OPEN VEINSOF
LATIN AMERICA

1

also by EDUARDO GALEANO
Days and Nights of Love and War
Memory of Fire:
Volume I, Genesis
Volume II, Faces and Masks
Volume III, Century of the Wind
The Book of Embraces

2

Eduardo Galeano

OPEN VEINSof

LATIN AMERICA
FIVE CENTURIES OF THE PILLAGE 0F A CONTINENT
Translated by Cedric Belfrage

25TH ANNIVERSARY EDITIONFOREWARD by Isabel Allende

LATIN AMERICA BUREAU
London3

Copyright © 1973,1997 by Monthly Review Press
All Rights Reserved
Originally published as Las venas abiertas de America Latina
by Siglo XXI Editores, Mexico, copyright © 1971 by Siglo XXI Editores
Library of Congress Cataloging-in-Publishing Data
Galeano, Eduardo H., 1940[Venas abiertas de America Latina, English]
Open veins of Latin America : five centuries or the pillage of acontinent / Eduardo Galeano ; translated by Cedric Belfrage. — 25th
anniversary ed. / foreword by Isabel Allende.
p. cm.
Includes bibliographical references and index.
ISBN 0-85345-991-6 (pbk.:alk.paper).— ISBN 0-85345-990-8 (cloth)
1. Latin America— Economic conditions. 1. Title.
HC125.G25313 1997
330.98— dc21

97-44750
CIP

Monthly Review Press
122 West 27th Street
New York, NY 10001
Manufactured in the United States of America

4

“We have maintained a silenceclosely resembling stupidity”.
--From the Revolutionary Proclamationof the Junta Tuitiva, La Paz, July 16, 1809

5

Contents
FOREWORD BY ISABEL ALLENDE ..........................................................IXFROM IN DEFENSE OF THE WORD ........................................................XIVACKNOWLEDGEMENT… … ..........................................................................XINTRODUCTION: 120 MILLION CHILDRENIN
THE EYE OF THE HURRICANE .....................................................… ...........1
PART I: MANKIND'S POVERTY AS A CONSEQUENCE
OF THE WEALTH OF THE LAND
1. LUST FOR GOLD, LUST FOR SILVER … … … … … … … … … … … … … 2
2. KING SUGAR AND OTHER AGRICULTURAL MONARCHS … … … ..59
3. THE INVISIBLE SOURCES OF POWER … … … … … … ..… .… … … … .134
PART II: DEVELOPMENT IS A VOYAGE WITH MORESHIPWRECKS THAN NAVIGATORS
4. TALES OF PREMATURE DEATH … … … … … … … … … … … .… … … .173
5. THE CONTEMPORARY STRUCTURE OF PLUNDER… … ...… … … ..205
PART III: SEVEN YEARS AFTER ...........................… … … … ...................263
REFERENCES … … … … … … … … … … … … … … … … ...… … … … … … … 287

INDEX… … … … … … … … … … … … … … … … … … … … … … … … … … … .307

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Foreword
Isabel Allende
Many years ago, when I was young and still believed that the world could be
shaped according to our best intentions and hopes, someone gave me a bookwith a yellow cover that I devoured in two days with such emotion that I had toread it again a couple more times to absorb all its meaning: Open Veins of
Latin America, by Eduardo Galeano.
In the early 1970s, Chile was a small island in the tempestuous sea inwhich history had plunged Latin America, the continent that appears on the
map in the form of an ailing heart. We were in the midst of the Socialist
government of Salvador Allende, the first Marxist ever to become president ina democratic election, a man who had a dream of equality and liberty and thepassion to make that dream come true. That book with the yellow covers,
however, proved that there were no safe islands in our region, we all shared
500 years of exploitation and colonization, we were all linked by a common
fate, we all belonged to the same race of the oppressed. If I had been able toread between the lines, I could have concluded that Salvador Allende's
government was doomed from the beginning. It was the time of the Cold War,and the United States would not allow a leftist experiment to succeed in what
Henry Kissinger called "its backyard." The Cuban Revolution was enough; noother socialist project would be tolerated, even if it was the result of ademocratic election. On September 11, 1973, a military coup7

ended a century of democratic tradition in Chile and started the long reign ofGeneral Augusto Pinochet. Similar coups followed in other countries, and soon
half the continent's population was living in terror. This was a strategy
designed in Washington and imposed upon the Latin American people by the
economic and political forces of the right. In every instance the military acted
as mercenaries to the privileged groups in power. Repression was organized ona large scale; torture, concentration camps, censorship, imprisonment without
trial, and summary executions became common practices. Thousands of people"disappeared," masses of exiles and refugees left their countries running fortheir lives. New wounds were added to the old and recent scars that thecontinent had endured. In this political context, Open Veins of Latin America
was published. This book made Eduardo Galeano famous overnight, although
he was already a well-known political journalist in Uruguay.
Like all his countrymen, Eduardo wanted to be a soccer player. He also
wanted to be a saint, but as it turned out, he ended up committing most of thedeadly sins, as he once confessed. "I have never killed anybody, it is true, but it
is because I lacked the courage or the time, not because I lacked the desire," Heworked for a weekly political magazine Marcha, and at twenty-eight hebecame the director of the Important newspaper Epoca, in Uruguay. He wrote
Open Veins of Latin America in three months, in the last ninety nights of 1970,
while he worked during the day in the university, editing books, magazines,
and newsletters.
Those were bad times in Uruguay. Planes and ships left filled with young
people who were escaping from poverty and mediocrity in a country thatforced them to be old at twenty, and that produced more violence than meator wool. After an eclipse that had lasted a century, the military invaded thescene with the excuse of fighting the Tupamaro guerrilla. They sacrificed thespaces of liberty and devoured the civil power, which was less and less civil.

By the middle of 1973 there was a military coup, he was imprisoned, andshortly afterward he went into exile in Argentina, where he created themagazine Crisis. But by 1976 there was a military coup also in Argentina, andthe "dirty war" against intellectuals, leftists, Journalists, and artists began.
Galeano initiated another exile, this time in Spain, with Helena Villagra, hiswife. In Spain he wrote Days and Nights of

8

Love and War, a beautiful book about memory, and soon after he began a sortof conversation with the soul of America: Memories of Fire, a massive frescoof Latin American history since the pre-Colombian era to modern rimes. "Iimagined that America was a woman and she was telling in my ear her secrets,
the acts of love and violations that had created her." He worked on these three
volumes for eight years, writing by hand. "I am not particularly interested insaving time; I prefer to enjoy it." Finally, in 1985, after a plebiscite defeatedthe military dictatorship in Uruguay, Galeano was able to return to his country.
His exile had lasted eleven years, but he had not learned to be invisible orsilent; as soon as he set foot in Montevideo he was again working to fortify thefragile democracy that replaced the military junta, and he continued to defy theauthorities and risk his life to denounce the crimes of the dictatorship.
Eduardo Galeano has also published several works of fiction and poetry;
he is the author of innumerable articles, interviews, and lectures; he has
obtained many awards, honorary degrees, and recognition for his literary talentand his political activism. He is one of the most interesting authors ever tocome out of Latin America, a region known for its great literary names. His
work is a mixture of meticulous detail, political conviction, poetic flair, andgood story telling. He has walked up and down Latin America listening to thevoices of the poor and the oppressed, as well as those of the leaders and theintellectuals. He has lived with Indians, peasants, guerrillas, soldiers, artists,and outlaws; he has talked to presidents, tyrants, martyrs, priests, heroes,
bandits, desperate mothers, and patient prostitutes. He has been bitten bysnakes, suffered tropical fevers, walked in the jungle, and survived a massive
heart attack; he has been persecuted by repressive regimes as well as, by
fanatical terrorists. He has opposed military dictatorships and all forms of
brutality and exploitation, taking unthinkable risks in defense of human rights.
He

has

more first-handknowledge of

Latin

America

than

any-

body else I can think of, and uses it to tell the world of the dreams anddisillusions, the hopes and the failures of its people. He is an adventurer with atalent for writing, a compassionate heart, and a soft sense of humor. "We live
in a world that treats the dead better than the living, We, the living, are askers
of questions and givers of answers, and we have other grave defects
unpardonable by a system that believes death, like money, improves people.”9

All these talents were already obvious in his first book, Open Veins of Latin
America, as was his genius for story-telling. 1 know Eduardo Galeanopersonally: he can produce an endless scream of stories with noapparent effort, for an undetermined period of time. Once we were bothstranded in a beach hotel in Cuba with no transportation and no airconditioning. For several days he entertained me with his amazing stories overpina coladas. This almost superhuman talent for storytelling is what makes
Open Veins of Latin America so easy to read— like a pirate's novel, as he once
described it— even for those who are not particularly knowledgeable about
political or economic matters. The book flows with the grace of a tale; it is
impossible to put it down. His arguments, his rage, and his passion would beoverwhelming if they were not expressed with such superb style, with such
masterful timing and suspense. Galeano denounces exploitation with
uncompromising ferocity, yet this book is almost poetic in its description ofsolidarity and human capacity for survival in the midst of the worst kind ofdespoliation. There is a mysterious power in Galeano's story-telling. He uses
his craft to invade the privacy of the reader's mind, to persuade him or her toread and to continue reading to the very end, to surrender to the charm of his
writing and the power of his idealism.
In his Book of Embraces, Eduardo has a story that I love. To me it is asplendid metaphor of writing in general and his writing in particular.
There was an old and solitary man who spent most of his time in bed. There
were rumors that he had a treasure hidden in his house. One day some thieves
broke in, they searched everywhere and found a chest in the cellar. They went
off with it and when they opened it they found that it was filled with letters.
They were the love letters the old man had received all over the course of hislong life. The thieves were going to burn the letters, but they talked it over andfinally decided to return them. One by one. One a week. Since then, every
Monday at noon the old man would be waiting for the postman TO appear. As
soon he saw him, the old man would start running and the postman, who knew
all about it, held the letter in his hand. And even St. Peter could hear the
beating of that heart, crazed with joy at receiving a message from a woman.

Isn't this the playful substance of literature? An event transformed bypoetic truth, Writers are like those thieves, they take something that is real, likethe letters, and by a trick of magic they transform it into something, totally
fresh. In Galeano's tale the letters existed and they10

belonged to the old man in the first place, but they were kept unread in a darkcellar, they were dead. By the simple trick of mailing them back one by one,those good thieves gave new life to the letters and new illusions to the old man.
To me this is admirable in Galeano's work: finding the hidden treasures, giving
sparkle to worn-out events, and invigorating the tired soul with his ferocious
passion.

Open Veins of Latin America is an invitation to explore beyond theappearance of things. Great literary works like this one wake up
consciousness, bring people together, interpret, explain, denounce, keep
record, and provoke changes. There is one other aspect of Eduardo
Galeano that fascinates me. This man who has so much knowledge andwho has— by studying the clues and the signs— developed a sense offoretelling, is an optimist. At the end of Century of the Wind, the third
volume of Memory of Fire, after 600 pages proving the genocide, thecruelty, the abuse, and exploitation exerted upon the people of Latin
America, after a patient recount of everything that has been stolen andcontinues to be stolen from the continent, he writes:
The tree of life knows that, whatever happens, the warm music spinningaround it will never stop. However much death may come, however muchblood may flow, the music will dance men and women as long as the air
breaths them and the land plows and loves them.

This breath of hope is what moves me the most in Galeano's work. Like
thousands of refugees all over the continent, I also had to leave my country
after the military coup of 1973. I could not take much with me: some clothes,family pictures, a small bag with dirt from my garden, and two books: an old
edition of the Odes by Pablo Neruda, and the book with the yellow cover, Las
Venas Abiertas de America Latina. More than twenty years later I still havethat same book with me. That is why I could not miss the opportunity to write
this introduction and thank Eduardo Galeano publicly for his stupendous love
for freedom, and for his contribution to my awareness as a writer and as a
citizen of Latin America. As he said once: "it's worthwhile to die for things
without which it's not worthwhile to live."

11

In Defense of the Word
One writes out of a need to communicate and to commune with others, todenounce that which gives pain and to share that which gives happiness. One
writes against one's solitude and against the solitude of others. One assumes
that literature transmits knowledge and affects the behavior and language of
those who read... One writes, in reality, for the people whose luck or
misfortune one identifies with— the hungry, the sleepless, the rebels, and thewretched of this earth— and the majority of them are illiterate.
... How can those of us who want to work for a literature that helps to makeaudible the voice of the voiceless function in the context of this reality? Can
we make ourselves heard in the midst of a deaf-mute culture? The small
freedom conceded to writers, is it not at times a proof of our failure? How far
can we go? Whom can we reach?
... To awaken consciousness, to reveal identity— can literature claim abetter function in these times?... in these lands?
. . Our own fate as Latin American writers is linked to the need for
profound social transformations. To narrate is to give oneself: it seems obviousthat literature, as an effort to communicate fully, will continue to be blocked ...
so long as misery and illiteracy exist, and so long as the possessors of power
continue to carry on with impunity their policy of collective imbecilization
through ... the mass media.

12. .. Great changes, deep structural changes, will be necessary in ourcountries if we writers are to go beyond... the elites, if we are to express
ourselves. ... In an incarcerated society, free literature can exist only as
denunciation and hope.
… ..We are what we do, especially what we do to change what we are....In
this respect a "revolutionary" literature written for the convinced is just as
much an abandonment as is a conservative literature devoted to the . . .
contemplation of one's own navel. ...
Our effectiveness depends on our capacity to be audacious and astute, clear
and appealing. I would hope that we can create a language more fearless andbeautiful than that used by conformist writers to greet the twilight.
... In Latin America a literature is taking shape and acquiring strength, aliterature... that does not propose to bury our dead, but to immortalize them;that refuses to stir the ashes but rather attempts to light the fire .. perhaps it
may help to preserve for the generations to come . . . "the true name of allthings."
Eduardo Galeano, 1978translation by Bobbye Ortiz
from Days And Nights of Love and War (1983)
reprinted by Monthly Review Press to honor Judy Ruben

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Acknowledgement
This book would not have been possible without the collaboration, in one formor another, of Sergio Bagu, Luis Carlos Benvenuto, Fernando Carmona,
Adicca.

Castillo,

AlbercoCouriel,Andre

GunderFrank,

Rogelio

Garcia Lupo, Miguel Labarca, Carlos Lessa, Samuel Lichtensztejn. Juan A.
Oddone, Adolfo Perelman, Artur Poerner, Carlos Quijano, German Rama,
Darcy

Ribeiro,OrlandoRojas,

Julio

Rosbiello,

Paulo

Schilling,Karl-Heinz Stanzick, Vivian Trias, and Daniel Vidart. To them, and to themany friends who have encouraged me in the task of these recent years, I
dedicate the result, of which they are of course innocent.
Montevideo, 1970

14

Introduction: 120 Million Children
in the Eye of the Hurricane~
The division of labor among nations is that some specialize in winning andothers in losing. Our part of the world, known today as Latin America, wasprecocious: it has specialized in losing ever since those remote times when
Renaissance Europeans ventured across the ocean and buried their teeth in thethroats of the Indian civilizations. Centuries passed, and Latin America
perfected its role. We are no longer in the era of marvels when face surpassed
fable and imagination was shamed by the trophies of conquest— the lodes ofgold, the mountains of silver. But our region still works as a menial. It
continues to exist at the service of others' needs, as a source and reserve of oil
and iron, of copper and meat, of fruit and coffee, the raw materials and foods
destined for rich countries which profit more from consuming them than Latin
America does from producing them. The taxes collected by the buyers aremuch higher than the prices received by the sellers; and after all, as Alliancefor Progress coordinator Covey T. Oliver said in July 1968, to speak of fair
prices is a "medieval" concept, for we are in the era of free trade.
The more freedom is extended to business, the more prisons have to bebuilt for those who suffer from that business. Our inquisitor-hang-man systems
function not only for the dominating external markets; they also provide
gushers of profit from foreign loans and investments

1

in the dominated internal markers. Back in 1913, President Woodrow Wilson
observed: "You hear of ‘concessions' to foreign capitalists in Latin America.
You do nor hear of concessions to foreign capitalists in the United States. They
are not granted concessions." He was confident; "Slates that are obliged ... togrant concessions are in this condition, that foreign interests are apt todominate their domestic affairs. . . . ," he said, and he was right.1 Along theway we have even lost the right to call ourselves Americans, although the
Haitians and the Cubans appeared in history as new people a century before theMayflower pilgrims settled on the Plymouth coast. For the world today,
America is just the United States; the region we inhabit is a sub-America, asecond-class America of nebulous identity.
Latin America is the region of open veins. Everything, from the discovery
until our times, has always been transmuted into European— or later UnitedStates— capital, and as such has accumulated in distant centers of power.
Everything: the soil, its fruits and its mineral-rich depths, the people and theircapacity to work and to consume, natural resources and human resources.
Production methods and class structure have been successively determinedfrom outside for each area by meshing it into the universal gearbox ofcapitalism. To each area has been assigned a function, always for the benefit of
the foreign metropolis of the moment, and the endless chain of dependency has
been endlessly extended. The chain has many more than two links. In Latin
America it also includes the oppression of small countries by their larger
neighbors and, within each country's frontiers, the exploitation by big cities andports of their internal sources of food and labor. (Four centuries ago sixteen of
today's twenty biggest Latin American cities already existed.)
For those who see history as a competition, Latin America's backwardness
and poverty are merely the result of its failure. We lost; others won. But thewinners happen to have won thanks to our losing: the history of Latin
America's underdevelopment is, as someone has said, an integral part of thehistory of world capitalism's development. Our defeat was always implicit in
the victory of others; our wealth has always generated our poverty bynourishing the prosperity of others— the empires and their native overseers. In
the colonial and neocolonial alchemy, gold changes into scrap metal and foodinto poison. Potosi, Zacatecas, and Ouro Preto became desolate warrens ofdeep, empty tunnels from which the2precious metals had been taken; ruin was the fate of Chile's nitrate pampas andof Amazonia's rubber forests. Northeast Brazil's sugar and Argentina's
quebracho belts, and communities around oil-rich Lake Maracaibo, havebecome painfully aware of the mortality of wealth which nature bestows andimperialism appropriates. The rain that irrigates the centers of imperialist
power drowns the vast suburbs of the system. In the same way, andsymmetrically, the well-being of our dominating classes— dominating inwardly,
dominated from outside— is the curse of our multitudes condemned to exist as
beasts of burden.
The gap widens. Around the middle of the last century the world's richcountries enjoyed a 50 percent higher living standard than the poor countries.
Development develops inequality: in April 1969 Richard Nixon told theOrganization of American States (OAS) that by the end of the twentiethcentury the United States' per capita income would be fifteen times higher than
Latin America's. The strength of the imperialist system as a whole rests on thenecessary inequality of its pares, and this inequality assumes ever more
dramatic dimensions. The oppressor countries get steadily richer in absoluteterms— and much more so in relative terms— through the dynamic of growing
disparity. The capitalist "head office" can allow itself the luxury of creating
and believing its own myths of opulence, but the poor countries on thecapitalist periphery know that myths cannot be eaten. The United States
citizen's average income is seven times that of a Latin American and grows ten
times faster. And averages are deceptive in view of the abyss that yawns
between the many poor and the rich few south of the Rio Grande. According to
the United Nations, the amount shared by 6 million Latin Americans at the topof the social pyramid is the same as the amount shared by 140 million at thebottom. There are 60 million campesinos whose fortune amounts to $.25 a day.
At the other extreme, the pimps of misery accumulate $5 billion in their private
Swiss or U.S. bank accounts. Adding insult 10 injury, they squander in sterileostentation and luxury, and in unproductive investments constituting no lessthan half the total investment, the capital that Latin America could devote to
the replacement, extension, and generation of job-creating means of production.
Harnessed as they have always been to the constellation of imperialist power,
ourrulingclasseshavenointerest

whatsoever

determining whether patriotism might not prove more profitable than3

in

treason, and whether begging is really the only formula for international
policies. Sovereignty is mortgaged because "there's no other way." Theoligarchies' cynical alibis confuse the impotence of a social class withthe presumed empty destinies of their countries.
Says Josue de Castro: "I, who have received an international peace prize,
think that, unhappily, there is no other solution than violence for Latin
America." In the eye of this hurricane 120 million children are Stirring. Latin
America's population grows as does no other: it has more than tripled in half acentury. One child dies of disease or hunger every minute, but in the year 2000
there will be 650 million Latin Americans, half of whom will be under fifteen;a time bomb. Among the 280 million Latin Americans of today, 50 million are
unemployed or underemployed and about 100 million are illiterate; half ofthem live in crowded, unhealthy slums. Latin America's three largest
markets— Argentina, Brazil, and Mexico— together consume less than France
or West Germany, although their combined population considerably exceedsthat of any European country. In proportion to population Latin America today
produces less food than it did before World War II, and at constant prices there
has been a threefold decline in its per capita exports since the eve of the 1929
crisis.
For its foreign masters and for our commission-agent bourgeoisie, whohave sold their souls to the devil at a price that would have shamed Faust, thesystem is perfectly rational; but for no one else, since the more it develops, thegreater its disequilibrium, its tensions, and its contradictions. Even
industrialization— coming late and in dependent form, and comfortably
coexisting with the latifundia and the structures of inequality— helps to spread
unemployment rather than to relieve it; poverty is extended, wealthconcentrated in the area where an ever multiplying army of idle hands isavailable. New factories are built in the privileged poles of development— Sao
Paulo, Buenos Aires, Mexico City— but less and less labor is needed. The
system did not foresee this small headache, this surplus of people. And thepeople keep reproducing. They make love with enthusiasm and without
precaution. Ever more people are left beside the road, without work in the
countryside, where the latifundios reign with their vast extensions of idle land,
without work in the city where the machine is king. The system vomits people.
North American missionaries sow pills, diaphragms, intrauterine

4devices, condoms, and marked calendars, but reap children. Latin American
children obstinately continue getting born, claiming their natural right to aplace in the sun in these magnificent lands which could give to all what is now
denied to almost all.
At the beginning of November 1968 Richard Nixon loudly confirmed that
the Alliance for Progress was seven years old and that malnutrition and foodshortages had nevertheless intensified in Latin America. A few months earlier,in April, George W. Ball wrote in Life :"But at least for the next several
decades, the discontent of poorer nations does not threaten world destruction.
Shameful as it undoubtedly may be, the world has lived at least two-thirds poorand one-third rich for generations. Unjust as it may be, the power of poor
countries is limited."2 Ball had headed the U.S. delegation to the First
Conference on Trade and Development in Geneva, and had voted against nineof the twelve general principles approved by the conference for removing someof the handicaps of the underdeveloped countries in international trade.
The human murder by poverty in Latin America is secret; every year,
without making a sound, three Hiroshima bombs explode over communities
that have become accustomed to suffering with clenched teeth. This systematic
violence is not apparent but is real and constantly increasing: its holocausts are
not made known in the sensational press but in Food and Agricultural
Organization statistics. Ball says that it is still possible to act with impunity
because the poor cannot set off a world war, but the Imperium is worried:
unable to multiply the dinner, it does what it can to suppress the diners. "Fight
poverty, kill a beggar!" some genius of black humor scrawled on a wall in La
Paz. What do the heirs to Malthus propose bur to kill all the beggars-to-be
before they are born? Robert McNamara, the World Bank president who waschairman of Ford and then secretary of defense, has called the population
explosion the greatest obstacle to progress in Latin America; the World Bank,he says, will give priority in its loans to countries that implement birth control
plans. McNamara notes with regret that the brains of the poor do 25 percent
less thinking, and the World Bank technocrats (who have already been born)
set computers humming to produce labyrinthine abracadabras on theadvantages of not being born: "If," one of the Bank's documents assures us, "adeveloping country with an average per capita

5income of $150 to $200 a year succeeds in reducing its fertility by 50 percent
in a period of twenty-five years, at the end of thirty years its per capita income
will be higher by at least 40 percent than the level it would otherwise haveachieved, and twice as high after sixty years." Lyndon B. Johnson's remark has
become famous: "Let us act on the fact that less than $5 invested in population
control is worth $100 invested in economic growth."3 Dwight D. Elsenhower
prophesied that if the world’s inhabitants continued multiplying at the samerate, not only would the danger of revolution be increased, but there would also
be a lowering of living standards for all peoples, including his own.
The United States is more concerned than any other country with spreading
and imposing family planning in the farthest outposts. Not only thegovernment, but the Rockefeller and the Ford foundations as well, havenightmares about millions of children advancing like locusts over the horizon
from the third world. Plato and Aristotle considered the question before
Malthus and McNamara; in our day this global offensive plays a well-definedrole. Its aim is to justify the very unequal income distribution between
countries and social elates, to convince the poor that poverty is the result of thechildren they don't avoid having, and to dam the rebellious advance of themasses. While intrauterine devices compete with bombs and machine-gun
salvos to arrest the growth of the Vietnamese population, in Latin America it ismore hygienic and effective co kill guerrilleros in the womb than in themountains or the streets. Various U.S. missions have sterilized thousands ofwomen in Amazonia, although this is the least populated habitable zone on ourplanet. Most Latin American countries have no real surplus of people; on thecontrary, they have too few. Brazil has thirty-eight times fewer inhabitants per
square mile than Belgium, Paraguay has forty-nine times fewer than England,
Peru has thirty-two times fewer than Japan. Haiti and El Salvador, the humanantheaps of Latin America, have lower population densities than Italy. The
pretexts invoked are an insult to the intelligence; the real intentions anger us.
No less than half the territory of Bolivia, Brazil, Chile, Ecuador, Paraguay, andVenezuela has no inhabitants at all. No Latin American population grows lessthan Uruguay's— a country of old folk— yet no nation has taken such a bearing
in recent years, with a crisis that would seem to drag it into the last circle ofhell. Uruguay is empty, and its

6fertile lands could provide food for infinitely more people than those who now
suffer in such penury.
Over a century ago a Guatemalan foreign minister said prophetically: "Itwould be strange if the remedy should come from the United Stares, the sameplace which brings us the disease." Now that the Alliance for Progress is deadand buried the Imperium proposes, more in panic than in generosity, to solve
Latin America's problems by eliminating Latin Americans; Washington has
reason to suspect that the poor peoples don't prefer to be poor. But it is
impossible to desire the end without desiring the means. Those who denyliberation to Latin America also deny our only possible rebirth, andincidentally absolve the existing structures from blame. Our youth multiplies,
rises, listens: what does the voice of the system offer? The system speaks asurrealist language. In lands that are empty it proposes to avoid births; incountries where capital is plentiful but wasted it suggests that capital is lacking;it describes as "aid" the deforming orthopedics of loans and the draining ofwealth that results from foreign investment; it calls upon big land-owners tocarry out agrarian reforms and upon the oligarchy to practice social justice. The
class struggle only exists, we are told, because foreign agents stir it up; but
social classes do exist and the oppression of one by the other is known as theWestern way of life. The Marines undertake their criminal expeditions only torestore order and social peace; the dictatorships linked to Washington lay
foundations in their jails for the law-abiding state, and ban strikes and smashtrade unions to protect the freedom to work.
Is everything forbidden us except to fold our arms? Poverty is not written
in the stars; under development is not one of God's mysterious designs.
Redemptive years of revolution pass; the ruling classes wait and meanwhile
pronounce hellfire anathema on everybody. In a sense the right wing is correctin identifying itself with tranquillity and order: it is an order of daily
humiliation for the majority, but an order nonetheless; it is a tranquillity inwhich injustice continues to be unjust and hunger to be hungry. If the futureturns out to be a Pandora's box, the conservative has reason to shout, "I havebeen betrayed." And the ideologists of impotence, the slaves who look atthemselves with the master's eyes, are not slow to join in the outcry. The
bronze eagle of the Maine, thrown down on the day the Cuban Revolution
triumphed, now

7lies abandoned. Its wings broken, in a doorway in the old town in Havana.
Since that day in Cuba, other countries have set off on different roads on theexperiment of change; perpetuation of the existing order of things isperpetuation of the crime. Recovery of the resources that have always been
usurped is recovery of our destiny.
The ghosts of all the revolutions that have been strangled or betrayedthrough Latin America's tortured history emerge in the new experiments, as if
the present had been foreseen and begotten by the contradictions of the past.
History is a prophet who looks back: because of what was, and against what
was, it announces what will be. And so this book, which seeks to chronicle ourdespoliation and at the same time explain how the current mechanisms ofplunder operate, will present in close proximity the caravelled conquistadors
and the jet-propelled technocrats; Hernan Cortes and the Marines; the agents of
the Spanish Crown and the International Monetary Fund missions; thedividends from the slave trade and the profits of General Motors. And, too, thedefeated heroes and revolutions of our time, the infamies and the dead andresurrected hopes: the fertile sacrifices. When Alexander von Humboldt
investigated the customs of the ancient inhabitants of the Bogota plateau, hefound that the Indians called the victims of ritual ceremonies quihica. Quihica
meant "door"; the death of each chosen victim opened the door to a new cycleof 185 moons.

8Part I~
Mankind’s Poverty a
is a Consequenceof the Wealth of the Land

9

10

1.

Lust for Gold, Lust for Silver~

THE SIGN OF THE CROSS ON THE HILT OF THE SWORD
When Christopher Columbus headed across the great emptiness west of
Christendom, he had accepted the challenge of legend. Terrible storms would
play with his ships as if they were nutshells and hurl them into the jaws ofmonsters; the sea serpent, hungry for human flesh, would be lying in wait in
the murky depths. According to fifteenth-century man, only 1,000 years
remained before the purifying flames of the Last Judgment would destroy theworld, and the world was then the Mediterranean Sea with its uncertain
horizons: Europe, Africa, Asia. Portuguese navigators spoke of strange corpses
and curiously carved pieces of wood that floated in on the west wind, but noone suspected that the world was about to be startlingly extended by a great
new land.
America not only lacked a name. The Norwegians did not know they had
discovered it long ago, and Columbus himself died convinced that he hadreached Asia by the western route. In 1492, when Spanish boats first trod thebeaches of the Bahamas, the Admiral thought these islands were an outpost of
the fabulous isle of Zipango— Japan. Columbus took along a copy of Marco
Polo’s book, and covered its margins with notes. The inhabitants of Zipango,
said Marco Polo, “have gold in the greatest abundance, its sources being
inexhaustible. . . In this island there are pearls also, in large quantities, of a redcolor, round in shape, and of11

great size, equal in value to, or even exceeding that of white pearls.” The
wealth of Zipango had become known to the Great Kubla Khan, stirring adesire to conquer it, but he had failed. Out of Marco Polo’s sparkling pages
leaped all the good things of creation: there were nearly 13,000 islands in the
Indian seas, with mountains of gold and pearls and twelve kinds of spices inenormous quantities, in addition to an abundance of white and black pepper.
Pepper, ginger, cloves, nutmeg, and cinnamon were as prized as salt inpreserving meat against putrefaction and loss of flavor in winter. Spain’s
Catholic rulers decided to finance the adventure to get direct access to thesources and to free themselves from the burdensome chain of intermediaries
and speculators who monopolized the trade in spices and tropical plants,
muslins and sidearms, from the mysterious East. The desire for precious metals,
the medium of payment in commercial dealings, also sparked the crossing of
the sinister seas. All of Europe needed silver; the seams in Bohemia, Saxony,
and the Tyrol were almost exhausted.
For Spain it was an era of reconquest: 1492 was not only the year of the
discovery of America, the new world born of that error which had such
momentous consequences, but also of the recovery of Granada. Early that year
Ferdinand of Aragón and Isabella of Castile, whose marriage had linked their
dominions, stormed the last Arab redoubt on Spanish soil. It had taken nearlyeight centuries to win back what was lost in seven years, and the war ofreconquest had drained the royal treasury. But this was a holy war, a Christian
war against Islam; and it was no accident that, in that same year of 1492,
150,000 Jews were expelled from the country. Spain achieved unity and reality
as a nation wielding swords with the Sign of the Cross on their hilts. Queen
Isabella became the patroness of the Holy Inquisition. The feat of discovering
America can only be understood in the context of the tradition of crusading
wars that prevailed in medieval Castile; the Church needed no prompting toprovide a halo for the conquest of unknown lands across the ocean. Pope
Alexander VI, who was Spanish, ordained Queen Isabella as proprietor andmaster of the New World. The expansion of the kingdom of Castile extended
God’s reign over the earth.
Three years after the discovery Columbus personally directed the military
campaign against the natives of Haiti, which he called Española.

12

A handful of cavalry, 200 foot soldiers, and a few specially trained dogs
decimated the Indians. More than 500, shipped to Spain, were sold as slaves inSeville and died miserably. Some theologians protested and the enslavement ofIndians was formally banned at the beginning of the sixteenth century.
Actually it was not banned but blessed: before each military action the captainsof the conquest were required to read to the Indians, without an interpreter but
before a notary public, a long and rhetorical Requerimiento exhorting them toadopt the holy Catholic faith:
f you do not, or if you maliciously delay in so doing, I certify that with God’s
help I will advance powerfully against you and make war on you whereverand however I am able, and will subject you to the yoke and obedience of the
Church and of their majesties and take your women and children to be slaves,and as such I will sell and dispose of them as their majesties may order, and I
will take your possessions and do you all the harm and damage that I can.2

America was the vast kingdom of the Devil, its redemption impossible or
doubtful; but the fanatical mission against the natives’ heresy was mixed withthe fever that New World treasures stirred in the conquering hosts. Bernal Diazdel Castillo, faithful comrade of Hernán Cortes in the conquest of Mexico,
wrote that they had arrived in America “to serve God and His Majesty and also
to get riches.”
At his first landing on San Salvador atoll, Columbus was dazzled by thetransparent hues of the Caribbean, the green landscape, the soft clean air, themagnificent birds, and the youths “with size and with good faces and wellmade” who lived there. He gave the natives “some red caps and strings ofbeads, and many other trifles of small value, which gave them great pleasure.
Wherewith they were much delighted, and this made them so much our friends
that it was a marvel to see.” They knew nothing of swords, and when thesewere shown to them they grasped the sharp edges and cut themselves.
Meanwhile, as the Admiral relates in his logbook, “1 was very attentive tothem, and strove to learn if they had any gold. Seeing some of them with little
bits of metal hanging at their noses, I gathered from them by signs, that bygoing southward or steering round the island in that direction, there would befound a king who possessed great cups full of gold, and in large quantities.”3
For “of gold is treasure made, and with it he who has it does as he wills in theworld and it even sends souls to Paradise.”13

On his third voyage, Columbus still believed he was in the China Sea when he
was off the coast of Venezuela. This did not prevent him from reporting that anendless land which was earthly paradise extended from there. Later Amerigo
Vespucci, an early sixteenth-century explorer of the Brazilian coast, reported toLorenzo de Mëdicis: “The trees are of such beauty and sweetness that we felt
we were in earthly Paradise.”4 (The lawyer Antonio de Leon Pinelo devoted
two entire volumes to demonstrating that the Garden of Eden was in America.
In El Paraiso en el Nuevo Mundo (1656) he had a map of South America
showing, in the center, the Garden of Eden watered by the Amazon, the Rio dela Plata, the and the Magdalena. The forbidden fruit was the banana. The map
showed the exact spot from which Noah’s Ark took off at the time of the
Flood.) In 1503 Columbus wrote to his monarchs from Jamaica: “When I
discovered the Indies, I said they were the greatest rich domain in the world. I
spoke of the gold, pearls, precious stones, spices
In the Middle Ages a small bag of pepper was worth more than a man’slife, but gold and silver were the keys used by the Renaissance to open the
doors of paradise in heaven and of capitalist mercantilism on earth. The epic of
the Spaniards and Portuguese in America combined propagation of theChristian faith with usurpation and plunder of native wealth. European power
stretched out to embrace the world. The virgin lands, bristling with jungles anddangers, fanned the flames of avarice among the captains, the hidalgos onhorseback, and the ragged soldiers who went out after the spectacular booty ofwar: they believed in glory, in “the sun of the dead,” and in the key toachieving it, which Cortés defined thus: “Fortune favors the daring.” Cortés
himself had mortgaged everything he owned to equip his Mexican expedition.
With a few exceptions— Columbus, Pedrarias Dávila, Magellan— theexpeditions of conquest were not financed by the state but by the conquistadorsthemselves, or by businessmen who put up money for their ventures
The myth of El Dorado, the golden king, was born: golden were the streetsand houses of his kingdom’s cities. In search of El Dorado a century after
Columbus, Sir Walter Raleigh sailed up the Orinoco and was defeated by its
cataracts. The will-o’-the-wisp of the “mountain that gushed silver” became a
reality in 1545 with the discovery of Potosi, but before this many adventurers
who sailed up the Rio Paraná in a vain

14

search for the silver spring had died of hunger or disease or pierced by nativearrows.
There was indeed gold and silver in large quantities, accumulated in the
Mexican plateau and the Andean altiplano. In 1519 Cortés told Spain of thefabulous magnitude of Montezuma’s Aztec treasure, and fifteen years later
there arrived in Seville the gigantic ransom— a roomful of gold and two ofsilver— which Francisco Pizarro had made the Inca Atahualpa pay before
strangling him. Years earlier the Crown had paid the sailors on Columbus’s
first voyage with gold carried off from the Antilles. The Caribbean island
populations finally stopped paying tribute because they had disappeared: they
were totally exterminated in the gold mines, in the deadly task of sifting
auriferous sands with their bodies half submerged in water, or in breaking up
the ground beyond the point of exhaustion, doubled up over the heavy
cultivating tools brought from Spain. Many natives of Haiti anticipated the fate
imposed by their white oppressors: they killed their children and committed
mass suicide. The mid-sixteenth-century historian Fernández de Oviedointerpreted the Antillean holocaust thus: “Many of them, by way of diversion,
took poison rather than work, and others hanged themselves with their own
hands.”5 (His interpretation founded a school I am amazed to read, in the latest(1970) book by the French technician René Dumont, Cuba: Is It Socia1ist?
“The Indians were not totally exterminated. Their genes subsist in Cuban
chromosomes. They felt such an aversion for the tension which continuous
work demands that some killed themselves rather than accept forced labor..”)

THE GODS RETURN WITH SECRET WEAPONS
While passing Tenerife on his first voyage, Columbus had witnessed a great
volcanic eruption. It seemed an omen of all that would come later in theimmense new lands which, surprisingly, stood athwart the western route toAsia. America was there— at first the subject of conjecture from its endlesscoasts, then conquered in successive waves like a furious tide beating in.
Admirals gave place to governors, ships’ crews were converted into invading
hosts. Papal bulls had apostolically granted Africa to the Portuguese Crown,
and the lands “unknown like those already discovered by your envoys andthose to be discovered in the15

future” to the Crown of Castile America had been given to Queen Isabella In
1508 another bull granted the Spanish Crown, in perpetuity, all tithes collectedin America. The coveted patronage of the New World Church included a royalprerogative over all ecclesiastical benefices.
The Treaty of Tordesillas, signed in 1494, allowed Portugal to occupy
Latin America territories below a dividing line traced by the Pope, and in 1530
Martim Affonso de Sousa founded the first Portuguese communities in Brazil,
expelling French intruders By then the Spaniards, crossing an infinity of hellishjungles and hostile deserts, had advanced far in the process of exploration andconquest In 1513 the South Pacific glittered before the eyes of Vasco Nunez deBalboa In the fall of 1522 the eighteen survivors of Ferdinand Magellan’s
expedition returned to Spain: they had for the first time united both oceans andconfirmed that the world was round by circling it. Three years earlier Hernan
Corres’s ten ships had sailed from Cuba toward Mexico, and in 1523 Pedro de
Alvarado launched the conquest of Central America Francisco Pizarro, anilliterate pig-breeder, triumphantly entered Cuzco in 1533 and seized the heartof Inca empire In 1540 Pedro de Valdivia crossed the Atacama desert andfounded Santiago de Chile The conquistadors penetrated the Chaco and laidbare the New World from Peru to the mouth of the mightiest river on ourplanet.
There was something of everything among the natives of Latin America:
astronomers and cannibals, engineers and Stone Age savages But none of thenative cultures knew iron or the plow, or glass or gun powder, or used thewheel except on their votive carts The civilization from across the ocean thatdescended upon these lands was undergoing the creative explosion of theRenaissance; Latin America seemed like another invention to be incorporated,along with gun powder, printing, paper, and the compass, in the bubbling birthof the Modern Age The unequal development of the two world explains therelative ease with which native civilizations succumbed Cortes landed at
Veracruz with no more than 100 sailors and 508 soldiers; he had 16 horses, 32
crossbows, 10 bronze cannon, and a few harquebuses, muskets, and pistols
Pizarro entered Cajamarca with 180 soldiers and 37 horses That was enoughYet the Aztec capital, Tenochtitlan, was then five times larger that Madrid andhad double the population of Seville, Spain’s largest city, and in Peru Pizarro
met an army of 100,000 Indians

16

The Indians were also defeated by terror. The emperor Montezuma
received the first news in his palace: a large hill was moving over the sea.
More messengers arrived: “He was very alarmed by the report of how thecannon exploded, how its thunder reverberated, and how it filled one with awe
and stunned one’s ears. And when it went off, a sort of stone hail came from its
entrails and it rained fire.” The strangers sat on “deer as high as the rooftops.”
Their bodies were completely covered, “only their faces can be seen. They arewhite, as if made of lime. They have yellow hair, although some have black.
Long are their beards.”6 Montezuma thought it was the god Quetzalcoatl
returning: there had been eight prophesies of this not long before. Hunters hadbrought him a bird with a round mirror-like crest on its head in which thesunset was reflected; in this mirror Montezuma saw squadrons of warriors
marching on Mexico, Quetzalcoatl had come from the east and gone to the east:
he was white and bearded. Also white and bearded was Viracocha, the bisexual
god of the Incas. And the east was the cradle of the Mayas’ heroancestors.( These remarkable coincidences have given rise to the hypothesisthat the gods of the native religions were really Europeans our shores long
before Columbus.7)
The avenging gods who were now returning to settle accounts with theirpeoples had armor and coats of mail, lustrous caparisons that deflected arrows
and stones; their weapons emitted deadly rays and darkened the air withsuffocating smoke. The conquistadors also practiced the arts of treachery andintrigue with refined expertise. They sagely allied themselves with the
Tlaxcalans against Montezuma and effectively exploited the split in the Inca
empire between the brothers Huáscar and Atahualpa. They knew how to win
accomplices for their crimes among the intermediate ruling classes, priests,
officials, and defeated soldiers and high Indian chiefs. But they also used otherweapons— or, if you prefer, other factors operated objectively for the victory of
the invaders. Horses and bacteria, for example.
Horses, like camels, had once been indigenous to Latin America but had
become extinct. In Europe, where they were introduced by Arab horsemen,
they had proved to be of enormous military and economic value. When they
reappeared in Latin America during the conquest, they lent magic powers to
the invaders in the natives’ astonished eyes.

17Atahualpa saw the first Spanish soldiers arriving on spirited steeds adorned
with plumes and little bells, making thunder and clouds of dust with their swift
hooves: panic-stricken, the Inca fell down on his back. The chief Tecum,
leading the descendants of the Mayas, beheaded the horse of Pedro de
Alvarado with his lance, convinced that it was part of the conquistador:
Alvarado stood up and killed him. A few horses in medieval war trappings
scattered the mass of Indians, sowing terror and death. During the colonizing
process, priests and missionaries spread for the superstitious Indians’ benefit
the tale that horses were of sacred origin, for Santiago, Spain’s patron saint,rode a white horse which had won valiant victories against the Moors and theJews with the aid of Divine Providence.
Bacteria and viruses were the most effective allies, The Europeans broughtwith them, like biblical plagues, smallpox and tetanus, various lung, intestinal,
and venereal diseases, trachoma, typhus, leprosy, yellow fever, and teethrotting caries. Smallpox was the first to appear. Must not this unknown andhorrible epidemic, which produced burning fever and decomposed the flesh, bea chastisement from the gods? The invaders “moved into Tlaxcala,” one native
eyewitness reported, “and then the epidemic spread: cough, burning hot
pustules.” Reported another: “The contagious, oppressive, cruel pustule
sickness brought death to many.”8 The Indians died like flies; their organisms
had no defense against the new diseases. Those who survived were feeble anduseless. The Brazilian anthropologist Darcy Ribeiro estimates that more thanhalf the aboriginal population of America, Australia, and Oceania died fromthe contamination of first contact with white men.

“THEY CRAVE GOLD LIKE HUNGRY SWINE”
Firing their harquebuses, hacking with their swords, and breathing pestilence,
the little band of implacable conquistadors advanced into America. The
conquered tell us what it was like. After the Cholula massacre Montezuma sent
new envoys to Cortës, who was advancing on the Valley of Mexico. They
brought gifts of golden collars and quetzal-bird feather banners. The Spaniards“were in seventh heaven,” says the Nahuati text preserved in the Florentine
Codex. “They lifted18

up the gold as if they were monkeys, with expressions of joy, as if it put newlife into them and lit up their hearts. As if it were certainly something forwhich they yearn with a great thirst. Their bodies fatten on it and they hunger
violently for it. They crave gold like hungry swine.” Later, when Cortés
reached Tenochtitlán, the resplendent Aztec capital with 300,000 inhabitants,
the Spaniards entered the treasure house, “and then they made a great ball of
the gold and set a fire, putting to the flames all that remained no matter how
valuable, so that everything burned. As for the gold, the Spaniards reduced it
and made bars.”
War followed. Finally Cortés, who had lost Tenochtitlán, reconquered it in
1521: “And by then we had no shields left, no clubs, and nothing to eat, weweren’t eating anymore.” Montezuma, harried by the priests who accused himof treason, had killed himself. Devastated, burned, and littered with corpses,
the city fell: “Shields were its defense, but they were not enough Cones had
expressed horror at the sacrifices of the Veracruz Indians, who burnedchildren’s entrails for a smoke offering to the gods, but there were no limits to
his own cruelty in the reconquered city: “And all night long it rained on us.”The gallows and torture were not enough, however: the captured treasure nevermeasured up to the Spaniards’ imagination, and for years they dug in the lakebottom searching for gold and precious objects presumably hidden by the
Indians.
Pedro de Alvarado and his men fell upon Guatemala and “killed so many
Indians that it made a river of blood which is called the Olimtepeque,” and “theday became red because of all the blood there was on that day.” Before thedecisive battle, “and seeing Indians tortured, they told the Spaniards not totorture them anymore, that the captains Nehaib and IxquIn— Nehaib in theguise of an eagle and of a lion— had much gold, silver, diamonds, andemeralds for them. Then they gave them to the Spaniards and the Spaniards
kept them.”9Before Pizarro strangled and decapitated Atahualpa, he got from him aransom of “gold and silver weighing more than 20,000 marks in fine silver and
1,326,000 escudos in the finest gold.” Then Pizarro advanced on Cuzco. His
soldiers thought they were entering the city of the Caesars, so dazzling was thecapital of the empire, but they proceeded without delay to sack the Temple of
the Sun. “Struggling and fighting among each other, each trying to get his
hands on the lion’s share, the19soldiers in their coats of mail trampled on jewels and images and pounded thegold utensils with hammers to reduce them to a more portable size. . . They
tossed all the temple’s gold into a melting pot to turn it into bars: the laminae
that covered the walls, the marvelous representations of trees, birds, and otherobjects in the garden.”10
Today in the enormous bare plaza at the center of Mexico City the Catholiccathedral rises on the ruins of Tenochtitlán’s greatest temple and thegovernment palace occupies the site where Cuauhtémoc, the Aztec chiefmartyred by Cortés, had his residence. Tenochtitlán was razed. In Peru, Cuzco
suffered the same fate, but the conquistadors could not completely destroy its
massive walls and this testimony in stone to the Inca’s colossal architecture canstill be seen in the bases of the colonial buildings.

