remains as does the latent need for peasant revolts.

The slow development of capitalism in the countryside, while maintaining the monopolistic structure of land ownership, accentuates the process of proletarianisation and breaks up the small subsistence economy.

The peasants are divided into two sectors: autonomous and wage-earners.

The autonomous are divided into:
     1. smallholders, owners of small plots of land who, using family labour, produce what is necessary for subsistence;
     2. small tenants, either sharecroppers or tenant-farmers who work rented land, paying through: a) labour with workdays for the landlord; b) a share of the produce; c) money.

Despite being extremely exploited by landowners, moneylenders, and middlemen (consumer prices are three times higher than producer prices), they aspire to establish themselves as a rural petty bourgeoisie.

Agricultural wage-earners live off the sale of their labour-power and are predominant in the more developed regions. The use of machinery tends to prevail, replacing more antiquated methods and driving small landowners out of business, who are proletarianised through leaving the countryside. The demands of agricultural wage-earners are typical of the working class, with which they increasingly identify. The precariousness of work and the enforcement of labour laws, as well as the temporary nature of employment, makes both their union and political organisation, as well as the existence and continuity of struggles, difficult. Whenever they have overcome these difficulties, they have shown remarkable fighting spirit.

When the peasant struggle remains within bourgeois limits, autonomous peasants are at the forefront of agrarian reform, which remains, inevitably, on paper, despite the myriad revolts that punctuate all of L.A.

In the advanced stages of the anti-capitalist struggle, agricultural wage-earners will be in a position, together with urban workers, to form the vanguard for the socialisation of the countryside.

The limits on economic and political power derived from the compromises of the industrial bourgeoisie initially manifest themselves as obstacles to the full development of the bourgeoisie and, as the industrialisation process advances, they intensify and worsen the crisis. The direction given to State policy tends to remain unchanged decade after decade. Even if the interests of industry ultimately prevail, and the State implements the infrastructure necessary for bourgeois development, the paternalism of the oligarchy continues to exert its influence.

The contradictions between industrial interests and the social complex have manifested themselves most clearly in relation to the opposing interests of the industrial upper middle class and the working class; and, to a lesser extent, also of the lower middle class and the middle classes. In order to increase capital accumulation, the industrial bourgeoisie needs an economic policy that keeps wages and salaries down and limits credit to small industries. The adoption of this type of repressive State economic policy, which clearly and unequivocally corresponds to the interests of big capital, has led to an inevitable clash with the workers’ and popular movement, which has been violently dismantled. However, these measures alone have proved insufficient to maintain strict control over the dominated classes.

The bourgeois State must make concessions in order to organise and discipline the workers’ and popular movement under its control. It thus creates social welfare agencies, guarantees minimum rights to workers and grants wage increases which, while not affecting the levels of accumulation due to the strict control to which they are subject, nevertheless represent a brake on bourgeois economic policy. The State must create new jobs for the middle classes and must mitigate its policy against the interests of the petty bourgeoisie, as it needs their political support. In phases of economic expansion, these concessions do not pose any problems in terms of implementation; in critical phases, which are inevitable due to the cyclical nature of the capitalist system, they become contradictions that the bourgeoisie must try to resolve with increasingly violent and openly dictatorial policies.

This is especially true in Brazil. Argentina follows closely behind. In Mexico, where the most extensive ‘bourgeois revolution’ took place, the bourgeoisie has achieved great institutional, economic and political stability. Despite the highly repressive nature of the Mexican capitalist regime, which manifests itself on every occasion and against all sectors that rebel against bourgeois politics, the contradiction between the State’s need to protect bourgeois interests and its function as an ‘amalgam’ of the interests of other classes has not taken the form of a crisis as in the other two countries.

The bourgeois State, which represents the interests of capitalist development at the national level, needs to pursue policies that slow down the process of indebtedness, a constant factor in crises. But it is limited in this regard because it also represents the interests of foreign capital invested in the country.

The export policy towards neighbouring countries clashes with that of other l.a. countries, despite market demarcation and regional integration agreements. The more developed countries impose themselves on the less developed ones, beyond slow regional agreements and the convenience of foreign capital, to the point of clashing with the interests of central imperialism. This is the case of Brazil, which, after the victory of the military coup in Bolivia in August 1971, directed its capital there to exploit natural resources and invest in industrial activity. It is also the case of Argentina.

This plan is hindered by the inability to implement a policy of domination over neighbouring countries that does not harm the centres of imperialism. This would restrict the dominance of the United States, which is unwilling to transfer its dominance over L.A. to any sub-imperialist country.

– TYPE B countries

In Type B countries, the need for currency for industrialisation, and the impossibility of obtaining it due to foreign control over the export economy, becomes more acute in the second post-war period in Peru and Venezuela and in the 1960s in other countries.