THE SILVER CYCLE: THE SPLENDORS OF POTOSIThey say that even the horses were shod with silver in the great days of the cityof Potosi, The church altars and the wings of cherubim in processions for the
Corpus Christi celebration in 1658, were made of silver: the streets from thecathedral to the church of Recoletos were completely resurfaced with silver
bars. In Potosi, silver built temples and palaces, monasteries and gambling
dens; it prompted tragedies and fiestas, led to the spilling of blood and wine,
fired avarice, and unleashed extravagance and adventure. The sword and thecross marched together in the conquest and plunder of Latin America, andcaptains and ascetics, knights and evangelists, soldiers and monks came
together in Potosi to help themselves to its silver. Molded into cones and ingots,
the viscera of the Cerro Rico— the rich hill— substantially fed the developmentof Europe. “Worth a Peru” was the highest possible praise of a person or athing after Pizarro took Cuzco, but once the Cerro had been discovered Don
Quixote de la Mancha changed the words: “Worth a Potosi,” he says to Sancho.
This jugular vein of the viceroyalty, America’s fountain of silver, had 120,000
inhabitants by the census of 1573. Only twenty-eight years had passed since
the city sprouted out of the Andean wilderness and already, as if by magic, it
had the same population as London and more than Seville, Madrid, Rome, orParis. A new census

20

in 1650 gave Potosi a population of 160,000. It was one of the world’s biggest
and richest cities, ten times bigger than Boston— at a time when New York had
not even begun to call itself by that name. Potosi’s history did not begin with
the Spaniards. Before the conquest the Inca Huayna Cápaj had heard his
vassals talk of the Sumaj Orko, the beautiful hill, and he was finally able to see
it when, having fallen ill, he had himself taken to the thermal springs of
Tarapaya. From the straw-hut village of Cantumarca the Inca’s eyescontemplated for the first time that perfect cone which rises proud1y between
the mountain peaks. He was awestruck by its reddish hues, slender form, andgiant size, as people have continued to be through ensuing centuries. But theInca suspected that it must conceal precious stones and rich metals in its
bowels, and he wanted to add new decorations to the Temple of the Sun in
Cuzco. The gold and silver that the Incas took from the mines of Colque Porcoand Andacaba did not leave the kingdom: they were not used commercially but
for the adoration of the gods. Indian miners had hardly dug their flints into thebeautiful Cerro’s veins of silver when a deep, hollow voice struck them to theground. Emerging as loud as thunder from the depths of the wilderness, thevoice said in Quechua: “This is not for you; God is keeping these riches for
those who come from afar.” The Indians fled in terror and the Inca, before
departing from the Cerro, changed its name. It became “Potojsi,” which means
to thunder, burst, explode.
“Those who come from afar” took little time in coming, although Huayna
Cápaj was dead by the time the captains of the conquest made their way in. In
1545 the Indian Huallpa, running in pursuit of an escaped llama, had to pass
the night on the Cerro, It was intensely cold and he lit a fire. By its light he saw
a white and shining vein— pure silver. The Spanish avalanche was unleashed.
Wealth flowed like water. The Holy Roman Emperor, Charles V, showed his
gratitude by bestowing on Potosi the title of Imperial City and a shield with theinscription: “I am rich Potosi, treasure of the world, king of the mountains,
envy of kings.” Only eleven years after Hualipa’s discovery the new-born
Imperial City celebrated the coronation of Philip II with twenty-four days offestivities costing 8 million pesos duros. The Cerro was the most potent ofmagnets. Hard as life was at its base, at an altitude of nearly 14,000 feet theplace was flooded with treasure21

hunters who took the bitter cold as if it were a tax on living there. Suddenly arich and disorderly society burst forth beside the silver, and Potosi became “thenerve center of the kingdom,” in the words of Viceroy Antonio de Mendoza.
By the beginning of the seventeenth century it had thirty-six magnificently
decorated churches, thirty-six gambling houses, and fourteen dance academies.
Salons, theaters, and fiesta stage-settings had the finest tapestries, curtains,heraldic emblazonry, and wrought gold and silver; multicolored damasks andcloths of gold and silver hung from the balconies of houses. Silks and fabrics
came from Granada, Flanders, and Calabria; hats from Paris and London;
diamonds from Ceylon; precious stones from India; pearls from Panama;stockings from Naples; crystal from Venice; carpets from Persia; perfumes
from Arabia; porcelain from China. The ladies sparkled with diamonds, rubies,
and pearls; the gentlemen sported the finest embroidered fabrics from Holland.
Bullfights were followed by tilting contests, and love and pride inspired
frequent medieval-style duels with emerald-studded, gaudily plumed helmets,
gold filigree saddles and stirrups, Toledo swords, and richly caparisoned
Chilean ponies.
In 1579 the royal judge Matienzo complained: “There is never a shortageof novelty, scandal, and wantonness.” Potosi had at the time 800 professional
gamblers and 120 famous prostitutes, whose resplendent salons were thronged
with wealthy miners. In 1608 Potosi celebrated the feast of the Holy Sacrament
with six days of plays and six nights of masked balls, eight days of bullfights
and three of fiestas, two of tournaments and other dissipations.

SPAIN OWNED THE COW, OTHERS DRANK THE MILK
Between 1545 and 1558 the prolific silver mines of Potosi, in what is now
Bolivia, and of Zacatecas and Guanajuato in Mexico, were discovered, and themercury amalgam process, which made possible the exploitation of the lowestgrade silver, began to be used. The “silver rush” quickly eclipsed gold mining.
In the mid-seventeenth century silver constituted more than 99 percent ofmineral exports from Spanish America. Latin America was a huge mine, with
Potosi as its chief center. Some excessively enthusiastic Bolivian writers insist
that in three22

centuries Spain got enough metal from Potosi to make a silver bridge from thetip of the Cerro to the door of the royal palace across the ocean. This iscertainly fanciful, but even the reality stretches one’s imagination to the limit:
the flow of silver achieved gigantic dimensions. The large-scale clandestine
export of Latin American silver as contraband to the Philippines, to China, andto Spain itself is not taken into account by Earl Hamilton, who neverthelesscites, in his well-known work on the subject, astounding figures based on datafrom the Casa de Contratacion in Seville.11 Between 1503 and 1660, 185,000
kilograms of gold and 16,000,000 of silver arrived at the Spanish port of
Sanlukar de Barrameda, Silver shipped to Spain in little more than a century
and a half exceeded three times the total European reserves— and it must be
remembered that these official figures are not complete.
The metals taken from the new colonial dominions not only stimulated
Europe’s economic development; one may say that they made it possible. Eventhe effect of the Persian treasure seized and poured into the Hellenic world by
Alexander the Great cannot be compared with Latin America’s formidable
contribution to the progress of other regions. Not, however, to that of Spain,
although Spain owned the sources of Latin American silver. As it used to besaid in the seventeenth century, “Spain is like a mouth that receives the food,chews it, and passes it on to the other organs, retaining no more than a fleeting
taste of the particles that happen to stick in its teeth.”12 The Spaniards owned
the cow, but others drank the milk. The kingdom’s creditors, mostly foreigners,
systematically emptied the “Green Strongroom” of Seville’s Casa deContratación, which was supposed to guard, under three keys in three different
hands, the treasure flowing from Latin America.
The Crown was mortgaged. It owed nearly all of the silver shipments,
before they arrived, to German, Genoese, Flemish, and Spanish bankers. The
same fate befell most of the duty collected in Spain itself: in 1543, 65 percent
of all the royal revenues went to paying annuities on debts. Only in a minimal
way did Latin American silver enter the Spanish economy; although formallyregistered in Seville, it ended in the hands of the Fuggers, the powerful bankers
who had advanced to the Pope the funds needed to finish St. Peter’s, and ofother big moneylenders of the period, such as the Welsers, the Shetzes, and the
Grimaldis. The silver

23

also went to paying for the export of non-Spanish merchandise to the New
World.
The rich empire had a poor metropolis, although the illusion of prosperity
blew increasingly large bubbles into the air. The Crown kept opening up new
war fronts, while on Spanish soil the aristocracy devoted itself to extravagance,and priests and warriors, nobles and beggars, multiplied as dizzily as living
costs and interest rates. Industry died with the birth of great sterile latifundia,
and Spain’s sick economy could not stand up to the impact of the risingdemand for food and merchandise that was the inevitable result of colonial
expansion. The big rise in public expenditures and the choking pressure of theoverseas possessions’ consumer needs accelerated trade deficits and set off
galloping inflation. Jean-Baptiste Colbert, French minister of marine underLouis XIV, wrote, “The more business a state does with the Spaniards, themore silver it has.” There was a sharp European struggle for the Spanish trade,which brought with it the market and the silver of Latin America. A lateseventeenth-century French document tells us that Spain controlled only 5
percent of the trade with “its” overseas colonial possessions, despite thejuridical mirage of its monopoly: almost a third of the total was in Dutch andFlemish hands, a quarter belonged to the French, the Genoese controlled over
one-fifth, the English one-tenth, and the Germans somewhat less. Latin
America was a European business.
Charles V, heir to the Holy Roman emperors by purchased election, man of
jutting chin and idiot gaze, spent only sixteen of his reign’s forty years in Spain.
Having áccupied the throne without knowing a word of Spanish, he governedwith a retinue of rapacious Flemings whom he authorized to take out of Spain
muletrain-loads of gold and jewels, and whom he showered with bishoprics,
bureaucratic titles, and even the first license to ship slaves to the Latin
American colonies. Intent on hounding Satan all across Europe, he drained
Latin America of its treasure for his religious wars. The Hapsburg dynasty did
not collapse with his death; Spain had to suffer them for nearly two centuries.
The great leader of the Counter-Reformation was his son, Philip II. From hishuge palace-monastery, Escorial, on the slopes of the Sierra de Guadarrama,
Philip spread the grim operations of the Inquisition across the world andlaunched his armies against the centers of heresy. Calvinism had taken hold in
Holland, England, and France, and the Turks

24

embodied the peril of a return to the faith of Allah. Spreading the true faith wasa costly business: the few gold and silver objects, marvels of Latin Americanart, that arrived unmelted-down from Mexico and Peru were quickly takenfrom the Casa de Contratación in Seville and thrown into the crucibles.
At the same time heretics, or those suspected of heresy, were roasted in theInquisition’s purifying flames, Torquemada burned books, and the Devil’s tailpeeped out from every crevice. The war against Protestantism was also the war
against ascendant capitalism in Europe. The “perpetuation of the Crusades,”writes J.H. Elliott, “meant the perpetuation of the archaic social organization ofa nation of Crusaders.” The metals of Latin America— the delirium anddownfall of Spain— provided a means to fight against the nascent forces of themodern economy. Charles V had already defeated the Castilian bourgeoisie inthe uprisings of the Comuneros, which had become a social revolution against
the nobility, its property and privileges. The uprisings were crushed following
the betrayal of the city of Burgos, which would be Francisco Franco’s capitalfour centuries later. With the last rebel fires extinguished, Charles returned toSpain accompanied by 4,000 German soldiers. At the same time, the highly
radical insurrection of weavers, spinners, and artisans, who had taken power inthe city of Valencia and had extended it through the whole district, wasdrowned in blood.
Defense of the Catholic faith turned out to be a mask for the struggle
against history. The expulsion of the Jews in the time of Ferdinand and Isabella
had deprived Spain of many able artisans and of indispensable capital. The
expulsion of the Arabs in 1609 is considered less important, although no fewer
than 275,000 Moors were put over the border, disastrously effecting the
economy of Valencia and ruining the fertile Aragonese lands south of the Ebro.
Previously, Philip II had thrown out thousands of Flemish artisans guilty orsuspected of Protestantism. England welcomed them and they made a solid
contribution to that country’s manufactures.
It is clear that the enormous distances and the difficulty ofcommunication .were not the main obstacles to Spain’s industrial progress.
Spanish capitalists became no more than rentiers through the purchase of titles
to Crown debts, and did not invest their capital in industrial development. The
economic surplus went into unproductive channels:

25

the old wealthy class, the señores of gallows and knife, the owners of land andtitles of nobility, built palaces and accumulated jewels; the new rich,speculators and merchants, bought land and titles. Neither the one nor the otherpaid taxes worth mentioning, nor could they be imprisoned for debt. Anyone
devoting himself to industrial activity automatically lost his membership in the
gentleman’s club.
Successive commercial treaties, signed after Spain’s military defeats in
Europe, gave concessions that stimulated maritime trade between the port ofCádiz, where Latin America’s metals were landed, and French, English, Dutch,
and Hanseatic ports. Every year from 800 to 1,000 ships unloaded in Spain the
products of other countries’ industries. They reloaded with Latin American
silver and Spanish wool that went to foreign looms, whence it would be
returned already woven by the expanding European industry. The Cádiz
monopolists merely forwarded foreign industrial products, which were thenshipped to the New World: if Spanish manufactures could not even supply thehome market, how could they satisfy the needs of the colonies?
The laces of Lille and Arras, Dutch fabrics, Brussels tapestries, Florentine
brocades, Venetian crystal, Milanese arms, and French wines and cloths
swamped the Spanish market, at the expense of local production, to satisfy theostentation and consumer demands of ever more numerous and powerfulparasites in ever poorer countries. Industry died in the egg, and the Hapsburgs
did their best to speed its demise. The process reached its height in the midsixteenth century when importation of foreign textiles was authorized and allexport of Castilian fabrics was banned except to Latin America. In contrast, as
Jorge Abelardo Ramos has noted, were the policies of Henry VIII andElizabeth I in England, when in that ascendant nation they banned the export ofgold and silver, monopolized letters of credit, stopped wool exports, and ousted
the North Sea merchants of the Hanseatic League from British ports.
Meanwhile, the Italian republics were protecting their industry and external
commerce through tariffs, privileges, and rigorous prohibitions: craftsmen
could not leave the country under pain of death.
Everything went to rack and ruin, Of 16,000 looms in Seville on Charles
V’s death in 1558, only 400 remained when Philip II died forty years later. The
7 million sheep in Andalusian flocks were reduced to 2 million. In Don
Quixote de Ia Mancha— which was banned for a long26

time in Latin America— Cervantes drew a portrait of the society of his time. A
mid-sixteenth-century decree stopped the importation of foreign books andbarred students from taking courses outside Spain; the Salamanca student bodywas reduced by half in a few decades; there were 9,000 convents and the clergy
multiplied almost as fast as the cloak-and-sword nobility; 160,000 foreigners
monopolized foreign trade; and the squanderings of the aristocracy condemned
Spain to economic impotence. Around 1630, 150-odd dukes, marquises, counts,
and viscounts garnered 5 million ducats in annual rents, adding ever more frills
to their fancy titles. The Duke of Medinaceli had 700 servants and the Duke of
Osuna, to score off the Tsar of Russia, dressed his 300 in leather cloaks.( The
species is not yet extinct, I opened a Madrid magazine at the end of 1969 andread of the death of Doña Teresa Beltrán de Lis y Pidal Gorouaki y Chico,Duchess of Albuquerque and Marchionesa of the Atcañices and Balbases. She
is mourned by the widower Duke of de Guzmán Albuquerque, Don Beltrán
Alonso Osorio y Diez de Rivera Martos y Figueroa, Marquis of the Alcañices,of the Balbases, of Cadreita, of Cuéllar, of Cullera, of Montaos, Count ofFuensaldana, of Grajal, of Huelma, of Ledesma, of La Torre, of Villanueva de
Canedo, of Villahumbrosa, thrice Grandee of Spain.) The seventeenth century
was the time of the picaro, the rogue, and of hunger and epidemics. Spain had
countless beggars, but this did not discourage an influx of foreign beggars fromevery corner of Europe. By 1700 there were 625,000 hidalgos, knights of thebattlefield, although the country was emptying: its population had dwindled byhalf in somewhat more than two centuries, and was equal to that of England,
which had doubled in the same period. The Hapsburg regime finally ended in
1700 amid total bankruptcy. Chronic unemployment, idle latifundios, chaotic
currency, ruined industry, lost war, empty coffers, central authority ignored in
the provinces: the Spain that Philip V faced was “hardly less defunct than its
dead master.”13
The Bourbons gave Spain a more modern look, but at the end of theeighteenth century there were 200,000 clergymen and the unproductive
population continued to proliferate at the expense of the country’s
underdevelopment. More than 10,000 towns and cities were still subject to theseignorial jurisdiction of the nobility and thus outside the king’s direct control.
The latifundia and the institution of entailed estates remained intact, along with
obscurantism and fatalism. Nothing had improved since the era of Philip IV
when a group of theologians,27

examining a project for a canal between the Manzanares and the Tagus, hadended their deliberations by declaring that if God had wanted the rivers to benavigable, He himself would have so arranged it.

THE DISTRIBUTION OF FUNCTIONS BETWEEN HORSEMAN
AND HORSE
Marx wrote in Chapter 3 of the first volume of Capital. “The discovery ofgold and silver in America, the extirpation, enslavement and entombment inmines of the aboriginal population, the beginning of the conquest and lootingof the East Indies, the turning of Africa into a warren for the commercial
hunting of black-skins, signalized the rosy dawn of the era of capitalist
production. These idyllic proceedings are the chief momenta of primitive
accumulation.
Plunder, internal and external, was the most important means of primitive
accumulation of capital, an accumulation which, after the Middle Ages, madepossible a new historical stage in world economic evolution. As the money
economy extended, more and more social strata and regions of the world
became involved in unequal exchange. Ernest Mandel has added up the valueof the gold and silver torn from Latin America up to 1660, the booty extracted
from Indonesia by the Dutch East India Company from 1650 to 1780, theharvest reaped by French capital in the eighteenth-century slave trade, theprofits from slave labor in the British Antilles and from a half-century of
British looting in India. The total exceeds the capital invested in all European
industrial enterprises operated by steam in about 1800.14 This enormous massof capital, Mandel notes, created a favorable climate for investment in Europe,
stimulated the “spirit of enterprise,” and directly financed the establishment of
manufactures, which in turn gave a strong thrust to the Industrial Revolution.
But at the same time the formidable international concentration of wealth forEurope’s benefit prevented the jump into the accumulation of industrial capitalin the plundered areas: “The double tragedy of the developing countries
consists in the fact that they were not only victims of that process ofinternational concentration, but that subsequently they have had to try andcompensate for their industrial backwardness— that is, realize the primitive
accumulation of28

industrial capital— in a world flooded with articles manufactured by an alreadymature industry, that of the West.”15
The Latin American colonies were discovered, conquered, and colonizedwithin the process of the expansion of commercial capital. Europe stretchedout its arms to clasp the whole world. Neither Spain nor Portugal received thebenefits of the sweeping advance of capitalist mercantilism, although it was
their colonies that substantially supplied the gold and silver feeding thisexpansion. As we have seen, while Latin America’s precious metals madedeceptive fortunes for a Spanish nobility living in a belated and contrahistorical Middle Age, they simultaneously sealed the ruin of Spain in
centuries to come. It was in other parts of Europe that modern capitalism could
be incubated, taking decisive advantage of the expropriation of primitive
American peoples. The rape of accumulated treasure was followed by thesystematic exploitation of the forced labor of Indians and abducted Africans in
the mines.
Europe needed gold and silver. The money in circulation kept multiplying
and it was necessary to stimulate the movement of capitalism in the hour ofbirth: the bourgeoisie took control of the cities and founded banks, produced
and exchanged merchandise, conquered new markets. Gold, silver, sugar: thecolonial economy, supplying rather than consuming, was built in terms of—and at the service of— the European market. During long periods of thesixteenth century the value of Latin American precious metal exports was fourtimes greater than the value of the slaves, salt, and luxury goods it imported.
The resources flowed out so that emergent European nations across the ocean
could accumulate them. This was the basic mission of the pioneers, although
they applied the Bible almost as often as the whip to the dying Indians. The
Spanish colonies’ economic structure was born subordinated to the externalmarket and was thus centralized around the export sector, where profit andpower were concentrated.
During the process, from the metals stage to that of supplying foodstuffs,
each region became identified with what it produced, and each produced what
Europe wanted of it: each product, loaded in the holds of galleons plowing theocean, became a vocation and a destiny. The international division of labor, as
it emerged along with capitalism, resembled the distribution of function
between a horseman and a horse,29

as Paul Baran put it. The markets of the colonial world grew as mere
appendices to the internal market of invading capitalism.
Celso Furtado notes that while most of Europe’s feudal seigneurs obtained
an economic surplus from the people they dominated and used it in one way or
another in the same areas, the chief aim of those Spaniards who received Latin
American mines, lands, and Indians from the king was to extract a surplus tosend to Europe16 This observation helps explain the ultimate goal of the Latin
American colonial economy from its inception: although it showed somefeudal characteristics, it functioned at the service of capitalism developing
elsewhere. Nor, indeed, can the existence of wealthy capitalist centers in our
own time be explained without the existence of poor and subjected outskirts:
the one and the other make up the same system.
But not all of the surplus went to Europe. The colonial economy was run
by merchants, by owners of mines and of big estates, who divided up theusufruct of Indian and black labor under the jealous and omnipotent eye of the
Crown and its chief associate, the Church. Power was concentrated in thehands of a few, who sent metals and foodstuffs to Europe and received backthe luxury goods to the enjoyment of which they dedicated their mushrooming
fortunes. The dominant classes took no interest whatever in diversifying theinternal economies or in raising technical and cultural levels in the population:
they had a different function within the international complex they were acting
for, and the grinding poverty of the people— so profitable from the standpointof the reigning interests— prevented the development of an internal consumer
market.
One French economist argues that Latin America’s worst colonial legacy,
which explains its backwardness today, is lack of capital.17 But all the historicalevidence shows that the colonial economy produced bountiful wealth for theclasses connected internally with the colonial system of domination. The laborthat was abundantly available for nothing or practically nothing, and the great
European demand for Latin American products, made possible “a precocious
and abundant accumulation of capital in the Iberian colonies. The hard core ofbeneficiaries, far from growing, became smaller in proportion to the mass ofthe population, as may be seen from the well-known fact that unemployed
Europeans and Creoles constantly increased.”18 The capital that stayed30

in Latin America, after the lion’s share went into the primitive accumulation
process of European capitalism, did not generate a process similar to thatwhich took place in Europe, where the foundations of industrial development
were laid. It was diverted instead into the construction of great palaces andshowy churches, into the purchase of jewels and luxurious clothing andfurniture, into the maintenance of flocks of servants, and into the extravaganceof fiestas. To an important extent this surplus was also immobilized in thepurchase of new lands, or continued to revolve around speculative commercial
activities.
In the twilight of the colonial era Alexander von Humboldt found in
Mexico an enormous amount of capital in the hands of mine owners andmerchants, while no less than half of Mexican real estate and capital belonged
to the Church, which also controlled much of the remaining land throughmortgages.19 Mexican mine operators invested their surpluses in the purchaseof great latifundia and in mortgage loans, as did the big exporters of Veracruz
and Acapulco; the Church hierarchy multiplied its possessions in similar
fashion. Palatial residences sprang up in the capital, and sumptuous churches
appeared like mushrooms after rain; Indian servants catered to the golden
luxuries of the powerful.
In mid-seventeenth-century Peru, capital amassed by encomenderos,( Anencomienda was an estate granted by the Crown to the Spanish conquistadorsand colonists for their services to Spain. It included the services of the Indians
living on it. The encomendero was thus the owner. (Trans.)) mine operators,inquisitors, and officials of the imperial government was poured into
commercial projects. The fortunes made in Venezuela from growing cacao—
begun at the end of the sixteenth century and produced by applying whips tothe backs of black slaves— were invested in new plantations, other commercial
crops, in mines, urban real estate, slaves, and herds of cattle.

THE SILVER CYCLE: THE RUIN OF POTOSIAndre Gunder Frank, in analyzing “metropolis-satellite” relations throughLatin American history as a chain of successive subjections, has highlighted
the fact that the regions now most underdeveloped and31

poverty-stricken are those which in the past had had the closest links with themetropolis and had enjoyed periods of boom.20 Having once been the biggest
producers of goods exported to Europe, or later to the United States, and therichest sources of capital, they were abandoned by the metropolis when for thisor that reason business sagged. Potosi is the outstanding example of thisdescent into the vacuum.
In the sixteenth and seventeenth centuries the Cerro Rico of Potosi(Mexico’s Guanajuato and Zacatecas silver mines had their boom much later)
was the hub of Latin American colonial life: around it, in one way or another,revolved the Chilean economy, which sent it wheat, dried meat, hides, andwines; the cattle-raising and crafts of Córdoba and Tucumán in Argentina,
which supplied it with draft animals and textiles; the mercury mines of
Huancavélica; and the Arica region whence the silver was shipped to Lima,
chief administrative center of the period. In the independence period the area,
now a part of Bolivia, still had a larger population than what is now Argentina.
A century and a half later Bolivia’s population is almost six times smaller thanArgentina’s.
Potosian society, sick with ostentation and extravagance, left Bolivia with
only a vague memory of its splendors, of the ruins of its churches and palaces,
and of 8 million Indian corpses. Any one of the diamonds encrusted in a richcaballero’s shield was worth more than what an Indian could earn in his whole
life under the mitayo,( A mitayo is an Indian who pays a mita. or tribute,
usually in the form of forced labor in public works, especially the mines,(Trans.)) but the caballero took off with the diamonds. If it were not a futile
exercise, Bolivia— now one of the world’s most poverty-stricken countries—
could boast of having nourished the wealth of the wealthiest. In our time Potosi
is a poor city in a poor Bolivia: “The city which has given most to the worldand has the least,” as an old Potosian lady, enveloped in a mile of alpaca shawl,
told me when we talked on the Andalusian patio of her two-century-old house.
Condemned to nostalgia, tortured by poverty and cold, Potosi remains an open
wound of the colonial system in America: a still audible “J’accuse.”
The people live off the refuse. In 1640 the priest Alvaro Alonso-Barba
published in Madrid’s royal printshop his excellent work on the art of32

metals.21 Tin, he wrote, “is poison.” He mentioned the Cerro, where “there ismuch tin, although few recognize it, and people throw it aside looking for thesilver everyone seeks.” Today the tin the Spaniards discarded like garbage is
exploited in Potosi. Walls of ancient houses are sold as high-grade tin. Throughthe centuries the wealth has been drained from the 5,000 tunnels the Spaniards
bored into the Cerro Rico. As dynamite charges have hollowed it out, its color
has changed and the height of its summit has been lowered. The mountains ofrock heaped around the many tunnel openings are of all colors: pink, lilac,
purple, ochre, gray, gold, brown. A crazy quilt of garbage. Llamperos break therocks and Indian palliris in search of tin pick like birds, with hands skilled inweighing and separating, at the mineral debris. Miners still enter old mines thatare not flooded, carbide lamps in hind, bodies crouching, to bring out whatever
there is. Of silver there is none. Not a glint of it: the Spaniards even swept out
the seams with brooms. The pallacos use pick and shovel to dig any metal outof the leavings. “The Cerro is still rich,” I was blandly told by an unemployed
man who was scratching through the dirt with his hands. “There must be a God,you know: the metal grows just like a plant.” Opposite the Cerro Rico rises awitness to the devastation: a mountain called Huakajchi, meaning in Quechua“the cerro that has wept.” From its sides gush many springs of pure water, the“water eyes” that quench the miners’ thirst.
In its mid-seventeenth-century days of glory the city attracted many
painters and artisans, Spanish and Indian, European and Creole masters andIndian image-carvers who left their mark on Latin American colonial art.
Melchor Perez de Holguin, Latin America’s El Greco, left an enormous
religious work which betrays both its creator’s talent and the pagan breath ofthese lands: his splendid Virgin, arms open, gives one breast to the infant Jesus
and the other to Saint Joseph; she is hauntingly memorable. Goldsmiths,
silversmiths, and engravers, cabinetmakers and masters of repoussé, craftsmen
in metals, fine woods, plaster, and noble ivory adorned Potosi’s many churches
and monasteries with works of the imaginative colonial school, altars sparklingwith silver filigree, and priceless pulpits and reredoses. The baroque church
façades carved in stone have resisted the ravages of time, but not so thepaintings, many of them irreparably damaged by damp, or the smaller figuresand objects. Tourists and parishioners have emptied the churches

33

of whatever they could carry, from chalices and bells to carvings in beech andash of Saint Francis and Christ.
These untended churches, now mostly closed, are collapsing under theweight of years. It is a pity, for pillaged as they have been they are still
formidable treasures of a colonial art that fuses all styles and glows withheretical imagination: the escalonado emblem of the ancient civilization of
Tiahuanacu instead of the cross of Christ, the cross joined with the sacred sun
and moon, virgins and saints with “natural” hair, grapes and ears of corn
twining to the tops of columns along with the kantuta, the imperial flower of
the Incas; sirens, Bacchus, and the festival of life alternating with romantic
asceticism, the dark faces of some divinities, caryatids with Indian features.
Some churches have been renovated to perform other services now that theylack congregations. San Ambrosio is the Cine Omiste; in February 1970 theforthcoming attraction was advertised across the baroque bas-reliefs of the
façade: It’s a Mad, Mad, Mad, Mad World. The Jesuit church became a movie
house, then a Grace Company warehouse, and finally a storehouse for publiccharity food.
A few other churches still function as best they can: it is at least a century
and a half since Potosians had the money to burn candles. It is said of the San
Francisco church, for example, that its cross grows several centimeters every
year, as does the beard of the Señor de Ia Vera Cruz, an imposing silver-andsilk Christ who appeared in Potosi, brought by nobody, four centuries ago. The
priests do not deny that they shave him every so often, and they attribute tohim— even in writing— every kind of miracle: incantations, down the centuries,
against droughts, plagues, and wars in defense of the beleaguered city.
The Señor de la Vera Cruz was powerless to stop the decline of Potosi, The
depletion of the silver was interpreted as divine judgment on the miners’
wickedness and sin. Spectacular masses became a thing of the past: like thebanquets, bullfights, balls, and fireworks, luxury religion had, after all, been asubproduct of Indian slave labor. In the era of splendor the miners madeprincely donations to churches and monasteries and sponsored sumptuous
funerals, all solid silver keys to the gates of heaven. In 1559 the merchant
Alvaro Bejarano directed in his will that “all the priests in Potosi” accompany
his corpse. Quack medicine and witchcraft were mixed with authorized religion
in the delirious

34

fervors and panics of colonial society. Extreme unction with bell and canopy
could, like Communion, succor the dying; but a juicy will that provided forbuilding a church or for a silver altar could prove much more effective. Fevers
were combated with the gospels. In certain convents prayers cooled the body,in others they warmed it: “The Credo was cool as tamarind or sweet spirit ofnitre, the Salve warm as orange blossoms or cornsilk.”22
In the Calle Chuquisaca one can admire the time-corroded façade of thepalace of the counts of Carma y Cayara, but it is now a dentist’s office; thecoat-of-arms of Maestro de Campo Don Antonio Lopez de Quiroga, in theCalle Lanza, now adorns a little school; that of the Marques de Otavi, with its
rampant lions, tops the doorway of the Banco Nacional. “Where can they beliving now? They must have gone far. The Potosian old lady, attached to hercity, tells me that the rich left first and then the poor: in four centuries the
population has decreased threefold. I gaze at the Cerro from a roof in the Calle
Uyuni, a narrow, twisting colonial lane with wooden-balconied houses so close
together that residents can kiss or hit each other without having to go down to
the street. Here, as in all of the city, survive the old street lamps under whose
feeble light, as Jaime Molins relates, “lovers’ quarrels were resolved, andmuffled caballeros, elegant ladies, and gamblers flitted by like ghosts.” Thecity now has electric light but one barely notices it. In the dim plazas raffle
parties are conducted at night under the ancient lamps: I saw a piece of cakebeing raffled in the middle of a crowd.
Sucre decayed along with Potosi. This valley city of pleasant climate,successively known as Charcas, La Plata, and Chuquisaca, enjoyed a goodshare of the wealth flowing from Potosi’s Cerro Rico. Here Francisco Pizarro’s
brother Gonzalo installed his court, as sumptuous as any king’s; churches andspacious residences, parks and recreation centers sprouted continuously,
together with the lawyers, mystics, and pretentious poets who put their stamp
on the city from century to century. “Silence, that is Sucre— just silence. But
before… ” Before, this was the cultural capital of two viceroyalties, seat of
Latin America’s chief archdiocese and of the colony’s highest court ofjustice— the most magnificent and cultured city in South America. Doña
Cecilia Contreras de Torres and Doña Maria de las Mercedes Torralba deGramajo, senoras of Ubina and Colquechaca, gave Lucullan banquets in acontest35

to squander the income from their Potosi mines. When their lavish fiestas
ended they threw the silver service and even golden vessels from theirbalconies to be picked up by lucky passersby.
Sucre still has an Eiffel Tower and its own Arcs de Triomphe, and they saythat the jewels of its Virgin would pay off the whole of Bolivia’s huge external
debt. But the famous church bells, which in 1809 rang out joyfully for Latin
America’s emancipation, play a funereal tune today. The harsh chimes of San
Francisco, which so often announced uprisings and rebellions, toll a death knell
over torpid Sucre. It matters little that Sucre is Bolivia’s legal capital, still theseat of its highest court. Through its streets pass countless pettifogging lawyers,
shriveled and yellow of skin, surviving testimonies to its decadence: learned
doctors of the type who wear pince-nez complete with black ribbon. From thegreat empty palaces Sucre’s illustrious patriarchs send out their servants to sell
baked tidbits down at the railroad station. In happier times there were people
here who could buy anything up to the title of prince.
Only ghosts of the old wealth haunt Potosi and Sucre. In Huanchaca,
another Bolivian tragedy, Anglo-Chilean capitalists in the past century strippedveins of highest-grade silver more than two yards wide; all that remains isdusty ruin. Huanchaca is still on the map as if it continued to exist— identified
by crossed pick and shovel as a live mining center. Did the Mexican mines ofGuanajuato and Zacatecas enjoy a better fate On the basis of Alexander von
Humboldt’s figures in his already cited Political Essay on the Kingdom of New
Spain, the economic surplus drained from Mexico between 1760 and 1809—
barely half a century— through silver and gold exports has been estimated atsome 5 billion present-day dollars.23 In Humboldt’s time there were no more
important mines in Latin America. The great German scholar compared
Guanajuato’s Valenciana mine with the Himmelsfurst in Saxony, then therichest in Europe; the Valenciana was producing thirty-six times more silver at
the turn of the century and its profits were thirty-three times as great for its
investors. Count Santiago de la Laguna trembled with emotion in describing, in
1732, the Zacatecas mining district and “the precious treasures concealed in its
deep womb,” in mountains “graced with more than 4,000 shafts, the better toserve both of Their Majesties,” God and the King, “with the fruit of its
entrails,” and that “all might come to drink and participate of the great, the rich,the36

learned, the urban and the noble” because it was a “fount of wisdom, order,
arms, and nobility.”24 The priest Marmolejo would later describe the city of
Guanajuato, crisscrossed by rivers and bridges, with its gardens recalling thoseof Semiramis in Babylon and its ornate churches, theater, bullring, cockfightarenas, and towers and cupolas rising against the green mountainsides. But thiswas “the country of inequality,” about which Humboldt could write: “Perhaps
nowhere is inequality more shocking. . . . The architecture of public and privatebuildings, the women’s elegant wardrobes, the high-society atmosphere: all
testify to an extreme social polish which is in extraordinary contrast to thenakedness, ignorance, and coarseness of the populace.” The new veins of silver
gobbled up men and mules in the cordillera foothills; the Indians, who “lived
from day to day,” suffered chronic hunger and epidemics killed them off likeflies. In only one year, 1784, more than 8,000 died in Guanajuato when a lackof food, the result of a bad cold spell, set off a wave of disease.
Capital, far from accumulating, was squandered. There was a saying:“Father a merchant, son a gentleman, grandson a beggar.” In a plea to thegovernment in 1843 Mexican politician Lucas Alamán gave a somber warningand insisted on the need to defend national industry by banning or imposing
heavy duties on foreign imports. “We must proceed to develop industry as the
only source of general prosperity,” he wrote. “The riches of Zacatecas would
bring no benefits to Puebla but for the former’s consumption of the latter’s
manufactures, and if these decline again, as has happened before, that presently
flourishing area will be ruined and the riches of the mines will not be able tosave it from poverty.” The prophesy proved true. In our time Zacatecas andGuanajuato are not even the most important cities in their own regions. Bothlanguish amid the skeletons of the camps of the mining boom. Zacatecas, highand arid, lives from agriculture and exports labor to other states; its gold andsilver are low in quality compared to former days. Of the fifty mines once
exploited in the Guanajuato district, only two remain today. The population of
the beautiful city does not grow, but tourists flock there to view the exuberant
splendor of olden times. San Diego, La Valenciana, La Compania, thecemetery in whose catacombs more than a hundred mummies, preserved intact
by the salinity of the soil, are on show. Half the families in Guanajuato state
average more than five members and live today in one-room hovels.

37

A FLOOD OF TEARS AND BLOOD:
AND YET THE POPE SAID INDIANS HAD SOULS
In 1581 Philip II told the audiencia(An audiencia was a judicial district as well
as a judicial, administrative, and advisory body. In Mexico, it was the supreme
court of administration and judgment. (Trans.)) of Guadalajara that a third of
Latin America’s Indians had already been wiped out, and that those who
survived were compelled to pay the tributes for the dead. The monarch addedthat Indians were bought and sold; that they slept in the open air; and thatmothers killed their children to save them from the torture of the mines.25 Yet
the Crown’s hypocrisy had smaller limits than the empire: it received a fifth ofthe value of the metals extracted by its subjects in all of the Spanish New
World, as well as other taxes, and the Portuguese Crown was to have the samearrangement in eighteenth- century Brazil. Latin American silver and gold— asEngels put it— .penetrated like a corrosive acid through all the pores ofEurope’s moribund feudal society, and, for the benefit of nascent mercantilist
capitalism, the mining entrepreneurs turned Indians and black slaves into ateeming “external proletariat” of the European economy. Greco-Roman slavery
was revived in a different world; to the plight of the Indians of theexterminated Latin American civilizations was added the ghastly fate of theblacks seized from African villages to toil in Brazil and the Antilles. The
colonial Latin American economy enjoyed the most highly concentrated laborfore known until that time, making possible the greatest concentration of
wealth ever enjoyed by any civilization in world history.
The price of the tide of avarice, terror, and ferocity bearing down on theseregions was Indian genocide: the best recent investigations credit preColumbian Mexico with a population between 30 and 37.5 million, and theAndean region is estimated to have possessed a similar number; Central
America had between 10 and 13 million. The Indians of the Americas totaled
no less than 70 million when the foreign conquerors appeared on the horizon; acentury and a half later they had been reduced to 3.5 million. In 1685 only
4,000 Indian families remained of the more than 2 million that had once lived
between Lima and Paita, according to the Marquis of Barinas. Archbishop
Liñán y Cisneros38

denied that the Indians had been annihilated: “The truth is that they are hiding
out,” he said, “to avoid paying tribute, abusing the liberty which they enjoy andwhich they never had under the Incas.”26 While metals flowed unceasingly
from Latin American mines, equally unceasing were the orders from the
Spanish Court granting paper protection and dignity to the Indians whose
killing labor sustained the kingdom. The fiction of legality protected the Indian;
the reality of exploitation drained the blood from his body. From slavery to theencomienda of service, and from this to the encomienda of tribute and theregime of wages, variants in the Indian labor force’s juridical condition madeonly superficial changes in the real situation. The Crown regarded the inhuman
exploitation of Indian labor as so necessary that in 1601 Philip III, banning
forced labor in the mines by decree, at the same time sent secret instructions
ordering its continuation “in case that measure should reduce production.”27
Similarly, between 1616 and 1619, Governor Juan de Solórzano carried out asurvey of work conditions in the Huancavelica mercury mines (directly
exploited by the Crown, in distinction to the silver mines, which were inprivate hands): “The poison penetrated to the very marrow, debilitating all themembers and causing a constant shaking, and the workers usually died withinfour years,” he reported to the Council of the Indies and to the king. But in
1631 Philip IV ordered that the same system be continued, and his successor
Charles II later reaffirmed the decree.
In three centuries Potosi’s Cerro Rico consumed 8 million lives. The
Indians, including women and children, were torn from their agriculturalcommunities and driven to the Cerro. Of every ten who went up into thefreezing wilderness, seven never returned. Luis Capoche, an owner of mines
and mills, wrote that “the roads were so covered with people that the whole
kingdom seemed on the move.” In their communities the Indians saw “manyafflicted women returning without husbands and with many orphaned children”
and they knew that “a thousand deaths and disasters” awaited them in themines. The Spaniards scoured the countryside for hundreds of miles for labor.
Many died on the way, before reaching Potosi, but it was the terrible work
conditions in the mine that killed the most people. Soon after the mine began
operating, in 1550, the Dominican monk Domingo de Santo Tomás told theCouncil of the Indies that Potosi was a “mouth of hell” which

39

swallowed Indians by the thousands every year, and that rapacious mineowners treated them “like stray animals.” Later Fray Rodrigo de Loaysa said:“These poor Indians are like sardines in the sea. Just as other fish pursue thesardines to seize and devour them, so everyone in these lands pursues thewretched Indians.” Chiefs of Indian communities had to replace the constantly
dying mitayos with new men between eighteen and fifty years old. The hugestone-walled corral where Indians were assigned to mine and mill owners is
now used by workers as a football ground. The mitayos’jail— a shapeless massof ruins— can still be seen at the entrance to Potosi.
The Compilation of the Laws of the Indies abounds with decrees
establishing the equal right of Indians and Spaniards to exploit the mines, andexpressly forbidding any infringement of Indian rights. Thus formal history—
the dead letter of today which perpetuates the dead letter of the past— hasnothing to complain about, but while Indian labor legislation was debated inendless documents and Spanish jurists displayed their talents in an explosion of
ink, in Latin America the law “was respected but not carried out.” In practice“the poor Indian is a coin with which one can get whatever one needs, as withgold and silver, and get it better,” as Luis Capoche put it. Many people claimed
mestizo status before the courts to avoid being sent to the mines and sold andresold in the market.
At the end of the eighteenth century, Concolorcorvo, who had Indian blood,denied his own people: “We do not dispute that the mines consume aconsiderable number of Indians, but this is not due to the work they do in thesilver and mercury mines but to their dissolute way of life.” The testimony of
Capoche, who had many Indians in his service, is more enlightening. Freezing
outdoor temperatures alternated with the infernal heat inside the Cerro. The
Indians went into the depths “and it is common to bring them out dead or withbroken heads and legs, and in the mills they are injured every day.” Themitayos hacked out the metal with picks and then carried it up on theirshoulders by the light of a candle. Outside the mine they propelled the heavy
wooden shafts in the mill or melted the silver on a fire after grinding andwashing it.
The mita labor system was a machine for crushing Indians. The process ofusing mercury to extract silver poisoned as many or more than40

did the toxic gases in the bowels of the earth. It made hair and teeth fall out andbrought on uncontrollable trembling. The victims ended up dragging
themselves through the streets pleading for alms. At night 6,000 fires burnedon the slopes of the Cerro and in these the silver was worked, taking advantageof the wind that the “glorious Saint Augustine” sent from the sky. Because of
the smoke from the ovens there were no pastures or crops for a radius oftwenty miles around Potosi and the fumes attacked men’s bodies no lessrelentlessly.
Ideological justifications were never in short supply. The bleeding of the
New World became an act of charity, an argument for the faith. With the guilt,
a whole system of rationalizations for guilty consciences was devised. The
Indians were used as beasts of burden because they could carry a greater
weight than the delicate Ilama, and this proved that they were in fact beasts ofburden. The viceroy of Mexico felt that there was no better remedy for their“natural wickedness” than work in the mines. Juan Ginés de Sepülveda, arenowned Spanish theologian, argued that they deserved the treatment they got
because their sins and idolatries were an offense to God. The Count de Buffon,a French naturalist, noted that Indians were cold and weak creatures in whom
“no activity of the soul” could be observed. The Abbé De Paw invented a Latin
Arnerica where degenerate Indians lived side by side with dogs that couldn’tbark, cows that couldn’t be eaten, and impotent camels. Voltaire’s Latin
America was inhabited by Indians who were lazy and stupid, pigs with navels
on their backs, and bald and cowardly lions. Bacon, De Maistre, Montesquieu,
Hume, and Bodin declined to recognize the “degraded men” of the New World
as fellow humans. Hegel spoke of Latin America’s physical and spiritual
impotence and said the Indians died when Europe merely breathed on them.
In the seventeenth century Father Gregorio Garcia detected Semitic bloodin the Indians because, like the Jews, “they are lazy, they do not believe in the
miracles of Jesus Christ, and they are ungrateful to the Spaniards for all thegood they have done them.” At least this holy man did not deny that the
Indians were descended from Adam and Eve: many theologians and thinkers
had never been convinced by Pope Paul III’s bull of 1537 declaring the Indians
to be “true men.” When Bartolomé de las Casas upset the Spanish Court withhis heated denunciations of the conquistadors’ cruelty in 1557, a member of the
Royal

41

Council replied that Indians were too low in the human scale to be capable ofreceiving the faith. Las Casas dedicated his zealous life to defending theIndians against the excesses of the mine owners and encomenderos. He once
remarked that the Indians preferred to go to hell to avoid meeting Christians.
Indians were assigned or given in encomienda to conquistadors andcolonizers so that they could teach them the gospel. But since the Indians owed
personal services and economic tribute to the encomenderos, there was little
time for setting them on the Christian path to salvation.
Indians were divided up along with lands given as royal grants, or wereobtained by direct plunder: in reward for his services, Cortés received 23,000
vassals. After 1536 Indians were given in encomienda along with theirdescendants for the span of two lifetimes, those of the encomendero and of his
immediate heir; after 1629 this was extended to three lifetimes and, after 1704,
to four. In the eighteenth century the surviving Indians still assured many
generations to come of a cozy life. Since their defeated gods persisted in
Spanish memory, there were saintly rationalizations aplenty for the victors’
profits from their toil; the Indians were pagans and deserved nothing better.
The past? Four hundred years after the papal bull, in September 1957, thehighest court in Paraguay published a notice informing all the judges of thecountry that “the Indians, like other inhabitants of the republic, are humanbeings.” And the Center for Anthropological Studies of the Catholic Universityof Asunción later carried out a revealing survey, both in the capital and in the
countryside: eight out of ten Paraguayans think that “Indians are animals.” In
Caaguazü, Alta Paraná, and the Chaco, Indians are hunted down like wild
beasts, sold at bargain prices, and exploited by a system of virtual slavery— yetalmost all Paraguayans have Indian blood, and Paraguayans tirelessly compose
poems, songs, and speeches in homage to the “Guarani soul.”

THE MILITAQNAT MEMORY OF TUPAC AMARU
When the Spaniards invaded Latin America, the theocratic Inca empire was at
its height, spreading over what we now call Peru, Bolivia, and Ecuador, taking
in part of Colombia and Chile, and reaching42

northern Argentina and the Brazilian jungle. The Aztec confederation had
achieved a high level of efficiency in the Valley of Mexico, and in Yucatan andCentral America the remarkable civilization of the Mayas, organized for work
and war, persisted among the peoples who succeeded them.
These societies have left many testimonies to their greatness despite thelong period of devastation: religious monuments built with more skill than the
Egyptian pyramids, technically efficient constructions for the battle against
nature, art works showing indomitable talent. In the Lima museum there are
hundreds of skulls which have undergone trepanning and the insertion of goldand silver plates by Inca surgeons. The Mayas were great astronomers,
measuring time and space with. astonishing precision, and discovered the valueof the figure zero before any other people in history. The Aztecs’ irrigation
works and artificial islands dazzled Cortes— even though they were not madeof gold.
The conquest shattered the foundations of these civilizations. The
installation of a mining economy had direr consequences than the fire andsword of war. The mines required a great displacement of people anddislocated agricultural communities; they not only took countless lives throughforced labor, but also indirectly destroyed the collective farming system. The
Indians were taken to the mines, were forced to submit to the service of theencomenderos, and were made to surrender for nothing the lands which they
had to leave or neglect. On the Pacific coast the Spaniards destroyed or let dieout the enormous plantations of corn, yucca, kidney and white beans, peanuts,
and sweet potato; the desert quickly devoured great tracts of land which theInca irrigation network had made abundant. Four and a half centuries after theConquest only rocks and briars remain where roads had once united an empire.
Although the Incas’ great public works were for the most part destroyed bytime or the usurper’s hand, one may still see across the Andean cordillera
traces of the endless terraces which permitted, and still permit, cultivation of
the mountainsides. A U.S. technician estimated in 1936 that if the Inca terraces
had been built by modern methods at 1936 wage rates they would have costsome $30,000 per acre.28 In that empire which did not know the wheel, thehorse, or iron, the terraces and aqueducts were made possible by prodigiousorganization and technical perfection achieved through wise distribution of43

labor, as well as by the religious force that ruled man’s relation with the soil—
which was sacred and thus always alive.
The Aztecs also responded in a remarkable way to nature’s challenges. The
surviving islands in the dried-up lake where Mexico City now rises on nativeruins are known to tourists today as “floating gardens.” The Aztecs createdthese because of the shortage of land in the place chosen for establishing
Tenochtitlán. They moved large quantities of mud from the banks and shored
up the new mud-islands between narrow walls of reeds until tree roots gavethem firmness. Between these exceptionally fertile islands flowed the canals,
and on them arose the great Aztec capital, with its broad avenues, its austerely
beautiful palaces, and its stepped pyramids: rising magically out of the lake, it
was condemned to disappear under the assaults of foreign conquest. Mexico
took four centuries to regain the population of those times.
As Darcy Ribeiro puts it, the Indians were the fuel of the colonial
productive system. “It is almost certain,” writes Sergio Bagü, “that hundreds ofIndian sculptors, architects, engineers, and astronomers were sent into themines along with the mass of slaves for the killing task of getting out the ore.
The technical ability of these people was of no interest to the colonial economy.
They were treated as so many skilled workers.” Yet all traces of those broken
cultures were not lost: hope of the rebirth of a lost dignity sparked many Indianrisings.
In 1781 Tupac Amaru laid siege to Cuzco. This mestizo chief, a direct
descendant of the Inca emperors, headed the broadest of messianic
revolutionary movements. The rebellion broke out in Tinta province, which
had been almost depopulated by enforced service in the Cerro Rico mines.
Mounted on his white horse, Tupac Amaru entered the plaza of Tungasuca andannounced to the sound of drums and pututus that he had condemned the royal
Corregidor Antonio Juan de Arriaga to the gallows and put an end to the Potosi
mita. A few days later Tupac issued a decree liberating the slaves. He
abolished all taxes and forced labor in all forms. The Indians rallied by thethousands to the forces of the “father of all the poor and all the wretched andhelpless.” He moved against Cuzco at the head of his guerilleros, promisingthem that all who died while under his orders in this war would return to life toenjoy the happiness and wealth the invaders had wrested from them. Victories
and defeats followed; in the end, betrayed and captured by one of his

44

own chiefs, Tupac was handed over in chains to the royalists. The Examiner
Areche entered his cell to demand, in exchange for promises, the names of his
rebel accomplices. Tupac Amaru replied scornfully, “There are no accomplices
here other than you and I. You as oppressor, I as liberator’deserve to die.”29
Tupac was tortured, along with his wife, his children, and his chief aides,
in Cuzco’s Plaza del Wacaypata. His tongue was cut out; his arms and legs
were tied to four horses with the intention of quartering him, but his body
would not break; he was finally beheaded at the foot of the gallows. His head
was sent to Tinta, one arm to Tungasuca and the other to Carabaya, one leg toSanta Rosa and the other to Livitaca. The torso was burned and the ashes
thrown in the Rio Watanay. It was proposed that all his descendants beobliterated up to the fourth generation.
In 1802 a chief named Astorpilco, also a descendant of the Incas, wasvisited by Humboldt in Cajamarca, on the exact spot where his ancestor
Atahualpa had first seen the conquistador Pizarro. The chief’s son took theGerman scholar on a tour of the ruins of the town and the rubble of the old Incapalace, and spoke as they walked of the fabulous treasures hidden beneath thedust and ashes. “Don’t you sometimes feel like digging for the treasure tosatisfy your needs?” Humboldt asked him. The youth replied: “No, we neverfeel like doing that. My father says it would be sinful. If we were to find thegolden branches and fruits, the white people would hate us and do us harm.”3°
The chief himself raised wheat in a small field, but that was not enough to save
him from white covetousness. The usurpers, hungry for gold and silver and forslaves to work the mines, never hesitated to seize lands when their crops
offered a tempting profit.
The plunder continued down the years and in 1969, when agrarian reform
was announced in Peru, reports still appeared in the press of Indians from thebroken mountain communities coming with flags unfurled to invade lands that
had been robbed from them or their ancestors, and of the army driving themaway with bullets. Nearly two centuries had to pass after Tupac Amaru’s death
before the nationalist general Juan Velasco Alvarado would take up and apply
Tupac’s resounding, never forgotten words: “Campesino! Your poverty shallno longer feed the master!”45

Other heroes whose defeat was reversed by time were the Mexicans
Miguel Hidalgo and José Maria Morelos. Hidalgo, who till the age of fifty wasa peaceable rural priest, pealed the bells of the church of Dolores one fine day
to summon the Indians to fight for their freedom: “Will you stir yourselves tothe task of recovering from the hated Spaniards the lands robbed from yourancestors 300 years ago?” He raised the standard of the Indian Virgin of
Guadalupe and before six weeks were out 80,000 men were following him,
armed with machetes, pikes, slings, and bows and arrows. The revolutionary
priest put an end to tribute and divided up the lands of Guadalajara; he decreed
freedom for the slaves and led his forces toward Mexico City. He was finally
executed after a military defeat and is said to have left a testament ofpassionate repentance. The revolution soon found another leader, however, thepriest José Maria Morelos: “You must regard as enemies all the rich, the nobles,
and high-ranking officials . . .“ His movement— combining Indian insurgency
and social revolution— came to control a large part of Mexico before he too
was defeated and shot. As one U.S. senator wrote, the independence of Mexico,
six years later, “turned out to be a typically Hispanic family affair between
European and American-born members… a political fight within thedominating social class.”31 The encomienda serf became a peon and theencomendero a hacienda owner.

FOR THE INDIANS, NO RESURRECTION
AT THE END OF HOLY WEEK
Masters of Indian pongos— domestic servants— were still offering them for hirein La Paz newspapers at the beginning of our century. Until the revolution of1952 restored the forgotten right of dignity to Bolivian Indians, the pongo slept
beside the dog, ate the leftovers of his dinner, and knelt when speaking toanyone with a white skin. Fourlegged beasts of burden were scarce in theconquistadors’ time and they used Indian backs to transport their baggage;even to this day Aymara and Quechua porters can be seen all over the Andean
altiplano carrying loads for a crust of bread. Pneumoconiosis was Latin
America’s first occupational disease, and the lungs of today’s Polivian minerrefuse to continue functioning at the age of thirty-five: the implacable silica
dust

46

impregnates his skin, cracks his face and hands, destroys his sense of smell andtaste, hardens and kills his lungs.
Tourists love to photograph altiplano natives in their native costumes,
unaware that these were imposed by Charles III at the end of the eighteenth
century. The dresses that the Spaniards made Indian females wear were copiedfrom the regional costumes of Estremaduran, Andalusian, and Basque peasant
women, and the center-part hair style was imposed by Viceroy Toledo. The
same was not true of the consumption of coca, which already existed in Incatimes. But coca was then distributed in moderation; the Inca government had amonopoly on it and only permitted its use for ritual purposes or for those who
worked in the mines. The Spaniards energetically stimulated its consumption.
It was good business. In Potosi in the sixteenth century as much was spent on
European clothes for the oppressors as on coca for the oppressed. In Cuzco 400
Spanish merchants lived off the coca traffic; every year 100,000 baskets with amillion kilos of coca-leaf entered the Potosi silver mines. The Church took a
tax from the drug. The Inca historian Garcilaso de la Vega tells us in his
Comentarios Reales Que Tratan del Origen de los Incas that the bishop,
canons, and other Cuzco church dignitaries got most of their income fromtithes on coca, and that the transport and sale of the product enriched many
Spaniards. For the few coins they received for their work the Indians bought
coca-leaf instead of food: chewing it, they could— at the price of shortening
their lives— better endure the deadly tasks imposed on them. In addition tococa the Indians drank potent aguardiente, and their owners complained of the
propagation of “maleficent vices.” In twentieth-century Potosi the Indians stillchew coca to kill hunger and themselves, and still burn their guts with purealcohol— sterile forms of revenge for the condemned. Bolivian miners still calltheir wages mita as in olden days.
Exiled in their own land, condemned to an eternal exodus, Latin America’s
native peoples were pushed into the poorest areas— arid mountains, the middleof deserts— as the dominant civilization extended its frontiers. The Indians
have suffered, and continue to suffer, the curse of their own wealth, that is thedrama of all Latin America. When placer gold was discovered in Nicaragua’s
Rio Bluefields, the Carca Indians were quickly expelled far from their riparianlands, and the same happened with the Indians in all the fertile valleys andrich-subsoil lands

47south of the Rio Grande. The massacres of Indians that began with Columbus
never stopped. In Uruguay and Argentine Patagonia they were exterminatedduring the last century by troops that hunted them down and penned them inforests or in the desert so that they might not disturb the organized advance of
cattle latifundia. (The last of the Charruas, who lived by raising bulls in the wild pampas ofnorthern Uruguay, were betrayed in 1832 by President José Fructuoso Rivera. Removed from thebush that gave them protection, deprived of horses and arms by false promises of friendship,
they were overwhelmed at a place called Boca del Tigre. “The bugles sounded the attack,” wrote
Eduardo Acevedo Diaz in La Epoca (August 19, 1890). “The horde churned about desperately,
one after the other of its young braves falling like bulls pierced in the neck.” Many chiefs were
killed. The few Indians who could break through the circle of fire took vengeance soon afterward.
Pursued by Rivera’s brother, they laid an ambush and riddled him and his soldiers with spears.
The chief Sepe “had the tip of his spear adorned with some tendons from the corpse.”
In Argentine Patagonia soldiers drew pay for each pair of testicles they brought in. David
Vinas’s novel Los dueños de la tierra (1959) opens with an Indian hunt: “For killing was like
raping someone. Something good And it gave a man pleasure: you had to move fast, you could
yell, you sweated and afterward you felt hungry… The intervals got longer between shots.
Undoubtedly some straddled body remained in one of these coverts— — an Indian body on its
back with a blackish stain between its thighs… ”) The Yaqui Indians of the Mexican

state of Sonora were drowned in blood so that their lands, fertile and rich inminerals, could be sold without any unpleasantness to various U.S. capitalists.
Survivors were deported to plantations in Yucatan, and the Yucatan peninsula
became not only the cemetery of the Mayas who had been its owners, but alsoof the Yaquis who came from afar: at the beginning of our century the fifty
kings of henequen had more than 100,000 Indian slaves on their plantations.
Despite the exceptional physical endurance of the strapping, handsome Yaquis,
two-thirds of them died during the first year of slave labor. In our day
henequen can compete with synthetic fiber substitutes only because of theworkers’ abysmally low standard of living. Things have certainly changed, but
not as much— at least for the natives of Yucatán— as some believe: “The living
conditions of these workers are much like slave labor,” says one contemporary
authority.32 On the Andean slopes near Bogota the Indian peon still must give a
day’s work without pay to get the hacendado’s permission to farm his own plot
on moonlit nights. As René Dumont says, “This Indian’s ancestors, answering
to no man, used once to cultivate the rich soil of the ownerless48

plain. Now he works for nothing to gain the right to cultivate the poor slopes ofthe mountain.”33 Not even Indians isolated in the depths of forests are safe inour day. At the beginning of this century 230 tribes survived in Brazil; sincethen ninety have disappeared, erased from the planet by firearms and microbes.
Violence and disease, the advance guard of civilization: for the Indian, contact
with the white man continues to be contact with death. Every legal
dispensation since 1537 meant to protect Brazil’s Indians has been turned
against them. Under every Brazilian constitution they are “the original andnatural masters” of the land they occupy, but the richer that virgin land proves
to be, the greater the threat hanging over their lives. Nature’s very generosity
makes them targets of plunder and crime. Indian hunting has become ferocious
in recent years; the world’s greatest forest, a huge tropical zone open to legend
and adventure, has inspired a new “American dream.” Men and businessenterprises from the United States, a new procession of conquistadores, havepoured into Amazonia as if it were another Far West. This U.S. invasion has
inflamed the avarice of Brazilian adventurers as never before. The Indians dieout leaving no trace, and the land is sold for dollars to the new interested
parties. Gold and other plentiful minerals, timber and rubber, riches whose
commercial value the Indians are not even aware of, recur in the reports ofeach of the few investigations that have been made. It is known that the Indians
have been machine-gunned from helicopters and light airplanes and inoculatedwith smallpox virus, that dynamite has been tossed into their villages, and thatthey have been given gifts of sugar mixed with strychnine and salt mixed witharsenic. The director of the Indian Protection Service, named by the Castelo
Branco dictatorship to clean up its administration, was himself accused, with
proof, of committing forty-two different kinds of crimes against the Indians.
That scandal broke in 1968.
Indian society in our time does not exist in a vacuum, outside the generalframework of the Latin American economy. There are, it is true, Brazilian
tribes still sealed within the jungle, altiplano communities totally isolated fromthe world, redoubts of barbarism on the Venezuelan frontier; but in general the
Indians are incorporated into the system of production and the consumer
market, even if indirectly. They participate in an economic and social orderwhich assigns them the role49

of victim— the most exploited of the exploited. They buy and sell a good partof the few things they consume and produce, at the mercy of powerful andvoracious intermediaries who charge much and pay little; they are day laborers
on plantations, the cheapest work force, and soldiers in the mountains; they
spend their days toiling for the world market or fighting for their conquerors.
In countries like Guatemala, for example, they are at the center of national
economic life: in a continuous annual cycle they leave their “sacred lands”—
high lands where each small farm is the size of a corpse— to contribute
200,000 pairs of hands to the harvesting of coffee, cotton, and sugar in thelowlands. They are transported in trucks like cattle, and it is not always need,but sometimes liquor, that makes them decide to go. The contractors provide amarimba band and plenty of aguardiente and when the Indian sobers up he isalready in debt. He will pay it off laboring on hot and strange lands which—perhaps with a few centavos in his pocket, perhaps with tuberculosis or
malaria— he will leave after a few months. The army collaborates efficiently inthe task of convincing the reluctant. Expropriation of the Indians— usurpationof their lands and their labor— has gone hand in hand with racist attitudes
which are in turn fed by the objective degradation of civilizations broken by
the Conquest. The effects of the Conquest and the long ensuing period of
humiliation left the cultural and social identity the Indians had achieved infragments. Yet in Guatemala this pulverized identity is the only one thatpersists.( The Maya-Quiches believed in a single god; practiced fasting, penitence, abstinence,and confession; and believed in the flood at the end of the world. Christianity thus brought themfew novelties. Religious disintegration began with colonization. The Catholic religion
assimilated a few magical and totemic aspects of the Maya religion in a vain attempt to submit to
the Indian faith to the conquistadors’ ideology. The crushing of the original culture opened theway for syncretism.34) It persists in tragedy. During Holy Week, processions of theheirs of the Mayas produce frightful exhibitions of collective masochism. Theydrag heavy crosses and participate in the flagellation of Jesus step by stepalong the interminable ascent to Golgotha; with howls of pain they turn His
death and His burial into the cult of their own death and their own burial, theannihilation of the beautiful life of long ago. Only there is no Resurrection at
the end of their Holy Week.

50

OURO PRETO, THE POTOSI OF GOLD
The gold fever which is still sentencing Amazonian Indians to death or slavery
is no novelty in Brazil. For two centuries after Brazil’s discovery, the soil
stubbornly denied metal to its Portuguese proprietors. In the first period ofcoastal colonization timber, or brazilwood, was commercially exploited; thensugar plantations were started in the Northeast. In contrast to Spanish Latin
America, there seemed to be no gold or silver. Having found no highly
developed and organized civilizations, only savage and scattered tribes who
had no knowledge of metal, the Portuguese had to discover the gold on theirown as they opened up the territory and exterminated its inhabitants.
The bandeirantes (A bandeirante was a member of a bandeira, a band of Portuguese
slave- or gold-hunters in the Brazilian interior. The São Paulo bandeiras were part of aparamilitary organization whose strength varied. Their expeditions into the jungle played an
important role n the interior colonization of Brazil. (Trans.)) of the São Paulo region had

crossed the great expanse between the Serra da Mantiqueira and the Rio SãoFrancisco headwaters, and had observed small traces of alluvial gold in thebeds and banks of several streams. The millennial action of the rains had eaten
into the seams in the rocks and deposited gold in river beds, valleys, andmountain ravines. Beneath the layers of sand, dirt, or clay, the stony subsoil
revealed nuggets that were easily removed from the quartz cascalho, or gravel;
methods of extraction became more complex as the more superficial deposits
were exhausted. Thus the Minas Gerais region entered history with a rush: thelargest amount of gold ever discovered in the world till then was extracted in
the shortest space of time.
“Here the gold was a forest,” says the beggar one meets today, his eyesscanning the church towers. “There was gold on the sidewalks, it grew likegrass.” He is seventy-five years old now and considers himself part of thefolklore in Mariana, the mining town where, as in nearby Ouro Préto, the clock
has simply stopped. “Death is certain, the hour uncertain— everyone has histime marked in the book,” the beggar tells me. He spits on the stone steps andshakes his head: “They had more money than they could count,” he says, as if
he had seen them. “They didn’t know where to put it, so they built churches
one next to the other.”51

Once this was the most important region of Brazil. Now...“Well, there’s nolife at all,” says the old man. “No young folk. They all go.” His bare feet moveslowly beside me under the warm afternoon sun. “See that? On the front of thatchurch, the sun and moon. That means that the slaves worked day and night.
This church was built by black men; that one by white men. And that’s thehouse of Monsenhor Alipio who died right on his ninety-ninth birthday.”In the eighteenth century Brazilian production of the coveted metal
exceeded the total volume of gold that Spain had taken from its colonies in two
previous centuries. Adventurers and fortune hunters poured in. Brazil had
300,000 inhabitants in 1700; a century later, at the end of the gold years, thepopulation had multiplied eleven times. No less than 300,000 Portuguese
emigrated to Brazil in the eighteenth century, a larger contingent than Spain
contributed to all its Latin American colonies. From the conquest of Brazil
until abolition, it is estimated that some 10 million blacks were brought fromAfrica; there are no precise figures for the eighteenth century, but the gold
cycle absorbed slave labor in prodigious quantities.
Salvador de Bahia was the Brazilian capital of the prosperous Northeasternsugar cycle, but the “golden age” in Minas Gerais moved the country’s
economic and political capital southward and Rio de Janeiro, the region’s port,
became the new capital in 1763. In the dynamic heart of the new mining
economy, camps bloomed abruptly into cities, described by a contemporary
colonial authority as “sanctuaries for criminals, vagabonds, and malefactors,”
in a vertigo of easy riches. The “Vila Rica de Ouro Prêto(The “Rich Town of Black
Gold,” so called because the mined gold turned black on exposure to the humid air, due to thepresence of silver. (Trans.)) had grown to city size by 1711; born of the miners’

avalanche, it was the quintessence of the gold civilization. Simão Ferreira
Machado, describing it twenty-three years later, said that the power of Ouro
Préto businessmen surpassed by far that of Lisbon’s most flourishingmerchants: “Hither, as to a port, are directed and collected in the Royal Mint
the grandiose amounts of gold from all the Mines. Here dwell the best educatedmen, both lay and ecclesiastic. Here is the seat of all the nobility and thestrength of the military. It is, by virtue of its natural position, the head of thewhole of America; and by the wealth52

of its riches, it is the precious pearl of Brazil.”35 Another writer of the period,
Francisco Tavares de Brito, in 1732 defined Ouro Prêto as “the Potosi of gold.”
Frequent complaints and protests reached Lisbon about the sinful life inOuro Prêto, Sabará, São Joao d’El Rei, Mariana, and the whole turbulent
mining district. Fortunes were made and lost overnight. It was commonplace
for a miner to pay a fortune for a black who played a good trumpet and twice
as much for a mulatto prostitute, “to abandon himself with her to continuousand scandalous sins.” Men of the cloth behaved no better: official
correspondence of the time contains many complaints against “bad clergymen”
infesting the area. They were accused of using their immunity to smuggle gold
inside little wooden images of saints. It was said that in 1705 Minas Gerais did
not contain one priest who was interested in the Christian faith of the people,
and six years later the Crown banned the establishment of any religious orderin the mining district.
In any case, there was a proliferation of handsome churches built anddecorated in the baroque style characteristic of the region. Minas Gerais
attracted the best artisans of the time. Outwardly the churches looked sober andaustere, but the interiors, symbolizing the divine soul, glistened with pure goldon their altars, reredoses, pillars, and bas-relief panels. Precious metals were
not spared, so that the churches could achieve “the riches of Heaven,” as themonk Miguel de São Francisco recommended in 1710. The price of religious
services was astronomical, but everything in the mining area was exorbitant.
As had happened in Potosi, Ouro Prêto devoted itself to squandering its sudden
wealth. Processions and spectacles provided occasions to exhibit splendid
robes and adornments. A religious festival in 1733 lasted over a week. There
were not only processions on foot, on horseback, and in triumphal mother-ofpearl, silk, and gold chariots, with fantastic costumes and dazzling settings, butthere were equestrian tournaments, bullfights, and dancing in the streets to thesound of flutes, flageolets, and guitars.
The slaves spent their strength and their days in the gold-washinginstallations. “There they work,” wrote Luis Gomes Ferreira, a doctor who
lived in Minas Gerais during the first half of the eighteenth century, “there theyeat, and often there they have to sleep; and since when they work they arebathed in sweat, with their feet always in the cold earth,53

on stones, or in water, when they rest or eat their pores close and they become
so chilled that they are susceptible to many dangerous illnesses, such as very
severe pleurisies, apoplectic and paralytic fits, convulsions, pneumonia, andmany other diseases.”36 The’ capitaes do mato of Minas Gerais collected
rewards in gold for the severed heads of slaves who tried to escape. Disease
was a blessing from heaven because it meant the approach of death.
The slaves were called the “coins of the Indies” when they were measured,weighed and embarked in Luanda in the Portuguese colony of Angola; in
Brazil those surviving the ocean voyage became “the hands and feet” of thewhite master. Angola exported Bantu slaves and elephant tusks in exchange forclothing, liquor, and firearms, but Ouro Prêto miners preferred blacks shippedfrom the little beach of Ouidah on the Gulf of Guinea because they were morevigorous, lasted somewhat longer, and had the magic power to find gold. Everyminer also needed a black mistress from Ouidah to bring him luck on his
expeditions. 37 (In Cuba, medicinal powers were attributed to female slaves. According to
onetime slave Esteban Montejo, “There was one type of sickness the whites picked up, asickness of the veins and male organs. It could only be got rid of with black women; if the man
who had it slept with a Negress he was cured immediately.”38) Ouro Préto’s appetite forslaves became insatiable; they expired in short order, only in rare cases
enduring the seven years of continuous labor. Yet the Portuguese were
meticulous in baptizing them all before they crossed the Atlantic, and once inBrazil they were obliged to attend mass, although they were not allowed to sit
in the pews or to enter the chanel.
The gold explosion not only increased the importation of slaves, butabsorbed a good part of the black labor from the sugar and tobacco plantations
elsewhere in Brazil, leaving them without hands. The miners were
contemptuous of farming, and in 1700 and 1713, in the full flush of prosperity,
hunger stalked the region: millionaires had to eat cats, rats, ants, and birds ofprey. A royal decree in 1711 banned the sale of slaves occupied in agriculture,with the exception of those who showed “perversity of character.”
By the middle of the eighteenth century many miners had gone to look for
diamonds in Serra do Frio. The crystalline stones the gold

54

hunters had tossed aside while exploring the riverbeds had turned out to bediamonds; Minas Gerais had both diamonds and gold in equal quantities. The
booming camp of Tijuco became the center of the diamond district and there,
as in Ouro Prêto, the wealthy sported the latest European fashions, bringing
luxurious clothes, weapons, and furniture from across the ocean for their hourof delirium and dissipation. A mulatto slave, Francisca da Silva, or Xica da
Silva, won her freedom by entering the bed of millionaire Joao Fernandes deOliveira, the uncrowned king of Tijuco; she was ugly and had two children, butbecame “the xica who gives orders.”39 As she had never seen the sea andwanted it near her, her cavalheiro made her a large artificial lake on which hefloated a ship, complete with crew. In the Säo Francisco foothills he built her acastle with a garden of exotic plants and artificial waterfalls; in her honor hegave sumptuous banquets with the finest wines, balls that never ended, andtheater and concert performances.
In 1818 Tijuco could still manage a large-scale celebration of the prince ofPortugal, but ten years earlier the Englishman John Mawe had visited Ouro
Préto and had been startled by its poverty. He found empty and worthless
houses with futile “for sale” signs, and ate wretched and meager food. Tijtico
did not take long to meet the same fate. The crisis had at first led to rebellion.
José Joaquim da Silva Xavier, known as “Tiradentes”— the “toothpuller”— washanged and quartered after being tortured, and other fighters for independence
had disappeared from Ouro Prêto into jail or exile.

WHAT BRAZILIAN GOLD CONTRIBUTEDTO PROGRESS IN ENGLAND
The gold began to flow just when Portugal signed the Methuen Treaty withEngland in 1703. The treaty crowned a long series of privileges obtained by
British merchants in Portugal. In return for some advantages for its wines inthe English market, Portugal opened its own and its colonies’ markets to
British manufactures. In view of the existing inequality of industrial
development, this proved disastrous for local Portuguese manufactures. It was
not with wine that English textiles were paid for, but with gold— Brazilian
gold— and in the process Portuguese55

looms were paralyzed. Not content with killing its own industry in the bud,Portugal destroyed the seeds of any kind of manufacturing development inBrazil: until 1715 sugar refineries were banned, in 1729 it was made a criminal
offense to open new roads in the mining region, and in 1785 local looms andspinning mills were ordered burned.
England and Holland, the leading gold and slave contrabandists, amassed
fortunes in the illegal “black meat” traffic and are said to have illicitly garneredmore than half the metal the Portuguese Crown was supposed to get from
Brazil in quinto real tax. But Brazilian gold was channeled to London by licit
as well as illicit methods. The gold boom, which brought a host of Portuguese
to Minas Gerais, sharply stimulated colonial demand for industrial products
and at the same time provided the means to pay for them. Just as Potosi silver
rebounded off Spanish soil, Minas Gerais gold only reached Portugal in transit.
The metropolis became an intermediary. In 1755 the Marquis de Pombal,
Portugal’s prime minister, tried to revive a protectionist policy, but it was toolate. He declared that the English had conquered Portugal without the troubleof a conquest, that they were supplying two-thirds of its needs, and that British
agents controlled the whole of Portuguese trade. Portugal was producing
almost nothing, and the wealth brought by gold was so illusory that even theblack slaves who mined it were clothed by the British.
Celso Furtado has noted that Britain, following a farsighted policy withrespect to industrial development, used Brazilian gold to pay for essential
imports from other countries and could thus concentrate on investments in the
manufacturing sector. Thanks to this historical graciousness on the part of thePortuguese, Britain could apply rapid and efficient technical innovations.
Europe’s financial center moved from Amsterdam to London. According to
British sources, the value of Brazilian gold arriving in London reached £50,000
a week in some periods. ‘Without this tremendous accumulation of gold
reserves, Britain would not have been able, later on, to confront Napoleon.
No result of the dynamic stimulus of gold remained on Brazilian soil
except churches and works of art. By the end of the eighteenth century,
although the diamond supply was still not exhausted, the country was prostrate.
Furtado calculates that at that time— the low point of the whole colonial
period— the per capita income of the 3 million-odd

56

Brazilians did not exceed $50 a year in today’s buying power. Minas Geraisdrowned in a long wave of decadence and insolvency. Incredibly, a modern
Brazilian author expresses gratitude for the favor and submits that the capital
the English derived from Minas Gerais “aided the great banking network thatbuilt international trade and made it possible to raise the living standards ofpeoples capable of progress.”(The author, Augusto de Limajr., derives great happinessfrom “the expansion of colonizing imperialism which ignorant people today, inspired by their
Moscow masters, describe as a crime.”40) Inexorably condemned to poverty so that

foreigners might progress, the “incapable” mining communities moldered inisolation and could only resign themselves to scraping a livelihood from lands
already despoiled of metals and precious stones. Subsistence farming replaced
mining. Today the Minas Gerais countryside, like the Northeast, is the
kingdom of the latifundio and the “hacienda colonels,” a dauntless bastion of
backwardness. The sale of Minas Gerais workers to haciendas in other states isalmost as common as the slave traffic in the Northeast. Recently, Franklin de
Oliveira toured Minas Gerais. He found collapsing wooden huts, villages
without water or light, prostitutes of an average age of thirteen on the road in
the valley of the Jequitinhonha, and crazed and famished people along theroadsides.41 Minas Gerais was once accurately described as having a heart ofgold in a breast of iron, but its fabulous “iron quadrilateral” is being exploited
today by a joint Hanna Mining Company-Bethlehem Steel enterprise: thedeposits were surrendered in a sinister deal in 1964. The iron, in foreigners’
hands, will leave no more behind than did the gold.
Only the explosion of artistic talent remains as a memento of the golddelirium, apart from the holes in the ground and the abandoned cities; nor
could Portugal salvage anything creative except for the aesthetic revolution.
The convent of Mafra, pride of Dom João V, lifted Portugal from artistic
decadence: in its carillons of thirty-seven bells and in its solid gold vessels andcandelabra, there still glints the gold of Minas Gerais. The Minas churches
have been extensively plundered and few sacred objects of portable size remainin them, but monumental baroque works still rise above the colonial ruins—façades and pulpits, galleries, reredoses, human figures designed, carved, or
sculpted by Antonio

57Francisco Lisboa— ”Aleijadinho”----”Little Cripple,” genius son of a female
slave and a famous artisan. The eighteenth century was coming to a close when
“Aleijadinho” began carving in stone a group of large sacred figures in thegarden of the Born Jesus do Matosinhos church in Congonhas do Campo. The
work was called “The Prophets,” but there was no longer any glory inprophesying. The gold euphoria was a thing of the past; all the pomp andgaiety had vanished and there was no room for hope. This dramatic final
testimony, like a grand monument to the fleeting gold civilization that wasborn to die, was left to succeeding generations by the most talented artist in all
Brazil’s history. “Aleijadinho,” disfigured and crippled by leprosy, created his
masterpiece with chisel and hammer tied to fingerless hands, dragging himself
on his knees to his workshop every morning.
Legend insists that in the Nossa Senhora das Mercés e Misericordia church
in Minas Gerais, dead miners still celebrate mass on cold rainy nights. ‘When
the priest turns around, raising his arms from the high altar, one sees the bonesof his face.

58

2. King Sugar and Other
Agricultural Monarchs
PLANTATIONS, LATIFUNDIA, AND FATE
Undoubtedly gold and silver were the main motivating force in the Conquest,
but Columbus on his second voyage brought the first sugarcane roots from theCanary Islands and planted them in what is now the Dominican Republic. To
the Admiral's joy they took hold rapidly. Grown and refined on a small scale inSicily, Madeira, and the Cape Verde Islands, and purchased in the Orient athigh prices, sugar was so precious to Europeans that it figured in the dowries ofqueens. It was sold in pharmacies, weighed out by the gram. For almost threecenturies after the discovery of America no agricultural product had more
importance for European commerce than American sugar, Canefields wereplanted in the warm, damp littoral of Northeast Brazil; then in the Caribbean
islands-Barbados, Jamaica, Haiti, Santo Domingo, Guadeloupe, Cuba, Puerto
Rico-and in Veracruz and the Peruvian coast, which proved to be ideal terrain
for the "white gold." Legions of slaves came from Africa to provide King
Sugar with the prodigal, wageless labor force he required: human fuel for theburning. The land was devastated by this selfish plant which invaded the New
World, felling forests, squandering natural fertility, and destroying
accumulated soil humus. The long sugar cycle generated a prosperity as mortalas the59

prosperity generated by-the silver and gold of Potosi, Ouro Preto, Zacatecas,
and Guanajuato. At the same time, directly or indirectly but decisively, it
spurred the growth of Dutch, French, English, and U.S. industry.
The demand for sugar produced the plantation, an enterprise motivated byits proprietor's desire for profit and placed at the service of the international
market Europe was organizing. Internally, however since it was to aconsiderable extent self-sufficient-the plantation was feudal in many important
aspects, and its labor force consisted mainly of slaves. Thus three distinct
historical periods-mercantilism, feudalism, slavery-were combined in a single
socioeconomic unit. But in the constellation of power developed by theplantation system, the international market soon took the center of the stage.
Subordinated to foregn needs and often financed from abroad, the colonial
plantation evolved directly into the present-day latifundio, one of thebottlenecks that choke economic development and condemn the masses topoverty and a marginal existence in Latin America today. The latifundio as weknow it has been sufficiently mechanized to multiply the labor surplus, andthus enjoys an ample reserve of cheap hands, It no longer depends on theimportation of African slaves or on the encomienda of Indians; it merely needs
to pay ridiculously low or in-kind wages, or to obtain labor for nothing in
return for the laborer's use of a minute piece of land. It feeds upon the
proliferation of minifundios--pocket-sized farms--resulting from its own
expansion, and upon the constant internal migration of a legion of workers who,
driven by hunger, move around to the rhythm of successive harvests.
The plantation was so structured as to make it, in effect, a sieve for thedraining-off of natural wealth, and today the latifundio functions in the sameway. Each region, once integrated into the world market, experiences adynamic cycle; then decay sets in with the competition of substitute products,
the exhaustion of the soil, or the development of other areas where conditions
are better. The initial productive drive fades with the passing years into a
culture of poverty, subsistence economy, and lethargy. The Northeast was
Brazil's richest area and is now its poorest; in Barbados and Haiti humanantheaps live condemned to penury; in Cuba sugar became the master key for
U. S. domination, at the price of monoculture and the relentless
impoverishment of the soil.

60

And this has not been the role of sugar alone: the story has been the same withcacao, which made the fortunes of the Caracas Oligarchy; with the spectacularrise and fail of cotton in Maranho; with the Amazonian rubber plantations,which became the cemeteries of Northeastern workers recruited for a few
pennies; with the devastated quebracho forests in northern Argentina andParaguay; with Yucatan's henequen plantations, where Yaqui Indians were sent
for extermination. It is also the story of coffee, which advances leaving deserts
behind it, and of the fruit plantations in Brazil, Colombia, Ecuador, and theunhappy lands of Central America. Each product has come to embody the fateof countries, regions, and peoples; and mineral-producing communities have,of course, traveled the same melancholy road. The more a product is desired by
the world market, the greater the misery it brings to the Latin American
peoples whose sacrifice creates it. The area least affected by this iron law has
been Rio de la Plata, feeding the international market with its hides, meat, andwool; yet even it has been unable to break out of the cage of underdevelopment.

HOW THE SOIL WAS RAVAGED IN NORTHEAST BRAZIL
Because they discovered precious metals first, the Spaniards only began raisingsugar in their colonies-initially in Santo Domingo, then in Veracruz, Peru, andCuba-as a secondary activity. Brazil, on the other hand, became the world's
largest sugar producer and remained so until the middle of the seventeenth
century, Portugal's Latin American colony was also the chief market for slaves;native workers, always scarce, were rapidly killed off by the forced labor, andsugar needed thousands of hands to clear and prepare the ground, to plant,
harvest, transport, grind, and refine the cane. Brazilian colonial society
flourished in Bahia and Pernambuco as a sub-product of sugar until the
discovery of gold moved its center to Minas Gerais.
The Portuguese Crown granted lands in usufruct to Brazil's first big
landlords. The feats of conquest proceeded in tandem with the organization of
production. Twelve "captains" received by written grant the whole of the vast
unexplored territory, to be exploited in the king's service. However, thebusiness was mostly financed by Dutch capital61

and thus became more Flemish than Portuguese. Dutch entrepreneurs not only
participated in establishing sugar estates and importing slaves; they also pickedup the crude sugar in Lisbon, refined it, sold it in Europe, and pocketed a thirdof its value In profits. In 1630 the Dutch West India Company invaded andconquered the northeast coast of Brazil and took over direct control of sugar
production. To multiply their profits, the sources of sugar had to be multiplied,
and the company offered the British in Barbados all facilities to start massive
production in the Antilles. It brought Caribbean colonists to Brazil to acquire
technical and organizational knowledge. When the Dutch were finally thrownout of the Brazilian Northeast in 1654, they had already laid the foundations
for intense and ruinous competition by Barbados. They had taken slaves andcane-roots there, had set up sugar estates, and had provided all the implements.
Brazilian exports plummeted to half of what they had been, and sugar prices
were halved by the end of the seventeenth century. Meanwhile, Barbados's
black population increased tenfold in a few decades. The Antilles were nearer
to the European market, and Barbados developed superior techniques andoffered virgin and while Brazilian soil was wearing out. The crisis in the sugargrowing Northeast was also precipitated by serious slave revolts and by thegold boom to the south, which robbed the plantations of labor. The crisis was
definitive: it has dragged itself painfully down the centuries into our time.
Sugar had destroyed the Northeast. The humid coastal fringe, well wateredby rains, had a soil of great fertility, rich in humus and mineral salts andcovered by forests from Bahia to Ceara. This region of tropical forests wasturned into a region of savannas. Naturally fitted to produce food, it became aplace of hunger. Where everything had bloomed exuberantly, the destructive
and all-dominating latifundio left sterile rock, washed-out soil, eroded lands.
At first there had been orange and mango plantations, but these were left totheir fate, or reduced to small orchards surrounding the sugar mill-owner's
house, reserved exclusively for the family of the white planter. Fire was used toclear land for canefields, devastating the fauna along with the flora: deer, wildboar, tapir, rabbit, pacas, and armadillo disappeared. All was sacrificed on thealtar of sugarcane monoculture.

62

At the end of the sixteenth century Brazil had no less than 120 sugarmills
worth some £2 million, but the' it masters, owners of the best lands, grew nofood. They imported it, just as they imported an array of luxury articles whichcame from overseas with the slaves and bags of salt. Abundance and prosperity
went hand in hand, as usual, with chronic malnutrition and misery for most of
the population. Cattle were relegated to deserts far inland from the humid
coastal zone to the sertao which, with two head of cattle to the square mile,
supplied (and still supplies) tough, tasteless, and always scarce meat.
A legacy of those colonial days which continues is the custom of eating
dirt. Lack of iron produces anemia, and instinct leads Northeastern children toeat dirt to gain the mineral salts which are absent from their diet of manioc
starch, beans, and-with luck-dried meat. In former times this "African vice"
was punished by putting muzzles on the children or by hanging them in willow
baskets far above the ground. (An English traveler, Henry Koster, attributed this custom
to the contact the white children had with little blacks "who infect them with this African vice."+In various ways the Northeast is the victim of internal colonialism for the benefit of theindustrialized south. Within the Northeast, the sertao region is subordinated to the sugarbelt
which it supplies, and the latifundios in their turn are subordinated to processing plants thatindustrialize sugar production. The ancient institution of the individually owned sugar estate is incrisis: the central mills have devoured the plantations.)

The Brazilian Northeast is today the most underdeveloped area in theWestern hemispheres As a result of sugar monoculture it is a concentration
camp for 30 million people-on the same soil that produced the most lucrative
business of the colonial agricultural economy in Latin America. Today lessthan a fifth of Pernambuco's humid zone is used for growing sugar; the rest is
not used at all.' The big sugarmill owners, who are also the biggest planters ofcane, permit themselves this luxury of waste. It is not in the Northeast’s arid
and semi-arid interior that food conditions are worst, as is erroneously believed.
The sertao, a desert of stones and sparse vegetation, has periods of hunger
when the scorching sun produces drought and the semblance of a lunar
landscape, forcing the people to flee and sowing crosses along the roadsides.
But in the humid littoral--that coastal fringe still so ironically known as the"forest zone" in tribute to the remote past arid to the pitiful remnants offorestation surviving from centuries of sugar--63hunger is endemic. Where opulence is most opulent, there--in this land ofcontradictions--misery is most miserable; the region nature chose to produce
all foods, denies all. The sugar latifundio, a structure built on waste, must still
import food from other areas, particularly from the center and south, atescalating prices. The cost of living in Recife is the highest in Brazil, well
above Rio de Janeiro. Beans cost more in the Northeast than in Ipanema, thecapital city's most luxurious beach resort. The price of half a kilo of manioc
starch equals the wage an adult sugar-plantation worker receives for working
from sunrise to sunset: if he complains, the foreman summons the carpenter tomeasure the man for the length and width of the boards that will be needed. In
large areas the owner's or administrator's "right of the first night" for each girlis still effective. A third of Recife's population lives in miserable hovels; in one
district, Casa Amarela, more than half the babies die before they are a year old.
Child prostitution--girls of ten or twelve sold by their parents--is common in
Northeastern cities. Some plantations pay less for a day's work than the lowest
wage in India. A United Nations Food and Agriculture Organization (FAO)
report in 1957 said that in the area of Victoria, near Recife, protein deficiency
in children produces a weight loss 40 percent worse than is generally found in
Africa. Many plantations still operate private prisons, but, as Rene Dumontnotes, "those who are responsible for murder by undernourishment are notlocked inside, since they are the keepers of the keys." 2Pernambuco now produces less than half as much sugar as the state of Sao
Paulo, and has a far lower per hectare yield; but Pernambuco's inhabitants,
densely concentrated in the humid zone, depend on sugar for their livelihood,
while Sao Paulo contains the greatest industrial center in Latin America. In the
Northeast not even progress is progressive, for it is in the hands of a few
owners. The food of the minority is the hunger of the majority. Beginning in
1870 the sugar industry I was substantially modernized as big central mills
were installed, and the absorption of land by latifundios progressed alarmingly,
sharpening the hunger of the area. In the 1950s, booming industrialization
increased the consumption of sugar in Brazil itself. This stimulated
Northeastern production, but without causing any rise in the per hectare yield,
New lands of inferior quality were planted to cane, and sugar devoured still
more of the few food-producing areas. Turned into a wage-worker, the64

peasant who had previously tilled his small plot experienced no benefit, since
he did not earn enough money to buy what he had once produced. As usual, theexpansion expanded hunger.

THE DEVASTATION OF THE CARIBBEAN"You believe perhaps, gentlemen," said Karl Marx in 1848, "that the
production of coffee and sugar is the natural destiny of the West Indies. Two
centuries ago, nature, which does not trouble herself about commerce, had
planted neither sugarcane nor coffee trees there."' The international division oflabor was not organized by the Holy Ghost but by men-more precisely, as aresult of the world development of capitalism.
It was the fate of the "sugar islands"--Barbados, the Leewards, TrinidadTobago, Guadeloupe, Puerto Rico, Haiti, and Santo Domingo-to beincorporated one by one into the world market and condemned to sugar until
our day. Grown on a grand scale, sugar spreads its blight on a grand scale andtoday unemployment and poverty are these islands' permanent guests. Cuba
also continues to depend on the sale of sugar, although the agrarian reforms of1959 sparked an intensive diversification of the economy which has ended
seasonal unemployment. Cubans no longer work only during the five or somonths of the sugar harvest, but for twelve months in the continuous job ofbuilding a new society.
Barbados was, starting in 1641, the first Caribbean island where sugar was
grown for bulk export, although the Spaniards had planted cane earlier in Santo
Domingo and Cuba. It was, as we have seen, the Dutch who introduced sugar
into the little British island; by 1666 Barbados had 800 plantations and morethan 80,000 slaves. Occupied vertically and horizontally by the developing
latifundio, Barbados suffered no better fate than the Brazilian Northeast. It had
previously produced a variety of crops on small holdings: cotton and tobacco,oranges, cows and pigs. Canefields devoured all this and devastated the dense
forests in the name of a glorious illusion. The island soon found that its soil
was exhausted, that it was unable to feed its population, and that it was
producing sugar at uncompetitive prices.

65

By this time sugar cultivation had spread to the Leeward Islands, toJamaica, and to the Guianas on the South American mainland. Jamaica entered
the eighteenth century with ten times more slaves than white colonists. Its soil
too was soon exhausted. In the second half of the century the world's best sugar
was being raised on the spongy coastal plains of Haiti, a French colony thenknown as Saint Domingue. Northern and western Haiti became a humanantheap: sugar needed hands and more hands. In 1786 the colony brought in
27,000 slaves; in the following year, 40,000. Revolution broke out in the fall of1791 and in one month, September, 200 sugar plantations went up in flames;
fires and battles were continuous as the rebel slaves pushed France's armies tothe sea. Ships sailed containing ever more Frenchmen and ever less sugar. The
war spilt rivers of blood, wrecked the plantations, and paralyzed the country,
and by the end of the century production had fallen to almost nothing. By
November 1803 almost all of the once flourishing colony was in ashes andruins. The Haitian revolution had coincided--and not only in time--with the
French Revolution, and Haiti bore its share of the international coalition's
blockade against France: England controlled the seas. Later, as its
independence became inevitable, Haiti also had to suffer blockade by France.
The U.S. Congress, yielding to French pressure, banned trade with Haiti in
1806. In 1825 France recognized its former colony's independence, but only in
exchange for a huge cash indemnity. General Leclerc had written to his
brother-in-law Napoleon in 1802, soon after taking prisoner the slave armies'
leader Toussaint L'Ouverture, "Here is my opinion about this country: all theblacks in the mountains, men and women, must be suppressed, keeping only
the children under twelve; half the blacks in the plains must be exterminated,and not a single mulatto with epaulets must be left in the colony.”4 The tropics
took their revenge on Leclerc: "Gripped by the black vomit," and despite themagical incantations of Pauline Bonaparte, he died without carrying out hisplan.( Alejo Carpentier has written a Fine novel about this fascinating period of Haitian history,
The Kingdom of This World (1957). It contains a perfect recreation of the Caribbean adventuresof Pauline and her husband.) But the cash indemnity was a millstone around thenecks of those independent Haitians who survived the bloodbaths of thesuccessive military66

expeditions against them. The country was born in ruins and never recovered:
today it is the poorest in Latin America.
The crisis in Haiti produced the sugar boom in Cuba, which quickly
became the world's top producer. Cuban production of coffee, another item ingreat demand overseas, was also stimulated by the collapse of Haitian
production, but sugar won the monocultural race: in 1862 Cuba had to importcoffee from abroad. A respected member of the Cuban "sugarocracy" held
forth on "the proven advantages that can be obtained from another's
misfortune.”5 After the Haitian rebellion, sugar prices in European markets
topped all records, and by 1806 Cuba had doubled both its mills and its
productivity.

SUGAR CASTLES ON CUBA'S SCORCHED EARTH
The British had taken Havana briefly in 1762. The island's rural economy wasthen based on small tobacco plantations and on cattle ranching; Havana, amilitary bastion, had craftsmen with advanced skills, an important foundry
manufacturing cannon, and Latin America's first shipyard for building
merchant and war ships on a big scale. Eleven months sufficed for the British
occupiers to introduce as many slaves as would otherwise have entered in
Fifteen years, and from that time on the Cub an economy was shaped by theforeign need for sugar: slaves produced it for the world market and its
bounteous surplus value was enjoyed by the local oligarchy and by imperialist
interests.
Cuban sugar historian Manuel Moreno Fraginals describes with eloquent
data the headlong advance of sugar in the years following the British
occupation, Spain's commercial monopoly had in fact been blown apart, and all
brakes on the entry of slaves had been removed. The sugarmills absorbed
everything, men and land. To the mills went shipyard and foundry workers andthe countless small artisans who had contributed decisively to the developmentof industry. Small peasants growing tobacco in the vegas or fruit in theorchards, victims now of the canefields' brutally destructive advance, also
turned to sugar production. Extensive planting relentlessly reduced the soil's
fertility; sugarmill towers multiplied in the Cuban countryside and each one
needed more and more land. Fire devoured tobacco vegas, forests, andpasturelands.

67

Dried meat, a Cuban export a few years earlier, was by 1792 arriving inlarge quantities from abroad and was an import from then on.( The Rio de la Plata
meatpacking plants were already in operation. Argentina and Uruguay (then without separate
existence and not so named) had adopted their economies to the massive export of dried andsalted meat, hides, fats, and tallows. Brazil and Cuba, the nineteenth century's two great slave
centers, were fine markets for dried meat, a very cheap food easily transported and warehoused
since it did not go bad in the tropical heat. Cuba was the first market for Uruguayan meat--thenshipped in thin, dry slices--at the end of the eighteenth century. Cubans still call dried meat"Montevideo," but Uruguay stopped selling it to Cuba in 1985 when they joined the OAS antiCuban bloc, thus idiotically losing their last market for the product.6) The shipyard andfoundry languished, tobacco production plummeted; the slaves of sugar put ina workday of up to twenty hours. On smoking lands the "sugarocracy"
consolidated its power. In the late eighteenth century euphoria of sky-highinternational prices, speculation ran riot: land prices went up twenty times inGuines; in Havana, eight times the legal rate of interest was paid; andthroughout Cuba the fees for baptisms, burials, and masses rose in proportion
to the soaring prices of blacks and oxen.
Early chroniclers told of traveling across all of Cuba in the shade of giant
palms and through leafy forests abounding in mahogany, cedar, and ebony.
Cuba's precious woods may still be admired in the tables and window framesof the Escorial and in the doors of the royal palace in Madrid, but in Cuba thesugarcane invasion sent the best virgin forests up in smoke. In the same years it
was destroying its own timberlands, Cuba became the chief purchaser of U.S.
timber. The extensive plunder-culture of sugarcane meant not only the death of
the forest but also, in the long run, the death of the island's fabulous fertility.
(Until recently, palanqueros operated on the Rio Sagua. According to Fraginals, "They carry along pole with an iron tip. With this they prod the riverbed until they strike a piece of wood....
Thus, day after day, they bring up from the river the remains of the trees that sugar felled. They
live from the corpses of the forest." )With forests surrendered to the flames, erosion

soon did its work on the defenseless soil and thousands of streams dried up.
The present-day per hectare yield from sugar plantations in Cuba is more than
three times lower than in Peru and four and one-half times lower than in
Hawaii. Irrigation and fertilization of the land are priority tasks for the Cuban
Revolution. Large and small hydraulic dams are multiplying,68

fields are being irrigated, and fertilizer is being scattered over lands weak from
centuries of punishment.
The “sugarocracy” piled up their fraudulent fortunes while reinforcing
Cuba's dependence. Among those who savagely devastated Cuba's fertile soil
were persons of refined European culture who could spot a genuine Brueghel
and afford to buy it; they returned from frequent Paris trips with Etruscan vases
and Greek amphorae, Gobelin tapestries and Ming screens, landscapes andportraits by the most fashionable British artists. I was startled to find in the
kitchen of a Havana mansion an enormous strongbox with a secret combinationin which a countess used to protect her table service. Up until 1959 it was notfactories, but sugar castles that were built on the island: sugar installed andremoved dictators, gave or denied jobs to workers, decided the rhythm of the"dance of the millions"--the 1919-1921 boom period--and of the terrible crises.
The city of Trinidad is today a resplendent corpse. It collapsed, never to riseagain, with the collapse of sugar prices in 1857.( Fraginals has perceptively noted thatthe names of sugar estates started in the nineteenth century reflected the rise and fall of the sugar
curve: “Hope” “New Hope” “Audacious,"“Gamble”: "Hopeful, "Conquest," "Confidence,” Good Results”: “Wit’s End,” “Woe,”"Disenchantment." There were four estates named— with premonition— “Disenchantment.”) In

the mid-nineteenth century it had forty sugarmills producing 700,000 arrobasof sugar. Poor tobacco-farming peasants had been displaced by force andviolence, and meat for the district--which had also raised cattle and had once
exported meat--was being bought abroad. There was a flowering of colonialstyle palaces with furtively shadowed porticos, chandeliers dripping crystal in
high-ceilinged salons, Persian carpets, minuets faintly breaking the velvet
silence, ormolu mirrors reflecting the graces of buckle-shod, bewigged
caballeros. Great marble and stone skeletons, proud silent bell towers, andSpanish carriages invaded by grass remain today as testimony to all this.
Trinidad became known as “the city of the ‘hads’” because its white survivors
always talked of past days when they "had" power and glory.
When the Sierra Maestra guerrilleros took power, Cuba's destiny was stilltied to sugar prices. "A people that entrusts its subsistence to one product alone
commits suicide," the national hero Jose Marti' had prophesied. When sugarstood at $.22 a pound in 1920, Cuba beat the world record in per capita export-even surpassing England--and had

69

Latin America's highest per capita income. But in December of that year the
price fell to $.04 and a crisis of hurricane force descended in 1921: manysugarmills went bankrupt--to be bought up by U.S. interests--as did all the
Cuban and Spanish banks, including the Banco Nacional itself. Only thebranches of U.S. banks survived. The 1921 disaster had been brought on by thefall in sugar prices on the U.S. market, and from the United States came a
prompt credit of $50 million. On the heels of the credit came General Enoch
Crowder who, under the pretext of controlling the use of the funds, became
Cuba's de facto governor. Thanks to his good offices the Machado dictatorshipcame to power in 1924, but the Great Depression of the 1930s lay ahead forthis bloody regime with Cuba paralyzed by a general strike. The U.S. crisis of1929 could not but have a fierce impact on so dependent and vulnerable aneconomy as Cuba's: the price of sugar sank well below $.01 by 1932, and in
three years the value of exports fell by 75 percent. At that time theunemployment index would have been hard to match in any other country.
What happened to prices was repeated in volume of exports. The UnitedStates lowered import duties on Cuban sugar in exchange for similar privileges
for U.S. exports to Cuba, but such "favors" only consolidated Cuba's
dependence. By 1948 Cuba had recovered its quota to the point of supplying
one-third of the U.S. sugar market, at prices lower than U.S. producers
received but higher and more stable than those in the international market.
Sugar production was arbitrarily limited by Washington's needs. The 1925
level of some 5 million tons remained the average through the 1950s; dictator
Fulgencio Batista took power in 1952 on the heels of the biggest harvest in
Cuban history--over 7 million tons--with the mission of tightening the screws,
and in the following year production, obedient to the demand in the north, fell
to 4 million tons.( The director of the U.S. Department of Agriculture's sugar program
declared soon after the Revolution: “Since Cuba has left the scene, we cannot count on thatcountry, the world's biggest exporter, which always had enough reserves to supply our market
when need arose.”7) When Batista fell in 1959, Cuba was selling almost all its

sugar to the United States. As Marti said and Che Guevara quoted at the OAS
Punta del Este conference in 1961, "The nation that buys commands, the nationthat sells serves; it is necessary to balance trade70

in order to ensure freedom; the country that wants to die sells only to one
country, and the country that wants to survive sells to more than one.”