It is true that 80% of industrial investment are, for 80%, the work of foreign capital, but its penetration is secondary to that of Type A countries, which is a priority.

Industrialisation, promoted according to interests external to internal capitalist development, in search of easy profits from limited sectors, is slow and incomplete; markets are moreover restricted.

Large international companies only establish light industries there and, for durable consumer goods, limit themselves to assembly. These markets are considered to be a reserve for industries located elsewhere. Industrialisation replaces and ruins handicrafts and small national business.

The small industrial working class is crushed by low wages and unemployment. The same conditions affect the proletarianised peasants who swell the ranks of the numerous marginal sectors. The non-industrial sectors have a precarious existence. The middle classes stagnate.

The resulting social tensions and consequent radicalisation, expressed by a strong conservative tendency among the wealthy classes and attitudes of discontent and rebellion among the proletarians, compel the ruling power to resort to permanent political and military repression. Coups become a historical constant, which, in any case, do not resolve the underlying issue.

The only possibility lies in the strengthening of the State so that it can act as an entrepreneur and try to fill the most serious gaps in economic development by controlling the primary sector. See the attempts at primary nationalisation in Bolivia, Peru and, at the level of intentions, Venezuela. See the constant threats of radicalisation by the petty bourgeoisie, often in power. In Peru, oil has been nationalised, agrarian reform has been carried out, some banks have been nationalised; but, at the same time, new agreements have been reached with foreign capital, which have materialised in new concessions to imperialism.

In these countries, except for Bolivia, attempts at agrarian reform have been very timid. The modernisation process has affected regions dominated by enclaves and those where export agriculture, controlled by foreign capital (the banana sector in Central America), predominates. The agrarian structure, by conditioning land use, hinders the process of capital accumulation in the countryside and makes it impossible to obtain resources for industrial development, while worsening the miserable living conditions of vast peasant sectors, who, driven into the cities, form extensive belts of poverty.

The recurring peasant revolts are countless, which are believed to be kept in check through the creation of a large sector of well-off middle peasants (Peru and Bolivia, as well as Venezuela and Guatemala), at the expense, of course, of the most exploited peasant sectors.

To sum up: what is the general trend in Latin America ?

On the economic level, a monopolisation process develops, reflecting industrial centralisation and concentration. The large foreign company establishes itself in key productive sectors.

In Type B countries, foreign capital controls the natural resources and the manufacturing industry it has created.

In Type A countries, multinational companies control the production sectors of durable consumer and capital goods. Ownership of the means of production and control of the process are denationalised.

State capitalism, which controls infrastructural sectors, is strengthened and allies itself with foreign capital, with which it shares power.

The traditional monopolistic agrarian structure, the industrial monopolies, the concentration of rents, the low incorporation of labour into the production system, limit the growth of the domestic market.

Industry, because of its high technology, cannot absorb the exodus from the countryside caused by the latifundia. The service sector swells enormously. Unemployment is increasingly high.

On the social and political level, with populism and the illusion of independent national development dead, the ideologies and political parties of the ruling classes tend to consolidate in order to confront the dominated classes. Military coups begin, mixed with transient neo-populist and liberalising attempts that are doomed to failure. The political regimes of the exploiting classes radicalise (neo-Nazism in Brazil), which should be matched by the radicalisation of the working class in terms of class political struggle.

The results of ‘dependent development’ in Brazil, Mexico, and Argentina (Type A) reveal sub-imperialist tendencies which, in addition to exploiting other countries and conquering their markets through exports and investments in key economic sectors (natural resources and industrial facilities), also combine a certain political and military dominance. The case, on a smaller scale, of El Salvador vis-à-vis Honduras is hampered by the absence of a strong capital goods sector.

In Brazil, Mexico, and Argentina, industrialisation is more developed; the industrial penetration of foreign capital has been more intense; the strengthening of State capitalism has been achieved in the closest connection with imperialist domination; the breaking of political ‘compromises’ with the dominated classes has been more radical; yet the contradictions generated by capitalist development are also more acute. After all, capitalism needs to expand to survive, and to expand it needs to impose itself and dominate. Since internal obstacles are difficult to overcome, the expansionist necessity asserts itself forcefully externally.

For Uruguay, Chile, and Colombia (Type A), this tendency is incomparably smaller due to specific demographic constraints; due to the presence of enclaves (Chile); due to late industrialisation (Colombia).

For Type B countries, development within capitalism is extremely unlikely, there will be ever-increasing imperialist exploitation, mediated by regional sub-imperialism, even if this trend is not yet real in any of the three countries.

Exploitation divides L.A.; but the same exploitation of the l.a. proletarian masses unites them in the struggle against capitalism. The prophetic role of Marxism is limited today by the concrete practice of the actual social movement. Increasingly, the contradictions of capitalism in L.A. will intensify and demand radical solutions. The final resolution will see the proletarian dictatorship crush the bourgeois dictatorship.