THE CUBAN REVOLT AGAINST THE STRUCTURE OF
IMPOTENCE
Geographical proximity and the advent of beet sugar production in France andGermany during the Napoleonic wars made the United States the chiefcustomer for Antillean sugar. By 1850 the United States was absorbing onethird of all Cuban trade, selling it more and buying more from it than Spain,
whose colony it was; the Stars and Stripes fluttered from more than half theships arriving at the island. A Spanish traveler found U.S.-made sewing
machines in remote Cuban villages in 1859. The main streets of Havana were
paved with New England granite.
At the dawn of the twentieth century one could read in the Louisiana
Planter. - "Little by little the whole island of Cuba is passing into the hands of
U.S. citizens, which is the simplest and safest way to obtain annexation to theUnited States." There was already talk in the Senate of a new star in the flag;with Spain's defeat, General Leonard Wood governed the island. At the sametime the Philippines and Puerto Rico dropped into the United States' lap.( Puerto
Rico, another sugar factory, remained a prisoner. From the U.S. standpoint, Puerto Ricans are
not good enough to live in a country of their own but are good enough to die in Vietnam for acountry which is not theirs. In proportion to population, the "Free Associated State" of Puerto
Rico has more soldiers fighting in Southeast Asia than the rest of the United States. Puerto
Ricans resisting compulsory military service in Vietnam are sent to U.S. penitentiaries. Other
humiliations inherited from the invasion of 1898 and blessed by law (the law of the U.S.
Congress) are added to service in the U.S. armed forces. Puerto Rico is symbolically represented
in the Congress, being without vote and virtually without voice. In exchange for this right:
colonial status for an island that before the U.S. occupation had its own currency and carried onprosperous trade with the principal markets. Today the currency is the dollar and customs duties
are fixed in Washington, where everything connected with the island's external and internal tradeis decided. The same for foreign relations, transport, communications, wages, and work
conditions. U.S, federal courts sit in judgment on Puerto Ricans; the local army is part of the U.S.
army. Industry and commerce are in the hands of U.S. private interests. The emigration of Puerto
Ricans has threatened to make denationalization complete: poverty has driven more than amillion to New York hoping to improve their lot at the cost of losing their national identity.

71

There they form a subprolerariat which piles up in the most sordid slums.) "They have been

conferred upon
us by the war," said President McKinley, including Cuba in his remarks, “andwith God's help and in the name of the progress of humanity and civilization, it
is our duty to respond to this great trust." In 1902 Toma Estrada Palma had torenounce the U.S. citizenship he had acquired while living there in exile; theUS. occupation forces made him the first president of Cuba. In 1960 the former
U.S. ambassador to Cuba, Earl Smith, told a Senate subcommittee: "Until
Castro came to power, the United States had such an irresistible influence inCuba that the U.S. ambassador was the country's second personage, sometimes
even more important than the Cuban president."
In 1954 a young revolutionary lawyer accurately prophesied, in his
testimony to a court trying him for the attack on the Moncada barracks, that
history would absolve him: "Cuba," he said in his resounding defense plea,"continues to be a producer of raw materials. We export sugar to import candy,
we export hides to import shoes, we export iron to import plows."8 Cubabought not only automobiles, machinery, chemical products, paper, andclothing, but also rice and beans, garlic and onions, fats, meat, and cotton, allfrom the United States. Ice cream came from Miami, bread from Atlanta, andeven luxury suppers from Paris. The country of sugar imported nearly half the
fruit and vegetables it consumed, although only a third of its population had
regular jobs and half of the sugar estate lands were idle acres where nothing
was produced. Thirteen U.S. sugar producers owned more than 47 percent of
the total area planted to cane and garnered some $180 million from eachharvest. The subsoil wealth--nickel, iron, copper, manganese, chrome,tungsten--formed part of the United States' strategic reserves and were
exploited in accordance with the varying priorities of U.S. defense and industry.
In 1958 Cuba had more registered prostitutes than mine workers and a million
and a half Cubans were wholly or partly unemployed.
The country's economy moved in step with its sugar harvests. The
purchasing power of Cuban exports between 1952 and 1956 was no greaterthan it had been thirty years earlier, although foreign currency was much moreneeded. In the 1930s, when the crisis deepened the economy’s dependence
instead of helping to break it, newly installed factories were actuallydismantled to sell to other countries. When the Revolution triumphed on thefirst day of 1959, Cuba's industrial72development was poor and sluggish, over half the production was concentrated
in Havana, and the few technologically modern factories were managed byremote control from the United States. A Cuban economist, Regino Boti, coauthor of the Sierra guerrilleros' economic theses, cites the example of a
Nestle's affiliate producing condensed milk in Bayamo: “When there was a
breakdown, the technician simply phoned Connecticut and told them what hethought had gone wrong. He was told at once what to do about it and he simply
followed instructions, without having to bother his head about theory. If thisdid not do the trick, a plane would arrive four hours later with a team of
specialists. After nationalization, we could no longer phone for help, and the
few technicians who might have been able to deal with minor faults hadgone.”9 This illustrates precisely what problems the Revolution faced when it
embarked on the adventure of converting the colony into a fatherland.
Cuba was crippled by its dependent status, and walking on its own feet has
not been easy. Half of its children did not go to school in 1958, but, as Fidel
Castro has said many times, the ignorance was much broader and more serious
than mere illiteracy. The big campaign of 1961 mobilized an army of young
volunteers to teach all Cubans to read and write, and the results astonished theworld: according to UNESCO's Department of Education, Cuba now has thelowest percentage of illiterates and the highest percentage attending primaryand secondary school in Latin America. But the inherited curse of ignorance
cannot be overcome overnight--or in twelve years. A lack of efficienttechnicians, administrative incompetence and disorganization of production,
and a bureaucratic fear of creative imagination and decision still obstruct thedevelopment of socialism. Yet despite the whole structure of impotence forgedby four and one-half centuries of oppression, Cuba is being reborn with an
enthusiasm that never flags: against obstacles it matches its strength, its gaiety,and its audacity,

IN CUBA, SUGAR WAS THE KNIFE, IMPERIALISM THE
ASSASSIN"Is building on sugar better than building on sand?" Jean-Paul Sartre asked
himself when he was in Cuba in 1960.

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On the pier in the port of Guayabal, which exports sugar in bulk, pelicans
wheel over an enormous shed. Entering it, I am astonished to see a golden
pyramid of sugar. As hatches open to run the unsacked cargo down into theships below, more cascades of gold-sugar newly brought from the mills--pourin through openings in the roof. It glints and sparkles in beams of sunlight.
This warm mountain, too big for my eyes to take in, is worth some $4 million.
Here, I think to myself, is summed up all the euphoria and drama of the record
harvest of 1970,
A harvest which aspired--but despite superhuman effort, was not able--toreach 10 million tons. Yet the story behind the golden cascade is a much longer
one. I think about the Francisco Sugar Company (in which Allen Dulles was a
director), where I have passed a week listening to stories of the past and seeing
the birth of the future. . . . Josefina, daughter of Caridad Rodriguez, who
studies in a classroom that was a barracks cell, the exact place where her father
was held and tortured before he died; Antonio Bastidas, the seventy-year-old
black who, early one morning this year, seized the lever of the siren with both
hands, dancing in the air because the mill had overfilled its quota and yelling,“Shit, man, we done it!"--and no one would take Antonio's clenched hands off
the lever while the siren, which had awakened the community, was awakening
all Cuba. Stories of evictions, bribery, murder, hunger, of strange occupations
which unemployment--obligatory more than six months of every year-engenders: hunting crickets in the fields, for example.
But those who died did not do so in vain: Amancio Rodriguez, for one,riddled with bullets by strikebreakers at a meeting, had angrily refused a blankcheck from the boss; his comrades, when they went to get his body, found heowned no underwear or socks to be buried in. Or Pedro Plaza, arrested at age
twenty, who guided a truckful of soldiers over mines he had himself laid andwas blown up with the truck and the soldiers. And so many more, in this area
and all over: "Here," an old sugar worker told me, "the people have a great love
for martyrs--but only after they're dead. Before, there's nothing but
complaints." It wasn’t an accident, I think to myself, that Fidel Castro recruited
three-quarters of his guerrilleros from among the campesinos, the sugar
workers; nor that Oriente province has throughout Cuba's history been the
biggest source of both sugar and rebellion. I understand the74accumulated rancor that made the Revolution, after the big harvest of 1961,
decide to take revenge on sugar, the living memory of humiliation. Was it also
Cuba's fate? Did it then become a penitence? Could it now be a lever, acatapult for economic development?
When a pardonable impatience set in, the Revolution destroyed many
canefields and sought to diversify agriculture overnight. It didn't fall into the
traditional error of dividing the latifundios into unproductive small farms, butevery socialized farm proceeded to make sudden and excessive variations in its
crops. Yet there had to be large-scale imports to industrialize the country, raise
agricultural production, and satisfy many consumer needs which, in
redistributing wealth, the Revolution enormously increased. Without big sugar
harvests, where would the currency for these imports come from? The
development of mining--particularly nickel--requires large investments, andthese are being made; fishery production, also needing enormous investments,
has risen eight times thanks to the growth of the fleet; ambitious plans for
citrus fruit production are being implemented, but the interval of years between
planting and harvesting demands patience. The Revolution, after discoveringthat it had confused the knife with the assassin, turned sugar, which had been
responsible for underdevelopment, into an instrument of development. There
was no alternative but to use the fruits of monoculture and dependence, born of
Cuba's incorporation into the world market, to break the spine of thatmonoculture and dependence. No longer was the income earned by sugar to go
to consolidate the structure of submission.( The stable sugar price guaranteed by thesocialist countries has played a decisive role in this respect, as has the breaking of the U.S.organized blockade by intensive trading with the West European countries. A third of Cuba'sexports earn dollars--that is, convertible currency; the rest is on a barter basis with the Soviet
Union and the ruble zone. This system of trading creates certain difficulties:while Soviet turbines
for thermoelectric installations are of excellent quality, like all Soviet-made heavy equipment,
this is not true of consumer goods produced by its light or medium-sized industry.)

Imports of machinery and industrial installations have risen by 40 percent
since 1958; the economic surplus generated by sugar has been mobilized todevelop basic industries and to see that neither lands nor workers arecondemned to idleness. Cuba had 5,000 tractors and 30,000 automobiles whenthe Batista dictatorship fell. Today it has 50,000

75

tractors--although they are to a large extent wasted because of organizational
deficiencies--and nothing remains of that fleet of automobiles, mainly luxury
models, except a few specimens fit for scrap-iron. The cement industry andelectrical plants are growing with extraordinary speed; big fertilizer factories
created by the Revolution have enabled Cuba to use five times more fertilizer
than in 1958. Reservoirs built all over the island today contain seventy-threetimes as much water as was available in 1958, and Cuba has made a sevenleague-boot advance in areas under irrigation. New highways throughout Cuba
have broken what once seemed to be the eternal isolation of many regions.
Holstein bulls, brought in to increase the meager milk production from Cebu
cattle, have produced 800,000 cross-bred cows by artificial insemination.
Much progress--but still not enough--has been made in the mechanizationof sugarcane cutting and loading, mainly using Cuban inventions. A new work
system is being organized, with difficulty, to replace the old one which could
not survive the changes brought by the Revolution. Professional macheteros,
canecutters who are prisoners of sugar, are an extinct species: for them too, theRevolution meant freedom to choose other less grueling work, and for theirchildren the chance of scholarships to study in the cities. Unavoidably, thesugar workers' liberation has resulted in serious upsets in the economy. In the1970 harvest Cuba had to use three times as many workers as before, mainly
volunteers or soldiers or people from different jobs, thereby harming otherrural and urban activities--the harvesting of other products, the work-rhythm inthe factories. Here one must bear in mind that in a socialist society, unlike in acapitalist one, workers are not motivated by fear of unemployment or byavarice. Other drives--solidarity, collective responsibility, awareness of theduties and rights that move a man beyond selfishness--must be brought intoplay. And the conscience of a whole people is not changed in a moment. When
the Revolution came to power most Cubans, according to Fidel Castro, were
not even anti-imperialists.
Cubans became radicalized along with their Revolution as challenges andresponses, blows and counter-blows between Havana and Washington
followed one upon the other, and as the Revolution proceeded to turn its
promises of social justice into solid facts, It built 170 new

76

hospitals and as many polyclinics, and made medical care free. It multiplied bythree the number of students enrolled at all levels and also made education free;
more than 300,000 children and youths benefit today from scholarships, andboarding schools and kindergartens have proliferated. A large part of the
population pays no rent and no one pays for water, light, public telephones,
funerals, or sporting events. Spending on social services increased five times ina few years. But now that everyone has education and shoes, necessities
multiply geometrically and production can only grow arithmetically. Cuba has
been compelled to escalate its exports, and sugar continues to be its major
resource. Many products are in short supply: In 1970, fruit and refrigeratorsand clothing. Queues, part of the daily routine, are not solely due todisorganized distribution. The essential cause of scarcity is the new abundanceof consumers: the country now belongs to everyone, consumption is by all, notjust a few. Thus it is scarcity of an opposite kind to that in other Latin
American countries. The Revolution is indeed living through the hard times oftransition and sacrifice. The Cubans themselves have learned that socialism isbuilt with clenched teeth and that revolution is no evening stroll. But after all,if the future came on a platter, it would not be of this world.
The Revolution is forced to sleep with its eyes open, and in economic
terms this also costs dearly. Constantly harassed by invasion and sabotage, itdoes not fall because--strange dictatorship!--it is defended by a people in arms.
The expropriated expropriators do not give up. The brigade that landed at the
Bay of Pigs in April 1961 was not only made up of former Batista soldiers andpolicemen, but also of the previous owners of more than 370,000 hectares ofland, nearly 10,000 buildings, seventy factories, ten sugarmills, three banks,
five mines, and twelve cabarets. Guatemalan dictator Miguel Ydigoras Fuentes
provided training camps for the expedition in return, as he later admitted, for
U.S. promises of cash (which was never paid) and an increase in the
Guatemalan sugar quota in the U.S. market.
In 1965 another sugar country, the Dominican Republic, was invaded, thistime--according to their commander, General Bruce Palmer--by 40,000 U.S.
Marines ready "to stay indefinitely in this country in view of the reigningconfusion." The vertical drop in sugar prices had been a factor in setting off
popular indignation; the people rose against77

the military dictatorship and U.S. troops arrived promptly to restore order,
They left 4,000 dead in battles fought by patriots, body to body, in a crowded
Santo Domingo slum, between the Rio Ozama and the Caribbean.(After theinvasion, President Lyndon johnson's special envoy to the Dominican Republic was Ellsworth
Bunker, the chairman of the National Sugar Refining Company. National Sugar's interests in thissmall country were safeguarded under Bunker's attentive eye: the occupation troops withdrew,leaving in power, after very democratic elections, Joaquin Balaguer, Trujillo's right arm
throughout his brutal dictatorship. The Dominicans had fought in the streets and on rooftops,
with sticks, machetes, and guns, against the foreign forces' tanks, bazookas, and helicopters forthe return to power of constitutionally elected President Juan Bosch, who had been overthrownby a military coup. History plays derisively prophetic games. On the day when Bosch began his
brief presidency, after thirty years of Trujillo tyranny, Lyndon Johnson, then vice-president,
brought his government's official gift to Santo Domingo: it was an ambulance.)

The

Organization of American States--which has the memory of a donkey, neverforgetting where it eats--blessed the invasion and supplied it with new forces.
The germ of another Cuba had to be exterminated.

FROM THE SACRIFICE OF THE SLAVES IN THE CARIBBEAN
WERE BORN JAMES WATT'S STEAM ENGINE ANDGEORGE WASHINGTON'S CANNONChe Guevara said that underdevelopment was a dwarf with an enormous head
and a bloated stomach: its spindly legs and stubby arms do not fit with the restof the body. In yesterday's Havana fashionable avenues glittered and puttedwith Cadillacs, and luscious starlets undulated to the rhythms of Lecuona's
famous band in the world's largest cabaret; meanwhile in the Cuban
countryside only one in every ten peasants ever drank milk, barely 4 percent
ate meat, and the wages of three out of five (according to the National
Economic Council) were three to four times lower than the cost of living.
But sugar did not only produce dwarfs. It also produced giants, or at least
contributed generously to their growth. The sugar of tropical Latin America
gave powerful impetus to the accumulation of capital for English, French,
Dutch, and U.S. industrial development, while at the same time mutilating the
economy of Northeast Brazil and the Caribbean islands and consummating thehistoric ruin of Africa. The fulcrum

78

of the triangular trade--manufactures, slaves, sugar--between Europe, Africa,and America was the traffic in slaves for sugar plantations. As Auguste Cochin
wrote: "The story of a grain of sugar is a whole lesson in political economy, in
politics, and also in morality."West African tribes fought among themselves to add prisoners of war totheir reserves of slaves. They were in Portugal's colonial orbit, but when theslave trade boomed the Portuguese, lacking ships and industrial articles to offer
in exchange, became mere middlemen between African potentates and slavercaptains of other nations. The English were the champions in buying andselling human flesh until it ceased to be convenient for them. The Dutch,
however, had longer experience in the business--Charles V had given them amonopoly in shipping slaves to the Americas before England obtained the rightto introduce slaves into the colonies. As for France, the "Sun King" Louis XIV
shared with the king of Spain half the profits of the Guinea Company, formed
in 1701 to facilitate the slave trade to the Americas; and his finance minister
Jean-Baptiste Colbert, the architect of French industrialization, had goodreason to describe the slave traffic as "recommended for the progress of thenational merchant marine."10
Adam Smith said that one of the principal effects of the discovery ofAmerica "has been to raise the mercantile system to a degree of splendour andglory which it could never otherwise have attained to."11 According to Sergio
Bagu, the most potent force for the accumulation of mercantile capital was
slavery in the Americas; and this capital in turn became "the foundation stone
on which the giant industrial capital of modern times was built." The New
World revival of Greco-Roman slavery had miraculous qualities: it multiplied
the ships, factories, railroads, and banks of countries that were not originallyinvolved in Africa or--with the exception of the United States--in the fate of theslaves crossing the Atlantic. From the dawn of the sixteenth to the dusk of thenineteenth centuries, many millions of Africans--no one knows how manycrossed the ocean; what is known is that they greatly exceeded the number ofwhite emigrants from Europe, although many fewer survived. From the
Potomac to the Rio de la Plata, slaves built the houses of their masters, felled
the forests, cut and milled the sugarcane, planted the cotton, cultivated thecacao, harvested the coffee and tobacco, and were entombed in the mines. How
many Hiroshimas did these successive

79

exterminations add up to? As an English planter in Jamaica remarked, "It'seasier to buy niggers than to breed them." Caio Prado estimates that up to thebeginning of the nineteenth century between 5 and 6 million Africans arrived
in Brazil alone, and that Cuba was then as big a slave market as the whole
Western hemisphere had been before.
Back in 1562 Captain John Hawkins had smuggled 300 blacks out of
Portuguese Guinea. Queen Elizabeth was furious: "It was detestable and would
call down vengeance from heaven upon the undertakers," she cried.12 But
Hawkins told her that in exchange for the slaves he had a cargo of sugar, hides,
pearls, and ginger in the Caribbean, and she forgave the pirate and became hisbusiness partner. A century later the Duke of York was branding the initials"DY" on the left buttock or breast of each of the 3,000 blacks his concern
annually took to the "sugar islands." The Royal African Company, whose
shareholders included Charles II, paid 300 percent in dividends, although only
46,000 of the 70,000 slaves it shipped between 1680 and 1688 survived thecrossing. On the voyage many Africans died of epidemics or malnutrition;others committed suicide by refusing to cat, hanging themselves by their chains,or throwing themselves into a sea bristling with sharks' fins.
Slowly but surely England broke Holland's slave-trade hegemony. The
South Sea Company was the chief beneficiary of the asiento, the royalmonopoly on the slave trade which Spain had conceded to England, andleading figures in British politics and finance were connected with thecompany. Its business topped all others, agitated the London stock exchange,and set off reckless speculation. Traffic in slaves raised the shipping center ofBristol to the rank of Britain's second city and made Liverpool the world's
greatest port. Ships sailed with cargoes of duly blessed weapons, cloth, gin andrum, baubles and colored glass, the means of payment for Africa's humanmerchandise and for the sugar, cotton, coffee, and cacao of American colonial
plantations. The British established their reign over the seas. At the end of theeighteenth century, Africa and the Caribbean were providing work for 180,000
textile workers in Manchester; Sheffield produced the knives, Birmingham
produced 150,000 muskets a year. African chiefs received the products ofBritish industry and delivered the human cargoes to slaver captains. This
provided them with new weapons and plenty of liquor to embark on the next
manhunts in the villages. They also supplied ivory, wax, and80

palm oil. Many of the slaves came from forest areas and had never seen the sea;
they mistook its roaring for that of some underwater beast waiting to devour
them, or (according to a slavetrader of the period) believed, not entirely
without reason, that "they are carried like sheep to the slaughter and that
Europeans are fond of their flesh… ”13 The cat-o’-nine-tails could do little tocontain the Africans' desperate suicides.
The "bundles" who survived the hunger and disease, the weeks of lying
crammed together below decks, were exhibited in rags--mere skin and bones-in the public square after being paraded through colonial streets to the sound of
bagpipes. Those arriving too exhausted could be fattened up in the slave
barracks before showing them to buyers; the sick ones were left to die on thepiers. Slaves were sold for cash or on three-year credit. The ships sailed backto Liverpool carrying various tropical products: in the early eighteenth century
three-quarters of the cotton used by the British textile industry came from the
Antilles, although Georgia and Louisiana later became its chief sources; by
mid-century there were 120 sugar refineries in Britain.
At that time an Englishman could live on ₤6 a year; Liverpool slave
merchants garnered more than ₤1.1 million a year in the Caribbean alone, notincluding their fat profits from the additional trade. Ten big concerns
controlled two-thirds of the traffic. Liverpool installed a new system of docks;
more, longer, and heavier ships were constantly being built. Silversmiths
offered "silver padlocks and collars for niggers and dogs," elegant ladies
paraded about with monkeys in embroidered jackets and child slaves in turbans
and ballooning silk trousers. An economist described the slave trade as thebasic and fundamental principle of all the rest, like the mainspring of themachine which sets every cogwheel in motion." Banks proliferated in
Liverpool, Manchester, Bristol, London, and Glasgow; Lloyds piled up profits
insuring slaves, ships, and plantations. From the beginning, London Gazetteannouncements advised that fugitive slaves should be returned to Lloyds.
Slave-trade profits financed the building of Britain's Great Western railway andof industries such as the Welsh slate factories. Capital accumulated in thetriangular trade made possible the invention of the steam engine: James Wattwas subsidized by businessmen who had made their fortunes in that trade.1481Early in the nineteenth century, Britain became the leader in the antislavery campaign. British industry needed international markets with morepurchasing power, which led it to preach the gospel of wages. But the
introduction of wages in Britain's Caribbean colonies gave renewed advantage
to Brazilian sugar, with its comparatively lower costs from using slave labor.
(The first law expressly banning slavery in Brazil was not Brazilian, It was--and not by accident-English. The British parliament voted it on August 8, 1845.) The British fleet now

attacked the slavers, but the traffic to supply Cuba and Brazil continued
growing. Before a British ship could reach a pirate ship, the slaves were throwninto the sea; all that remained on board were the smell and the laughing captainon deck. Repression of the traffic raised prices and further pyramided profits.
By the middle of the century slavers were selling vigorous slaves, whom they
had got for an old rifle, for more than $600 a head in Cuba.
The little Caribbean islands had been far more important to Britain than its
colonies to the north: Barbados, Jamaica, and Monserrat were forbidden to
make so much as a needle or a horseshoe for themselves. But the situation wasquite different in New England, and this facilitated both its economic
development and its political independence. In New England the slave tradegave birth to a large part of the capital that produced the U.S. industrial
revolution. In the middle of the eighteenth century Northern slave ships carriedbarrels of rum to Africa from Boston, Newport, and Providence; theyexchanged the rum for slaves, sold the slaves in the Caribbean, and from there
brought molasses to Massachusetts, where it was distilled and converted into
rum, completing the cycle. The best Antillean rum, "West Indian Rum," wasnot even made in the Antilles. With capital obtained from this trade in slaves,the Brown brothers of Providence installed the foundry that provided George
Washington with guns for the American Revolution. Caribbean sugar
plantations, condemned as they were to cane monoculture, were not the
dynamic center of development for the "thirteen colonies" solely because of theimpetus the slave trade gave to naval industry and to the New Englanddistilleries; they also provided a large market for the export of foodstuffs,
timber, and sugarmill implements, lending economic viability to the farm andbudding factory economy of the North Atlantic. Ships built in the colonists'
yards carried to the Caribbean

82

massive cargoes of fresh and smoked fish, grain, beans, flour, fats, cheese,onions, horses and oxen, candies and soap, textiles, pine, oak, and cedar forsugar boxes (Cuba had the first steam saw in Hispanic America but no timber
to cut), and barrel staves, hoops, rings, and nails.
The whole process was a pumping of blood from one set of veins toanother: the development of the development of some, the underdevelopmentof others.

THE RAINBOW IS THE ROAD BACK TO GUINEA
From Santo Domingo, a lawyer named Alonso Zuazo reported to Charles V in
1518: "Fears of a possible rising by the blacks are groundless; there are widows
living tranquilly with eight hundred slaves in Portuguese islands; it is all amatter of how they are handled. I found on arrival here some cunning niggers,
and others who had taken to the Woods; I thrashed some, cut off the ears ofothers, and there has been no more trouble." Four years later the first slave
rising in the Americas broke out: the slaves of Diego Columbus, son of the
discoverer, started the revolt and ended on gallows lining the sugarmill lanes.
Other rebellions followed, in Santo Domingo and then in all the Caribbean
sugar islands. A couple of centuries after the Diego Columbus uprising, at theother end of the island, runaway slaves fled to the Haitian mountains and there
reconstructed African life, growing their food, worshiping their gods,
practicing their ancient customs. For the people of Haiti the rainbow still
symbolizes the road back to Guinea--in a ship with a white sail. In Dutch
Guiana (Surinam) communities of Djukas, descendants of slaves who fled into
the forest, have survived for three centuries across the Courantyne River. In
these villages "obeah shrines like those in Guinea can be seen, ceremonial
dances are performed that could take place in Ghana, and the people talk withdrums, which are made like Ashanti drums."15 The first big revolt in Guiana
occurred one hundred years after the flight of the Djukas: the Dutch recovered
the plantations and burned the slave leaders in slow fires, but in Brazil a little
before the Djuka exodus, fugitive slaves had organized the black kingdom ofPalmares in the Northeast, and throughout the eighteenth century had
successfully resisted dozens of military expeditions sent to83

suppress them, first by the Dutch and then by the Portuguese. Assaults bythousands of soldiers were fruitless against the guerrilla tactics which, until
1693, made the refuge invulnerable. The independent kingdom of Palmares--acall to rebellion, a banner of liberty--was organized as a state, similar to themany that existed in Africa in the seventeenth century. It extended from near
Cape Santo Agostinho in Pernambuco to the northern Rio Sao Francisco zone
in Alagoas, an area one-third the size of Portugal and surrounded by dense,
wild forests. The ruling chief was elected from among the wisest and mostskillful: the man, of greatest prestige and success in war or command. Whenthe sugar plantation was at its height of omnipotence, Palmares was the one
corner of Brazil where agriculture was being diversified. Guided by their own
experience or that of their ancestors in African savannas and forests, the blacks
raised corn, sweet potatoes, beans, manioc, bananas, and other foods. The
colonial troops, assigned to bring back the men who had crossed the sea inchains and deserted the plantations, believed--and not without reason--that thedestruction of these crops was their main purpose.
The abundance of food in Palmares contrasted with its lack in coastal areasat the zenith of the sugar prosperity. The slaves who had won liberty defended
it ably and bravely because they shared its fruits: land in the black state washeld in common and no money circulated. No slave rebellion in world history
lasted as long as that in Palmares: Spartacus's rebellion, which shook the mostimportant slave system of ancient times, lasted eighteen months.16 For the final
onslaught the Portuguese Crown mobilized the biggest army seen in Brazil
until the colony became independent much later. No fewer than 10,000 people
defended the last bastion of Palmares; the survivors were beheaded, thrownfrom precipices, or sold to merchants in Rio de Janeiro and Buenos Aires. Twoyears later the chief Zumbi, whom the slaves believed to be immortal, wasbetrayed and captured. He was surrounded in the forest and his head cut off.
And rebellions continued. Not long afterward Captain Bartolomeu Bueno do
Prado returned from the Rio das Mortes with trophies of victory over anotherslave rising. He brought 3,900 pairs of ears in his horses' saddlebags.
In Cuba, too, there were risings. Some slaves committed mass suicide,mocking their masters, as Fernando Ortiz has put it, "with84their eternal strikes, their unending flight to the other world." They thought
they would thus be brought back to life, body and soul, in Africa. By
mutilating the corpses so they would return to life castrated, maimed, or
decapitated, the masters dissuaded many from killing themselves. Around 1870,
according to a recent account by a Las Villas 100-year-old slave who took to
the woods as a youth, blacks in Cuba no longer chose suicide. A magic chain
gave them power and they "flew through the sky and returned to their own
land"; or they lost themselves in the mountains because "everyone wearied oflife, and the ones who got used to it were broken in spirit. Life in the forest was
healthier."17
The gods of Africa remained alive for the slaves, as did the nostalgianourished legends and myths of their lost fatherlands. In their ceremonies,
dances, and incantations the blacks clearly expressed the need to affirm acultural identity that Christianity denied, but the Church's material stake in the
exploitation they suffered must have been a factor also. In the early eighteenth
century, while slaves convicted of crimes in British islands were crushed
between cane-milling cylinders, and in French islands were burned alive or
broken on the wheel, the Jesuit Antonil was offering Brazilian sugarmill
ownerskindlyrecommendations

for

the

avoidanceofexcesses:"Administrators should under no circumstances be permitted to administerkicks in the belly to pregnant women nor beatings to the slaves, since anger
may prevail over restraint and an efficient and valuable slave may be injured in
the head and lost."18 In Cuba, overseers applied their thongs of hide or hemp to
the backs of pregnant females who had erred, but not before stretching themout with their bellies over a hole to avoid damaging "the little creature"; priests,
who received 5 percent of sugar production as a tithe, gave Christianabsolution; the overseer administered punishment like Jesus Christ castigating
sinners. The apostolic missionary Juan Perpina y Pibernat published his
sermons to the blacks: "My poor little ones! Be not afraid because as slaves
you have so many burdens to bear! Your body may be enslaved, but your soulremains free to fly one day to the happy mansions of the chosen." 19 (One Holy
Thursday the Count of Casa Bayona decided to humiliate himself before his slaves. Inflamedwith Christian fervor, he washed the feet of twelve blacks and invited them to dine with him at
his table. It was in truth the last supper. Next day the slaves rebelled and set fire to the sugarmill.
Their heads were stuck on 12 lances in the middle of the estate.)

85

The god of the pariahs is not always the same as the god of the system thatmakes them pariahs. Although the Catholic religion officially embraces 94
percent of the population of Brazil, black Brazilians today maintain their
African traditions and keep alive their religious faith, often camouflaged
behind Christian saints; cults of African origin are widely practiced by the
oppressed, whatever their skin color. The same is true in the Antilles. The
voodoo gods in Haiti, Cuba's bembe, and Brazil's umbanda and quimbanda are
more or less the same, despite the greater or smaller transfiguration that rites
and original gods have undergone through American naturalization. In the
Caribbean and in Bahia the ceremonial chants are intoned in Nago, Yoruba,
Congo, and other African languages. In the big city suburbs of southern Brazil,on the other hand, Portuguese predominates. But from the West African coast
the gods of good and evil have endured throughout the centuries to become theavenging phantoms of the disinherited, the humiliated poor who chant in theslums of Rio de Janeiro:
Power of Bahia,
Power of Africa,
Divine power,
Come to us,
Come and help us.

PEASANTS FOR SALE
Brazil abolished slavery in 1 888, but it did not abolish the latifundio, and in
the same year an eyewitness wrote from Ceara, in the Northeast: "The humancattle market was open as long as there was hunger, and there was no lack ofbuyers. Rare was the steamer in which large numbers of Ceara people were notshipped out."20 Half a million Northeasterners emigrated to Amazonia, drawn
by the rubber mirage, until the turn of the century; after that the exodus
continued as periodic droughts devastated the sertao and "forest zone" sugar
latifundios expanded in successive waves, In 1900, 40,000 drought victims left
Ceara. They took86

the road that everyone took at the time, north to the jungle. Later the directionchanged: in our day Northeasterners emigrate to the center and south of Brazil.
The drought of 1970 drove hungry multitudes into the cities of the Northeast.
They plundered trains and stores, implored the saints to send rain, and clogged
the roads. "Pernambuco state police," said a wire service cable in April 1970,"last Sunday arrested in the municipality of Belem do Sao Francisco 210
peasants who were to be sold for $18 a head to rural landowners in Minas
Gerais state."21(In 1938 the pilgrimage of a cowhand over the parched roads of the sertao
inspired one of the best novels in Brazilian literature. On cattle ranches in the interior,
subordinated to coastal sugarmills, there has been no let-up in the scourge of drought and theeffects continue the same. The world of Graciliano Ramos's Barren Lives--in which the parrot
imitates the dog's bark because his masters have almost stopped using the human voice—remains intact.) The peasants came from Paraiba and Rio Grande do Norte, thetwo states most punished by drought. In June, statements by the federal police
chief came over the teletype: no effective means of ending the slave traffic
were available to him, and although ten investigations had been launched inrecent months, the sale of Northeastern workers to rich landowners in otherareas continues.

THE RUBBER CYCLE: CARUSO INAUGURATES A JUNGLE
THEATER
Some authors estimate that in the period of the rise of rubber no less than half amillion Northeasterners succumbed to epidemics, malaria, tuberculosis, orberiberi. Says one: "This grim charnel house was the price of the rubber
industry."22 Peasants with no nutritional reserves went from the dry lands to theswampy jungle, where fevers lay in wait for them. Packed into ships' holds forthe long journey, many anticlpated their fate by dying en route. Others did noteven reach the ships. In 1878, 120,000 of Ceara's 800,000 population headed
for the Amazon and less than half got there; the rest collapsed from hunger or
disease on the sertao trails or in the suburbs of Fortaleza. A year earlier one of
the Northeast's seven greatest droughts of the past century had begun.
Not only fevers awaited them in the jungle, but a work regime very similar
to slavery. Guardias rurales posted along the riverbanks shot at fugitives. The
pay was in kind--dried meat, manioc flour, lumps of87

unrefined sugar, aguardiente--until the rubber worker paid off his debts, amiracle that rarely occurred. Employers had an agreement among themselves
not to give jobs to workers who were in debt to other employers. Debts piled
on debts. To the cost of transport from the Northeast were added the debts forwork tools, machetes, knives, and eating bowls; and since the worker
consumed food--and above all liquor, never a scarce commodity in the rubber
forests--the longer he worked the higher his accumulated debt. The illiterateNortheasterners were at the mercy of the administrators' conjuring tricks withthe ledgers.
In 1770 J.B. Priestley had observed that rubber would erase pencil marks
on paper, and seventy years later Charles Goodyear and the Englishman
Thomas Hancock simultaneously discovered the process of vulcanizing rubber,making it flexible and impervious to temperature changes. By 1850 the wheelsof vehicles were being sheathed in rubber. At the end of the century theautomobile industry was born in the United States and Europe, and with it theconsumption of great quantities of pneumatic tires. World demand for rubbersoared. The rubber-tree was bringing Brazil a tenth of its export income in1890, and by 1910 this had risen to 40 percent, making rubber sales almost
equal to those of coffee, although coffee was then at the height of its prosperity.
Most of the rubber production came from the Acre area, which Brazil had
wrested from Bolivia after a lightning military campaign.( Some 75,000 square
miles were lopped off Bolivia. In 1902 it got a £2 million indemnity and a railway line giving it
access to the Madeira and Amazon rivers.)

With Acre in its possession, Brazil had almost all of the world's rubber
reserves. Prices were at their peak on the international market and it seemedthat good times had come to stay. The rubber workers, of course, did not sharein this, although it was they who went out from their huts each dawn,
receptacles strapped on their backs, to bleed the giant Hevea brasiliensis trees.
They made incisions in the trunks and in thick branches and the whitish, sticky
latex dripped from the wounds, filling the cups in a couple of hours. At nightthe flat slabs of rubber which had accumulated in the administration center
were cooked. The sour and revolting smell of rubber impregnated the city of
Manaus, world capital of the rubber business. Manaus had 5,000 inhabitants in
1849; it had 70,000 in little more than half a century. There rubber magnates88built their extravagantly designed and sumptuously decorated mansions with
precious Oriental woods, Portuguese majolicas, columns of Carrara marble,
and furniture by French master cabinetmakers. The nouveau riche of the jungle
had the most costly foods brought from Rio de Janeiro; Europe's top couturiers
cut their dresses and outfits; they sent their sons to study at British schools. The
Amazonas theater, a baroque monument in triumphantly poor taste, is the chiefsymbol of that vertigo of wealth at the beginning of our century. Caruso
navigated the river through the jungle to sing to Manaus's inhabitants for a
kingly fee on opening night; Pavlova, who was supposed to dance there, could
not get beyond Belem but sent her apologies.
In 1913 sudden disaster hit Brazilian rubber. The world price fell to aquarter of the two shillings it had been three years earlier. The Far East had
only exported four tons of rubber in 1900; in 1914 Ceylonese and Malay
plantations poured over 70,000 tons onto the world market, and within five
years their exports approached the 400,000-ton mark. By 1919 Brazil, which
had had a virtual monopoly, was supplying only one-eighth of worldconsumption. A half-century later Brazil is buying more than half its rubberfrom abroad,
What happened? Back in 1873 Henry Wickham, an Englishman who
owned rubber forests on the Rio Tapajoz and was known for his botanicalmanias, had sent sketches and leaves of the rubber tree to the director of Kew
Gardens in London. He got an order for a quantity of seeds from the yellow
fruit of Hevea brasiliensis. Since Brazil severely punished any leakage of seeds,
he had to smuggle them out, which was not easy: ships were meticulously
searched by the authorities. Then, as if under a magic spell, an Inman Line ship
penetrated 1,200 miles further than usual into the interior of Brazil. On its
return, Henry Wickham was aboard as a member of the crew. He had selected
the best seeds after putting the fruit out to dry in a native village, and had put
them in a locked cabin, wrapped in banana leaves and suspended on strings sothat the ship's rats could not get at them. The rest of the ship was empty. In theport of Belem, at the river's mouth, Wickham invited the authorities to a grandbanquet. The Englishman's eccentricities were notorious--all Amazonia knewthat he collected orchids--and he explained that on order from the English kinghe was carrying a collection of rare orchid bulbs to Kew Gardens. As the plants
were very delicate

89he had them in a hermetically sealed cabin at a special temperature: if it was
opened the flowers would be ruined. Thus the seeds reached the Liverpool
docks unscathed. Forty years later the British invaded the world market with
Malayan rubber. The Asian plantations, skillfully developed from shootsgrown at Kew Gardens, easily supplanted Brazilian production.
Amazonian prosperity vanished in a puff of smoke. The jungle closed backupon itself. Fortune hunters left for other parts and the luxurious campdisintegrated. The only people remaining, surviving as best they could, were
the workers who had been brought from afar to make fortunes for others--andnot even for Brazilians. For Brazil had merely responded to the siren song ofworld demand for raw materials, without itself participating in the real businessof rubber--finance, trade, industrialization, and distribution. The siren fell muteuntil World War II gave a new but fleeting push to Amazonian rubber. The
Allied powers desperately searched for supplies when the Japanese occupied
Malaya: the Peruvian jungle was ransacked and the so-called Battle of Rubber
once again mobilized Brazil's Northeastern peasants.( Early in our century, rubberforested mountains in Peru had held out the promise of a new El Dorado. In 1908 Francisco
Garcia Calderon wrote in El Peru contempordneo that rubber was the great wealth of the future.
In his novel The Green House, Mario Vargas Llosa reconstructs the feverish atmosphere in
Iquitos and in the jungle, where adventurers robbed the Indians and each other. Nature had
leprosy and other weapons with which to take its vengeance.) This time, according to an

accusation made in the Congress when the "battle" ended, the victims of
disease and hunger, whose bodies remained to rot among the rubber trees,
numbered some 50,000.
The rubber boom and the rise of coffee growing involved big levies ofNortheastern workers. But the government also uses its bottomless reserve ofcheap labor for public works. The naked men who built the city of Brasilia
almost overnight were Northeasterners transported like cattle to the wildernesssite. Today this most modern of the world's cities is surrounded by a great beltof poverty: when they finished their work, these people--known as candangos-were dumped in outlying hovels. There, always available for any task, 300,000
Northeasterners live off the splendid capital's leavings.
The Northeasterners' slave labor is now constructing the great transAmazonia highway that will cut Brazil in two, penetrating the jungle up

90

to the Bolivian border. The "march to the west," as the plan is called, also
involves an agricultural colonization project to extend "the frontiers ofcivilization"; each peasant will get ten hectares of land if he survives thetropical fevers. The Northeast contains 6 million landless peasants while
15,000 people own half of all the land. Agrarian reform is not carried out in thealready occupied areas, where the latifundistas' property rights remain sacred,but in the jungle. Thus a road for the latifundio's expansion into new territory is
being opened up by its victims, the flagelado, or "tormented ones," of theNortheast. Without capital or implements, what is the use of ten hectares one to
two thousand miles from consumer centers? One must conclude that the
government's real alms are quite different: to provide labor for the U.S.
latifundistas who have bought or appropriated half the lands north of the Rio
Negro, and also for U.S. Steel, which received Amazonia's rich iron andmanganese deposits from General Garrastazu Medici.( In October 1970 the Bishop
of Para denounced to the president of Brazil the brutal exploitation of Northeastern workers bycontractors for the trans-Amazonia highway. The government calls it "the work of the century.")

CACAO PLANTERS LIT THEIR CIGARETTESWITH 500,000-REIS BILLS
For a long time Venezuela was identified with cacao, a native South American
plant. Venezuelans, as Domingo Rangel says, have been made to sell cacao anddistribute foreign trinkets in their own lands.23 The cacao oligarchs made up a
"Holy Trinity of backwardness," along with moneylenders and traders. Cacao
coexisted with indigo, sugar, tobacco, and a few mines, and cattle-raising on
the plains, but the people correctly baptized as "Gran Cacao" the slave-owning
oligarchy in Caracas, which supplied cacao to Mexico's mining oligarchy andto the Spanish metropolis, thus using black labor to enrich itself. A coffee era
began in Venezuela in 1873; coffee, like cacao, needs sloping lands or warm
valleys. Despite this competition, cacao continued to expand, invading thehumid lands of Carupano. Venezuela remained an agricultural country
condemned to the cyclical rise and fall of coffee and cacao prices;91the two products created the capital that enabled landlords, merchants, andmoneylenders to live as wasteful parasites.
Then, in 1922, the country suddenly became a fountain of oil, and oil has
reigned without interruption ever since. The black gold finally gushed forth,justifying, four centuries late, the fantasies of the Spanish conquistadors:
searching in vain for the king who bathed in gold, they had become madenough to confuse a little Maracaibo village with Venice and the fetid coast of
Paria with earthly paradise.
The last decades of the nineteenth century marked the rise of European and
U.S. gluttony for chocolate. The industry's progress lent great impetus to
Brazilian cacao and to production in the old Venezuelan and Ecuadorean
plantations. Cacao made its entrance onto the Brazilian economic stage at thesame time as rubber, and like rubber it gave work to Northeastern peasants,
Sao Salvador, now Bahia, on Todos os Santos bay, once capital of Brazil andof sugar and one of Latin America's most important cities, revived as the cacao
capital. In our time latifundios south of Bahia--from the Reconcavo region to
the state of Espirito Santo, between the littoral lowlands and the mountainchain along the coast--still supply raw material for a good part of the world's
chocolate consumption. Like sugarcane, cacao means monoculture, the burningof forests, the dictatorship of international prices, and perpetual penury for theworkers. The plantation owners, who live on the Rio de Janeiro beaches andare more businessmen than farmers, do not permit a single inch of land to be
devoted to other crops. Their managers normally pay wages in kind--jerked
beef, flour, beans; when paid in cash, the peasant receives the equivalent of aliter of beer for a whole day's work, and must work a day and a half to buy a
can of powdered milk.
For some time Brazil was favored in the international market, but from theoutset Africa offered serious competition. By the 1920s the Gold Coast (nowGhana) had won the top position as a world cacao supplier: the British had
developed cacao plantations in their colony on a large scale with modern
methods. Brazil fell back to second place, and years later to third. But there
was more than one period when no one would have believed that the fertile
lands of southern Bahia were destined for mediocrity. Unused throughout thecolonial period, the soil yielded prodigally: peons split the pods with theirknives, collected the beans, and loaded them into donkey-drawn carts to betaken to the92grinders; it became necessary to fell ever more forests, to open up newclearings and conquer new territory with machete and gun. The peons knew
nothing of prices or markets. They did not even know who ruled Brazil-up
until not long ago one could still meet hacienda workers who were convincedthat King Pedro II was still on the throne. The cacao masters rubbed theirhands together: they knew, or thought they knew. Chocolate consumption grew,
and with it prices and profits. The port of Ilheus, from which almost all the
cacao was shipped, became known as "Queen of the South," and although it islanguishing today, the small but massive palaces which the hacendados
furnished with the greatest luxury and the worst taste may still be seen there.
Jorge Amado wrote several novels about it. He recreates one of the high-priceperiods thus: "Ilheus and the cacao zone swam in gold, bathed in champagne,
slept with French ladies from Rio de Janeiro. At the Trianon, the city's, mostchic cabaret, Colonel Maneca Dantas lit cigarettes with 500,000-reis bills,
repeating the gesture of all the country's rich fazendeiros during the previous
rises in coffee, rubber, cotton, and sugar prices."(In Brazil the title of "colonel" isconferred with the greatest ease on old-established latifundistas and, by extension, on allimportant persons. The quoted passage comes from Jorge Amado's novel Sao Jorge dos Ilheus(1946). From another novel, Cacao (1935): "Not even the children touched the cacao fruit. They
were afraid of those yellow berries, so sweet on the inside, which enslaved them to this life ofbreadfruit and dried meat." For, after all, "cacao was the great senhor feared even by thecolonel." In still another novel, Gabriela, Clove and Cinnamon (1959), a character speaks ofIlheus in 1925, pointing a categorical finger: "In the north of the country there exists no more
rapidly progressing city." Ilheus today is not even the shadow of what it was.) With the risein price, production increased; then prices fell. Conditions became more andmore unstable and land kept changing hands. The era of "beggar millionaires"
began, as plantation pioneers yielded to exporters, who took over the lands forpayment of debts.
In barely three years, from 1959 to 1961--to give but one example theinternational price of the Brazilian cacao bean fell by one third. Since then thetendency to rise has opened the door of hope a crack, but the United Nations
Economic Commission for Latin America (ECLA) predicts a short life for the
upward curve. (Referring to the improvements in cacao and coffee prices, ECLA says they
are relatively transitory and result largely from occasional harvest setbacks.24) To keep theirchocolate cheap, the big cacao consumers--the United States, Britain, West
Germany,93Holland, France--stimulate competition between African cacao and cacao from
Brazil and Ecuador. Controlling prices as they do, these nations bring on
periods of depression which put cacao workers back on the road. The
unemployed look for trees to sleep under and green bananas to fool theirstomachs: one product they certainly don't eat is the fine chocolate that Brazil
actually imports from France and Switzerland. Chocolate costs more and more;cacao less and less. Between 1950 and 1960 Ecuador's cacao sales rose morethan 30 percent in volume but only 15 percent in value. The remaining 15
percent was a gift from Ecuador to those rich countries which, in the same
period, sent it their industrial products at escalating prices. Ecuador's economy
depends on the sale of bananas, coffee, and cacao, three food products highly
subject to price fluctuations. According to official data, seven of every ten
Ecuadoreans suffer from basic malnutrition, and the country has one of thehighest death rates in the world.

CHEAP HANDS FOR COTTON
Brazil is the fourth largest cotton-producing country, Mexico the fifth. Morethan one-fifth of all cotton consumed by the world's textile industries comesfrom Latin America. At the end of the eighteenth century, cotton had become
the most important industrial raw material in Europe; England multiplied its
purchases of the fiber by five in thirty years. The spinning frame invented by
Arkwright--at the same time that Watt was patenting his steam engine--and
Cartwright's later development of the mechanical loom gave textile
manufacturing a decisive push and provided the cotton plant with eager
overseas markets. The cotton euphoria brusquely awakened the port of Sao
Luiz do Maranhao from a long tropical siesta previously interrupted only by
the arrival of a couple of ships a year. Now black slaves streamed onto thenorth Brazilian plantations and some 200 ships a year, carrying a million
pounds of raw cotton, sailed from Sao Luiz. The economic crisis in mining at
the beginning of the nineteenth century gave cotton an abundance of slavelabor; with the exhaustion of the gold and diamond supply in the south, Brazil
seemed to revive in the north. The port flourished, producing enough poets tobecome known as the Athens of94

Brazil, but since no one in the Maranhao region bothered to raise food, hunger
entered along with prosperity. Sometimes there was only rice to eat. The story
ended as it had begun: suddenly. Large-scale cotton production on southern
United States plantations, which had better $oil and machines for cleaning andbaling, lowered prices by two-thirds and Brazil dropped out of the race.
Prosperity returned when the Civil War interrupted U.S. supplies, but did notlast long. Between 1934 and 1939, Brazilian cotton production grew
impressively, from 125,000 to more than 320,000 tons; then the United States
flooded the world market with its surpluses and prices slumped again.
The United States' agricultural surpluses are, as we know, the result of fat
subsidies to its producers; it spills the surpluses out across the world at
dumping prices as part of its foreign aid program. Cotton was Paraguay's chief
export until the ruinous competition of U.S. cotton displaced it in the market,
and Paraguayan production has fallen by 50 percent since 1952, (In the sameway Uruguay lost the Canadian market for its rice, and the wheat of Argentina,
once the world's granary, virtually vanished from international markets.) The
United States' dumping of cotton has not affected the imperial hold of a U.S,
firm, Anderson, Clayton & Co., over this product in Latin America, orinterfered with U.S. purchases, through the firm, of Mexican cotton for resale
to other countries.
World trade of Latin American cotton nevertheless remains lively thanks to
its extremely low production costs. Even reality-concealing official figures
betray the wretched standards of pay for actual work. In Brazil it is done either
for hunger wages or on a serf basis. In Guatemala, plantation owners boast of
paying 19 quetzals (about $10) a month, most of it in kind at prices they
themselves determine. Mexican migrant workers, moving from harvest to
harvest at $1.50 a day, suffer from underemployment and consequent undernutrition. The lot of Nicaraguan cotton workers is much worse, andSalvadorans, who supply cotton to Japanese textile industries, consume fewer
calories and proteins than the hungry peasants of India.
In Peru's economy cotton is the second agricultural source of foreign
currency. Jose Carlos Mariategui has noted how foreign capitalism, in its
constant search for land, labor, and markets, came to control Peru's export
crops by foreclosing the mortgages of debt-delinquent95

landowners. When General Velasco Alvarado's nationalist government came to
power in 1968, less than one-sixth of the land suitable for intensive cultivation
was being used, per capita income was fifteen times less than in the UnitedStates, and consumption of calories was among the world's lowest. But cotton
production, like sugar, was still dictated by the same non-Peruvian criteria
exposed by Mariategui. The best lands, those along the coast, belonged to U.S.
enterprises or to landlords who, like the Lima bourgeoisie, were only nationals
in a geographical sense. Five big concerns (two of which--Anderson, Clayton
and Grace--are based in the United States) dominated the export of cotton andsugar and also produced them in their own "agro-industrial complexes."
Coastal sugar and cotton plantations--supposedly centers of prosperity andprogress in contrast to sierra latifundios--paid hunger wages until the 1969agrarian reform expropriated them and handed them over to the workers ascooperatives. According to the Inter-American Committee for Agricultural
Development, the income for each member of a coastal worker's family
amounted to a mere $5 a month. 26
With thirty affliliates in Latin America, Anderson, Clayton has a monopoly:
it not only sells cotton, but its network controls the financing andindustrialization of the fiber and its derivatives, and also produces food on alarge scale. In Mexico, for example, while the company owns no land, it still
dominates cotton production and the 800,000 Mexicans who harvest the crop
are in fact at its mercy, It buys the excellent Mexican cotton at a very low price,
having previously extended credits to producers on the condition that they sell
to it at the price with which it opens the market. In addition to advancing
money, it supplies fertilizers, seeds, and insecticides; it reserves the right tosupervise the application of Fertilizer, the sowing, and the harvesting. It fixes
its own price for ginning the cotton, and uses the seeds in its oil, far, andmargarine factories. In recent years the firm, not content with dominating thecotton business, has even broken into the candy and chocolate fields, recently
buying the well-known firm Luxus.
Anderson, Clayton is also involved in coffee, and is the chief exporter ofBrazilian coffee. It first took an interest in that business in 1950, and three
years later it had dethroned the American Coffee Corporation. It is also the top
producer of Brazilian foodstuffs and is one of the country's thirty-five mostpowerful firms.

96

CHEAP HANDS FOR COFFEE
Some people rank coffee almost on a par with oil in its importance on theinternational market. At the beginning of the 1950s Latin America was
supplying four-fifths of the coffee the world consumed; since then thecompetition of "robust" African coffee, lower in quality but also in price, hasreduced Latin America's share. Nevertheless, one-sixth of the currency theregion obtains abroad now comes from coffee. Its price fluctuations affectfifteen countries south of the Rio Grande. Brazil is the world's top producer,
getting about half of its export income from coffee. El Salvador, Guatemala,Costa Pica, and Haiti also largely depend on coffee, and it accounts for twothirds of Colombia's foreign exchange.
Coffee brought inflation to Brazil. Between 1824 and 1854 the price of aman doubled. At that Figure, and with their prosperous days a thing of the past,neither the north's cotton producers nor the Northeast's sugar producers could
afford slaves. Brazil's center of gravity moved south. In addition to slave labor,
the coffee producers used European immigrants, who brought in 50 percent of
the harvests in a sharecropping setup that still prevails in Brazil's interior.
Today's tourists who drive through the woods for a swim at Tijuca beach areunaware that there, in the mountains surrounding Rio de Janeiro, big coffee
plantations existed more than a century ago. Flanking the Sierra, theseplantations spread toward the state of Sao Paulo in their endless pursuit of thehumus of virgin lands. Toward the end of the century coffee planters, by then
the new Brazilian social elite, sharpened their pencils and totted up theiraccounts: subsistence wages worked out cheaper than the purchase andmaintenance of increasingly scarce slaves. With the abolition of slavery in
1888, the combined forms of feudal serfdom and wage labor that still persist
were inaugurated. From then on an army of "free" farmhands would
accompany coffee on its travels. The Rio Paraiba became the country's richest
area, to be quickly ruined by a plant whose destructive form of cultivation left
forests razed, natural reserves exhausted, and general decadence in its wake.
Previously virgin lands were pitilessly eroded as the plunder-march of coffee
advanced, weakening the plants and making them vulnerable to diseases. The
coffee plantation invaded the broad purple plateau west of Sao Paulo,converting97

it into a "sea of coffee" with slightly less crude farming methods, andcontinued advancing westward. It reached the banks of the Parana where,
facing the Mato Grosso savannas, it turned south; in recent years it has again
moved west along the Paraguayan border.
Today Sao Paulo is the most developed state in Brazil, containing thecountry's industrial center, but its coffee plantations still teem with “vassal
inhabitants” who pay rent for their land with their and their children's toil. In
the prosperous post--World War I years the coffee growers, voracity virtuallyended the system under which plantation workers could grow food crops on
their own. Now they can only do it by paying rent in the form of wagelesslabor. The latifundista also uses contractual sharecroppers who are allowed toraise seasonal crops in return for planting still more coffee trees for his benefit.
Four years after planting, when the branches are yellow with beans, the land
has multiplied in value and it is time for the sharecropper to move on.
Coffee plantations pay even less in Guatemala than cotton plantations. On
the southern slopes the owners claim to pay $15 a month to the thousands ofnatives who descend southward each year from the altiplano to sell their labor
during the harvests. The plantations have private police forces: there, as the
popular saying has it, "a man is cheaper than a mule," and the repressive
apparatus sees that he remains so. In the Alta Verapaz region the situation iseven worse. The planters have no trucks or carts: they do not need them since it
costs less to use the Indians' backs,
Coffee is basic to the economy of El Salvador, a little country owned by ahandful of oligarchical families: monoculture makes it necessary to import thebeans--the people's only source of protein corn, vegetables, and other foods thecountry traditionally produced. A quarter of all Salvadorans die of avitaminosis,
or severe vitamin deficiency. As for Haiti, it has Latin America's highest deathrate, and more than half of its children are anemic. The wages Haiti requires by
law belong-in the department of science fiction: actual wages on coffee
plantations vary from $.07 to $.15 a day.
In Colombia, where suitable slopes abound, coffee is king. According to a
Time magazine report in 1962, only 5 percent of the price yielded by coffee in
its journey from tree to U.S. consumer goes into the wages of the workers who
produce it.27(The price breakdown is as follows: 40 percent for middlemen, exporters, andimporters; 10 percent for taxes imposed by both governments; 10 percent for transport; 5 percent
for publicity by the Pan-American Coffee Bureau; 30 percent for plantation owners; and 598percent for workers' wages.)

In contrast to Brazil, most Colombian coffee isproduced not by latifundios but by minifundios--small farms which tend to
become increasingly smaller and smaller. Between 1955 and 1960, 100,000
new plantations appeared, most of them minute less than one hectare. Smalland very small farmers produce three-quarters of the coffee exported by
Colombia, and 96 percent of the plantations are minifundios. "Juan Valdes"
smiles in the ads, but in fact atomization of the land is steadily forcing his
living standards down and making it easier for the Federacion Nacional deCafeteros, which represents the big landowners and virtually monopolizes
trade in the product, to manipulate the situation. Farms of less than a hectare
produce starvation incomes--an average of $ 130 a year.

BURN THE CROPS? GET MARRIED?
THE PRICE OF COFFEE DICTATES A.LL
What's this? An electroencephalogram of a lunatic? In 1889 coffee was worth
two cents and six years later it had risen to nine; three years later it was down
to four, five years after that to two. A typical period. The graph of coffee prices,like those of all tropical products, has always resembled a clinical epilepsy
chart--more than ever when it shows the value of coffee in exchange formachinery and industrial products. Colombian President Lleras Restrepo
complained that in 1967 his country had to pay fifty-seven sacks of coffee for a
jeep that had only cost seventeen sacks in 1950. Figures offered at the sametime by Brazilian Minister of Agriculture Herbert Levi were more dramatic: fora tractor, which had cost 70 sacks of coffee fourteen years earlier, Brazil now
had to pay 350 sacks. When President Getulio Vargas put a bullet through hisheart in 1954, the price of coffee played a role in the tragedy: "The crisis incoffee production came," he wrote in his moving final testament, "and the priceof our chief product went up. We tried to defend the price and the answer was
such violent pressure on our99economy that we had to give in." Vargas hoped that his blood would buy
salvation for the Brazilian people.
If the 1964 coffee crop had been sold on the U.S. market at 1955 prices,
Brazil would have received $200 million more. A drop of only one cent in theprice meant a loss of $65 million to the combined producing countries. With
the price falling continually between 1964 and 1968, the consuming country-the United States--helped itself to more and more millions from the producing
country, Brazil. But for the benefit of whom? Of the coffee-drinking citizen? In
July 1968 Brazilian coffee cost 30 percent less in the United States than in
January 1964, but U.S. consumers did not pay less: they paid 13 percent more).
Thus in the 1964-1968 period middlemen kept the 13 percent as well as the 30
percent, feathering their nests twice over. In the same period the price Brazilian
producers received for each sack of coffee dropped by half.28 Who are themiddlemen? Six U.S. concerns control more than a third of the coffee thatleaves Brazil, and another six control more than a third of what enters theUnited States: these firms dominate the business at both ends." just as United
Fruit monopolizes the sale of bananas from Central America, Colombia, andEcuador, as well as their importation and distribution in the United States, so
U.S. firms run the coffee business and Brazil only participates as supplier andvictim. The Brazilian state takes over the stocks when overproduction demands
the accumulation of reserves.
But isn't there an International Coffee Agreement to stabilize prices on themarket? The World Coffee Information Center published a detailed documentin Washington in 1970 to try and convince legislators that the United Statesshould keep the agreement in force after September. The report affirms that theagreement's chief beneficiary has been the United States, which consumes
more than half the coffee sold in the world. The purchaser of the coffee beans
always gets a bargain. In the U.S. market, the trivial rise in price (for the
middleman's benefit, as we have seen) has been much less than the general riseof living costs and internal wage levels; U.S. exports rose in value by one-sixth
between 1960 and 1969, and in the same period the value of coffee imports
dropped. And one must bear in mind that Latin American countries use
depreciated foreign currency from coffee sales to buy ever costlier U,S.
products.

100

It is much more profitable to consume coffee than to produce it. In the
United States and Europe coffee creates income and jobs and mobilizes
substantial capital; in Latin America it pays hunger wages and sharpens
economic deformation. It provides work for more than 600,000 people in the
United States: those who distribute and sell Latin American coffee there earn
infinitely more than the Brazilians, Colombians, Guatemalans, Salvadorans,and Haitians who plant and harvest it on the plantations. And incredible as it
seems, coffee--so ECLA tells us--puts more wealth into European state coffers
than it leaves in the hands of the producing countries. In effect, in 1960 and1961 the total taxes levied on Latin American coffee by European Economic
Community countries amounted to about $700 million, while suppliercountries (in terms of the f.o.b. value of exports) only got $600 millions.30 The
rich countries that preach free trade apply stern protectionist policies against
the poor countries: they turn everything they touch--including theunderdeveloped countries' own production--into gold for themselves andrubbish for others. The international coffee marker operates so exactly like afunnel that Brazil recently agreed to impose high taxes on its soluble coffee
exports, a reverse protectionism designed to protect the interests of competing
U.S. manufacturers. Instant coffee made in Brazil is cheaper and better thanthat made by the flourishing U.S. industry; but then, of course, in a system offree competition some are freer than others.
In this kingdom of organized absurdity, natural disasters become blessingsfrom heaven for the producing countries. They raise prices and permit themobilization of accumulated reserves. Fierce frosts wrecked the 1969 harvest
in Brazil and sealed the fate of many producers, especially the weakest, but at
the same time pushed up coffee prices on the world marker and appreciably
lightened the "stock" of 60 million sacks--the equivalent of two-thirds ofBrazil's external debt-which the state had accumulated to defend prices. The
warehoused coffee, progressively deteriorating and losing value, could haveended up in a bonfire. It would not have been the first time. The collapse of
prices and the shrinkage in consumption after the 1929 crisis caused Brazil toburn 78 million sacks; thus the efforts of 200,000 people during Five harvests
went up in flames. This was a typical crisis in a colonial economy: It camefrom outside. Apart from burning the coffee, the fall of the planters'101and exporters' profits in the 1930s produced a bonfire in currency values. Suchis the normal Latin American mechanism to "socialize the losses" of the export
sector: losses of foreign currency are compensated in national currency throughdevaluation.
The consequences of rising prices are no better. While they lead to moresowing for more production, and multiply the area devoted to the fortunate
crop, this acts as a boomerang since an abundance of the product demolishes
prices and leads to disaster. Such was the fate of Colombia in 1958 when it
harvested the coffee sown so enthusiastically four years earlier, and similar
cycles have recurred throughout that country's history. Colombia is so
dependent on coffee and its external price that "in Antioquia the marriage
curve responds sensitively to the coffee-price curve. Par for the course in adependent structure: even the propitious moment for a declaration of love onan Antioquian hillside is decided on the New York Stock Exchange."31

THE TEN YEARS THAT EMPTIED COLOMBIA'S VEINSBack in the 1940s the noted Colombian economist Luis Eduardo Nieto
Arreta wrote an apologia for coffee. Coffee had achieved what neither mines
nor tobacco, nor indigo nor quinine, had managed to produce in the country's
previous economic cycles: it had given birth to a mature and progressive order.
Textile factories and other light industries had arisen in coffee-producing areas-Antioquia, Caldas, Valle del Cauca, Cundinamarca--and not by accident. A
democracy made up of small farmers raising coffee had turned Colombians
into “moderate and sober people. . . . The strongest premise for normality inthe functioning of Colombian political life has been the attainment of our own
kind of economic stability. Coffee has produced it, and with it tranquillity andmoderation."32
Violence soon erupted again. For all the panegyrics, coffee had no magicwith which to end Colombia's long history of revolt and bloody repression.
This time--for ten years, from 1948 to 1957--small and large plantations, desert
and farmland, valley and forest and Andean plateau were engulfed in peasantwar; it put whole communities to flight, generated revolutionary guerrillas andcriminal bands, and turned

102the country into a cemetery: it is estimated to have left a toll of 180,000 dead,The bloodbath coincided with a period of economic euphoria for the rulingclass. But is the prosperity of a class really identifiable with the well-being of acountry?
The violence began with a confrontation between Liberal and Conservative
parties, but the dynamic of class hostilities steadily sharpened its class-struggle
character. The Liberal leader Jorge Eliecer Gaitan--known half contemptuously
and half fearfully to his own party's oligarchy as "The Wolf” or "The Idiot"-had won great popular prestige and threatened the established order. When hewas shot dead, the hurricane was unleashed. First the spontaneous bogotazo-an uncontrollable human tide in the streets of the capital; then the violence
spread to the countryside, where bands organized by the Conservatives had forsome time been sowing terror. The bitter taste of hatred, long in the peasants'
mouths, provoked an explosion; the government sent police and soldiers to cut
off testicles, slash pregnant women’s bellies, and--throw babies in the air tocatch on bayonet points--the order of the day being "don't leave even the seed."
Liberal Party sages shut themselves in their homes, never abandoning their
good manners and the gentlemanly tone of their manifestos, or went into exile
abroad. It was a war of incredible cruelty and it became worse as it went on,
feeding the lust for vengeance. New ways of killing came into vogue: the corte
corbata, for example, left the tongue hanging from the neck. Rape, arson, andplunder went on and on; people were quartered or burned alive, skinned or
slowly cut in pieces; troops razed villages and plantations and rivers ran red
with blood. Bandits spared lives in exchange for tribute, in money or loads ofcoffee, and the repressive forces expelled and pursued innumerable families,
who fled to seek refuge in the mountains. Women gave birth in the woods. The
first guerrilla leaders, determined to take revenge but without clear politicalvision, took to destroying for destruction's sake, letting off blood and steam
without purpose.
The names adopted by the protagonists of violence-Gorilla, Evil Shadow,
The Condor, Redskin, The Vampire, Black Bird, Terror of the Plains-hardly
suggest a revolutionary epic, yet the scent of social rebellion was in the
couplets sung by their followers:

103

I'm just a campesino,
I didn't start the fight,
But if they come asking for trouble,
They'll get what's coming to them.
There is no doubt that indiscriminate terror, mixed with the cry for justice,
had emerged in the Mexican Revolution. In Colombia many just ran amok, yetthat violent decade gave birth to the political guerrillas who later raised thebanner of social revolution over broad areas they came to occupy and control.
Hounded by the repressors, the peasants took to the mountains to organize
agriculture and self-defense. The so-called independent republics continued tooffer refuge to the persecuted after Conservatives and Liberals signed a peace
pact in Madrid. In an ambiance of toasts and mutual goodwill, the leaders ofboth parties agreed to take turns in power under a banner of national unity, andthen began the "clean-up" operations against foci of subversion. In one of these
operations alone--the crushing of the rebels in Marquetalia--1.5 million
projectiles were fired, 20,000 bombs were dropped, and 16,000 soldiers were
mobilized on the ground and in the air.
At the height of the violence one official said, "Don't bring me stories,
bring me ears." Could the sadism of the repression and the ferocity of the war
be explained clinically? Were they the result of inherent evil in the protagonists?
A man who cut off the hands of a priest, set fire to his body and his house, andlater cut him in pieces and threw him in a sewer, cried after the war was over:"I'm not guilty. Leave me alone." He had lost--yet in a certain sense retained-his reason: the horror of all the violence merely exposed the horror of thesystem. For coffee did not bring happiness and harmony as Nieto Arteta had
prophesied. It is true that coffee opened up railroads, highways, and the Rio
Magdalena to navigation, and that thanks to coffee enough capital was
accumulated to found some industries. But the ascendancy of coffee did notaffect either the oligarchical social order or the dependence of the economy onforeign power centers; on the contrary, both became far more oppressive forColombians. Toward the end of the violent decade, the United Nations
published the results of a study of nutrition in Colombia (and there has beenabsolutely no improvement since then): 88 percent of Bogota schoolchildren
suffered from avitaminosis, 78 percent from104

riboflavinosis, and more than half were below normal weight; avitaminosis
affected 71 percent of workers and 78 percent of Tensa Valley peasants.33 The
study showed "a marked insufficiency of protective foods--milk and its
derivatives, eggs, meat, fish, and some fruits and vegetables--which together
provide protein, vitamins, and salt." It is not only the flash of gunfire thatreveals social tragedy. Statistics show that Colombia has seven times more
homicides than the United States, and that one in every four Colombians ofactive age has no regular job. Every year 250,000 people come onto the labormarket while industry fails to generate new jobs; the latifundio-minifundio
system not only cannot absorb more labor, but it constantly banishes more
people to swell the ranks of the unemployed in city slums. In Colombia over a
million children do not attend school. This does not discourage the systemfrom running forty-one public and private universities, each with its own
faculties and departments, to educate the children of the elite and middle
class.( Professor Germin Rama found that some of these venerable groves of academe containin their libraries, like some precious patrimony, complete bound volumes of the Spanish editionof the Reader’s Digest.34)

THE WORLD MARKET CASTS ITS SPELL OVER CENTRALAMERICA
Central American lands were comparatively unmolested up until the middle ofthe past century, In addition to food, the area produced cochineal and indigo
with modest capital, a meager labor force, and few worries. Both the indigo
plant and the cochineal bug, busily multiplying on the prickly surface of thenopal cactus, were in steady demand in European textile industries, but both ofthese natural pigments met a synthetic death around 1850, when German
chemists invented aniline and other cheaper dyes. Thirty years after this victoryof the laboratory over nature it was coffee's turn. Central America wastransformed: by 1880 its newborn plantations were raising almost one-sixth of
the world's coffee production. Coffee locked the region firmly into the world
market. First English, then German, and finally U.S. buyers gave life to anative coffee bourgeoisie, which became the political power after

105

the revolution led by Justo Rufino Barrios early in the 1870s. Agricultural
specialization, dictated from abroad, set off a frenzy of land and labor grabbing:
the Central American latifundio of today was born under the banner of freelabor.
Great tracts of idle land--belonging to no one, or to the Church, or to thestate--passed into private hands, and Indian communities were freneticallyplundered. Peasants who declined to sell their land were hauled off into thearmy; plantations became human compost pits for Indians. The colonial order
was revived with the forcible recruitment of labor and with laws against
vagrancy, while fugitive workers were pursued with guns. Liberal governments
modernized labor relations by introducing wages, but recipients of the wages
became the property of upstart coffee planters. At no time in the ensuingcentury, of course, were periods of high prices reflected in wages, which haveremained at the hunger level no matter how much was paid for the coffee. This
helped prevent the development of any internal consumer market in Central
America. As elsewhere, the ever expanding cultivation of coffee discouraged
food-raising for the home market. These countries too were condemned to achronic scarcity of rice, beans, corn, wheat, tobacco, and meat. A bleak
subsistence agriculture barely survived on the high semi-barren lands to which
the latifundio drove the Indians when it appropriated the lower and more fertile
areas. The Indians who work on the plantations at harvest time spend part of
the year on tiny mountain plots raising the corn and beans without which they
could not survive. They are the world market's "labor reserve." Nothing haschanged in a century: the latifundio and minifundio together make up a system
based on ruthless exploitation of Indian labor. In general--but especially in
Guatemala--this structure of labor force appropriation is visibly identified with
racism: Indians suffer the internal colonialism of whites and mestizos blessed
ideologically by the dominant culture, just as Central American countries
suffer foreign colonialism.
Early in our century banana enclaves made their appearance in Honduras,
Guatemala, and Costa Rica. A few railway lines financed by native capital had
been built to take coffee to the ports. U.S. concerns took over these railroads
and built others, to carry the products of their own plantations exclusively,
while monopolizing electric light, the mails, telegraph and telephone, and--a noless important public

106Service--politics: in Honduras a mule costs more than a deputy, and throughout
Central America U.S. ambassadors do more presiding than presidents. The
United Fruit Company swallowed up its competitors in the production and saleof bananas and became Central America's top latifundista, while its affiliates
cornered rail and sea transport. It took over the ports and set up its own
customs and police. The dollar in effect became the national currency ofCentral America.
THE FILIBUSTERERS COME ABOARD
In the geopolitical concept of imperialism, Central America is no morethan a natural appendage of the United States. Not even Abraham Lincoln, who
also contemplated annexation, could resist the "manifest destiny" of the great
power to dictate to its contiguous areas.
In the middle of the nineteenth century the filibusterer William Walker,
operating on behalf of bankers Morgan and Garrison, invaded Central America
at the head of a band of assassins. With the obliging support of the U.S.
government, Walker robbed, killed, burned, and in successive expeditions
proclaimed himself president of Nicaragua, El Salvador, and Honduras. He
restored slavery in the areas that suffered his devastating occupation, thus
continuing his country's philanthropic work in the states that had just been
seized from Mexico. He was welcomed back to the United States as a national
hero. From then on invasions, interventions, bombardments, forced loans, andgun-point treaties followed one after the other. In 1912 President William H.
Taft declared: "The day is not far distant when three Stars and Stripes at threeequidistant points will mark our territory: one at the North Pole, another at the
Panama Canal, and the third at the South Pole. The whole hemisphere will beours in fact as, by virtue of our superiority of race, it already is ours morally.”35
Taft said that the correct path of justice in U.S. foreign policy "may well bemade to include active intervention to secure for our merchandise and ourcapitalists opportunity for profitable investment."36 In the same period exPresident Theodore Roosevelt loudly recalled his successful amputation of land
from Colombia: "I took the Canal Zone and let Congress debate," said theproud Nobel Peace Prize winner as he related how he had invented Panama.
Colombia soon107

afterward received $25 million in indemnity: it was the price of a country thatwas born so that the United States could have a route between two oceans.
U.S. concerns took over lands, customs houses, treasuries, andgovernments; Marines landed here, there, and everywhere to "protect the lives
and interests of U.S. citizens"--the same holy-water formula that would be used
to deodorize the Dominican Republic crime in 1965. General Smedley D.
Butler, who headed many of the expeditions, indicated the sort of merchandisethat was wrapped inside the flag when he wrote in 1935 of his own experience:
I spent thirty-three years and four months in active service as a member of ourcountry's most agile military force--the Marine Corps. I served in allcommissioned ranks from a second lieutenant to major-general. And duringthat period I spent most of my time being a high-class muscle man for Big
Business, for Wall Street, and for the bankers. In short, I was a racketeer forcapitalism.... Thus I helped make Mexico and especially Tampico safe for
American oil interests in 1914. 1 helped make Haiti and Cuba a decent place
for the National City Bank to collect revenues in.... I helped purify Nicaragua
for the international banking house of Brown Brothers in 1909-1912. I
brought light to the Dominican Republic for American sugar interests in 1916.
1 helped make Honduras "right" for American fruit companies in 1903.37

In the first years of our century the philosopher William James passed thelittle-known judgment that the country had finally vomited the Declaration of
Independence. To cite but one example: the United States occupied Haiti fortwenty years and, in that black country that had been the scene of the first
victorious slave revolt, introduced racial segregation and forced labor, killed
1,500 workers in one of its repressive operations (according to a U.S. Senate
investigation in 1922), and when the local government refused to turn the
Banco Nacional into a branch of New York's National City Bank, suspended
the salaries of the president and his ministers so that they might think again.
Alternating the "big stick" with "dollar diplomacy," similar actions werecarried out in the other Caribbean islands and in all of Central America, thegeopolitical space of the imperial mare nostrum.
The Koran mentions the banana among the trees of paradise, but the"bananization" of Guatemala, Honduras, Costa Rica, Panama, Colombia, andEcuador suggests that it is a tree of hell. United Fruit became owner of thebiggest latifundio in Colombia when a big strike broke out

108

on the Atlantic coast in 1928, Banana workers were mowed down with bullets
in front of a railroad station. "The forces of public order are authorized topunish with the aid of appropriate weapons," it was officially decreed, and nofurther decree was necessary to wipe the massacre from official memory. (Thisis the theme of Alvaro Cepedi Sanitidio's novel La casa grande (1967), and also makes a chapter
of Gabriel Garcia Marquez's One Hundred Years of Solitude: "You must have been dreaming theofficers insisted.")Miguel Angel Asturias described the process of Central

American conquest and plunder in his novel The Green Pope, about Minor
Keith, the uncrowned king of the region, great white father of United Fruit,
devourer of nations:"We have docks, railroads, land, buildings, and water. . . . The dollar
circulates, English is spoken, and they fly our flag.... Chicago could not help
but feel proud of that son who went off with a brace of pistols and returned todemand his position among the meat emperors, the railroad kings, the copperkings, the chewing-gum kings.38 (The novel is one of Asturias's trilogy; the othertwo are strong Wind and Los ojos de los enterrados (The Eyes of the Buried),published in Buenos Aires in the 1950s. Mister Pyle, a character in Strong Wind, says
prophetically: "If instead of making new plantations, we buy fruit from the individual
growers, it'll be much better for the future.”39 This is exactly the present situation in
Guatemala: United Fruit imposes its banana monopoly through the selling end, a more
effective and less risky method than direct production. It is worth noting that banana
production fell sharply in the 1960s from the moment when United Fruit decided tosell and/or lease its Guatemalan plantations, then threatened by social agitation.)

In The 42nd Parallel John Dos Passos traced the dazzling career of Keithand United Fruit:
In Europe and the United States people had started to eat bananas, so they cut
down the jungles through Central America to plant bananas, and built
railroads to haul the bananas, and every year more steamboats of the GreatWhite Fleet steamed north loaded with bananas, and that is the history of theAmerican empire in the Caribbean, and the Panama canal and the future
Nicaragua canal and the marines and the battleships and the bayonets.40

The land was as exhausted as the workers--the land was robbed of humus
and the workers of their lungs--but there were always new lands to exploit and
new workers to exterminate. Comic opera dictators watched over United Fruit's
interests with knives between their teeth. Banana production eventually fell andthe omnipotent corporation

109

went through various crises; although cotton and sugar have pushed the banana
off its privileged perch, Central America remains to this day a bonanzasanctuary for adventurers. Bananas are still the main source of foreign currency
for Honduras and Panama and, in South America, for Ecuador. Around 1929
Central America exported 38 million bunches and United Fruit paid Hondurasa penny tax on each. There was no way to see that this mini-tax--which laterrose slightly--was actually paid; nor is there today, for even now United Fruit
exports and imports what it likes, operating outside the state customs system.
The country’s trade and payment balances are the works of fiction of
exceptionally imaginative technicians.

THE CRISIS OF THE I930S: "KILLING AN ANT IS A GREATERCRIME THAN KILLING A MAN"
Coffee depended on the U.S. market, on U.S. consumption capacity, and on
U.S. prices; bananas were a business of, by, and for the United States.
Suddenly, in 1929, came the crisis. In the Caribbean, the New York stock
market disaster which cracked the foundations of world capitalism fell like ahuge block of stone into a puddle. Coffee and banana prices plummeted, alongwith sales. Peasants were evicted on all sides, unemployment soared, and awave of strikes swept city and countryside; credit, investment, and public
spending collapsed; and in Honduras, Guatemala, and Nicaragua, state
employees' salaries were cut almost in half. Jackbooted dictators were the orderof the day: in Washington it was the dawn of the Good Neighbor policy, butsocial agitation was boiling up everywhere and had to be sternly suppressed.
For about twenty years-for some more, for some less-power would remain in
the hands of Guatemala's Jorge Ubico Castaneda, El Salvador's Maximiliano
Hernandez Martinez, Honduras's Tiburcio Carias Andino, and Nicaragua's
Anastasio Somoza.
The epic of Augusto Cesar Sandino stirred the world. The long struggle ofNicaragua's guerrilla leader was rooted in the angry peasants' demand for land.
His small ragged army fought for some years against 12,000 U.S. invaders andthe National Guard. Sardine tins filled with stones served as grenades,
Springfield rifles were stolen from the enemy,110and there were plenty of machetes; the flag flew from any handy stick, and thepeasants moved through mountain thickets wearing strips of hide calledhuaraches instead of boots. The guerrillas sang, to the tune of Adelita:
In Nicaragua, gentlemen,
the mouse kills the cat.
Neither the Marines' firepower nor the bombs dropped from planes
sufficed to crush the rebels of Las Segovias; nor did the calumnies spreadworldwide by Associated Press and United Press International, whose
Nicaraguan correspondents were two North Americans who controlled thecountry's customs houses. In 1932 Sandino had a presentiment: "I won t live
very long." A year later, under the influence of the Good Neighbor policy,
hostilities ceased. The guerrilla leader was invited by the president to adecisive meeting in Managua, and on the way was killed in an ambush. The
murderer, Anastasio Somoza, later said that U.S. Ambassador Arthur Bliss
Lane had ordered the execution. Somoza, then head of the army, soon installed
himself in power. He ruled Nicaragua for a quarter of a century and thenbequeathed the job to his sons. Before wrapping the presidential sash across hisbreast, Somoza had conferred upon himself the Cross of Valor, the Medal ofDistinction, and the Presidential Medal of Merit. Once in power he organizedvarious massacres and grand celebrations for which he dressed up his soldiersin sandals and helmets like Romans. He became the country's biggest coffee
producer, with forty-six plantations, and raised cattle on fifty-one additional
haciendas. But he was never too busy to spread terror. During his long reign helacked for nothing and even retailed with some wistfulness his youthful years
when he had to forge gold coins to pay for his amusements.
The crisis brought tensions to a head, too, in El Salvador. Nearly half ofHonduras's banana workers were Salvadorans, and many had to return to theircountry, where there was no work for anyone, A peasant rising n the Izalco
region in 1932 quickly spread throughout western El Salvador. Hernandez sent
troops with modern equipment to deal with the "Bolsheviks." The Indiansfought with machetes against machine-guns and the incident ended with 10,000
dead. Hernandez, a vegetarian crank and theosophist, maintained that "killing
an ant is a111

greater crime than killing a man, because a man is reincarnated after death
while an ant dies once and for all.”41 He said he was protected by "invisible
legions" who reported all plots and were in direct telepathic communication
with the president of the United States. A pendulum clock showed him if foodon a dish placed beneath it was poisoned, or showed places on a map where
pirate treasure or political enemies were hidden. He used to send condolencenotes to the parents of his victims, and deer pastured in the patio of his palace.
He ruled until 1944.
Massacres were continual throughout the area. In Guatemala in 1933, Jorge
Ubico shot one hundred trade union, student, and political leaders while
restoring the laws against Indian "vagrancy." Each Indian had to carry a booklisting his days of work; if these were deemed insufficient, he paid the debt injail or by bending his back over the ground without pay for half a year. On theunhealthy Pacific coast men worked up to their knees in mud for $.30 a day
and United Fruit explained that Ubico had forced it to cut wages. Just before
the dictator fell in 1944, Reader's Digest ran a eulogistic article about him; thisharbinger of the International Monetary Fund had avoided inflation bylowering wages from $1 to $.25 a day in the construction of the emergency
military highway, and from $1 to $.50 for jobs on the air base in the capital.
Ubico granted coffee and banana concerns permission to kill: "Plantation
proprietors will be exempt from criminal responsibility. . . ." This decree-number 2,795--was revived in 1967 during the democratic and representative
government of Julio César Méndez Montenegro (1966-1970).
Like all the Caribbean tyrants, Ubico thought he was Napoleon. He
surrounded himself with busts and portraits of the Emperor who, he said, had
the same profile. He believed in military discipline: he militarized post office
employees, schoolchildren, and the symphony orchestra. Dressed in uniforms,
the orchestra members played Ubico's selections, with techniques andinstruments decided by him, for $9 a month. He felt that hospitals were forsissies, and patients who were poor as well as sick were put on the floors ofcorridors and passageways.

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WHO STARTED THE VIOLENCE IN GUATEMALA?
Ubico was swept off his pedestal in 1944 by a revolution of liberal hue, led bysome young officers and middle-class university people. Juan José Arévalo,
elected to the presidency, instituted a vigorous education plan and a new labor
code to protect rural and city workers. Trade unions sprang tip; United Fruit,
the virtually untaxed and uncontrolled owner of vast lands and of the railroad
and port, was no longer omnipotent on its domains. In his farewell speech in1951 Arévalo disclosed that he had had to deal with thirty-two conspiracies
financed by the Firm. The administration of Jacobo Arbenz Guzmán continued
and extended the reforms. Highways and the new port of San José broke
United Fruit's monopoly of transport and export. With national capital, andwithout begging from any foreign banker, various projects were launched tolead the country to independence. An agrarian reform law, aimed basically atdeveloping a peasant capitalist economy and an agricultural capitalist economy
in general, was approved in 1952. By 1954 over 100,000 families had benefited,
although the law only affected idle lands and paid expropriated owners an
indemnity in bonds. But since United Fruit was using a mere 8 percent of its
land, which extended from ocean to ocean, its unused lands began to be
distributed to the peasants. A frenetic international propaganda campaign was
launched: "The Iron Curtain is failing over Guatemala," roared the radio,
newspapers, and the bigwigs of the Organization of American States. Colonel
Rodolfo Castillo Armas, a graduate of the Fort Leavenworth military post,
invaded his own country with troops trained and equipped for the purpose by
the United States, and with support from U.S.-piloted F-47 bombers. "We had
to get rid of a Communist government which had taken over," Dwight D.
Eisenhower said nine years later.42 Testifying before a Senate subcommittee on
July 27, 1961, the U.S. ambassador to Honduras said that the "liberating"operation in 1954 had been worked out by a team which included himself andthe ambassadors to Guatemala, Costa Rica, and Nicaragua. Allen Dulles, then
the number one man at the CIA, had cabled them his congratulations on a job
well done. Dulles had previously been on United Fruit's board of directors, anda year after the invasion his seat was occupied by another CIA man, Walter
Bedell Smith. Allen's113brother, John Foster Dulles, had shown burning impatience at the OAS
conference that approved the military expedition against Guatemala; it so
happened that the United Fruit contracts in the Ubico era had been drafted in
his law office.
Arbenz's fall started a conflagration in Guatemala which has never been
extinguished. The same forces that bombed Guatemala City, Puerto Barrios,
and the port of San José on the evening of June 18, 1954, are in power today.
Foreign intervention was followed by a series of ferocious dictatorships-including the administration of Méndez, who lent democratic trappings to thetyranny. Arbenz's agrarian reform was blown to smithereens when Castillo
Armas fulfilled his mission of returning the land to United Fruit and otherexpropriates landlords; Méndez promised agrarian reform but merely signed anauthorization for landlords to carry guns and to use them.
The worst year in the orgy of violence begun in 1954 was 1967. Thomas
Melville, a U.S. Catholic priest expelled from Guatemala, told the National
Catholic Reporter in January 1968 that in little more than a year right-wing
terrorist groups had murdered more than 2,800 intellectuals, students, tradeunion leaders, and peasants who were trying "to combat the sicknesses of
Guatemalan society." Melville based his figure on information in the press, but
most of the corpses never earned any report at all: they were poor Indians of no
known name or habitat whom the army included sometimes only as numbers-in its cornmuniqués on its victories over subversion. Indiscriminate repression
formed a part of the military "search and destroy" campaign against guerrilla
movements. Under the newly adopted code, members of the security forceswere not held responsible for homicides, and police and army communiqués
were accepted as full proof by the courts. Plantation owners and managers had
the legal status of local authorities, with the right to carry arms and form
punitive squads. The systematic butchery set no teletypes humming; no newshungry reporters flew to Guatemala, nor was any reproving voice heard. The
world turned its back while Guatemala underwent a long Saint Bartholomew'snight. All the men of the village of Cajón del Rio were exterminated; those of
Tituque had their intestines gouged out with knives; in Piedra Parada they were
flayed alive; in Agua Blanca de Ipala they were burned alive after being shot in
the legs. A rebellious peasant's head was stuck on a pole in the114

center of San Jorge's plaza. In Cerro Gordo the eyes of Jaime Velázquez werefilled with pins. The body of Ricardo Miranda, thirty-eight holes in his head,
and the head of Haroldo Silva were found beside the San Salvador highway. In
Los Mixcos, Ernesto Chinchilla's tongue was cut out. In Ojo de Agua, theOliva Aldana brothers, blindfolded and with hands tied behind backs, werepumped full of bullets. The head of José Guzmán was chopped into a mass oftiny pieces and scattered along the road. In San Lucas Sacatepéquez, the wells
yielded corpses instead of water. On the Miraflores plantation, the men greeted
the dawn without hands or feet. Threats were followed by executions or byshots without warning through the back of the neck. In the cities, the doors ofthe doomed were marked with black crosses. Occupants were machine gunned
as they emerged, their bodies thrown into ravines.
The violence did not stop after that: it has been a way of life in Guatemala
ever since the period of humiliation and fury begun in 1954. Corpses-although
not quite so many continue to turn up in rivers and on roadsides, theirfeatureless faces too disfigured by torture to be identified. The slaughter that isgreater but more hidden--the daily genocide of poverty--also continues. In 1
968 another expelled priest, Father Blase Bonpane, reported on this sicksociety in the Washington Post: "Of the 70,000 people who die each year in
Guatemala, 30,000 are children. The infant mortality rate in Guatemala is forty
times higher than in the United States."

THE FIRST AGRARIAN REFORM: 150 YEARS OF DEFEATFOR JOSÉ ARTIGAS
It was the dispossessed of Latin America who, with spears and machetes, reallyfought against Spanish power at the dawn of the nineteenth century.
Independence did not reward them; it betrayed the hopes of those who had
shed their blood. Peace came, and with it a new era of daily misery.
Landowners and businessmen increased their fortunes while poverty grew
among the masses. The intrigues of Latin America's new masters grew, and thefour viceroyalties of the Spanish empire blew up and gave birth to many new
nations, splinters of a might-have-been national unity. The "nation," as thesubcontinent's

115

gentry conceived it, looked too much like a busy port, inhabited by the
mercantile and financial clientele of the British Empire, with latifundios andmines in the background. A legion of parasites, who had received the War of
Independence communiqués while dancing minuets in city salons, used
British-made wineglasses to drink toasts to freedom of trade. The most
pompous republican slogans of the European bourgeoisie came into fashion as
our countries placed themselves at the service of English industrialists andFrench thinkers. But what sort of "national bourgeoisie" was ours, composed oflandlords, big wheelers and dealers and speculators, frock-coated politicos, andintellectuals of borrowed cultures? Latin America quickly gave birth tobourgeois constitutions well varnished with liberalism, but there was nocreative bourgeoisie in the European or U.S. style to accompany them, one
which would undertake as its historical mission the development of a strong
national capitalism. The bourgeoisies of our countries came into being as mere
instruments of international capitalism, liberally oiled cogs in the global
mechanism that bled the colonies and semicolonies. These shop-windowbourgeois, moneylenders, and merchants who monopolized political power had
no interest in developing local manufactures, which died in the egg when free
trade opened the doors to the avalanche of British merchandise. Nor were theirassociates, the landlords, interested in resolving "the agrarian question," except
to the extent that they could feather their own nests. The latifundio wasconsolidated on a foundation of plunder.
Economic, social, national frustration: a series of betrayals followed
independence, and Latin America, split apart by its new frontiers, was doomed
as before to monoculture and dependence. Agrarian reform was a demand fromthe beginning. In 1824 Sim6n Bolivar issued the Trujillo Decree, designed toprotect the Indians and reorganize the land-ownership system in Peru. Its legal
provisions in no way limited the Peruvian oligarchy's privileges, which
remained intact despite the Liberator's good intentions, and the Indians were as
exploited as they had been before. Earlier, Miguel Hidalgo and José Maria
Morelos had been defeated in Mexico, and a century would pass before
anything came of their demands for the emancipation of the dispossessed andthe recovery of usurped lands.

116

Down south it was José Artigas who personified the agrarian revolution.
This man, the victim of impassioned vilification by official historians, led themasses during the heroic years from 1811 to 1820, in the area now occupied by
Uruguay and the Argentine provinces of Santa Fe, Corrientes, Entre Rios,
Misiones, and Córdoba. He wanted to lay economic, social, and politicalfoundations for a Great Fatherland within the frontiers of the old Rio de laPlata viceroyalty, and was the most important and clear-headed of the leaders
who resisted the annihilating centralism of the port of Buenos Aires. He fought
against Spanish and Portuguese, and his forces were Finally crushed by apincer movement from Rio de Janeiro and Buenos Aires--instruments of the
British Empire--and by an oligarchy which, true to form, sold him out as soon
as they saw the implications of his program of social demands.
Patriots took up arms to follow Artigas. They were mostly poor country
people, rugged gauchos, Indians who rediscovered their dignity in the struggle,
slaves who won freedom by joining the independence army. The cowboys'
revolution set the pampas aflame. Buenos Aires's betrayal in leaving what is
now Uruguay in the hands of Spanish power and Portuguese troops produced amass exodus to the north. A people in arms became a people in flight: men andwomen, old people and children, abandoned everything to form an endlesscaravan of horses and carts behind their leader. Artigas called a halt on the Rio
Uruguay and soon set up his government. By 1815 he controlled a large areafrom his Purificación camp in Paysandú. "What do you think I saw?" an
English traveler reported, "His Excellency the Seńor Protector of half the New
World sitting on the head of an ox beside a bonfire on the muddy soil of his
ranch, eating barbecued meat and drinking gin from a cow s horn! A dozen
ragged officers surrounded him....”43 Soldiers, aides-de-camp, and scouts rodein at the gallop from all directions. Pacing, hands behind his back, Artigas
dictated the revolutionary decrees of his people's government. Two secretaries-carbon paper didn't exist--took notes. Thus was born Latin America's firstagrarian reform; it was applied for a year in the "Eastern Province" (today's
Uruguay) and then--after the oligarchy opened the doors of Montevideo toGeneral Lecor, greeted him as a liberator, and conducted him beneath a canopy
to a solemn honor-the-invader Te Deum in the Cathedral smashed by a new
Portuguese invasion. Artigas had earlier levied a tariff

117which heavily taxed foreign merchandise that competed with domestic
products--manufactures and crafts which were substantially developed lay
within the leader's dominions, At the same time, he stopped the taxation on theimportation of means of production which were needed for economic
development, and fixed a trifling duty on such Latin American products as
Paraguayan yerba mate and tobacco. The gravediggers of the revolution werealso to bury these tariff measures.
The agrarian code of 1815--free land, free men--was the most advanced
and glorious of the many constitutions the Uruguayans would have. Artigas's
code was no doubt influenced by the ideas of Pedro Rodriguez deCampomanes and Gaspar Melchor de Jovellanos in the reformist era of Charles
III, but beyond question it was also a revolutionary response to the national
need for economic recovery and social justice. It included expropriation anddistribution of the lands of "bad Europeans and worse Americans," whoemigrated because of the revolution and were never pardoned. Lands belonging
to the revolution's enemies were expropriated without indemnity--and let it berecalled that these enemies owned the great majority of the latifundios.
Children did not have to pay for the sins of their fathers: the code offered themthe same as it offered poor patriots. Lands were distributed on the principle that"the most unfortunate will be the most privileged." Indians, in Artigas's view,
had "the chief right." The essence of this agrarian reform was to settle the rural
poor on the land, making a peasant out of the gaucho who was accustomed to aroving life in war and to clandestine activities and smuggling in peace,
Subsequent La Plata basin governments would mercilessly suppress the gaucho,
forcing him to work as a peon on big estates, but Artigas wanted to make him
an owner of land: the rebel gauchos began to enjoy honest work, built ranches
and corrals, and planted their first crops.
Foreign intervention wiped it all out. The oligarchy reared its head andtook vengeance. The validity of Artigas' land distribution was legislatively
repudiated. From 1820 until the end of the century, the poor patriots who had
benefited from the agrarian reform were violently evicted. The only land they
kept was enough to be buried in. The defeated Artigas had gone to Paraguay, todie alone after a long exile of austerity and silence. The land titles he had
issued were without value: government attorney Bernardo Bustamante, forexample, said that "the118worthlessness of the said documents" was clear at first sight. Meanwhile,“order” restored, his government hastened to celebrate the first constitution of
an independent Uruguay, that fragment of the Great Fatherland Artigas had
vainly fought to consolidate.
The code of 1815 contained special clauses to avoid the accumulation ofland in a few hands. In our day the Uruguayan countryside looks like a desert:
500 families monopolize half of all the land and, to crown their power, also
control three-quarters of the capital invested in industry and banking. Agrarianreform protects pile up in the parliamentary cemetery while the countryside is
depopulated: unemployment proliferates and the number of people occupied inagriculture steadily dwindles from one dramatic census to another. The country
makes its living from wool and meat, but its pastures contain fewer sheep andfewer cows than at the beginning of our century. The backwardness of
production methods is reflected in the low yields from livestock--dependent forfood on periodic rains and natural soil fertility--and from crop farming. Meat
production per animal is not even half that of France or Germany, and the same
applies to milk in comparison with New Zealand, Denmark, and Holland.
Every sheep produces a kilogram less wool than in Australia. Per hectare wheatyields are three times lower than in France, corn seven times lower than in the
United States. The big landowners send their profits abroad, spend theirsummers at Punta del Este, and do not reside at their latifundios even in winter,paying occasional visits in their own airplanes. When the Asoclación Rural
was founded a century ago, two-thirds of its members already made theirhomes in the capital. The extensive production, left to nature and hungry peons,causes them no headaches.
And it certainly pays off. The rents and profits of cattle capitalists now
amount to no less than $75 million a year.( In the period of the rise of national industry,strongly subsidized and protected by the state, a large part of agricultural profits went into newfactories. When industry entered its cycle of crisis, surplus capital from cattle-raising wasdiverted in ocher directions; Punta del Este's most useless and luxurious mansions were built on
the nation's misfortune. Speculators then began feverishly fishing in the turbid waters of inflation.
Above all, there was a flight of the capital and profits that the country produces year by year.
According to official figures, between 1962 and 1966, $250 million fled Uruguay for safe Swiss
and U.S. banks. There was also, two decades ago, the flight of young people from countryside tocity, seeking jobs in developing industry. Today it continues by land or by sea to foreigncountries, although their fate is of course not the same. The capital is received with open arms,

119but the uprooted pilgrims have to face a cold and uncertain destiny. The Uruguay of 1971,
shaken by profound crisis, is no longer the oasis of peace and progress that attracted European
immigrants; it is a turbulent land condemning its own inhabitants to emigration. It produces
violence and exports people as naturally as it produces and exports meat and wool.) Despite

low yields, profits stay up because of extremely low costs. A landscape without
people: the biggest latifundios provide work for barely two people per 1,000
hectares, and then not for the whole year. The always available labor supply
accumulates miserably in hut settlements beside the ranches. The gaucho of
folklore, the subject of paintings and poems, is a far cry from the peon who
works the broad, hostile lands today. Instead of leather boots, he wears frayedsandals; instead of a wide belt adorned with gold or silver, an ordinary belt, or
merely a knotted cord. The producers of meat have lost the right to eat it: rarely
do these Creoles have access to the typical Creole roast, juicy tender meat
turning golden over a fire. Misleadingly rosy international statistics
notwithstanding, the truth is that pasta-and-chicken innards stew--no source ofprotein--is the basic diet of the Uruguayan campesino.

ARTEMIO CRUZ AND THE SECOND DEATH OF EMILIANOZAPATA
Just a century after the Artigas land code, Emiliano Zapata introduced farreaching agrarian reform in his zone of revolutionary jurisdiction in southern
Mexico. It was five years after the dictator Porfirio Diaz had celebrated withhuge fiestas the centenary of the Grito de Dolores, the beginning of the
Mexican war of independence from Spain. The official Mexico of frock-coatedgentlemen olympically ignored the real Mexico whose poverty fed theirsplendor. In this republic of outcasts, workers' wages had not risen by acentavo since the historic rising of the priest Miguel Hidalgo in 1810. In 1910,
800-odd latifundistas, many of them foreigners, owned almost all the national
territory. They were urban princelings who lived in the capital or in Europe andvery occasionally visited their estates--where they slept shielded by high,buttressed walls of dark stone. On the other side of the walls, the peons
huddled in adobe hovels. Of a population of 15 million, 12 million depended
on rural wages, almost all of which were paid at the hacienda

120

company stores in astronomically priced beans, flour, and liquor. Prison,barracks, and vestry shared the task of combating the natural defects of the
Indians who, as a member of one illustrious family put it, were born "weak,
drunk, and thieving." With the worker tied by inherited debts or by legal
contract, slavery was the actual labor system on Yucatάn henequen plantations,on the tobacco plantations of the Valle Nacional, on Chiapas and Tabasco
timberland and fruit orchards, and on the rubber, coffee, sugarcane, tobacco,and fruit plantations of Veracruz, Oaxaca, and Morelos. In a fine report on his
visit, John Kenneth Turner wrote that "the United States has virtually reduced
Diaz to a political dependency, and by so doing has virtually transformed
Mexico into a slave colony of the United States.”44 U.S. capital made juicy
profits directly or indirectly from its association with the dictatorship. "TheAmericanization of Mexico of which Wall Street boasts," wrote Turner, "isbeing accomplished and accomplished with a vengeance."45
In 1845 the United States had annexed the Mexican territories of Texas andCalifornia, where it restored slavery in the name of civilization. Mexico also
lost the present states of Colorado, Arizona, New Mexico, Nevada, and Utahmore than half the country. The stolen territory was equal in size to present-day
Argentina. "Poor Mexico!" it has been said ever since, "so far from God and so
close to the United States!" After the invasion, the rest of Mexico's mutilated
territory suffered from U.S. investments 'in copper, petroleum, rubber, sugar,
banking, and transportation. Far from guiltless in the extermination of the
Maya and Yaqui Indians on Yucatάn henequen plantations— on concentration
camps where men, women, and children were bought and sold like mules--wasthe Standard Oil affiliate American Cordage Trust, which bought more thanhalf the henequen and could sell it cheap at a handsome profit. But sometimes,
as Turner discovered, the exploitation of slave labor was direct. A North
American administrador bought press-ganged peons in lots at fifty pesos ahead. He told Turner: "We always kept them as long as they lasted.... In lessthan three months we buried more than half of them.”46 (Mexico was the preferredcountry for U.S. investments: at the end of the century it had almost a third of the U.S. capital
invested abroad. In Chihuahua state and in other northern areas, William Randolph Hearst, the"Citizen Kane" of Orson Welles's Film, owned more than 3 million hectares.)121

Mexico’s hour of revenge struck in 1910: the country rose in arms against
Porfirio Diaz. An agricultural leader headed the insurrection in the south: he
was Emiliano Zapata, purest of revolutionaries, most loyal to the cause of thepoor, most determined to right the wrongs of society.
For agricultural communities throughout Mexico, the last decades of thenineteenth century had been a period of ruthless pillage. In Morelos, towns andvillages were the victims of a bout of land-, water-, and labor-grabbing assugarcane plantations expanded voraciously. Sugar haciendas dominated thelife of the state, and their prosperity had brought with it modern mills, big
distilleries, and railroad spurs. In Anenecuilco, where Zapata lived and towhich he belonged body and soul, the plundered peasants claimed the soil they
had worked for seven continuous centuries: they were there before Cort6s
arrived. But those who spoke up were marched off to forced labor in Yucatάn.
Throughout their state, whose good land belonged to seventeen families, they
lived considerably worse than the polo ponies the latifundistas pampered inluxurious stables. A law in 1909, providing further seizure of land from its
legitimate owners, was the last straw. Zapata, taciturn but famous as the state's
best horsebreaker and respected by all for his honesty and courage, turned
guerrillero. The men of the south quickly formed a liberating army.
Diaz fell and the revolution swept Francisco Indalecio Madero into power.
Promises of agrarian reform soon disappeared in a fog of “institutionalism.”
On his wedding day, Zapata had to interrupt the party: the government had sent
General Victoriano Huerta's troops to crush him. According to the learned
pundits in the city, the hero had become a "bandit." In November 1911 Zapata
proclaimed the Plan de Ayala and wrote: "I am resolved to struggle against
everything and everybody."47 The Plan noted that "the overwhelming majorityof Mexican communities and citizens are owners of no more than the land theywalk on," and proposed that the property of enemies of the revolution benationalized, that lands usurped by the latifundista avalanche be returned totheir legal owners, and that a third of the remaining hacendados' lands be
expropriated. The Plan de Ayala became a magnet, drawing thousands upon
thousands of peasants into Zapata's ranks. Zapata denounced "the infamous
pretension" of reducing

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everything to a mere change of men in government: the revolution was not
being made for that.
The struggle went on for nearly ten years-against Diaz, against Madero,
against Huerta the assassin, and later against Venustiano Carranza. The long
war years were also years of continual U.S. intervention: the Marines staged
two landings and several bombardments, diplomatic agents framed a variety ofpolitical plots, and Ambassador Henry Lane Wilson successfully organized themurder of President Madero and his vice president. The successive shifts ofpower did not dilute the fury of the attacks against Zapata and his forces, forthey were the real danger, the open expression of the class struggle deeply
imbedded in the national revolution. Governments and newspapers clamoredagainst "the vandal hordes" of the general, from Morelos. Powerful armies
were sent, one after the other, against him. Fire, massacre, and the devastationof villages proved equally futile. Men, women, and children were shot or
hanged as "Zapatista spies," with proclamations of victory following thebutcheries: the clean-up has succeeded! But in the nomadic revolutionaries'
mountain camps in the south, bonfires soon blazed up again. More than once
Zapata's forces counterattacked successfully up to the suburbs of the capital.
After the fall of Huerta's regime, Zapata and Pancho Villa--the "Attila of theSouth" and the "Centaur of the North"--entered Mexico City as conquerors andarranged a temporary division of power. At the end of 1914, a brief period ofpeace enabled Zapata to put into force, in Morelos, an agrarian reform evenmore radical than that outlined in the Plan de Ayala. The founder of theSocialist Parry and some anarchosyndicalist militants considerably influenced
this process; they radicalized the leader's ideology without weakening his
traditionalist roots, and afforded him indispensable organizational know-how.
The agrarian reform proposed to "destroy at the roots and forever theunjust monopoly of land, in order to realize a social state which guarantees
fully the natural right which every man has to an extension of land necessary
for his own subsistence and that of his family."41 Lands taken from
communities and individuals since the deamortization law of 1856 were
restored; maximum limits were laid down for holding sizes, according toclimate and fertility; and the lands of enemies of the revolution were declared
national property. This last political decision123

had, as in the Artigas agrarian reform, a clear economic meaning: thelatifundistas were the enemy. Technical schools, tool factories, and a rural
credit bank were established; sugarmills and distilleries were nationalized andbecame public services. A system of local democracy put the reins of politicalpower and of economic maintenance in the people's hands. Zapatista schools
sprouted and spread, popular juntas were organized for defense and thepromotion of revolutionary principles, and an authentic democracy took shapeand gained in strength. The municipalities were nuclear units of government
and the people elected their leaders, courts, and police. Military leaders had tosubmit to the wishes of organized civilian communities. Bureaucrats andgenerals no longer imposed methods of production and of living. The
revolution tied itself to tradition and functioned "in conformity with thecustoms and usage of each pueblo . . . that is, if a certain pueblo wants thecommunal system, so it will be executed, and if another pueblo wants thedivision of land in order to admit small property, so it will be done."
In the spring of 1915 all the fields of Morelos were under cultivation,
mostly with corn and food crops. Meanwhile food was short and hunger
loomed in Mexico City. Carranza, who had won the presidency, also ordered aland reform, but his henchmen speedily cornered all its benefits. In 1916
Morelos's capital, Cuernavaca, and the Zapatista district were threatened bypowerful forces. Crops now coming to fruition, minerals, hides, and machines
were attractive booty for the advancing officers, who set fires as they came,and proclaimed "a work of reconstruction and progress."
A stratagem and a betrayal ended Zapata's life in 1919. A thousand men
lying in ambush fired into his body. He died at the same age as Che Guevara.
The legend of a sorrel horse, galloping alone southward through the mountains,survived him. But not only the legend: the resolve of all Morelos to "complete
the reformer's work, avenge the martyr's blood, and follow the hero's example"
found an echo throughout the country. Time passed and under the presidencyof Lάzaro Cάrdenas (1934-1940), the Zapatista tradition regained life and vigor
with the nationwide implementation of agrarian reform. Mainly during thisadministration, 67 million hectares owned by foreign or Mexican corporations
were expropriated, and in addition to the land peasants received credits,
education, and the means to organize their work. The

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economy and population had begun their accelerating rise; agricultural
production multiplied while the whole country underwent modernization andindustrialization. Cities expanded and the consumer market grew in breadthand depth.
But Mexican nationalism did not lead to socialism and consequently, likeother countries that failed to take the decisive step, Mexico did not fully
achieve its goals of economic independence and social justice. The million
dead in the revolutionary war years had paid blood tribute "to a Huitzilopoxtli
more cruel and insatiable than the one our ancestors worshiped: the capitalist
development of Mexico under conditions imposed by subordination toimperialism."49 The fading of the bright banners has been studied by a varietyof scholars. Edmundo Flores writes in an official publication that "at thepresent time, 60 percent of Mexico's total population has incomes below $120
a year and goes hungry."50 Eight million Mexicans consume almost nothing but
beans, corn, tortillas, and chilis. The Tlatelolco massacre of some 500 students
in 1 968 is not the only evidence of the system's deep contradictions. Using
official figures, Alonso Aguilar concludes that Mexico has some 2 million
landless peasants, 3 million children not attending school, around 11 million
illiterates, and 5 million who have no shoes. Collectively owned ejido land iscontinually being partitioned, and along with the multiplication of minifundios-which themselves become steadily more fragmented--a new type of latifundio
system, and a new agrarian bourgeoisie engaged in large-scale commercial
farming, have made their appearance. Local landlords and entrepreneurs, whohave achieved a dominant position by trampling on the letter and spirit of thelaw, are in turn dominated: a recent book classifies them within the words "andCo." attached to Anderson, Clayton.51 In the same book, Lάzaro Cάrdenas's son
writes that "the camouflaged latifundios have been established, when possible,on the best and most productive lands."
Novelist Carlos Fuentes has reconstructed, in reverse chronological order,
the life of a captain in Carranza's army who, in war and then in peace, uses gun
and cunning to make his way to the top.52 A man of humble origin, Artemio
Cruz sheds the idealism and heroism of his youth as the years pass: he helps
himself to land, founds and multiplies businesses, gets a seat in the Congress,and climbs the shining steps to the peaks of society, accumulating wealth,power, and prestige by125

wheeling and dealing, bribery, speculation, audacity, and the bloody repressionof the Indians. His pilgrim's progress resembles that of the potently impotent
party of the Mexican revolution which virtually monopolizes the country's
political life in our time. Both have fallen upward.

THE LATIFUNDIO MULTIPLIES MOUTHS BUT NOT BREAD
Latin American agricultural and livestock production per capita is lower today
than on the eve of World War II. During the thirty years since then, world
production of food has grown in the same proportion as it has fallen in Latin
America. The structure of backwardness in our countryside also functions as astructure of waste: waste of labor, of available land, of capital, of the product,
and above all of the fleeting opportunities for development that history hasoffered. In almost all Latin American countries the latifundio--and its poor
relation the minifundio--are the bottlenecks choking the growth of agriculture
and the development of the whole economy. The private property systemmolds the production system: 1.5 percent of the agricultural landlords own halfof all the cultivable land, and every year Latin America spends more than $500
million on importing food that its own broad and fertile lands could produce
without difficulty. Hardly 5 percent of the total area is under cultivation: thelowest proportion--and consequently the greatest waste--on earth. Furthermore,
yields from the small acreage that is cultivated are very low. In many areas
there are more pointed-stick plows than tractors. The use of modern
techniques--not only the mechanization of tasks, but the aid and stimulation of
the soil with fertilizers, herbicides, seeds, pesticides, and artificial irrigation--isthe exception rather than the rule. In a manner sometimes recalling the "SunKing" Louis XIV, the latifundio forms a constellation of power which, in Maza
Zavala's apt phrase, multiplies mouths but not bread.53 Instead of absorbing
labor, the latifundio expels it: in forty years the proportion of rural workers in
Latin America has fallen from 63 to 40 percent. There are plenty of technocrats,mechanically applying ready-made formulas, to tell us that this is a sign ofprogress: massive transfer of the peasant population accelerated urbanization.
The unemployed continually126

vomited by the system do indeed pour into the cities and extend its suburbs.
But the factories, which also create unemployment as they modernize, provide
no refuge for this surplus and nonspecialized labor force. The scanty technicaladvances in the countryside sharpen the problem. Landlords increase theirprofits by adopting more modern ways to exploit their properties; as morehands become idle, the gap separating rich and poor only widens. For example,
the introduction of motorized equipment eliminates more rural jobs than it
creates. Malnutrition is the normal lot of Latin Americans who produce thefood in dawn-to-dusk workdays; they receive paupers' wages while the income
produced by the countryside is spent in the cities or sent abroad. A technicalimprovement that increases the soil's meager yields while leaving the propertysystem intact is certainly no blessing to the peasants, despite its contribution to
general progress. There is no rise in their wages, nor any participation in thecrop. The countryside radiates poverty to the many and wealth to very few.
Private airplanes soar over forlorn deserts, sterile luxury is spawned in
fashionable resorts, and Europe teems with banknote-stuffed Latin American
tourists who neglect to cultivate their lands but not their souls.
Paul Bairoch attributes the principal weakness of the third world's
economy to the fact that its median agricultural productivity is only half what
today's developed countries achieved on the eve of the Industrial Revolution.54
In fact, for industry to expand harmoniously, a much greater increase in the
production of food and agricultural raw materials is needed. Food because thecities keep growing and eating more; raw materials for the factories and forexport, so that agricultural imports can be cut and foreign sales, which provide
currency

neededfordevelopment,

increased. Furthermore,domestic

consumption, which must expand if infant industries are to thrive, is enfeebledby the latifundio minifundio system. Hunger wages in the countryside and theever growing reserve army of unemployed encourage this weakness: theemigrants from the rural areas who come to beat on city doors keep pushingdown the overall level of the workers' wages.
Ever since the Alliance for Progress trumpeted the need for agrarian reformto the four winds, the oligarchy and technocracy have tirelessly elaborated
projects. Dozens of projects--fat ones, thin ones, broad and narrow ones-gather dust on the shelves of every Latin American127

parliament. No curse is attached anymore to the theme of agrarian reform:
politicians have learned that the best way not to have it is to keep invoking it.
The simultaneous processes of concentration and atomization of the land
continue olympically in most of the countries.
Nevertheless, exceptions are beginning to break through. For thecountryside is not merely a seed bed of poverty: it is also a seed bed ofrebellion, and acute social tensions often lie concealed behind the apparent
resignation of the masses. Brazil's Northeast, for example, impresses one atfirst as a kingdom of fatalism whose inhabitants consent to die of hunger as
passively as they accept nightfall at the end of each, day. Yet it is not so long,after all, since that mystical explosion when the Northeasterners fought besidetheir way-out Messiahs, raising cross and gun against armies to bring theKingdom of Heaven to this world; nor since the cangaceiros created waves ofviolence. Fanatics and bandoleiros, seeking Utopia and vengeance, made a bed
for the river of desperate peasant protest, even though it was still blind. The
peasant leagues later recovered and deepened these fighting traditions.
The military dictatorship that seized power in Brazil in 1964 was prompt toannounce its agrarian reform. Paulo Schilling has drawn our attention to theuniqueness of the Instituto Brasileiro de Reforma Agrάria: instead of
distributing land to the peasants, it proceeded to expel them and to restore to
the latifundistas the acreage that had been spontaneously invaded or
expropriated under previous governments. In 1966 and 1967, before press
censorship was applied with greater rigor, the dailies used to report thespoliations, conflagrations, and persecutions with which the military police
carried out the hardworking institute's orders. In 1964 Ecuador proclaimed
another agrarian reform that deserves recognition: the government distributed
unproductive land only, while facilitating the concentration of better land in thegrip of the big landlords. Half of the land distributed by Venezuela's agrarianreform, beginning in 1960, was public property; big commercial plantations
were untouched, and such generous indemnities were paid to expropriatedlatifundistas that they bought new land in other areas with the profits.
In 1968, a couple of years before his fall, Argentine dictator Juan Carlos
Onganía tried to apply a new tax system to rural property. The idea was to tax
unproductive "bare plains" more heavily than productive land.

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The cattle oligarchy protested to high heaven and mobilized their own forceson the General Staff, and Onganía had to forget his heretical idea. Like
Uruguay, Argentina's naturally fertile lands and benign climate have brought it
relative prosperity in Latin America. But erosion does its remorseless work on
the vast abandoned plains, which are neither farmed nor used for pasture, andthe same occurs on a large part of the millions of hectares used for cattleraising. This extensive method--again as in Uruguay, but to a smaller extent-was at the bottom of the crisis that shook the Argentine economy in the 1960s.
Argentine latifundistas show no interest in technical innovations. Productivity
is low because it suits them; the law of profit prevails over all others.
Extending estates by buying new acreage is more remunerative and less risky
than applying modern intensive techniques. (From the large-scale livestock owners'
standpoint, artificial pasture means transferring capital into an investment that is larger, morerisky, and at the same time less profitable than the traditional investment in extensive cattlefarming. Thus the private interest of the producer is in contradiction with the interest of society
as a whole: the quality and yield of cattle can only improve, beyond a certain point, through theincrease of nutrients in the soil. The country needs cows to produce more meat and sheep to
produce more wool, but the landlords make greater profits from yields at the present level. In thismatter, the conclusions of the University of Uruguay's Instituto de Economía are equallyapplicable to Argentina.55) In 1931, the Sociedad Rural defended the horse against

the tractor: "Cattle farmers! Working with horses on agricultural tasks isprotecting your own and the country's interests!" Twenty years later it insisted:"It is easier, as a well-known military man has said, to put grass in a horse's
stomach than gas in the tank of a heavy truck,"56 According to ECLA
calculations, in proportion to arable acreage Argentina has sixteen times fewer
tractors than France and nineteen times fewer than Britain. Also in proportion,
the country consumes 140 times less fertilizer than West Germany. 57 Yields ofwheat, corn, and cotton are much lower in Argentina than in developed
countries.
Juan Domingo Perón had defied the interests of Argentina's landowning
oligarchy by imposing the Statute of the Peon and compliance with a rural
minimum wage. In 1944 the Sociedad Rural declared: "In fixing wages, it isessential to determine the standard of living of the ordinary peon. His material
needs are sometimes so limited that the use to which any surplus will be put isof little social interest." The Sociedad Rural

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continues to refer to peons as if they were animals, and its reflections on theworkers' limited need to consume provide an unintentional key to thelimitations of Argentine industrial development: the internal market neither
expands nor deepens sufficiently. Perón's economic development policy neverbroke the structure of agricultural underdevelopment. In a speech at the Teatro
Colón in June 1952, Per6n denied any intention of agrarian reform, and theSociedad Rural commented officially: "It was a masterly dissertation." In
Bolivia, thanks to the agrarian reform of 1952, nutrition visibly improved overlarge areas of the altiplano--so much so that increases in height were notedamong the peasants. Yet the Bolivian population as a whole still consumes
barely 60 percent of the protein and 20 percent of the calcium necessary for aminimal diet; rural consumption is even more deficient than these average
figures reveal. While agrarian reform can certainly not be called a failure, thedivision of altiplano land has not been enough to prevent Bolivia fromspending one-fifth of its foreign currency on imported food.
The agrarian reform introduced in 1969 by the military government in Peru
looked from the outset like a serious experiment. As for the Eduardo Frei
administration's expropriation of some Chilean latifundios, it must at least be
credited with opening a channel for the radical agrarian reform which the newpresident, Salvador Allende, is announcing as I write these pages.

THE THIRTEEN NORTHERN COLONIES AND THE IMPORTANCE
OF NOT BEING BORN IMPORTANT
In Latin America, private appropriation of land always came before its usefulcultivation. The most backward aspects of the present property system are notthe offspring of crises, but emerged in periods of great prosperity; inversely,
periods of economic depression have tempered the voracity of the latifundistas
in acquiring new acreage. In Brazil, for example, the decline of sugar and thevirtual disappearance of gold and diamonds made possible, between 1820 and
1850, legislation providing that anyone who occupied land and made it
produce acquired title to it. The rise of coffee as a new "king product"
produced the 1850 Law of Lands, cooked to the taste of oligarchic politicians
and military men

130and denying ownership of land to those who worked it when the great spacesof the interior, to the south and west, were being opened up. This law was
subsequently "reinforced and ratified ... by abundant legislation that decreed
purchase as the only form of access to land, and created civil registration
system that would make it nearly impossible for a pool farmer to legalize hisland, and stipulated as the sale value of the unoccupied government lands muchhigher price levels than the current ones for land already appropriated."58
U.S. legislation in the same period had the opposite aim: it was to promote
the internal colonization of the country. Covered wagon! rolled westward into
virgin lands with pioneers who extended the frontier at the cost of slaughtered
Indians. The Homestead Act of 1862 assured every family of ownership of aquarter section, a lot one-half mile square; each beneficiary committed himself
to farm his parcel for a minimum of five years. The public domain wascolonized with startling speed and the population grew and spread like a great
oil smear The fertile land that was to be had almost gratis drew European
peasants like a magnet: they crossed the ocean and then the Appalachians onto
the wide-open prairies. Thus it was free farmers who occupied the nm central
and western territories. As the country grew in extent and population,
unemployment was avoided by the creation of farm jobs and at the same time
an internal market--the multitude of farmer-proprietors--was generated with
substantial purchasing power to sustain industrial development.
In contrast, the rural workers who have pushed Brazil's frontier inland formore than a century have not been--and are not--free peasant families seeking apiece of land of their own, but (as Ribeiro notes) braceros contracted to serve
latifundistas who have already taken possession of the great open spaces. Theinterior deserts have never been accessible, except in this way, to the rural
population. Workers have hacked their way through the jungle with machetes
to open up the country for the benefit of others. Between 1950 and 1960, sixtyfive Brazilian latifundios absorbed a quarter of the new land brought undercultivation.
These two opposite systems of internal colonization reveal one of the mostimportant differences between U.S. and Latin American development models.
Why is the north rich and the south poor? The Rio

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Grande is much more than a geographical frontier. Is today's profounddisequilibrium, which seems to confirm Hegel's prophecy of inevitable war
between the two Americas, to be traced to U.S. imperialist expansion, or doesit have more ancient roots? In fact, back in the colonial beginnings, north andsouth had already generated very different societies with different aims.( Lewis
Hanke and the other authors of Do the Americas Have a Common History? stretch their
imaginations in vain trying to find parallels between Northern and Southern historical processes.)

The Mayflower pilgrims did not cross the sea to obtain legendary treasures;
they came mainly to establish themselves with their families and to reproduce
in the New World the system of life and work they had practiced in Europe.
They were not soldiers of fortune but pioneers; they came not to conquer but tocolonize, and their colonies were settlements. It is true that a slave-plantation
economy like Latin America's developed later south of the Delaware, but there
was a difference: the center of gravity in the United States was from the outset
the farms and workshops of New England, from which came the victorious
armies of the Civil War. New England colonists, the original nucleus of U.S.
civilization, never acted as colonial agents for European capitalist
accumulation; their own development, and the development of their new land,
were always their motivation. The thirteen colonies served as an outlet for thearmy of European peasants and artisans who were being thrown off the labormarket by metropolitan development. Free workers formed the base of thatnew society across the ocean.
Spain and Portugal, on the other hand, had an abundance of subjugatedlabor in Latin America. Enslavement of the Indians was followed by thewholesale transplantation of Africans. Through the centuries, a legion ofunemployed peasants was always available to be moved to production centers:
as precious metal or sugar exports rose and fell, flourishing centers coexistedwith centers of decay, and the latter provided labor for the former. This
structure persists to our time; today, as yesterday, it means low wage scales
because of the pressure of the unemployed on the labor market, and frustrates
the growth of an internal consumer market. But also in contrast to the Northern
Puritans, internal economic development was never the goal of the rulingclasses of Latin American colonial society. Their profits came from outside;
they were tied more to the foreign market than to their own domain.

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Landlords, miners, and merchants had been born to fulfill the mission of
supplying Europe with gold, silver, and food. Goods moved along the roads inonly one direction: to the port and overseas markets. This also provides the key
to the United States' expansion as a national unit and to the fragmentation of
Latin America. Our production centers are not interconnected but take the formof a fan with a far-away vertex.
One might say that the thirteen colonies had the fortune of bad fortune.
Their history shows the great importance of not being born important. For thenorth of America had no gold or silver, no Indian civilizations with dense
concentrations of people already organized for work, no fabulously fertile
tropical soil on the coastal fringe. It was an area where both nature and history
had been miserly: both metals and the slave labor to wrest it from the groundwere missing. Those colonists were lucky. Furthermore, the northern colonies,
from Maryland to New England to Nova Scotia, had a climate and soil similar
to British agriculture and produced exactly the same things. That is, as Sergio
Bagú notes, they did not offer products complementary to the metropolis. The
situation in the Antilles and the mainland Spanish-Portuguese colonies wasquite different. Tropical lands produced sugar, tobacco, cotton, indigo,turpentine; a small Caribbean island had more economic importance forEngland than the thirteen colonies that would become the United States.
These circumstances explain the rise and consolidation of the United States
as an economically autonomous system, one which did not drain abroad thewealth it produced. The ties between colony and metropolis were slender. In
Barbados and Jamaica, on the other hand, only the capital necessary to replaceworn-out slaves was reinvested. Thus it was not racial factors that decided thedevelopment of the one and the underdevelopment of the other: there wasnothing Spanish or Portuguese about Britain's Antillean islands. The truth isthat the economic insignificance of the thirteen colonies permitted the early
diversification of their exports and set off the early and rapid development of
manufacturing. Even before independence, North American industrialization
had official encouragement and protection. And England took a tolerant
attitude while it strictly forbade its Antillean islands to manufacture so much asa pin.

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3. The Invisible Sources of PowerAS LUNGS NEED AIR, SO THE U.S. ECONOMY NEEDSLATIN.AMERICAN MINERALSIn June 1969, when the astronauts had put the first human footprints on themoon, the father of that achievement, Werner von Braun, announced to thepress a U.S. plan for a remote space station with functions that were lessremote: he heralded an observation platform from which we will be able toexamine all the wealth of the earth, including unknown petroleum, copper, andzinc deposits.
Petroleum continues to be our world's chief fuel, and the United States
imports one-seventh of the petroleum it consumes. Bullets are needed to kill
Vietnamese, and bullets need copper: the United States buys abroad one-fifthof the copper it uses. Shortages of zinc cause increasing anxiety: over halfcomes from abroad. Planes cannot be built without aluminum, and aluminumcannot be produced without bauxite: the United States has almost no bauxite.
Its great steel centers--Pittsburgh, Cleveland, and Detroit--on not get enoughiron from the Minnesota deposits, which are on the way to exhaustion, andthere is no manganese within the United States: one-third of its iron and all of
its manganese are imported. Nor has it any nickel or chrome of its own to
produce jet engines. Tungsten is needed to make special steels and one-fourthof that is imported.

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This growing dependence on foreign supplies produces the growing
identification of the interests of U.S. capitalists operating in Latin America
with U.S. national security. The internal stability of the world's greatest poweris closely linked with its investments south of the Mo Grande. About half of
those investments are in the extraction of petroleum and minerals,
indispensable for the U.S. economy in peace and war. In 1959, the chairman of
the Chamber of Commerce International Department said: "Historically, one of
the United States' chief reasons for investing abroad has been to develop
natural resources, particularly minerals and more especially petroleum. It isquite obvious that incentives for this type of investment can only grow. Our
needs for raw materials are continually increasing as the population expands
and living standards rise. At the same time our domestic resources are
depleted."1 Government, universities, and big corporations invest astronomic
amounts in scientific laboratories, which make new discoveries and inventions
at a dizzy pace, but the new technology still has not found a substitute for thebasic materials nature alone provides. At the same time, the materials
necessary to meet the challenge of its industrial growth become increasingly
scarce in the United States' own subsoil.

BY-PRODUCTS OF THE SUBSOIL: COUPS D'É TAT,REVOLUTIONS, SPY DRAMAS, ETC.
The wealth of iron beneath Brazil's Paraopeba valley overthrew two presidents-Jânio Quadros and João Goulart--before Marshal Castelo Branco, who madehimself dictator in 1964, graciously handed it over to the Hanna Mining
Company. An earlier friend of the U.S. ambassador, President Eurico Dutra(1946-1951), had handed Bethlehem Steel the 40 million tons of manganese in
the state of Amapά–one of the world's biggest deposits--for 4 percent of theincome from exporting it. Since then Bethlehem has been moving themountains to the United States so enthusiastically that in fifteen years' time
Brazil may have no manganese r its own steel industry. Furthermore, thanks to
the generosity of the Brazilian government, $88 of each $100 Bethleheminvests in mineral extraction are tax exempt, in the name of "regional
development." As we can see, the experience of the lost gold of Minas

135

Gerais--"white gold, black gold, rotten gold," as the poet Manuel Bandeira
wrote--has gone for nothing: Brazil continues the gratuitous self-plunder of its
own natural sources of development.( The Mexican government, on the other hand, saw
in time that the country, one of the chief exporters of sulphur, was being emptied of it. Texas
Gulf Sulphur and Pan-American Sulphur had insisted that the reserves still in their concessions
were six times greater than they actually were. The government decided in 1965 to limit foreign
sales.) In Bolivia, the Matilde mine contains lead, silver, and abundant zinc

twelve times more pure than that in U.S. mines; between massacres of miners,
dictator René Barrientos, who seized power in 1964, handed it over to Phillips
Industries, a Dutch conglomerate, The firm was authorized to remove the crude
zinc for processing in its refineries abroad, paying the state no less than 1.5
percent of the sale value. In Peru in 1968, page 11 of the agreement which
President Fernando Belaúnde Terry had signed with a Standard Oil affiliate
was mysteriously lost; General Juan Velasco Alvarado overthrew Belaúnde,took the reins, and nationalized the firm's wells and refinery. In Venezuela, thelargest U.S. military mission in Latin America sits on Standard and Gulfs great
petroleum take. Argentina's frequent coups d'état erupt before or after eachoffer of oil concessions. Copper was a far from minor factor in the Pentagon's
disproportionate military aid to Chile before the electoral victory of Salvador
Allende's left coalition; U.S. copper reserves had fallen by more than 60
percent between 1965 and 1969. In 1964, Che Guevara showed me, in his
office in Havana, that Batista's Cuba was not merely sugar: the Imperium's
blind fury against the revolution was better explained, he thought, by Cuba's
big deposits of nickel and manganese. The United States' nickel reserves
subsequently fell by two-thirds when Nicaro Nickel was nationalized andPresident Johnson threatened an embargo on French metal exports if theFrench bought nickel from Cuba.
Minerals had much to do with the fall of Cheddi Jagan's socialist
government, which at the end of 1964 had again won a majority of votes inwhat was then British Guiana. The country now called Guyana is the world's
fourth producer of bauxite and Latin America's third producer of manganese.
The CIA played a decisive role in Jagan’s defeat. Arnold Zander, leader of thestrike that served as a provocation and pretext to deny electoral victory to
Jagan, afterward admitted publicly that his

136union had dollars rained upon it from one of the CLA foundations. The new
regime--very Western and very Christian--guaranteed the Aluminum Companyof America (Alcoa) against any danger to its interests in Guyana: it could
continue tranquilly removing the bauxite and selling it to itself at the same
price as in 1938, although the price of aluminum had since soared. (Arthur Davis,
long-time chairman of Alcoa, died in 1962 leaving $300 million to charitable foundations, withthe express condition that the money not be spent outside the United Stares. Not even throughthis channel could Guyana recover at least some of its stolen wealth.) The danger was

indeed past. Arkansas bauxite costs twice as much as Guyana bauxite. The
United States has very little bauxite on its own territory, but using cheap
imported raw material it produces almost half of the world's aluminum.
The United States depends on foreign sources for most of the minerals it
needs to maintain its ability to wage war. The jet engine, the gas turbine, andnuclear reactors have a great influence over the demand for materials only
obtainable abroad, and there is a clear link between the imperative need forstrategic minerals, indispensable for the maintenance of U.S. military-atomic
power, and the massive purchase of land-usually by fraudulent methods-in
Brazil's Amazonia. During the 1960s many U.S. firms, represented byprofessional adventurers and contrabandists, descended in a hectic "rush" uponthese enormous forests, which under an agreement signed in 1964 had alreadybeen flown over and photographed by the U.S. air force. Scintillometers todetect deposits of radioactive minerals, electromagnetic devices for x-ray
photography of subsoils rich in nonferrous minerals, and magnetometers todetect and measure the iron were all used. With the aid of a U.S. government
geological survey, information and photos concerning the extension and depthof Amazonia's hidden wealth were put in the hands of interested private
concerns. Gold, silver, diamonds, gypsum, hematite, magnetite, tantalite,
titanium, thorium, bauxite, zinc, chrome, and mercury were detected.
Photographing everything from the virgin forest of Mato Grosso to thesouthern Goiάs plains, the intrepid lensmen (as ecstatically reported in the final
Latin American edition of Time in 1967) captured God's-eye views showing
lightning flashes of half a dozen distant storms on the same exposure as
brilliant sunshine. The government had offered tax exemptions and otherseductions to colonizers

137

of these wild, magical lands. Before 1967, according to Time, foreign
capitalists had bought, at $.07 an acre, a tract larger than Connecticut, Rhode
Island, Delaware, Massachusetts, and New Hampshire put together. "We
must," said the director of the government's Amazonian development agency,"keep the doors wide open to foreign investment, for we need more than we
can get." To justify the U.S. air force's aerophoto excursions, the government
had previously declared it lacked the resources for the job. Again par for thecourse in Latin America: its resources are always surrendered to imperialism in
the name of its lack of resources.
The Brazilian Congress managed to conduct an investigation whichbrought forth a voluminous report.2 In this were listed cases of sale orusurpation of 20 million-odd hectares of land, forming so odd a shape that(said the investigating commission) "they constitute a cordon to isolate
Amazonia from the rest of Brazil." The "clandestine exploitation of highly
valuable minerals" appears in the report as one of the United States' chief
motives for opening a "new frontier" in Brazil. Army testimony stresses "theinterest of the U.S. government in maintaining under its control a vast tract ofland for later use, whether for exploitation of minerals – especially radioactive
ones – or as a base for organized colonization." Says the National Security
Council: "A suspicious factor is that the areas occupied or being occupied byforeign elements are the same areas where sterilization campaigns for Brazilian
women are carried on by foreigners." In fact, according to the newspaper
Correio da Manhã, “more than twenty foreign religious missions, mainly of
the U.S. Protestant church, are occupying Amazonia, functioning in places thatare richest in radioactive minerals, gold, and diamonds.... They make extensive
use of sterilization, using the intrauterine device, and teach English to thecatechized Indians.... Their areas are surrounded by armed elements and no one
can enter them.”3 Note that Amazonia is the largest of all the habitable deserts
on our planet. Birth control has been introduced into this great empty space to
avoid demographic competition by the very few Brazilians who live andreproduce in remote comers of the immense forests and plains.
GeneralRiograndino

Kruel

told

the

congressional

investigating

commission that "contraband in materials containing thorium and uranium
amounts to an astronomical one million tons." Shortly before, in 1966,

138

Kruel (then federal police chief) had denounced a U.S. consul's "insolent andsystematic interference" in the open trial of four U.S. citizens accused ofsmuggling Brazilian atomic minerals. To the general's mind the fact that forty
tons of radioactive minerals had been found in their possession was enough toconvict them. Soon afterward three of the contrabandists mysteriously fled thecountry.
The smuggling was no new phenomenon, although it had greatly increased.
Through clandestine leakage of rough diamonds alone, Brazil has for someyears been losing more than $100 million a year. But the need to smuggle isonly relative: legal concessions deprive Brazil, without any inconvenience, ofmost of its fabulous natural wealth. To give but one example--just a new beadon a long string--the world's largest niobium deposit, in Araxά, belongs to anaffiliate of the Niobium Corporation of New York. Niobium is alloyed withvarious other metals which, because of their resistance to high temperatures,are used in constructing nuclear reactors, rockets, space ships, satellites, or
simple jet planes. Along with the niobium, the concern incidentally extracts
substantial quantities of tantalum, thorium, uranium, pyrochlore, and raremineral-rich soils.

A GERMAN CHEMIST DEFEATS THE WINNERS OF THE WAR
OF THE PACIFICThe story of the rise and fall of nitrates is a good illustration of Latin America's
illusory fortunes in the world market: how transient the blissful breezes havealways been, how crushing the catastrophes.
In the middle of the last century Malthus's dark prophecies hovered over
the Old World. With Europe's population climbing steeply, it was, urgently
necessary to revive exhausted soil so that food production could grow in thesame proportion. The value of guano as fertilizer was demonstrated in British
laboratories, and after 1840 it began to be exported from Peru on a large scale.
Since time immemorial pelicans and seagulls, feeding on the prodigious shoalsof fish in the coastal currents, had been accumulating mountains of excrementrich in nitrogen, ammonia, phosphates, and alkaline salts: on these rainless
shores the guano had remained in a pure state.( The guano producers, wrote Robert
Cushman Murphy long after the boom, were the world's most valuable birds in their dollar yieldfor each digestive process: they surpassed Shakespeare's nightingale that sang on Juliet's balcony,139the dove that flew from Noah's Ark, and, of course, the sad swallows of Gustavo Adolfo
Bécquer.4)

Soon after guano was launched in the international market,

agricultural chemistry discovered even greater nutritive virtues in nitrate, andby 1850 it was being used intensively to fertilize European fields. Old World
wheat-growing lands, impoverished by erosion, hungrily absorbed the cargoesof sodium nitrate shipped from Tarapacά (then in Peru) and later from
Antofagasta (then in Bolivia).5 Thanks to the sodium nitrate and the guanolying on Pacific coasts, almost within reach of the ships that came to fetch
them, the specter of hunger departed from Europe.
The uncommonly arrogant Lima oligarchy continued enriching itself andamassing symbols of its power in the palaces and Carrara marble mausoleums
which sprouted amid sandy deserts. Once it had been Potosi’s silver that
nourished the great families of the capital city; now they lived from birddroppings and the shiny white clots in the nitrate fields--more vulgar means tothe same elegant ends. Peru thought it was independent, but Britain had taken
Spain's place. The country felt rich, according to José Carlos Mariάtegui, andthe state carelessly used up its credit, living prodigally and mortgaging its
future to British high finance. In 1868, the state's expenditures and debts far
exceeded the value of its sales abroad. The guano deposits served as guarantee
for British loans, and Europe juggled prices. The plunder of the exporters
created havoc; what nature had accumulated over millennia on the islands was
squandered in a few years. Meanwhile, out on the nitrate fields the workers
survived in hovels hardly higher than a man, made of stones, nitrate, rubble,
and mud.
The exploitation of saltpeter rapidly spread into Antofagasta, although thebusiness was not Bolivian but Peruvian and, more than Peruvian, Chilean.
When the Bolivian government proposed to tax those nitrate fields on its
territory, the Chilean army invaded the province, never to leave. Until then thedesert had served as a damper on latent conflicts between Chile, Peru, andBolivia, but now nitrates brought them to the boil. The War of the Pacificbroke out in 1879 and lasted till 1883. Chile's armed forces, having occupied
the Peruvian nitrate ports of Patillos, Iquique, Pisagua, and Junín in 1879,
finally140

entered Lima as conquerors and the fortress of Callao surrendered the next day.
The defeat brought mutilation and bloodletting to Peru. The national economy
lost its two chief resources, productive forces were paralyzed, the currency
collapsed, and foreign credit was cut off. (Peru lost the nitrate province of Tarapacά
and some important guano islands, but retained guano deposits on the northern coast. Guano
remained the chief fertilizer for Peruvian agriculture until the fishmeal boom wiped out thepelicans and seagulls after 1960. The fishing concerns, mostly from the United States, quickly
destroyed the anchovy shoals near the coast to feed U.S. and European pigs and poultry with
Peruvian fishmeal, and the guano-producing birds took off after the fishing boats, ever further
out to sea. Without the strength to fly back, they fell in the ocean, others stayed put, so that in1962 and 1963 one could see flocks of pelicans hunting for food along Lima's main avenue;
when they could no longer take wing, they died on the streets.) But, as Mariάtegui notes,

the collapse failed to wipe out the past: the colonial economic structure wasuntouched even though its sources of sustenance had been removed. As for
Bolivia, it did not realize what the war had cost it: the most important coppermine today, Chuquicamata, lies in the province it lost to Chile. And the victors?
Nitrate and iodine accounted for 5 percent of Chile's income in 1880; ten
years later, more than half came from the export of nitrates from the conquered
territories. In the same period, British investments in Chile more than tripled:
the nitrate region became a British factory. The English took over nitrates atbargain rates. The Peruvian government had expropriated the nitrate fields in
1875, paying for them in bonds; five years afterward, the war had reduced
these documents to a tenth their former value. Such daring adventurers as John
Thomas North and his partner Robert Harvey turned this to good account.
While Chileans, Peruvians, and Bolivians exchanged bullets on the field ofbattle, the English bought up the bonds, thanks to credits graciously afforded
them by the Bank of Valparaiso and other Chilean banks. The soldiers werefighting for them without knowing it. The Chilean government promptly
rewarded the sacrifices of North, Harvey, Inglis, James, Bush, Robertson, andother industrious businessmen: in 188 1 by which time half the bonds were in
the hands of Britain's speculating wizards-it ordered the return of the nitrate
fields to their "legitimate owners." Not one penny had left England to financethis masterpiece of looting.
In the early 1890s Chile was sending three-quarters of its exports to Britain
and getting almost half of its imports from that country: its

141

commercial dependence at the time was even greater than India's. The war had
given Chile a world monopoly on natural nitrates, but the rate king was John
Thomas North. One of his enterprises, the Liverpool Nitrate Company, waspaying 40 percent in dividends. North had landed at Valparaiso in 1866 with
only L10 in the pocket of his dusty old suit; thirty years later princes and dukes,
top politicians and great industrialists, sat at table in his London mansion. He
had appointed himself "Colonel" and, as befitted a gentleman of his standing,
had joined the Conservative Party and the Kent Masonic Lodge. Lord
Dorchester, Lord Randolph Churchill, and the Marquis of Stackpole graced his
extravagant parties, where North danced in Henry VIII costume. Meanwhile, in
his remote nitrate kingdom Chileans put in sixteen-hour work days withouteven Sundays off and were paid in script that lost about half its value at thecompany stores.

Between 1886 and 1890, the Chilean state under President José
Manuel Balmaceda undertook the most ambitious development plan in
its history. Balmaceda promoted some industries, carried out important
public works, modernized education. took measures to break the British
Pacific . He announced in 1888 that the nitrate areas must be
nationalized through the formation of Chilean enterprises, and refused tosell state-owned nitrate fields to the British. Three years later civil war
broke out. North and his colleagues generously financed the rebels, andBritish warships blockaded the Chilean coast while the London press
fulminated against Balmaceda, a "butcher" and "dictator of the worst
stripe."( The Congress headed the opposition to the president— the weakness of many of its
members for pounds sterling was notorious. The bribery of Chileans was "a custom of thecountry,” according to the English, and North's associate Harvey described it thus at the trial of alawsuit brought against him and other Nitrate Railways Company directors in 1897 by somesmall shareholders. Explaining a £100,000 expenditure on bribes, Harvey said: "The public
administration in Chile, as you know, is very corrupt.... I don't say that one has to bribe judges,
but I think many members of the Senate who were short of funds got some part of that money inexchange for their votes, and that it served to prevent the government from flatly refusing tolisten to our protests and claims.....”6) Balmaceda was defeated and killed himself.

The British ambassador informed the Foreign Office: "The British
community makes no secret of its satisfaction over the fall of Balmaceda,
whose victory, it is thought, would have142

implied serious harm to British commercial interests." State investments inroads, railways, colonization of new land, education, and public works
promptly slumped as British enterprises extended their dominions.
On the eve of World War I, two-thirds of Chile's national income camefrom nitrate exports, but it was a prosperity which, far from developing anddiversifying, only heightened the country's structural deformations. Chile
functioned as an appendage of the British economy: the biggest supplier of
fertilizer to the European market had no right to its own life. And then aGerman chemist, sitting in his laboratory, defeated the generals who had won
the day on the battlefield. Perfection of the Haber process, which produces
nitrates by fixing nitrogen from the air, decisively displaced Chilean nitrate andsent Chile's economy into a tailspin,
In the thirsty desert of Tamarugal, where the land dazzles one's eyes withits brilliance, I have stood beside the ruins of Tarapacά. During the boom there
were 120 nitrate fields here; now only two remain in operation. Since thepampa is without moisture or moths, it was not only possible to sell themachine as scrape but also Oregon pine boards from the best houses, zinc
sheets, and even intact nails, nuts, and bolts. Workers specializing in taking
towns apart appeared on the scene: they were the only ones who could get a jobin these razed and abandoned immensities. I saw the debris and the empty
holes, the ghost towns, the dead tracks of the nitrate railway, the silent
telegraph wires, the skeletons of nitrate fields mangled by the bombardment ofyears, the cemetery crosses buffeted at night by the cold wind, the whitish hillsof slag piled up beside the excavations. "Here money flowed and everyone
thought it would never stop," I was told by the surviving residents. They
idealize the past as a paradise; even Sundays-which in 1889 did not exist for
the workers, and were won later by determined strike action-are rememberedwith nostalgia. "Each Sunday on the nitrate pampa," a very old oldster said,"was a national fiesta for us, a new Independence Day every week." Iquique,the biggest nitrate port--"a first-class port," according to its official citationwas the scene of more than one massacre of workers, but its municipal theaterin the Belle É poque style once drew Europe's best opera stars before they went
to Santiago, the capital.

143

COPPER TEETH IN CHILE’S FLESH
Copper soon replaced nitrates as the pillar of Chile's economy, while U.S.
predominance took the place of British. On the eve of the 1929 crisis, U.S.
investments in Chile exceeded $400 million, almost all made in the
exploitation and transport of copper. Anaconda and Kennecott, two concernswith close links as parts of a single world consortium, remained masters of thebest copper deposits up until the Unidad Popular victory of 1970. In half acentury they bled Chile of $4 billion, sent to their home offices under various
headings; yet by their own inflated figures they invested no more than $800
million, almost all in profits taken from the country. (These firms process Chilean
copper in their own distant plants. Anaconda, American Brass, Anaconda Wire & Cable, andKennecott Wire & Cable are among the world's chief manufacturers of bronze and wire.) The

hemorrhage kept growing as production grew, exceeding $100 million a year
in recent times. The masters of copper were masters of Chile. On December 21,
1970, President Salvador Allende spoke to an excited multitude from thegovernment palace balcony. He announced that he had just signed aconstitutional reform project enabling the mines to be nationalized. In 1969, hesaid, Anaconda had garnered $79 million in profits from Chile--the equivalentof 80 percent of its global profits, although its investment in Chile was lessthan one-sixth its total investments abroad. The "bacteriological warfare" of theright--a planned propaganda campaign of terror to avoid nationalization ofcopper and other structural reforms proposed by the left-had been as intense as
in previous elections. The newspapers had pictured heavy Soviet tanks rolling
before La Moneda, the presidential palace; bearded guerrilleros dragging
innocent youths off to death appeared on Santiago walls; every house waited
for the bell to ring...... “Do you have four children? Two will go to the Soviet
Union and two to Cuba," a señora explained. None of this worked; copper is“putting on poncho and spurs" and becoming Chilean.
The United States, its feet caught in the tangle of Southeast Asian wars,
has not concealed its official displeasure at the trend in the southern Andes.
But Chile is not within reach of a sudden Marine

144

expedition, and Allende, after all, is president by every precept ofrepresentative democracy preached by Washington. Imperialism is In the First
stages of a critical new cycle whose portents have shown themselves in
economics; its function as world policeman becomes ever more costly anddifficult. And the price war? Chilean products are now sold in several markets
and new ones can be opened up in the socialist world; the United States lacks
the means to set up a universal blockade of the copper Chile is exporting. Quite
different, of course, was the situation in Cuba twelve years ago, when 100
percent of its sugar was destined for the U.S. market and was wholly dependenton U.S. prices. When Fret won the 1964 elections in Chile, the price of copper
immediately rose; when Allende won the 1970 elections it was already failingand fell further. But copper, always subject to sharp price fluctuations, has inrecent years enjoyed fairly high prices, and since demand exceeds supply,
scarcity prevents any serious drop. While aluminum has substantially replacedcopper as a conductor of electricity, aluminum also requires copper;
furthermore, cheaper and more efficient substitutes have not been found to
displace it from either the steel or the chemical industry, and copper remains
the chief raw material used in gunpowder, brass, and wire manufacture.
Along the Andean slopes Chile has the world's greatest reserves of copper,a third of all those now known. Chilean copper generally appears with othermetals, such as gold, silver, and molybdenum-an additional factor which
stimulates its exploitation. And Chilean workers are cheap: their low costs inChile more than compensated Anaconda and Kennecott for their high costs in
the United States, and Chilean copper, through the device of "expendituresabroad," paid more than $10 million a year to maintain the offices in New York.
The average wage in Chilean mines in 1964 was barely one-eighth of the basic
Kennecott refinery wage in the United States, although the workers'
productivity was the same. The foreign personnel in the big mines inhabit aworld apart, a little state-within-a-state where only English is spoken andwhere newspapers are especially published for the inhabitants. The worker's
productivity has grown as the companies have mechanized methods of
exploitation. Since 1945 copper production has increased by 50 percent, but the
number employed in the mines has fallen by one-third.

145

Nationalization will put an end to a state of affairs that had become
intolerable for Chile, and prevent repetition in copper of the plunder anddescent into the abyss of the nitrate cycle. The taxes the companies paid to thestate did not begin to compensate for the remorseless draining of mineral
resources which nature bestowed but will not renew. Furthermore, the taxes
have decreased in relative terms since 1955, when a system of lower
assessments for higher production was established, and since the Freigovernment's "Chileanization" of copper. In 1965 Frei made the state a partnerof Kennecott and allowed the copper companies to almost triple their profits:
tax assessments were based on an average price of $.29 per pound, althoughheavy global demand raised the actual price as high as $.70. Radomiro Tomic,
the candidate chosen by the Christian Democrats to succeed Frei, admitted thatthe difference between the fictitious and the real price had lost Chile a vast sum
in dollars. In 1969 the Frei government agreed to buy 51 percent of Anaconda's
shares in half-yearly installments, on conditions that set off a new politicalscandal and further swelled opposition ranks. Anaconda's chairman had,according to the version given to the press, previously told the president ofChile: "Excellency, capitalists do not conserve their assets for sentimental
motives but for economic reasons. It is commonplace for a family to keep awardrobe because it belonged to a grandfather, but corporations don't have
grandfathers. Anaconda can sell all of its assets. It only depends on the pricethat is paid."
But everywhere the nationalist tide runs faster, and the best of good humor
cannot stop it; the lesser evil of "nationalization by agreement" had a short life.
The structure of the international copper market is crumbling dangerously, andthe four biggest producers--Chile, Zambia, the Congo, and Peru--have for sometime been meeting to apply a common price-defense policy. At the end of 1969
the Peruvian affiliate of American Smelting & Refining signed a contract
whereby the rich Cuajone mine, conceded to it years earlier, would remain in
its possession. But despite some "traditional" clauses, the terms of the contractreflected the company's weakness and desperation in face of an internationalsituation more unfavorable than ever to its interests. Under “normal" conditions,
American Smelting would not have accepted the elimination of many of its
privileges, which had made foreign mines all-powerful enclaves indifferent to
Peru's economic development

146

needs. Under the new conditions imposed by ascendant nationalism, thecompany hastened to proclaim its satisfaction with the terms of the agreement.
Deep divergencies persist with regard to interpretation of the text, but the
Peruvian government says that the recent state monopolization of mineralmarketing also includes Cuajone copper. The state also reserves refining for its
own projected plants, which will be obliged to hire and fulfill a work plansetting definite terms for investment and production. For not abiding by theterms of the new mining laws, Anaconda and American Smelting have losttheir concessions at Cerro Verde and Michiquillay, two big reserves which had
remained untouched for half a century.

TIN MINERS, UNDER AND ABOVE GROUND
Almost a century ago a man half dead from hunger battled against the rocks of
Bolivia's desolate altiplano. A dynamite charge exploded. When he approached
to pick up the pulverized bits of stone, he was dazzled by what he saw in his
hands: sparkling fragments of the world's richest vein of tin. At dawn hemounted his horse and headed for Huanuni. Tests confirmed the value of his
find. The tin could go straight from the vein to the port without the need forany concentration process. The man became the king of tin, and when he died
Fortune described him as one of the ten multi-est multimillionaires on earth.
His name was Simón Ituri Patiño. For years he sat in Europe making andunmaking Bolivian presidents and ministers, planning the hunger of his
workers, organizing massacres, ramifying and extending his personal fortune:
Bolivia was a country that existed for him, that was at his service.
Bolivia nationalized its tin after the heroic revolutionary days of 1952, butby then the super-rich mines had become poor. On the Juan del Valle mountain
where Patiño found his dazzling vein, the degree of purity of the ore had fallen
120-fold. Of 156,000 tons of rock brought out every month, only 400 tons are
now recovered. The total length of the perforations is twice the distance fromthe mine to La Paz: the mountain is an anthill pierced by countless galleries,
passages, tunnels, and chimneys. It is on the way to becoming an empty shell.
Every year147

it loses a little height, and the gradual process of collapse is eating away the
crest; from a distance it looks like a cavitied molar.
Antenor Patiño not only collected a fat indemnity for the mines his father
had almost exhausted, but he also kept control of the price and destination of
the expropriated tin. He sat with fixed smile in his European mansion. "Mister
Patiño is the affable Bolivian tin king," the society pages continued saying foryears after nationalization. (The New York Times (August 13, 1969) described him thus inecstatically reporting the vacation of the Duke and Duchess of Windsor at Patiño's sumptuous
sixteenth-century castle near Lisbon. "We like to give the servants some peace and quiet," thehostess confessed, describing her daily program to Charlotte Curtis.
Then it is time to vacation in the Swiss mountains; photographers pursue counts andfashionable stars to St. Moritz. A Fifty-year-old millionairess has just lost her second husband, aFord vice-president: she smiles before the flashbulbs and announces her new romance with ayouth who takes her by the arm and gazes at her with frightened eyes, Beside them in themagazine picture is another "in" couple. He is a stubby man with Indian features--thick eyebrows,
hard eyes, squashed nose, prominent cheekbones: Antenor Patiño still looks like a Bolivian. In
another magazine he appears dressed as an Oriental prince, complete with turban, among various
real princes who have gathered in the palace of Baron Alexis de Rédé: Princess Margaret of
Denmark, Prince Henry, Maria Pia de Savoia and her cousin Prince Miguel de Bourbon-Parma,
Prince Lobckowitz, and other toilers in the vineyard.) For nationalizations a fundamental

achievement of the 1952 revolution has not changed Bolivia's role in theinternational division of labor. Bolivia has continued to export the crude
mineral, and nearly all the tin is still refined in the Liverpool smelter ofWilliams, Harvey and Company, which belongs to Patiño. Nationalization of
the production source of any raw material is not enough, as painful experiencehas taught. Even if a country has become nominal master of its own subsoil, it
can remain as condemned to impotency as ever. Throughout its history Bolivia
has produced crude minerals and refined speeches. Rhetoric and poverty
abound: cheap writers and expensive sages have always dedicated themselves
to absolving the guilty of all guilt. Of every ten Bolivians, six still cannot read,
while half of the children do not attend school. In 1971 Bolivia was at last to
get a tin smelter of its own in Oruro, after a chain of betrayals, sabotage,
intrigues, and bloodshed stretching back into the mists of time.( In July 1966,
when General Alfredo Ovando announced an agreement with the German firm Klochner toinstall a state smelter, he saw a new destiny for "those poor mines which have only served, tillnow, to open pits in the lungs of our brothers the miners." As Sergio Almaraz wrote, the men

148who give their lives for the mineral "do not own it. They never did, neither before nor after 1952.
For tin has no immediate value except in ingots. The mineral, a heavy, earthy powder, serves no
purpose except to be thrown into a smelter."7
Almaraz tells the story of an industrialist, Mariano Peró, who for more than thirty years
fought a lone war to have Bolivian tin refined in Oruro and not in Liverpool. In 1946, a few days
after the fall of nationalist President Gualberto Villarroel, Peró walked into the Quemado Palace.
He had come to pick up two ingots of tin, the first produced in his Oruro smelter. There was nopoint in leaving the symbolic ingots to continue adorning the president's desk: Villarroel had
been hanged from a lamppost in the Plaza Murillo, and with his fall the power of the oligarchy
had been restored. Peró picked up the ingots and walked away with them. They were stainedwith newly dried blood.) This country that till now has not been able to produce its

own ingots can, however, boast of eight different law schools which turn out
suckers of Indian blood in industrial quantities.
A story is told of Mariano Melgarejo, a dictator of a century ago, who
forced the British ambassador to drink a barrelful of chocolate as punishment
for sneering at a glass of local chicha. The ambassador was paraded down La
Paz's main street sitting backward on a donkey and then shipped back to
London. An infuriated Queen Victoria supposedly called for a map of SouthAmerica, chalked an X over Bolivia, and pronounced sentence: "Bolivia does
not exist." For the world, in effect, Bolivia did not exist then or later: thelooting of its silver, and later of its tin, was no more than an exercise of the richcountries' natural rights. The tin can is, after all, as much the emblem of theUnited States as the eagle or apple pie. But the tin can is not merely a "pop"symbol; it is also, if unwittingly, a symbol of silicosis in the Siglo XX and
Huanuni mines: Bolivians die with rotted lungs so that the world may consume
cheap tin. Tinplate is made from tin, and the tin is worth nothing: a half-dozen
people fix its global price. What does the Bolivian miner's bitter life matter tothe consumer of preserves or the money-exchange manipulators? Most of thetin refined in the world is consumed in the United States: according to Foodand Agricultural Organization figures, the average U.S. citizen consumes fivetimes more meat and milk and twenty times more eggs than the inhabitant of
Bolivia. And the miners are well below the national average. In the cemetery at
Catavi, where blind people solicit pennies to pray for the dead, a forest ofwhite crosses stand over small graves scattered among the dark headstones ofadults. Of every two children born in the mining camps, one dies soon after

149

opening its eyes. The other, the survivor, will surely grow up to be a miner.
And before he is thirty-five he will have no lungs.
The cemetery creaks. Beneath the graves countless tunnels have been dug,with openings barely wide enough for the men who disappear into them, likerabbits, in search of tin. New deposits of tin have accumulated through theyears in the tons upon tons of slag piled up in huge gray mounds across thelandscape. When the violent rains pour from low clouds over Llailagua--wheremen drink themselves into a desperate stupor in the chicha taverns--one sees
the unemployed crouching beside the dirt roads to collect the tin as it is washeddown. Here, tin is an omnipresent canned god reigning over men and things.
There is not only tin in the bowels of Patiño's old mountain; the black sparkleof cassiterite betrays its presence even in the adobe walls of the camps. Thereis tin, too, in the yellowish mud that slides off the slag, and in the poisoned
water that flows from the mountains; it is in earth and rock, surface and subsoil,in the sands and pebbles of the Seco riverbed. In these dry and stony regions
almost 13,000 feet above sea level, where no grass grows and everything--even
the people--is the dark color of tin, men stoically endure their enforced
separation from the joys of the world. The camps are a huddle of one-room
dirt-floor shacks; the wind howls through cracks in the walls, cutting to thebone. A university study of the Colquiri mine found that of every ten boys
questioned, six sleep in the same bed with their sisters. "Many of the parents,"
the report added, "feel embarrassed when their children observe them in thesexual act." There are no baths; the latrines are public sheds covered with filthand flies. People prefer to use open ash-dumps where, despite the accumulated
garbage and excrement and the contentedly rooting pigs, at least air circulates.
Likewise, the water supply is collective: people must await the moment of its
arrival and hurry with gasoline tins and pots for a place in the queue at the
public trough. The food is meager and bad. It consists of potatoes, beans, rice,
dried potato starch, ground corn, and sometimes a little tough meat.
We were deep down inside the Juan del Valle mountain. Hours earlier thesiren shrilly summoning workers of the first shift had resounded through thecamp. Going from gallery to gallery inside the mine, we had passed fromtropical heat to polar cold and back again to the heat, always--for hours--in thesame poisoned air: humid, gas-filled, dusty,

150

smoky. Breathing it we could understand why miners lose their senses of smell andtaste in a few years. They all chew coca-leaf and ash as they work, and this too ispart of the annihilation process, for coca, by deadening hunger and masking fatigue,
turns off the alarm system which helps the organism stay, alive. But the worst of it
was the dust: circles of light from the miners' helmets danced dimly in the gloom,
showing thick white curtains of deadly silica. It does not take long to do its work.
The first symptoms are felt within a year, and in ten years one enters the cemetery.
Late-model Swedish drills are used in the mine, but the ventilation system andwork conditions have not improved with time.
Up on the surface, independent workers use twelve-pound wooden
sledgehammers to conquer the rock, just as they did a century ago, as well as
antique pumping devices and sifters to collect the mineral. They work like dogs
and are paid in pennies, but they have the advantage of fresh air over theunderground workers, prisoners sentenced without appeal to death by asphyxiation.
The din of the drills stopped and the workers took a break as we waited formore than twenty charges of dynamite to explode. Death in the mine can also bequick and thunderous: it is enough to miscount the number of detonations or toleave a wick burning longer than it should. Or a loose rock, a tojo, may crash on
your head. Another form of death is by bullet: St, John's Night 1967 was the latest
bead in a long rosary of massacres. At dawn soldiers took up kneeling positions on
the hillsides and fired volley after volley into mining camps lit by bonfires for the
fiesta. (“When I sit up, I'm drunk. My eyes--see three or four of you. Can't feed myself. I'm just ababy, a child." Saturnino Condori, a veteran construction worker in the Siglo XX mining camp, lies in
a Catavi hospital bed. He has been there four years, one of the victims of the St. John's Night massacre.
He had been offered triple pay for working on Saturday, and he decided not to join in the chicha party
like everyone else. He went to bed early. That night he dreamed that a gentleman was hurling spikes
into his body: "Big spikes, they stuck in me." He awoke several times because of the rain of bullets
that began whamming into the camp at 5 a.m. "My body felt all torn to bits, I had the shivers, and I
was scared, scared--that's how it was. My old woman said to escape, but what did I do? I didn't go
anywhere. Get going, she kept saying. Guns firing in the night, what's it about, what goes on, pap-pappap-pap-pap! And me waking and drowsing off and not escaping, and the old lady repeating. Get amove on, escape! What'll they do to me, I says to her, I'm a bricklayer, what could they want to do?"He woke again around eight and sat up in bed. A bullet tore through the roof and through his wife's hat,burying itself in his body and cracking his spinal column) But slow, silent death is the mine's

speciality. Vomiting151

blood, coughing, the sensation of a leaden weight on the back and acute chest
pains are the signs that herald it. After the medical diagnosis, pilgrimages to an
endless chain of bureaucrats. You are allowed three months before eviction
from your house.
After the explosions we could talk. The workers' cheeks bulged with cocaand greenish juice oozed through their tight lips. A miner passed in a hurry,
splashing up mud from between the rails of the gallery. "That's a new man,"they told me. "See how fresh he looks in his army pants and yellow jacket? Just
came on the job, and how he works! He still thinks he's smart. Still doesn't feelanything.
The technocrats and bureaucrats do not die of silicosis, but they live off it.
The general manager of the Corporatión Minera Boliviana (COMIBOL) earns
100 times as much as a worker. From a slope that falls sharply to a riverbed, inthe Liallagua region, one can see the María Barzola pampa. It was so named inhonor of the militant woman worker who, the Bolivian flag sewn to her body,was machine-gunned at the head of a demonstration thirty years ago. Beyond
the María Barzola pampa one can see Bolivia's best golf course--the one
Catavi's engineers and chief officials use. Dictator René Barrientos had cut theminers' hunger wages in half in 1964 and at the same time had raised salaries
for technicians and chief bureaucrats. The top-echelon salaries are secret-secretand paid in dollars. There is an all-powerful "advisory group" of techniciansfrom the Inter-American Development Bank, the Alliance for Progress, and theforeign credit bank, who lay down the guidelines for the nationalized mines in
Bolivia-to such an extent that COMIBOL, by now a state within a state, has
become living propaganda against the nationalization of anything. The powerof la rosca, the old oligarchy, has been replaced by that of a numerous "newclass" which has devoted its best efforts to sabotaging the state-owned minesfrom within. The engineers not only torpedoed every project and plan for anational smelter, but helped to confine state mining within the limits of the old
Patiño, Aramayo, and Hochschild deposits, accelerating the process of draining
the reserves. Between the end of 1964 and April 1969, Barrientos, with theopen complicity of technicians and managers, broke the sound barrier in thesurrender of Bolivian subsoil resources to imperialist capital. Sergio Almaraz
has told the story of tin concessions to the International Mining Corporation.
With a mere $5,000 in152declared capita, this pompously named enterprise secured a contract thatenabled it to amass more than $900 million.8

IRON TEETH IN BRAZIL'S FLESHThe United States pays less for Brazilian and Venezuelan iron than for ironfrom its own subsoil. But this is not the key to the feverish desire for iron ore
deposits abroad: more than just a brassiness, capture of foreign mines is animperative of national security. Steel cannot be made without iron, and 85
percent of U.S. industrial production contains steel in some form. As we haveseen, the subsoil is becoming exhausted. When supplies from Canada werereduced in 1969, this was at once reflected in the increase of iron imports from
Latin America.
Venezuela's Cerro Bolivar is so rich that its dirt is taken by U.S. Steel andloaded directly into the holds of U.S.-bound ships; its flanks betray the deep
wounds that bulldozers are making in it. The company estimates that it
contains some $8 billion worth of iron. In a single year, 1960, U.S. Steel andBethlehem Steel realized a greater than 30 percent profit on their Venezuelan
iron investment, and this profit equaled all the taxes paid the Venezuelan statein the decade since 1950. Since both firms sell the iron ore to their own steel
mills in the United States, they have no interest in defending prices; on thecontrary it suits them that the raw material should be as cheap as possible. The
world price of iron, which fell sharply between 1958 and 1964, has been
relatively stable since and remains so; meanwhile, the price of steel has
continued to rise. Steel is produced in the world's wealthy centers, iron in thepoor suburbs; steel pays "labor aristocracy" wages, iron mere subsistence
wages.
Thanks to information gathered and published by the International
Geological Congress in Stockholm in 1910, U.S. businessmen could for the
first time evaluate the amount of wealth in the subsoil of various countries.
One of these--perhaps the most tempting--was Brazil. Many years later, in
1948, the U.S. embassy in Brazil created a new job: “minerals attaché.” Fromthe start he had at least as much work as the military or cultural attachés--somuch, indeed, that two minerals attachés were soon appointed instead of one.
Soon Bethlehem Steel153

received the splendid Amapá manganese deposits from Eurico Dutra’s
government. By 1952 Brazil had agreed, in a military pact with the UnitedStates, not to sell raw materials of strategic value--such as iron--to any socialist
country. This was one of the causes of the tragic fall of President Getulio
Vargas, who sold iron to Poland and to Czechoslovakia in 1953 and 1954 atmuch higher prices than the United States was paying. In 1957 Hanna Mining
paid $6 million for most of the shares of the British firm St. Mining, which had
been exploiting Minas Gerais gold since the empire's early days. St. John
operated in the Paraopeba valley, where the greatest iron reserves on earth,valued at $200 billion, are located. The British firm was not legally authorized
to exploit this fabled wealth, and, under clear constitutional and legal clauses(which Duarte Pereira lists in his work on the subject), neither was Hanna. But
as it was later realized, this was the business deal of the century.
At the time Hanna's chairman George Humphrey, was a big wheel in the
U.S. government--he was secretary of the treasury and director of the ExportImport Bank (Eximbank), the official bank for financing foreign tradeoperations. St. John had asked Eximbank for a loan, but nothing came of it
until Hanna took over the firm. After that, successive Brazilian governments
were subjected to fierce pressure: Hanna's directors, lawyers, and adviser-Lucas Lopes, José Luiz Bulhões Pedreira, Roberto Campos, Mario da Silva
Pintos, Otavio Gouveia de Bulhões--were also top-level members of theBrazilian

governmentandcontinued occupying postsasministers,

ambassadors, and directors of services in subsequent years. Hanna had picked
its general staff sagaciously. The bombardment to recognize Hanna's right toexploit the iron which properly belonged to the state grew in intensity. On
August 21, 1 961, President Jânio Quadros signed a bill annulling the illegal
rights extended to Hanna and restoring Mnas Gerais iron to the national reserve.
Four days later the armed forces made Quadros resign: “Terrible forces haverisen against me," said the text of his resignation.
A popular rising in Põrto Alegre, headed by Leonel Brizola, frustrated themilitary coup and put Quadros's vice-president, Joâo Goulart, in power. But
when a minister sought to implement the fatal decree against Hanna, U.S.
Ambassador Lincoln Gordon wired Goulart, indignantly protesting thegovernment's threatened strike against the interests of a154

U.S. concern. The judiciary decreed Quadros's bill valid, but Goulart vacillated.
Meanwhile, Brazil set the wheels in motion for a minerals transshipment depot
in the Adriatic which would supply iron to various European countries,
socialist and capitalist. Such a direct sale of iron ore implied an intolerable
defiance of the big firms that manipulate global prices. The depot nevermaterialized, but other nationalist measures--such as plugging the drain of theforeign concerns' profits--were implemented and proved to be detonators in an
explosive political situation. The Damoclean sword of the Quadros billremained hanging over Hanna's head. Finally, on the last day of March 1964,
the coup d'état exploded in Minas Gerais, where the disputed iron deposits
happened to be located. "For Hanna," commented Fortune, "the revolt that
overthrew Goulart last spring arrived like a last-minute rescue by the 1st
Cavalry.”9Hanna men moved in to occupy the vice-presidency and three ministries.
On the day of the military revolt, the Washington Star had run an editorial that
was at least prophetic: "Here is a situation in which a good, effective, old-stylecoup by conservative military leaders may well serve the best interests of all
the Americas."10 Goulart had still neither resigned nor left Brazil when
President Lyndon Johnson, unable to restrain himself, sent his famous
congratulatory telegram to Ranieri Mazzili, who had provisionally assumed thepresidency: "The [North] American people have watched with anxiety thepolitical and economic difficulties through which your great nation has beenpassing and have admired the resolute will of the Brazilian community toresolve these difficulties within a framework of constitutional democracy andwithout civil strife."11 A little over a month later Ambassador Lincoln Gordon,
on a euphoric tour of army barracks, said in a speech at the war college, theEscuela Superior de Guerra, that the success of the plot "might be included
with the Marshall Plan proposal, the Berlin blockade, the defeat of communist
aggression in Korea, and the solution of the Cuban missile crisis as one of themost important moments of change in mid-twentieth century world history.”12
One of the U.S. embassy's military officials had offered material aid to theplotters shortly before the coup, and Gordon himself had suggested that theUnited States would recognize an autonomous government in São Paulo if it
could maintain itself for two days. It is not worth detailing all the evidence of155

the importance of U.S. economic aid (we will take this up later), and of U.S.
help on the military and trade union level, in the dénouement of these
events.( According to a revealing article in Selecciones del Reader’s Digest, thanks to the good
offices of the American Institute for Free Labor Development, which has its headquarters inWashington, the Brazilian putschists could coordinate their troop movements by cable. The new
military regime rewarded AIFLD by designating four of its graduates "to clean up the Reddominated unions… ”1)

After it tired of throwing the books of Dostoevski, Tolstoy, Gorky, andother Russians into bonfires or into Guanabara Bay, and after it had sentenced
countless Brazilians to exile, prison, or the grave, the Castelo Branco
dictatorship got down to business: it gave away the iron and everything else.
Hanna got its decree on December 24, 1964. This Christmas parcel contained
not only total freedom to exploit the Paraopeba deposits in peace, but support
for the firm's plans to open a port of its own sixty miles from Rio and to build arailroad to transport the iron. In October 1965, Hanna formed a consortiumwith Bethlehem Steel for joint exploitation of the iron deposits. The tireless
Lincoln Gordon had finished the job, everyone could live happily ever after,and he left to preside over a university in Baltimore. In April 1966, after somemonths of vacillation, Johnson named John Tuthill as his replacement,
explaining that he had delayed because Brazil needed a good economist.
U.S. Steel did not lag behind. Why should it be left off the party invitation
list? Before long it teamed up with a state mining enterprise, the Companhia
Vale do Rio Doce, which in effect became its official pseudonym. Resigningitself to no more than 49 percent of the shares, U.S. Steel thus got the Sierra delos Carajás iron deposit concession in Amazonia. Technicians say that it
compares in size with Hanna-Bethlehem's bonanza in Minas Gerais. The
Brazilian government, as usual, said that Brazil lacked the capital to exploit its
own wealth.

THE BLACK CURSE OF PETROLEUM
Along with natural gas, petroleum is today the chief fuel that keeps our world
in motion; it is a raw material of rising importance for the156

chemical industry and is the basic strategic material for military activities.
Nothing compares with this "black gold" as a magnet for foreign capital,
nothing earns such lush profits, no jewel in the diadem of capitalism is somonopolized, and no businessmen wield the global political power of the great
petroleum corporations. Standard Oil and Shell seat and unseat kings andpresidents, finance palace plots and coups d'état, have innumerable generals,
ministers, and James Bonds at their command, and make decisions about peaceof war in every field and every language. Standard Oil of New Jersey (nowExxon) is the capitalist world's biggest industrial enterprise; outside the UnitedStates no industrial enterprise has greater power than Royal Dutch/Shell.
Affiliates sell crude petroleum to subsidiaries which refine it and sell it tobranch organizations for distribution: there is no loss of blood in the wholeinternal circulatory system of the cartel, which also owns the pipelines andmost of the oil fleets on the seven seas. Prices are manipulated on a world scale
to keep taxes low and profits high: the crude petroleum gets constantly cheaper,
the refined constantly, more expensive.
With petroleum, as with coffee or meat, rich countries profit more from thework of consuming it than do poor countries from the work of producing it.
The ratio is ten to one; of the $11 that the derivatives of a barrel of petroleum
sell for, countries exporting the world's most important raw material get a sum
total of $1 from taxes and extraction costs. Countries in the developed zone,
where the oil companies have their head offices, get the other $10, the sum
total of their own taxes--eight times larger than those of the producing
countries--and the costs and profits of transport, refining, processing, anddistribution, monopolized by the big corporations.14
While petroleum from U.S. wells enjoys high prices and U.S. oil workers'
wages are comparatively generous, the price of Venezuelan and Middle
Eastern petroleum has been falling through the late 1950s and all through the
1960s. A barrel of Venezuelan petroleum, for example, cost $2.65 in 1957 and$1.86 as this chapter is written. The Rafael Caldera administration has
promised to unilaterally fix the price much higher, but even by manipulating
statistics it will not reach the 1957 level. The United States is at the same time
the biggest producer and the biggest importer of petroleum. When most of thecrude petroleum sold by the oil companies came from U.S. wells, the price was
kept up;157

but when, during World War II, the United States became a net importer andthe cartel began applying a new policy, the price systematically sagged. An
odd inversion of the “laws of the market”: the price of petroleum falls as world
demand rises and factories, automobiles, and generating plants multiply. And
another paradox: while the price of petroleum falls, the price consumers
everywhere pay for fuel rises. There is an enormous disproportion between theprice of crude oil and that of its derivatives. This whole chain of absurdity isperfectly rational: no need to seek an explanation in supernatural forces. For, as
we have seen, the oil business in the capitalist world is in the hands of an allpowerful cartel. The cartel was born in 1928, in a castle wreathed in Scottish
mists, ‘when Standard Oil of New Jersey, Shell, and Anglo-Iranian (nowknown as British Petroleum) agreed to divide up the planet. Standard Oil of
New York (now Mobil), Standard Oil of California, Gulf, and Texaco joined
later. Founded by Rockefeller in 1870, Standard Oil had split in 1911 into
thirty-five different firms under the requirements of the Sherman Anti-Trust
Act; the first of the teeming Standard family as we now know it is Standard Oilof New Jersey. Today its petroleum sales, added to those of Standard Oil of
New York and Standard Oil of California, amount to half of the cartel’s entire
sales. The Rockefeller group of oil concerns is so vast that it accounts for onethird of all profits earned throughout the world by all U.S. corporations.
Standard Oil of New Jersey, a typical multinational corporation, earns its
biggest profits abroad, with Latin America bringing in more than the UnitedStates and Canada put together: south of the Rio Grande its profit rate is fourtimes higher. In 1957, more than half of its global profits came from its
Venezuelan affiliates; in the same year Shell’s Venezuelan affiliates accounted
for half of Shell’s world profits. These multinational corporations do notbelong to the nations in which they operate: their multinationality consists infunneling a torrent of petroleum and dollars from the four points of thecompass into the capitalist system’s centers of power. They have no need toexport capital to finance the expansion of their business; the profits taken outof poor countries not only flow directly to the few cities where their major
coupon-clippers live, but they are partially reinvested to strengthen and extend
the international operations network. The structure of the cartel implies thedomination of many countries and the penetration of many governments;
petroleum158

saturates presidents and dictators and further deforms the societies it conscripts
into its service. It is the orporations, pencils on a terrestrial globe, that decide
which zones will be exploited and which held in reserve, what price producers
must get and consumers must pay. The natural wealth of Venezuela, and ofother oil-bearing Latin American lands subjected to this organized looting, has
become the chief instrument of political servitude and social degradation. Thisis a long story of infamies, of deeds of business prowess which have spread a
black curse across the earth.
Cuba brought handsome peripheral profits to Standard Oil of New Jersey.
Standard Oil bought crude oil from its Vnezuelan affiliate, Creole Petroleum,and refined and distributed it on the island at prices that best suited it at eachstage. When the Cuban Revolution was in full effervescence in October 1959,
an official State Department note to Havana expressed concern about the futureof U.S. investments in Cuba: bombardments by “pirate” planes from the north
had already begun and relations were tense. rn January 1960, President
Eisenhower cut the Cuban sugar quota, and in February Fidel Castro signed a
trade agreement with the USSR to exchange sugar for petroleum and otherproducts at prices beneficial to Cuba. Standard Oil ofNewJersey, Shell, andTexaco refused to refine Soviet petroleum, and in July the Cuban government
nationalized them without compensation. The ccrporations, headed byStandard Oil, began a blockade, first boycotting qualified personnel, thenmachinery replacement parts, then transportation. The conflict was a test ofsovereignty and Cuba emerged with flying colors. It simultaneously stopped
being a star in the U.S. flag and a cog in the worldwide Standard Oil machine.
Twenty years earlier, Mexico had had its own experience of aninternational embargo decreed by Standard Oil ofNewJersey and RoyalDutch/Shell: from 1939 to 1942 the cartel organized a blockade of Mexican
petroleum exports and of supplies for its wells and refineries. President Lázaro
Cárdenas had nationalized the oil concerns. Nelson Rockefeller, who had
graduated as an economist in 1930 with a thesis on his own Standard Oil’s
virtues, journeyed to Mexico to negotiate an agreement, but Cárdenas would
not budge. Standard Oil and Shell, having divided up Mexico by taking thenorth and the south respectively, defied Mexican Supreme Court rulings on theapplication of159

Mexican labor laws; at the same time, they drained the famous Fajo de Oro
deposits with startling speed and were making Mexicans pay more for theirown petroleum than they received for what was sold in the United States and inEurope. (This is still a normal phenomenon in various countries. In Colombia, for example,
where petroleum is freely exported without any taxes, the state refinery buys Colombian
petroleum from foreign concerns at a price 37 percent higher than the world price, and has to pay
in dollars.)

In a few months of feverish exporting, wells that could havecontinued producing for thirty or forty years were drained dry. “Nearly three
decades of foreign operations had robbed Mexico of her richest oil deposits,”
writes Harvey O’Connor, “and left only a collection of antique refineries,
depicted fields, ramshackle camps, the slum city of Tampico, and bitter
memories.” 15
In less than twenty years production had dropped by 80 percent. Mexico
was left with a decrepit industry; geared to foreign demand, and 14,000
workers; the technicians took off and even the transportation network
disappeared. Cárdenas made recovery of the petroleum a national crusade andconquered the crisis with imagination and courage. Today Pemex (Petróleos
Mexicanos), the enterprise created in 1938 to take charge of all production andmarketing, is the largest nonforeign concern in Latin America. Althoughbetween 1947 and 1962 the Mexican government paid heavy indemnities to the
expropriated corporations out of Pemex’s profits, Mexico, as Jesds Silva
Herzog has said, “is not the debtor of these pirate companies but theirlegitimate creditor.” 16 In 1949 Standard Oil vetoed a loan the United States
was going to make to Pemex, and years later, after generous indemnities had
healed the wounds, Pemex had a similar experience with the Inter-American
Development Bank.
Uruguay was the first Latin American country to install a state refinery.
ANCAP was created in 1931, and the refining and sale of crude petroleum
were to be among its chief functions. It was a national response to a long
history of abuse by the international cartel on the Rio de la Plata. At the sametime, the state contracted to buy cheap petroleum from the USSR. The cartel
immediately financed a campaign of calumny against the Uruguayan state
concern and began threatening that no one would sell Uruguay machinery, it
would find itself without any crude petroleum, the state was incompetent to run
such a complicated160business. The palace coup of March 1933 exuded the smell of oil; the Gabriel
Terra dictatorship ANCAP’s right to monopolize fuel imports, and in January
1938 it signed ominous “secret agreements”— still in effect— with the cartel,
agreements which the public did not learn of for a quarter of a century.
Uruguay has to buy 40 percent of its crude petroleum from whomever Standard
Oil, Shell, Atlantic, or Texaco might indicate, at prices fixed by the cartel; andthe state, while retaining the refining monopoly, has to pay all the
corporations’ costs, including publicity, executive salaries, and luxurious officefurnishings. “Esso es progreso”— Esso is progress— warbles the TV, and theadvertising barrage does not cost Standard Oil a cent. The Banco de la
Republica’s lawyer is also in charge of Standard Oil’s public relations; thestate pays him for both jobs.
In 1939 ANCAP’s refinery— emasculated shorstly after birth, as we haveseen, but still an example of defiance to cartel pressure— was operating
successfully. The chief of Brazil’s Conselho Nacional del Petróleo, General
Horta Barbosa, went to Montevideo and was exhilarated by what he saw: the
Uruguayan refinery had paid off almost all of its installation costs in a single
year. Thanks to the efforts of Barbosa and the enthusiasm of other nationalist
military men, the Brazilian state enterprise was able to get under way in 1953,
to the cry of "The petroleum is ours!" Today Petrobras is the biggest concern in
Brazil.17 It explores, extracts, and refines Brazilian petroleum. But Petrobras
was also emasculated when the cartel appropriated two of its big sources ofincome. First, the distribution of gasoline, oils, kerosene, and various fuels, anenormous business which Esso, Shell, and Atlantic manage effortlessly by
telephone and so profitably that it attracts more U.S. investment than anythingin Brazil except the automobile industry. Second, the lush petrochemicalindustry, which the Castelo Branco dictatorship denationalized a few years ago.
Recently the cartel started a loud campaign to take the refining monopoly awayfrom Petrobras. Petrobras's defenders recall that before 1953, when the Field
was wide open, private industry paid no attention to Brazilian petroleum,18 andremind the short-memoried public of an episode that illustrates the goodwill of
the monopolies. In 1960 Petrobras assigned two Brazilian technicians to head
up a survey of the country's deposits. As a result of its reports, the little
Northeastern state of Sergipe took the lead in

161

Petroleum production. Shortly before, in August, U.S. technician Walter Link,
who had been chief geologist for Standard Oil of New Jersey, had received$500,000 from the Brazilian state for a pile of maps and an extensive reportbelittling the Sergipe deposits as "unviable": until then they had been rated“Grade B.” and Link demoted them to “Grade C”; it was subsequently
established that they were Grade A.19 According to Harvey O'Connor, Link
was said to have worked the whole time as a Standard Oil agent, intending in
advance not to find any petroleum so that Brazil would remain dependent on
Imports from the Rockefeller affiliate in Venezuela.20
Likewise in Argentina, the foreign concerns and their native echoes havealways insisted that the subsoil contains little petroleum, although
investigations by technicians of Yacimientos Petroliferos Fiscales (YPF), thestate organization, have established beyond doubt that deposits exist beneath
almost half of the national territory and the Atlantic coastal shelf. Each time
talk of the Argentine subsoil's poverty becomes fashionable, the government
makes a new concession to some member of the cartel. YPF has been the targetof continuous and systematic sabotage since its inception. Until a few years
ago, Argentina of the last historical settings for the interimperialist conflict
between declining Britain and the ascendant United States. Cartel agreements
did not prevent a dispute, sometimes involving violence, between Shell andStandard Oil over Argentina's petroleum: the coups d'état that have followed
one after the other in the past forty years provide some eloquent coincidences.
The Argentine Congress was ready to pass the oil nationalization law on
September 6, 1930, when José Felix Uriburu’s barracks Putsch ousted
nationalist leader Hipólito Irigoyen from the presidency. The Ramón Castillo
government fell in June 1943 when it was signing an agreement to promote oil
extraction by U.S, capitalists. In September 1955, Juan Domingo Perón went
into exile when the Argentinian Congress was about to approve a concession toStandard Oil of California. Arturo Frondizi set off more than one acute crisis in
the three branches of the armed services by announcing that the country's entire
subsoil would be put up for bids by concerns interested in extracting petroleum.
In August 1959 the offer was called off for lack of bidders. The plan waspromptly revived and again called off in October 1960. Frondizi made various
concessions to U.S. members of the cartel, and162

British interest— decisive in the navy and inone political group in the army-played a part in his fall in March 1962. Arturo Illia annulled the concessions
and was overthrown in 1966; Juan Carlos Ongania's hydrocarbons law thefollowing year showed the United States to be the final victor in the internal
struggle.
Petroleum has not only sparked coups d'état in Latin America: it also set
off a war--the Chaco War of 1932-1935--between South America's two poorest
peoples. René Zavaleta called the mutual massacre of Bolivians andParaguayans "the war of the naked soldiers."21 Louisiana Senator Huey Long
shook the United States on May 30, 1934, with a violent speech accusing
Standard Oil of New Jersey of provoking the conflict and of financing the
Bolivian army so that it would appropriate the Paraguayan Chaco on its behalf.
It needed the Chaco--which was also thought to be rich in petroleum--for apipeline from Bolivia to the river. "These criminals," Long charged, "havegone down there and hired their assassins."( Long took off the adjectival brakes
regarding Sandard Oil, calling it "criminal... evil ...wicked ... domestic assassin ... foreignassassin international nonspirator... a gang of rapacious highwaymen and thieves… a bunch of
vandals and thieves.”22)

At Shell's urging, the Paraguayans marched to theslaughterhouse: advancing northward, the soldiers discovered Standard Oil's
perforations at the scene of the dispute. It was a quarrel between two
corporations, enemies and at the same time partners within the cartel, but it was
not they who shed their blood. In the end Paraguay won the war but not thepeace. Spruille Braden, the notorious Standard Oil agent, chaired thenegotiating commission which retained for Bolivia and for Rockefeller
thousands of square miles claimed by the Paraguayans.
Close to the battlefields of that war lie the oil wells and great natural gas
deposits which Gulf Oil, the Mellon family concern, lost in Bolivia in October1969. "The days of indignity for Bolivia are ended," cried Alfredo Ovando inproclaiming nationalization from the Quemado Palace balcony. Two weeks
earlier, before he had taken power, Ovando had sworn to a group of nationalist
intellectuals that he would nationalize Gulf; he had drafted the decree, signed it,
and kept it undated in an envelope(Five months earlier, René Barrientos’s helicopter hadtangled fatally with telegraph wires in the Arque ravine. Human imagination could not haveconceived of a more perfect death. The helicopter was a personal gift from the Gulf Oil; thetelegraph wires belong to the state. Burned up along with Barrientos were two suitcases full ofmoney he was taking to distribute among the peasants, as well as some machine-guns which163

began spraying bullets around the flaming helicopter, preventing anyone from coming to therescue as the dictator was roasted alive.)

In addition to decreeing nationalization, Ovando annulled the Petroleum
Code, called the "Davenport Code" in homage to the lawyer who drafted it inEnglish. In return for accepting it Bolivia had obtained a U.S. loan in 1956; on
the other hand, Eximbank, private New York bankers, and the World Bank had
always turned down requests for credit to develop YPFB, the state petroleum
organization. The U.S. government always makes common cause with private
oil corporations. (Examples abound in recent and remote history, Irving Florman, U.S.
ambassador to Bolivia, reported to the White House’s Donald Dawson on December 28, 1950:“Since my arrival here I have worked diligently on the project of throwing Bolivia’s petroleum
industry wide open to American private enterprise, and to help our national defense program ona vast scale." He went on: "I knew that you would be interested to hear that Bolivia's petroleum
industry and the whole land is now wide open for free American enterprise. Bolivia is, therefore,
the world's first country to denationalize or to have nationalization in reverse, and I am proud tohave been able to accomplish this for my country and the administrator.”23) Under the Code,

Gulf received a forty-year concession to the country's richest fields. The Codeprovided for ridiculously low state participation in the companies' profits: formany years, a mere 11 percent. The state became a partner in theconcessionaire’s expenses but had no control over the spending, making thisthe last word in giveaways: the state took the risks, Gulf took none. In the"letter of intention" signed by Gulf at the end of 1966, during the Barrientos
dictatorship, it was even provided that in joint operations with YPFB, Gulf
would recover 100 percent of the capital it invested in exploration of an area if
petroleum was not found. If it was found, expenses would be recovered
through later exploitation, but meanwhile would be charged to the stateorganization as liabilities. And Gulf would appraise the expenses to its own
taste. 24 In this same "letter of intention," Gulf appropriated ownership of gas
deposits which had never been conceded to it--the Bolivian subsoil contains
much more gas than petroleum.
The parry was not yet over. A year before Ovando expropriated Gulf in
Bolivia, Velasco Alvarado had nationalized the deposits and refinery ofStandard Oil of New Jersey's Peruvian affiliate, International Petroleum (IPC).
Velasco had taken power at the head of a military junta and on the crest of apolitical scandal: the Belaúde administration had "lost"164

the last page of the Talara agreement between the state and IPC. The vanishedpage contained the guarantee of the minimum price to be paid by IPC for crude
petroleum produced at its refinery. The scandal did not end there. It was also
disclosed that the Standard Oil subsidiary had swindled the state out of morethan a billion dollars in unpaid taxes and other kinds of fraud and corruption
over half a century. The head of IPC had had sixty interviews with President
Belaúnde before reaching the agreement that sparked the military rising; for
two years the U.S. State Department had suspended all aid to Peru while thenegotiations proceeded, were broken off, and reopened.( When the scandal broke,
the U.S. embassy failed to observe a prudent silence. One of its officials even said that no
original copy of the Talara agreement existed.25) There was hardly time to restore theaid since the submissive president's surrender seated his fate. When the
Rockefeller concern protested before a Peruvian court, people threw coins in its
lawyers' faces.
Latin America is a Pandora's box; the torture subcontinent's capacity tospring surprises is never exhausted. In the Andean region, military nationalism
has come impetuously to the surface like a long-hidden subterranean river. The
same generals who today are pursuing a contradictory but well-aimed policy ofreform and patriotic affirmation were only yesterday mowing down
guerrilleros. Thus many of the banners of the dead have been picked up by
those who killed them. In 1965 the Peruvian officers were spraying guerrillazones with napalm, their know-how supplied by IPC at the Las Palmas air basenear Lima. The corporation could not foresee what lay in store for it.

VULTURES OVER LAKE MARACAIBO
Though its participation in the world market has dwindled by half in the past
decade, Venezuela is still the top petroleum exporter. Almost half the profits
U.S. capitalists take from Latin America come from Venezuela. One of theworld's richest countries, it is also one of the poorest and most violent. It boasts
of Latin America's highest per-capita income and most complete and up-todate highway network, and no country consumes as much Scotch whiskey per
inhabitant. Immediately

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exploitable iron, petroleum, and gas reserves in its subsoil could multiple byten the wealth of every Venezuelan; the population of Germany or England
could fit into its enormous virgin lands. In half a century, oil rigs haveextracted an income double the resources of the Marshall Plan. Since the firstwell blew, the population has multiplied by three and the national budget by100, but most of the people scramble for the plush minority’s leavings, still as
poor as the country depended on cacao or coffee. The capital, Caracas, hasgrown 700 percent in thirty years: the old city of airy patios, central and silent
cathedral is covered with skyscrapers as Lake Maracaibo covered with oilwells. Today it is a supersonic, deafening, air-conditioned nightmare, a centerof oil culture that might pass as the capital of Texas. Caracas chews gum andloves synthetic products and canned foods; it never walks, and poisons theclear air of the valley with the fumes of its motorization; its fever to buy,
consume, obtain, spend, use, get hold of everything leaves it no time to sleep.
From surrounding hillside hovels made of garbage, half a million forgotten
people observe the sybaritic scene. The gilded city's avenues glitter withhundreds of thousands of late-model cars, but in the consuming society not
everyone consumes. According to the census, half of Venezuela's children andyouths do not go to school.
Every day Venezuela produces 3 .5 million barrels of petroleum to movethe capitalist world's industrial machinery, but four-fifths of the concessions
owned by Standard Oil, Shell, Gulf, and Texaco are untouched reserves andover half the value of the exports never returns to the country. Creole (Standard
Oil) publicity brochures point with pride to the corporation's Venezuelan
philanthropies much as the Royal Guipuzcoan Company proclaimed its own
virtues in the eighteenth century; the profits milked from this wonderful cow,in proportion to capital invested, are only comparable with those obtained by
old-time slave merchants and pirates. No country has yielded as much forworld capitalism in so short a time: the wealth drained from Venezuela,
according to Domingo Alberto Rangel, exceeds what the Spaniards took from
Potosí or the English from India. Some estimates put the real profits ofVenezuelan oil concerns at 38 percent in 1961 and 48 percent in 1962,
although the profit rates announced in their balance sheets were 15 percent and17 percent respectively. The difference is attributable to the juggling ofaccounts and to hidden transfers. In the complex

166

mechanism of the oil business, with its multiple simultaneous price systems, it
is hard to estimate the profits hidden behind the artificial reduction of the priceof crude oil-which from well to gasoline pump always circulates through thesame veins--and the artificial raising of production costs which include fancy
salaries and inflated publicity expenditures. But by official figures, Venezuela,
far from receiving new investments from abroad, has experienced systematic
de-investment in the past decade. It suffers an annual bloodletting of more than$700 million, "convicted and confessed" as “interest on foreign capital.” The
only new investments are provided by the country itself. Meanwhile, oil
extraction costs are falling sharply as the companies use less labor. From 1959
to l962 alone, the work force was cut by 10,000; somewhat more than 30,000
workers remained active, but by the end of 1970 petroleum only employed
23,000. Yet production has greatly increased in the decade.
Growing unemployment sharpened the crisis in the Lake Maracaibo oilcamps. The lake is a forest of towers. Within these iron structures the endlessly
bobbing pumps have for half a century pumped up all the opulence and all thepoverty of Venezuela. Alongside, flames lick skyward, burning the natural gas
in a carefree gift to the atmosphere. There are pumps even in houses and on
street corners of towns that spouted up, like the oil, along the lakeside-towns
where clothing, food, and walls are stained black with oil, and where evenwhores are known by oil nicknames, such as "The Pipeline," "The Four
Valves," "The Derrick," "The Hoist." Here clothing and food cost more than in
Caracas. These modern villages, of cheerless birth but quickened by theeuphoria of easy money, have discovered that they have no future. When thewells die, survival becomes something of a miracle: skeletons of houses remain,
oily waters lick abandoned shores and poison the fish. Mass firings andgrowing mechanization bring misfortune, too, to cities that live from exploiting
still-active wells. "Oil has come and gone for us here," people were saying in
Lagunilllas in 1966. "It would have been better for us if these machines had
never come… ” Cabimas, which for fifty years was Venezuela's biggest oilsource and brought so much prosperity to Caracas and the oil companies, does
not even have privies. It has two asphalt streets.

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The euphoria began in the 1920s. Around 1917 oil co-existed in Venezuelawith traditional latifundas, those enormous extensions of thinly populated oridle land where hacendados kept up production by whipping their peons orburying them alive up to the waist. At the end of 1922 the La Rosa well started
gushing, 100,000 barrels a day, and the petroleum orgy was on. Lake
Maracaibo sprouted rigs and derricks and was invaded by helmeted men;peasants swarmed in to build plank-and-oilcan huts on the bubbling ground andoffer their muscles to petroleum. Plains and forests resounded for the first timewith Oklahoma and Texas accents, and in the bat of an eye seventy-threecompanies were born. The carnival king of the concessions was Juan Vicente
Gómez, an Andean cattleman who spent his twenty-seven years as dictator(1908-1935) making children and business deals. While the black geysers
spouted on all sides, Gómez took petroleum shares front his bursting pockets toreward his friends, relations, and courtiers, the doctor who looked after his
prostate, the generals who served as his bodyguard, the poets who sang his
praises, and the archbishop who gave him a special dispensation to eat meat on
Good Friday. The great powers covered Gómez's breast with gleaming
decorations: the automobiles invading the world's highways needed food. The
dictator's favorites sold concessions to Shell or Standard Oil or Gulf; the traffic
in influence and bribes provoked speculation and set mouths watering for
subsoil. Native communities were robbed of their lands and many farm
families lost their holdings in one way or another. The petroleum law of 1922
was drafted by representatives of three U.S. firms. The oilfields were fenced inand had their own police. No one could enter without a company pass, andeven the roads on which the oil was transported to the ports were barred toother traffic. When Gómez died in 1935, oil workers cut the barbed wire
surrounding the camps and proclaimed a strike. The following years weredangerously explosive.
The fall of the Rómulo Gallegos government in 1948 ended three years ofreform. The victorious military brass rapidly cut state participation in the
petroleum extracted by cartel affiliates. Tax cuts in 1954 afforded Standard Oil$300 million additional profits. A U.S. business man had said in Caracas in
1935: “Here you have freedom to do what you like with your money; for me,
this freedom is worth more that all political and civil freedoms put together."26
When dictator

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Marcos Pérez Jimenez was overthrown in 1958. Venezuela was one hugeoilwell, surrounded by jails and torture chambers and importing everythingfrom the United State: cars, refrigerators, condensed milk, eggs, lettuce, laws,and decrees. In 1957, the biggest of Rockfeller’s enterprises, Creole, haddeclared profits equaling almost half its total investment. The ruling
revolutionary junta raised the tax on its profits from 26 percent to 45 percent;in reprisal the cartel promptly lowered the price of Venezuelan petroleum andbegan to fire workers en masse. The price fell so low that despite the tax raise
and increased oil exports, the state collected $60 million less in 1958 than in
the previous year.
The governments that followed did not nationalize the oil industry, butneither did they grant new oil-extracting concessions to foreign companies
until 1970. Meanwhile, the cartel speeded production from its Near Eastern andCanadian deposits; in Venezuela, prospecting for new wells here and there,
confirming that it has no other function than that stated by President Romulo
Betancourt: “Not to achieve the dimension of a major enterprise, but to serve
as intermediary for negotiations on the new concession formula.” The new
formula was proclaimed several times but never put into practice. In 1970,
under the Christian Democratic regime of Rafael Caldera, progress was said tobe well advanced toward singing “service contracts” under which thecompanies would explore and exploit 250,000 hectares in partnership with thestate. Another form of fig-leaved imperialism, the mixed-enterprise system,
had previously been used to deliver most of the petrochemical industry—
synthetic rubber, polyethylene, ammonia, urea— to Union Carbide and aStandard Oil subsidiary.
The industrializing thrust that has taken shape and strength during the past
two decades shows visible symptoms of exhaustion, of an impotence that is all
too familiar in Latin America: the internal market, limited by the poverty of themasses, cannot sustain the development of manufacturers beyond certain limits.
At the same time, agrarian reform initiated by the Acción Democrática
administration, has traveled less than half of the road its creators promised totraverse.

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Salvador Garmendia, the novelist who reinvented the prefabricated hell of
this whole conquest culture, the culture of petroleum, wrote to me in the
middle of 1969:
Have you seen the apparatus that extracts crude petroleum? It looks like a big
black bird whose sharp-pointed head rises and falls heavily day and night
without stopping for a second: it is the only vulture that doesn't eat shit. What
do we do when the characteristic sound of the sipper tells us there isn't any
more oil? The grotesque overture is already beginning to be heard over Lake
Maracaibo, where fabulous communities grew up overnight, withsupermarkets, dance halls, a profusion of whorehouses and gambling dens-money had no value. I recently made a trip through there and felt claws in mystomach. The smell of death and decay overpowers the smell of oil. The towns
are semi-deserted, wormeaten, ulcerated, the streets deep in mud, the stores
dilapidated One of the companies' old divers goes down every day with a saw
to cut lengths of abandoned pipeline which he sells as old iron. People are
beginning to talk about the “companies” as if conjuring up a golden fable.
They live like acrobats on a tightrope of myths about the old days, when
fortunes were squandered on a turn of the dice or a week-long drinking orgy.
Meanwhile, the pumps continue bobbing up and down and the rain of dollars
falls on Miraflores, the government palace, to be turned into superhighways
and other cement monsters. Seventy percent of the country lives a totally
marginal existence. In the cities an unconcerned, well-paid middle class stuffs
itself with useless objects and makes a strident cult of imbecility and bad taste.
The government recently announced with great fanfare that it had
exterminated illiteracy. Sequel: in the recent electoral fiesta registration lists
showed a million illiterates between eighteen and fifty years of age.

170

Part II~

Development Is a Voyage
With More Shipwrecks
Than Novigators

171

172

4. Tales of Premature DeathA DECL.ARATION OF INDEPENDENCE
HAILED BY BRITISH WARSHIPS
When George Canning, the brains of the British Empire, was celebrating its
worldwide triumphs in 1823, the French chargé d'affaires had to swallow thehumiliation of this remark: "Be yours the glory of victory followed by disasterand ruin, be ours the inglorious traffic of industry and an ever growing
prosperity.... The age of chivalry is gone; and an age of economists andcalculators has succeeded." London was entering a long period of festivity;
Napoleon had finally been beaten some years earlier, and the curtain was risingon the era of Pax Britannica. In Latin America, the power of landlords and richport merchants had been secured in perpetuity by independence, at the cost of
the new-born countries' imminent ruin. The former Spanish colonies and Brazil
were markets hungry for English textiles and pounds sterling at so muchpercent. Canning did not err when he wrote in 1824: "The deed is done, the nailis driven, Spanish America is free; and if we do not mismanage our affairs
sadly, she is English.”1
The steam engine, the mechanical loom, and the perfection of textile
machinery had precipitously matured Britain's Industrial Revolution. Factories
and banks multiplied; the internal combustion engine modernized navigation
and big ships sailed to the uttermost parts, expanding173

British industry. The British economy paid with cotton textiles for the hides of
Rio de la Plata, the guano and nitrates of Peru, the copper of Chile, the sugar of
Cuba, the coffee of Brazil. Throughout the nineteenth century industrial
exports, freightage, insurance, interest on loans, and profits on investments fed
British prosperity. Actually, much of the legal commerce between Spain and its
colonies, before the wars of independence, was British-controlled--apart fromthe steady flow of contraband to Latin American coasts, effectively screenedby the slave trade. The overwhelming majority of goods passing through Latin
American customs houses was not Spanish. Spain's monopoly had never in fact
existed: "The colony was already lost to the metropolis well before 1810, andthe revolution was no more than political recognition of this state of affairs."2
British troops had taken Trinidad with but one casualty, but thecommander of the expedition, Sir Ralph Abercromby, was convinced that othermilitary conquests in Spanish America would not be so easy. Soon afterward,
British invasions of Rio de la Plata failed. The defeat confirmed Abercromby'sview on the ineffectiveness of armed expeditions and the ripeness of the hourfor diplomats, merchants, and bankers: a new liberal order in the Spanish
colonies would offer Britain the opportunity to secure nine-tenths of Spanish
American commerce.3 Latin American lands burned with independence fever;after 1810, London applied a devious and two-faced policy which fluctuatedwith the need to favor British trade, keep Latin America from falling into
United States or French hands, and avert Jacobin infection in the newly
independent countries.
When the revolutionary junta was formed in Buenos Aires on May 25,
1810, British warships saluted it with a salvo of guns from the river. The
captain of the Mutine made a glowing speech on His Majesty's behalf, and thejubilation warmed British hearts. Buenos Aires waited barely three days torepeal certain bans on trade with foreigners; twelve days later it cut the taxes
on external sales of hides and fats or tallow from 50 to 7.5 percent. Six weeks
later, the ban on exporting gold and silver coins was removed, so that they
could flow tranquilly to London. A triumvirate replaced the junta in September
1811, and the export and import taxes were again reduced and in some cases
abolished. After 1813, when the Assembly declared itself the sovereignauthority, foreign traders174were exempted from the obligation to sell their merchandise through native
businessmen. In 1812, British traders were reporting to the Foreign Office thatthey had succeeded in replacing German and French textiles; they had also
replaced Argentine textile production, which was strangled by the free-trade
port. The same occurred with variations elsewhere in Latin America.
From Yorkshire, Lancashire, the Cheviot Hills, and Wales poured an
endless stream of cotton and woolens, iron and leather, wood and porcelain
goods. Manchester's looms, Sheffield's foundries, Worcester and Staffordshire
potteries flooded Latin American markets. Free trade enriched the ports which
lived from exports, lifted sky-high the extravagance of oligarchies determined
to enjoy every known luxury, but ruined budding local manufacture andfrustrated expansion of the internal market. Some weak and technically
backward colonial industries had grown up despite metropolitan prohibitions,and were on the rise on the eve of independence as Spain's oppressive bonds
loosened and war in Europe created a shortage of supplies. In the nineteenth
century's first years, factories were recovering from the blow of the royal
decree of 1778 authorizing free trade between Spanish and American ports,
The resulting deluge of foreign goods had crushed colonial production of
textiles, pottery, and metal objects, and the artisans had little time to get backon their feet; then independence flung open the door to free competition from
Europe's already developed industries. Under the vacillating customs policies
of independence governments, Latin American manufactures continued fitfully,
with one foot in the grave and with no possibility of sustained long-term
development.

THE DIMENSIONS OF INDUSTRIAL INFANTICIDEAt the beginning of the nineteenth century Alexander von Humboldt estimatedthe value of Mexican manufactures--mostly textiles--at some 7 or 8 million
pesos. Woolen and cotton cloth were turned out in specialized workshops:
Quer6taro had more than 200 looms and 1,500 workers; 1,200 cotton weavers
worked in Puebla.4 In Peru, the colony's crude products were never as perfectas the native textiles of Pizarro's time but economic performance was very
great. The industry was based

175

on forced labor by Indians who were locked into the shops from before dawn
till late at night. This development-annihilated by independence-had been
precarious but of some magnitude in Ayacucho, Cacamorsa, Tarma; thecommunity of Pacaicasa, which formed one great weaving establishment withmore than 1,000 workers, is now extinct, and Paucarcolla, which supplied alarge area with wool blankets, is disappearing. In Chile, one of Spain's most
far-flung possessions, isolation favored the development of industrial activity
from the beginnings of colonial life. It had spinning mills, textile mills, andtanneries; all the ships of the South Seas were equipped with Chilean rigging
and cordage; it manufactured metal objects, from retorts and guns to ornaments,
fine tableware, and clocks, and built boats and vehicles. In Brazil, too, textile
and metal works, which took their modest first steps in the eighteenth century,
were wiped out by foreign imports. Both manufactures had managed to prosper
despite obstacles imposed by Lisbon, but after 1807 the Portuguese monarchy,
installed in Rio de Janeiro, was a toy in British hands and London had strengthof a different order. "Until the ports were opened up," writes Caio Prado, “theshortcomings of Portuguese commerce had provided a protective barrier for asmall local industry--a poor artisan industry, true, but enough to satisfy part ofthe local demand. This small industry could not survive free competition fromabroad, even in the most insignificant products."5
Bolivia was the Rio de la Plata viceroyalty's most important textile center.
At the end of the century, according to Intendente Francisco de Viedma,
80,000 people in Cochabamba were engaged in making wool and cotton clothand tablecloths. Oruro and La Paz also had factories which, together with thosein Cochabamba, supplied blankets, ponchos, and warm flannel to the
population, troops of the line, and frontier garrisons. From Mojos, Chiquitos,
and Guarayos came the finest linen and cotton cloth, hats of straw, vicuna andlamb's fur, and cigars. "All these industries have disappeared in the face ofcompetition with similar foreign-made articles," testified a book published on
the first centenary of Bolivia's independence.6
In Argentina, the coast was the most backward and least populated region
until independence moved the economic and political center of gravity frominland to Buenos Aires. Only one-tenth of the population

176

lived in Buenos Aires, Santa Fe, and Entre Ríos at the beginning of thenineteenth century. A rudimentary native industry had slowly developed in thecenter and north while, as Procurador Larramendi observed in 1795, "not one
craft or manufacture" existed on the coast. Textile workshops wove three typesof ponchos, and factories produced sturdy carts, cigars and cigarettes, leather
and shoe soles in Tucumán and Santiago del Estero--both pockets ofunderdevelopment today. All kinds of cloth, fine woolens, and clergymen's
black flannel came from Catamarca; Córdoba turned out more than 70,000
ponchos, 20,000 blankets, and 40,000 Spanish yards of flannel a year, alongwith shoes and leather goods, sailing cinches and yards, carpeting andcordovan. The important tanneries and saddleries were in Corrientes. Salta wasfamous for its fine saddles; Mendoza produced between 2 and 3 million litersof wine a year, rivaling that of Andalusia; and San Juan distilled 350,000 litersof aguardiente a year. Mendoza and San Juan, situated between the Atlantic
and the Pacific, were the "throat" of South American commerce.
Commercial agents from Manchester, Glasgow, and Liverpool toured
Argentina and copied Santiagan and Córdoban ponchos and Corrientes leather
goods, as well as the local wooden stirrups. Argentine ponchos cost sevenpesos, Yorkshire ones three. The world's most advanced textile industry won at
a gallop over the products of native looms, and it was the same with boots,
spurs, iron grill work, bridles, and even nails. Interior Argentine provinces
were ruined and promptly rose against the dictatorship of the port of Buenos
Aires. The top merchants (Escalada, Belgrano, Pueyrredón, Vieytes, Las Heras,
Cerviño) had assumed the power wrested from Spain, and trade enabled themto buy English silks and knives, fine Louviers cloth, Flanders lace, Swisssabres, Dutch gin, Westphalian ham, and Hamburg cigars. In exchange,
Argentina exported hides, tallow, bones, and salted meat, and the cattlemen of
Buenos Aires province extended their markets thanks to free trade. The typicaltough gaucho of the pampas was described thus in 1837 by the British consul
in La Plata, Woodbine Parish: "Take his whole equipment--examine everything
about him--and what is there not of raw hide that is not British? If his wife has
a gown, ten to one it is made in Manchester; the camp-kettle in which he cooks
his food, the earthenware he eats from, the knife, his poncho, spurs, bit, are allimported177

from England.”7 Argentina even received the stones for its sidewalks fromBritain.
In about the same period James Watson Webb, U.S. ambassador in Rio deJaneiro, reported:
In all of Brazil's haciendas the master and his slaves dress in the products offree labor, and nine-tenths of them are British. Britain supplies all the capitalneeded for internal improvements in Brazil and manufactures all the utensils
in common use, from the spade on up, and nearly all the luxury and practicalitems from the pin to the costliest clothing. British pottery, British articles ofglass, iron, or wood are as common as woolens and cotton cloth. Great Britain
supplies Brazil with its steam and sailing ships, and paves and repairs its
streets, lights its cities with gas, builds its railways, exploits its mines, is its
banker, puts up its telegraph wires, carries its mail, builds its furniture, motors,
wagons .... 8

Free trade euphoria drove the port merchants wild: in those years Brazil
also imported coffins (already lined) for the dead, riding saddles, crystal
chandeliers, saucepans, and-most improbable of all for tropical coasts-ice
skates; also wallets (although Brazil had no paper money) and an inexplicablequantity of mathematical instruments. The trade and navigation treaties signed
in 1810 put a lower tax on English than on Portuguese imports, and their text
was so barbarously translated from English that the word "policy," for example,
was transmogrified into the Portuguese word for "police." The British in Brazil
enjoyed a special code of justice which removed them from the jurisdiction of
the national courts: Brazil was an unofficial member of the British economic
empire.
A mid-century Swedish traveler arriving at Valparaiso witnessed theextravagance and ostentation free trade had produced in Chile: "The only way
to rise in the world," he wrote, "is to submit to the dictates of Paris fashion
magazines, to the black frock coat and all accessories thereof... The señora
buys a new hat that makes her feel eminently Parisian, while the husband donsa high, stiff cravat and imagines himself at the pinnacle of European culture,"9Three or four British concerns had taken over the Chilean copper market andjuggled prices in the best interests of foundries in Swansea, Liverpool, andCardiff. The British consul general reported to his government in 1838 on the"prodigious growth" in sales of copper, which was exported "chiefly, if notentirely, in British ships or on behalf of Britons."10 British businessmenmonopolized178

commerce in Santiago and Valparaiso, and Chile was the second mostimportant Latin American market for British products.
Latin America's big ports, through which the wealth of its soil and subsoil
passed en route to distant centers of power, were being built up as instrumentsof the conquest and domination of the countries to which they belonged, and as
conduits through which to drain the nations' income. While ports and capitals
strove to be like Paris or London, behind them stretched the desert.

PROTECTIONISM AND FREE TRADE: THE BRIEF FLIGHT
OF LUCAS ALAMÁ N
The expansion of Latin American markets speeded accumulation of capital in
the nursery gardens of British industry. The Atlantic had for some time been
the main highway of world trade and the British had shrewdly capitalized on
the location of their island--surrounded by ports, halfway between the Baltic
and the Mediterranean, and facing out to the coasts of America. Britain wasorganizing a worldwide system and becoming the great factory supplying theplanet: the entire world supplied it with raw materials and received its
manufactured goods. The Empire had the greatest port and most potent
financial apparatus of its time, the highest level of commercial specialization, aworld monopoly on insurance and freight, and control of the international gold
market. Friedrich List, father of the German customs union, once observed that
free trade was Britain's chief export. (This German economist, born in 1789, preached in
the United States and his own country the doctrine of protectionism and industrial development.
He killed himself in 1846, but his ideas took hold in both countries.) Nothing roused such

British anger as protectionism, and they sometimes gave vent to it in violent
language, as during the Opium War against China. But free trade only became
revealed truth for them after they became sure of being the strongest power,
and after they had developed their own textile industry under the umbrella ofEurope's toughest protectionist legislation. In the difficult early days, when
British industry was still at a disadvantage, an Englishman caught exporting
raw wool was sentenced to lose his right179

hand, and if he repeated the sin he was hanged. It was prohibited to bury acorpse without prior certification from the parish priest that the shroud camefrom a British factory.
"All the destructive phenomena which unlimited competition gives rise towithin one country," wrote Marx, "are reproduced in more gigantic proportions
on the world market."(“If the free-traders cannot understand how one nation can grow richat the expense of another, we need not wonder, since these same gentlemen also refuse tounderstand how within one country one class can enrich itself at the expense of another."11)

Latin America's entry into the British orbit-which it would leave only to enterthe U.S. orbit--took place within this general framework, and within it thedependence of the new independent countries was consolidated. Free
circulation of merchandise, and of money for payment and transfer of capital,
had dramatic consequences.
Vicente Guerrero came to power in Mexico in 1829, writes Chávez Orozco,"on the shoulders of the artisans' despair, fanned by the great demagogue
Lorenzo de Zavala who loosed a hungry, desperate crowd on shops stuffedwith British marketplace items." Guerrero soon fell amid the workers'
indifference, since he did not want or was not able to dam up European
merchandise, "the abundance of which spread unemployment among urban
artisan masses who before independence--above all in periods of war in
Europe--enjoyed modest comfort."12 Mexican industry had been short ofcapital, labor, and modern techniques, had not been efficiently organized, andhad lacked communications and transport to and from markets and supply
sources. "The only things it probably had too much of," writes Alonso Aguilar,"were interference, restrictions, and every kind of obstacle."13 Nevertheless, asvon Humboldt noted, industry had grown when foreign trade was stagnant, sea
communications were being interrupted or obstructed, and the manufacture ofsteel and the use of iron and mercury had begun. The liberalism that
accompanied independence added new pearls to the British crown andparalyzed the textile and metallurgical workshops in Mexico City, Puebla, andGuadalajara.
Lucas Alamán, an able conservative politician, gave timely warning thatthe ideas of Adam Smith contained poison for the national economy, and set
the stage, as minister, for a credit and loan bank to promote

180industrialization. By taxing foreign cotton textiles, Mexico could buy
machinery and equipment abroad in order to supply its own needs in cotton
cloth. The country had the raw material and hydraulic power--cheaper thancoal--and could train good workers quickly. The bank opened in 1830 and soonafterward modern cotton-spinning and weaving machinery from the best
European factories arrived; the state also hired foreign experts in textile
techniques. In 1844 the big Puebla plants produced 1.4 million lengths ofheavy cotton. The country's new industrial capacity exceeded internal demand;the consumer market in the "kingdom of inequality," mostly consisting of
hungry Indians, could not sustain the dizzying industrial growth. The effort tobreak the inherited colonial structure collided against this wall. Yet theindustry had been so modernized that in 1840 U.S. textile mills averaged fewer
spindles than did those in Mexico. Ten years later the ratio had been
more than reversed. Political instability, pressure from British and Frenchmerchants and their powerful domestic partners, and the paltriness of aninternal market strangled in advance by the mining and latifundista economy,
wrecked the experiment. By 1850 Mexico's textile industry had stopped
progressing, The creators of the credit and loan bank had broadened their Fieldof action and, when the bank died, its credits also included woolen mills, carpet
factories, and iron and paper producers. Esteban de Antuñano insisted on
Mexico's need to create, as soon as possible, a national machine industry "toresist European egoism." The great merit of the Alamán-Antuñano
industrializing cycle was that both men reestablished the identity between
political

independence

andeconomic

independence,andextolled

industrialization as the only defense against powerful and aggressive nations.
Alamán himself became an industrialist, building Mexico's biggest textile plantof the day (it still exists), and organizing fellow industrialists as a pressuregroup against successive free-trade governments. (Various protectionist statements
were published in 1850 in El Siglo XIX:. "With the end of the conquest by Spanish civilizationand its three centuries of military dominion, Mexico entered a new era, which can also be called
conquest, but a scientific and mercantile one… Its power is merchant shipping; its faith isabsolute economic freedom; its mighty principle with less advanced people is the law ofreciprocity..... ‘Bring to Europe,' we were told, 'what manufactures you can (except, however,those we prohibit); and in return let us bring you what manufactures we can, though they may
ruin your industries.' … If we adopted doctrines that they (our lords across the ocean and the Rio
Grande) give but do not take, our exchequer would perhaps benefit a little ... but we would not181be promoting the labor of the Mexican people but that of the English, French, Swiss and North
American people.”14) But Alamán, conservative and Catholic, never took up theagrarian question since he felt ideologically linked to the old order. And he did
not realize that industrial development was condemned in advance to remain
up in the air, without bases of support, in that land of countless latifundios andgeneral poverty.

THE MONTONEROS AND JUAN MANUEL DE ROSAS'SLEGACY OF HATE
Protectionism versus free trade, the country versus the port: this was theessence of the struggle in Argentina's nineteenth-century civil wars. Buenos
Aires, which in the seventeenth century was no more than a big village with
400 houses, took power over the whole nation after the May revolution andindependence. It was the only port: all that entered or left the country wasforced to pass through it. Today the deformations that its hegemony imposedon the nation are plain to see: the capital and its suburbs embrace more than athird of the country's population and in various ways play the role of procurer
to the provinces. In that period, with its monopoly on customs revenue, banks,
and the issuance of currency, Buenos Aires prospered dizzily at the expense of
the inland provinces. It appropriated the national customs receipts--almost allof the port city's income--for its own benefit, spending more than half on wars
against the provinces--which thus paid for their own destruction.
From Buenos Aires's Sala de Comercio, founded in 1810, the British kept
watch on shipping through telescopes; they supplied the city folk with finecloth, artificial flowers, shoelaces, umbrellas, buttons, and chocolate, while theflood of ponchos and factory-made stirrups played havoc up-country. To
appreciate the value the world market then placed on Rio de la Plata hides, theimagination must travel back to an age when plastics and synthetic fabrics did
not exist, even as a gleam in a chemist's eye. Nothing could equal the fertile
coastal plains for grandscale cattle production. In 1816, a new system was
discovered for the indefinite preservation of hides by treatment with arsenic; atthe same time,182

slaughterhouses were prospering and multiplying. Brazil, the Antilles, andAfrica were opening their markets to imported dried meat, and as that productgained foreign consumers, Argentinians felt the change. Taxes were imposedon internal meat consumption and removed from exports; in a few years theprice of calves tripled and ranches upped the value of their land. The gauchos
were accustomed to hunting calves freely under the open sky of the unfenced
pampa, to eating the best meat and discarding the rest with the sole obligationof delivering the hide to the owner. Things changed. Reorganization of
production involved submitting the nomad gaucho to a new servile dependence:a decree in 1815 proclaimed every propertyless countryman a servant, with the
obligation to carry a card and have it checked every three months by his master.
Either he was a servant or a vagrant, and vagrants were forcibly recruited into
frontier battalions. The untamed criollo of yore, who had served as cannonfodder in patriot armies, was turned into a pariah, a wretched peon, or a buckprivate. Or else he got himself a weapon and joined the rebel montonera
bands.( The montonera band "is born in the plains like a whirlwind. It strikes, roars, andsmashes like a whirlwind, and suddenly stops and dies like one."15 In Martin Fierro, Argentina's
most popular book, José Hernández (who was a federal soldier) puts the plight of the gaucho
exiled from his haunts and persecuted by the authorities into song:
The eagle lives in his nest,
The tiger lives in the jungle,
The fox in any cave,
And in his fickle fortune,
Only the gaucho lives a-wandering
Wherever fate takes him.
Because:For him there are calabooses,
For him grim prisons,Nothing he says is right,
Although he has right a-plenty-The right of a wooden churchbell,
The right of the poor.16
Jorge Abelardo Ramos notes that the two real surnames appearing in Martin Fierro are
Anchorena and Gaínza--names representing the oligarchy chat exterminated the armed criollos;
today both have been fused into the family that owns the daily La Prensa.
The other face of Martin Fierro appears in Ricardo Güiraldes's Don Segundo Sombra (1939):
here it is the domesticated gaucho, tied to his daily wage, fawning upon his master, a useful type
for the folklore of nostalgia and pity.) This fierce gaucho, dispossesed of183everything except glory and anger, swelled the cavalry charges that repeatedly
defied well-equipped armies sent from Buenos Aires. The rise of the capitalist
cattle ranch in the damp coastal pampa subjected the whole country to theexporting of hides and meat, and went hand in hand with the dictatorship of thefree-trade port. Until his defeat and exile, the Uruguayan José Artigas had been
the outstanding leader of the criollo masses' struggle against merchants andlandlords tied to the world market; years later Felipe Varela was able to set off
a big rebellion in northern Argentina because, as he proclaimed, "to be aprovincial is to be a beggar without country, liberty, or rights." His rising drewa response from the entire hinterland. He was the last of the montoneros; hedied in 1870, tuberculous and in poverty.( In 1870 Paraguay, the only Latin Americancountry that still had not entered the imperialist prison, also fell in a bloodbath by foreign
invaders.)

In history as taught in Argentine schools, this defender of the"American Union"--the dream of reviving the fragmented Great Fatherland-remains as much a bandit as Artigas did until recently.
Born in a village lost among the Catamarca sierras, Varela had been an
unhappy witness of the poverty inflicted on his province by the remotearrogant port. In 1824, when Varela was three, Catamarca could not pay the
expenses of the delegates it sent to the Constituent Congress in Buenos Aires,and Misiones, Santiago del Estero, and other provinces were in similar plight.
Catamarcan deputy Manuel Antonio Acevedo pointed to "the ominous change"
brought about by foreign competition: “Catamarca has had to stand byhelplessly, while its agriculture is primitive and costly, its industry without
consumers . . . and its commerce by now almost nonexistent.”17 In 1830, therepresentative from Corrientes province, Brigadier General Pedro Ferré,summed up the possible consequences of the protectionism he advocated:
Yes, certainly a few wealthy men will be deprived of fine wines and liquors
with their dinners.... For the less well-off classes the difference will hardly be
noticeable in the wines and liquors they now drink, only in the price, andconsumption will go down, which is not such a bad thing. Our country folk
won't wear English ponchos or carry British-made bolas and lassos; we won't
get clothing, and other things we can make ourselves, from abroad; but on theother hand, the condition of all the Argentine communities will begin to beless miserable and the frightful poverty to which we are now condemned will
no longer pursue us.18

184In an important step toward reconstruction of the national unity that war
had torn apart, the Juan Manuel de Rosas administration introduced a
decidedly protectionist tariff. It banned the importation of iron and tinplate
manufactures, riding equipment, ponchos, belts, wool or cotton waistbands,
coarse woolen cloth, farm products, carriage wheels, tallow candles, andcombs, and levied heavy duties on coaches, shoes, cordage, clothing, saddles,
dried fruits, and alcoholic beverages. There was no tax on meat transported inArgentine flagships, and saddlery and tobacco-growing were encouraged. The
effects were soon observable. Until the battle of Caseros that brought Rosas
down in 1852, ships built in the Corrientes and Santa Fe yards sailed the rivers,
more than one hundred factories prospered in Buenos Aires, and all travelers
agreed on the excellence of Córdoba- and Tucumάn-made textiles and shoes,
Salta cigars and crafts, and Mendoza and San Juan wines and brandies.
Tucumán cabinet-makers were exporting to Chile, Bolivia, and Peru. Ten years
after passage of the law, the guns of British and French warships smashed thechains across the Río Paraná to open up the interior waterways that Rosas had
kept firmly closed. Blockade followed the invasion.
Ten appeals from Yorkshire, Liverpool, Manchester, Leeds, Halifax, andBradford, signed by 1,500 bankers, traders, and industrialists, had urged theBritish government to take measures against the restrictions on trade in La
Plata. The blockade showed up the limitations of the national industries which,despite the progress made under the tariff law, were incapable of satisfying
internal demand. Since 1841 manufacturing had in fact been languishing rather
than gaining in vigor. Rosas represented above all the interests of the beefranchers in Buenos Aires province, and no industrial bourgeoisie existed or
was created to promote the development of a genuine national capitalism: thebig ranch occupied the center of the economic stage, and no industrial policy
could be independently and vigorously undertaken without destroying theomnipotence of the exporting latifundio. Basically, Rosas always remained true
to his class, The best rider in the province, guitar-strummer, dancer, and noted
horsebreaker, who on stormy starless nights chewed some blades of grass tolocate his whereabouts, was himself a big ranch owner producing cured meatand hides, and the big landowners had made him their chief. The black legendthat was later spun around his

185name cannot conceal the national and popular character of many of his
administrative measures,( In his well-known Tablas de sangre, José Rivera listed Rosas's
crimes in order to horrify European sensibilities. According to Atlas (London), the Britishbanking house of Samuel Lafone paid the writer a penny per corpse. Rosas had hit the Imperium
hard by banning gold and silver exports, and had dissolved the National Bank, which was an
instrument of British trade.19) but class contradictions explain the lack— except forthe customs-house surgery--of any dynamic, sustained industrial policy. This
lack cannot be attributed to instabilities and shortages resulting from domestic
wars and foreign blockade, for was it not in the whirlwind of a besieged
revolution that Artigas, twenty years earlier, had combined in-depth agrarianreform with policies aimed at industrializing and uniting the country? In a
substantial book, Vivian Trias has compared Rosas's protectionism with theseries of measures spread by Artigas from the Banda Oriental (now Uruguay),
between 1813 and 1815, to bring true independence to the area of the La Plata
viceroyalty.20 Rosas neither barred foreigners from trading in the internalmarket, nor returned to the nation the tariff revenues which Buenos Aires still
appropriated, nor ended the dictatorship of the one and only port. But thenationalization of internal trade and the abolition of Buenos Aires's port andcustoms monopoly had been foundation stones--along with the agrarian
questioner Artigas's policy. Artigas had wanted free navigation on internal
waterways, but Rosas never gave the provinces this key to the door of foreign
trade. Rosas also remained basically loyal to his privileged province. Despite
all these limitations, the nationalism and populism of the "blue-eyed gaucho"
still inspire hatred in Argentina's ruling classes. Rosas remains "guilty oftreason to the fatherland"--as a never-annulled law of 1857 put it--and thecountry still refuses to provide a tomb for his bones, which are buried inEurope. His official image is that of an assassin.
With the suppression of Rosas's heresy, the oligarchy rediscovered its
destiny. The chairman of the rural exhibition committee of 1858 opened theshow with these words: "We, still in our infancy, are humbly content to send
our products and raw materials to European markets so that they may bereturned to us transformed by the powerful means at Europe's disposal. Raw
materials are what Europe wants, so as to change them into rich artifacts."21186

The illustrious Domingo Faustino Sarmiento and other liberal writers saw
in the rural montonera only a symbol of barbarism, backwardness, andignorance, the anachronism of the countryside confronting urban civilization,
the poncho and chaps against the frock coat, the spear and knife against thetroops of the line, illiteracy against the school. Sarmiento wrote to President
Bartolomé Mitre in 1861: "Don't try to economize on gaucho blood, it's all they
have that is human. This 'is a fertilizer that must be made useful to thecountry." Such scorn and hatred were an expression of antipatriotism clearly
tinged with political economy: "We are neither industrialists nor navigators,"
said Sarmiento, and Europe will provide us for many centuries with its artifacts
in exchange for our raw materials."22 Beginning in 1862, Mitre launched a warof extermination against the provinces and their last leaders. Sarmiento was put
in charge, and troops marched northward to kill gauchos, “biped animals of themost perverse stripe.” In La Rioja, rebels under General "El Chacho" Peñaloza,
whose influence extended over Mendoza and San Juan, put up one of the last
stands against Buenos Aires, which felt that it was time to finish Peñaloza off.
They cut off his head and nailed it up in the Plaza de Olta. The railroad andhighways completed the collapse of La Rioja that had begun with the 1810
revolution: free trade had brought on a crisis for its craftsmen and had
deepened the region's chronic poverty.
In the twentieth century, La Rioja peasants flee from their villages in themountains and on the plains and flood into Buenos Aires m offer their labor:
like the peasants of other poor provinces, they get no further than the city's
outskirts, where they settle down beside 700,000 other inhabitants of the "villas
miseries” and make out as best they can with crumbs from the great capital's
banquet table. A few years ago sociologists asked the 150 survivors of La
Rioja village if they saw any change in their former neighbors who had left andreturned on visits. Those who had remained said enviously that yes, Buenos
Aires had improved the emigrants' clothing, manners, and way of speaking.
Some also found the emigrants to be "whiter."23

187

HOW THE WAR AGAINST PARAGUAY WRECKED THE ONLY
SUCCESSFUL ATTEMPT AT INDEPENDENT DEVELOPMENT
The man sat beside me in silence. The strong noonday light outlined his sharpnosed, high-cheekboned profile. We had left the southern frontier bound for
Asunción in a bus for twenty persons which by some alchemy contained fifty.
There was a halt after a few hours. We sat in an open patio under the shade of
thick leaves, Before us stretched the blinding brilliance of the red earth,immense, unpopulated, untouched; from horizon to horizon nothing disturbed
the transparency of the Paraguayan air. We smoked. My companion, aGuaraní-speaking peasant, strung together a few sad words in Spanish; "WeParaguayans are poor and few." He explained that he'd gone down toEncarnación to look for work but had found none. He'd managed to scrape upsome pesos for the fare home. Years earlier, as a child, he'd tried his fortune in
Buenos Aires and southern Brazil. Now it was cotton-picking time and many
Paraguayan braceros were taking off, as they did every year, for Argentina.
"But I'm sixty-three. All that crowd going after the jobs--my heart can't take it."In the last twenty years, half a million Paraguayans have left their country
once and for all. Poverty drives out the inhabitants of what was, until a century
ago, South America's most advanced country. Today Paraguay's population isbarely double what it was then and, with Bolivia, it is one of the poorest andmost backward countries in the hemisphere. The woes of the Paraguayans stemfrom a war of extermination which was the most infamous chapter in SouthAmerican history: the War of the Triple Alliance, they called it. Brazil,
Argentina, and Uruguay joined in committing genocide. They left no stone
unturned, nor male inhabitants amid the ruins. Although Britain took no directpart in the ghastly deed, it was in the pockets of British merchants, bankers,
and industrialists that the loot ended up. The invasion was financed from start
to finish by the Bank of London, Baring Brothers, and the Rothschild bank, inloans at exorbitant interest rates which mortgaged the fate of the victorious
countries.
Until its destruction, Paraguay stood out as a Latin American exception-the
only country that foreign capital had not deformed. The long, iron-fisted
dictatorship of Gaspar Rodríguez de Francia (1814-1840)

188

had incubated an autonomous, sustained development process in the womb of
isolation. The all-powerful paternalist state filled the place of a nonexistentnational bourgeoisie in organizing the nation and orienting its resources and its
destiny. Francia had used the peasant masses to crush the Paraguayan oligarchy,
and had established internal peace by erecting a cordon sanitaire between
Paraguay and the other countries of the old La Plata viceroyalty.
Expropriations, exilings, jails, persecutions, and fines had been used--not toconsolidate the internal power of landlords and merchants, but for theirdestruction. Political liberties and the right of opposition neither existed nor
would come into being later, but in that historical stage the lack of democracy
only disturbed people who were nostalgic for lost privileges. There were no
great private fortunes when Francia died, and Paraguay was the only Latin
American country where begging, hunger, and stealing were unknown;( Inofficial histories, Francia appears as a star in a chamber of horrors. The optical distortions
imposed by liberalism are not a monopoly of Latin America's ruling classes; many Left
intellectuals who look at our countries' history through alien spectacles accept certain myths,
canonizations, and excommunications of the Right. Pablo Neruda's Canto General pays moving
homage to the Latin American peoples, but clearly reveals this distortion. Neruda pays no
attention to Artigas, or to Carlos Antonio or Francisco López, and instead identifies with
Sarmiento. He calls Francia a "leprous king" and is no more amiable wich Rosas.24) travelersof the period found an oasis of tranquillity amid areas convulsed by continuous
wars. The U.S. agent Hopkins informed his government in 1845 that in
Paraguay there was no child who could not read and write. It was also the only
country that did not have its eyes riveted on the other side of the ocean.
Foreign trade was not the axis of national life; liberal doctrine, the ideologicalexpression of the global market, had no answer to the defiant attitude that
Paraguay--forced by its inland isolation to grow inward-adopted from the
beginning of the century. Extermination of the oligarchy enabled the state togather its economic mainsprings into its own hands, to put this autarchic
internal development policy into effect.
The succeeding governments of Carlos Antonio López and his son
Francisco Solano continued and vitalized the task. The economy was in fullgrowth. When the invaders appeared on the horizon in 1865, Paraguay had
telegraphs, a railroad, and numerous factories manufacturing construction
materials, textiles, linens, ponchos, paper and ink,

189

crockery, and gunpowder. Two hundred foreign technicians, handsomely paidby the state, made a decisive contribution. From 1850 on, the lbycui foundry
made guns, mortars, and ammunition of all calibers; the arsenal in Asunción
produced bronze cannon, howitzers, and ammunition. The steel industry, likeall other essential economic activities, belonged to the state. The country had amerchant fleet, and the Asunci6n shipyard turned out many of the ships flying
the Paraguayan flag on the Paraná and across the Atlantic and Mediterranean.
The state virtually monopolized foreign trade; it supplied yerba maté andtobacco to the southern part of the continent and exported valuable woods to,Europe. The trade balance produced a big surplus. With a strong and stablecurrency, Paraguay was wealthy enough to carry out great public works
without recourse to foreign capital. It did not owe one penny abroad, yet wasable to maintain the best army in South America, hire British technicians toserve the state instead of putting the state at their service, and send someuniversity students to finish their studies in Europe. The economic surplus
from agricultural production was not squandered by an oligarchy (which did
not exist); nor did it pass into the pockets of middlemen and loan sharks, or
swell the profits of the British Empire's freight and insurance men. The
imperialist sponge, in short, did not absorb the wealth the country produced.
Ninety-eight percent of Paraguayan territory was public property: the state
granted holdings to peasants in return for permanently occupying and farming
them, without the right to sell them. There were also sixty-four "estancias de la
patria, " haciendas directly administered by the state. Irrigation works, dams
and canals, and new bridges and roads substantially helped to raise agricultural
production. The native tradition of two crops a year, abandoned by theconquistadors, was revived. The lively encouragement of Jesuit traditions
undoubtedly contributed to this creative process.( Fanatical monks of the Society ofJesus, "the Pope's black guard," had become defenders of the medieval order against the newforces bursting upon the European stage. But in Hispanic America Jesuit missions developed
along progressive lines. They came to cleanse by abnegation and ascetic example a Catholic
Church which had surrendered to sloth and the untrammeled exploitation of the goods theConquest had made available to the clergy. It was the Paraguayan missions that reached thehighest level; in little more than a century and a half (1603-1768), they fully justified the aims of
their founders. The Jesuits used music to draw in Guaraní Indians who had sought shelter in theforest, and who had stayed there rather than join in the "civilizing process" of the encomenderos
and landlords. Thus 150,000 Guaranís were able to move back into theirprimitive community

190

organization and revive their traditional arts and crafts. The latifundio system was unknown inthe missions; the soil was cultivated partly to satisfy individual needs and partly to develop
projects of common concern and to acquire the necessary work tools, which were common
property. The Indians' life was intelligently organized; musicians and artisans, farmers, weavers,
actors, painters, and builders gathered in workshops and schools. Money was unknown; traders
were barred from entering and had to transact any business from hotels at an appropriate distance.
The Crown finally succumbed to the criollo encomenderos' pressure and the Jesuits were
expelled from Latin America. Landlords and slave traders went in pursuit of the Indians. Corpses
hung from trees in the missions; whole communities were sold in Brazilian slave markets. Many
Indians took to the forest again. The Jesuits' libraries were used to fuel ovens or to make powder
cartridges.25)

The state pursued a tough protectionist policy--much reinforced in 1864-over national industry and the internal market; internal waterways were closed
to the British ships which bombarded the rest of Latin America with
Manchester and Liverpool products. British commerce did not hide its concern,
not only because this last bastion of national resistance in the heart of thecontinent seemed invulnerable, but also and especially because of thedangerous example set to its neighbors by Paraguayan obstinacy. Latin
America's most progressive country was building its future without foreign
investment, without British bank loans, and without the blessings of free trade.
But as Paraguay progressed, so did its need to break out of its seclusion.
Industrial development called for closer and more direct contacts with theinternational market and with sources of advanced techniques. Paraguay waseffectively blockaded by Argentina on one side and Brazil on the other, andboth could starve its lungs of oxygen by closing the river mouths (as did
Rivadavia and Rosas) or imposing arbitrary taxes on its merchandise in transit.
In any event, it was indispensable for the consolidation of the oligarchical state
to cut short the scandal of this odious country, which was sufficient unto itself
and objected to bowing down before British merchants.
Britain's minister in Buenos Aires, Edward Thornton, played a substantial
role in preparing for the war. When it was about to break out, he participated asa government advisor in Argentine cabinet meetings, sitting beside President
Mitre. The web of provocations and deceptions, which ended with a BrazilianArgentine agreement that sealed Paraguay's fate, was woven under Thornton's
fatherly gaze. Venancio Flores invaded Uruguay, aided in his intervention by
its two big neighbors, and after the Paysandú massacre he set up an

191

administration in Montevideo subservient to Rio de Janeiro and Buenos Aires.
The Triple Alliance was on the road. Paraguayan President Solano López had
threatened war in the event of an attack on Uruguay: he knew that this would
close an iron pincers around the throat of his country, corraled as it was bygeography and the enemy. Nevertheless, liberal historian Efraím Cardozo
stoutly maintains that López stood up to Brazil merely because he wasoffended: the emperor had refused him the hand of one of his daughters. The
conflict was inevitable, but it was Mercury's work, not Cupid's.
The Buenos Aires press called López "the Attila of America": “He must be
killed like a reptile,” thundered the editorials. In September 1864, Thornton
sent a long confidential report to London, datelined Asunción. He described
Paraguay as Dante described the inferno, but put stress where it belonged:"Import duties on nearly all articles are 20 or 25 percent ad valorem; but since
this value is calculated on the current price of the articles, the duty that is paid
often amounts to 40 to 45 percent of the invoice price. Export duties are from10 to 20 percent of value. . . ." In April 1865 the Buenos Aires English
language daily, The Standard, was already hailing Argentina's declaration of
war on Paraguay, whose president had "violated all the usages of civilized
nations," and was announcing that Argentine President Mitre's sword "willhold high in its victorious course, in addition to the weight of past glories, theirresistible thrust of public opinion in a just cause." The treaty with Brazil and
Uruguay was signed on May 1, 1865; its draconian terms were published ayear later in the London Times, which got the text from banker-creditors inArgentina and Brazil. The future victors divided up the spoils of thevanquished in advance. Argentina was to get the whole territory of Misiones
and the vast Chaco; Brazil got a fat slice west of its frontiers. Uruguay, ruledby a puppet of both powers, got nothing.
Mitre announced that he would take Asunción in three months, but the war
lasted five years. It was a carnage from the beginning to end of the chain offorts defending the Rio Paraguay. The "opprobrious tyrant" Solano López wasa heroic embodiment of the national will to survive; at his side the Paraguayan
people, who had known no war for half a century, immolated themselves. Men
and women, young and old, fought like lions. Wounded prisoners tore off theirbandages so that they192

would not be forced to fight against their brothers. In 1870 López, at the headof an army of ghosts, old folk, and children who had put on false beards tomake an impression from a distance, headed into the forest. The invading
troops set upon the debris of Asunci6n with knives between their teeth. Whenbullets and spears finally finished off the Paraguayan president in the thickets
of Cerro Corá, he managed to say: "I die with my country!"--and it was true.
Paraguay died with him. López had previously ordered the shooting of his
brother and a bishop who accompanied him on this caravan of death. The
invaders came to redeem the Paraguayan people, and exterminated them. When
the war began, Paraguay had almost as large a population as Argentina. Only
250,000, less than one-sixth, survived in 1870. It was the triumph ofcivilization. The victors, ruined by the enormous cost of the crime, fell backinto the arms of the British bankers who had financed the adventure. The slave
empire of Pedro II, whose armies were filled with slaves and prisoners,
nevertheless won more than 20,000 square miles of territory--plus labor, for theParaguayan prisoners who were marched off to work on the São Paulo coffee
plantations were branded like slaves. The Argentina of President Mitre, who
had crushed his own federal leaders, came out with 36,000 square miles ofParaguayan territory, as well as other booty: "The prisoners and other war
matériel we will divide in a convenient form," he wrote. Uruguay, where theheirs of Artigas had been killed or defeated and an oligarchy ruled, participatedin the war as a junior partner and without reward. Some Uruguayan soldiers
sent into the Paraguayan campaign had boarded the ships with bound hands.
The financial bankruptcy of the three countries deepened their dependency on
Britain. The Paraguay massacre left its mark on them forever.( Solano López lives
on in memory. When, in September 1969, Rio de Janeiro's National Historical Museum
announced it would dedicate a window to the Paraguayan president, the military was furious.
General Mourão Filho, who had set off the coup d'état in 1964, told the press: "A wind of
madness is sweeping the country.... Solano López is a figure who should be erased forever fromour history, as a paradigm of the uniformed South American dictator. He was a butcher who
destroyed Paraguay, leading it into an impossible war.")Brazil had performed the role the British had assigned it when they moved
the Portuguese throne to Rio de Janeiro. Lord Canning's instructions to theambassador, Viscount Strangford, early in the193nineteenth century, had been clear: make Brazil an emporium for British
manufactures designed for consumption in all South America. Shortly before
going to war, the Argentine president, inaugurating a new British railway line,
made an impassioned speech: "What is the force driving this progress?
Gentlemen, it is British capital!" In defeated Paraguay it was not only the
population and great chunks of territory that disappeared, but customs tariffs,
foundries, rivers closed to free trade, and economic independence. Within its
shrunken frontiers, the conquerors implanted free trade and the latifundio.
Everything was looted and everything was sold: lands and forests, mines, yerba
maté farms, school buildings. Successive puppet governments were installed in
Asuncion by the occupation forces. The war was hardly over when the firstforeign loan in Paraguay's history fell upon the smoking ruins. It was, of course,
British. Its nominal value was £1 million, but a good deal less than half of thisreached Paraguay; in ensuing years refinancing raised the debt to more than £3
million. The Opium War had ended in 1842 with a free-trade treaty signed in
Nanking, consecrating the right of British traders to introduce the drug
unrestrictedly into China; now the flag of free trade flew over Paraguay too.
Cotton farming was abandoned and Manchester ruined textile production; thenational industry never came back to life.
The Colorado Party, which now rules Paraguay, makes breezy mileage
with the heroes' memory, but exhibits at the foot of its founding charter thesignatures of twenty-two traitors to Solano López, "legionnaires" who servedwith the Brazilian occupation troops. Dictator Alfredo Stroessner, who has
spent the last fifteen years turning Paraguay into a large concentration camp,
did his military training under Brazilian generals, who sent him back with highmarks and warm eulogies: “He is worthy of a great future......” During his reign
Stroessner has bestowed on Brazil and its U.S. masters the dominant place
occupied in previous decades by Anglo-Argentine interests. Brazil andArgentina, which "liberated" Paraguay in order to gobble it up, have taken
turns since 1870 enjoying the fruits of the plunder. But they have their own
crosses to bear from the imperialist power of the moment. Paraguay has the
double burden of imperialism and subimperialism. The British Empire used tobe the main link in the chain of dependencies, but today the United States,
understanding only too well the geopolitical194

importance of this country at the center of South America, maintains countlessadvisors who train and advise the armed forces, cook up economic plans,
refashion the university to their taste, invent a new "democratic" policy for thecountry, and reward the generous services of the regime with burdensome
loans.(Before the 1968 elections General Stroessner visited the United States. "When I
interviewed President Johnson," he told Agence France Presse, "I showed him that I had been
fulfilling the prime ministerial function for twelve years by mandate of the polls. Johnson repliedthat was another reason for continuing to exercise it in the next period.") Paraguay is also acolony of other colonies. Using agrarian reform as a pretext, the Stroessnergovernment annulled the legal ban on selling frontier lands to foreigners, andtoday -even state lands have fallen into the hands of Brazilian coffee
latifundistas. The invading wave has crossed the Río Paraná with thecomplicity of the president, in partnership with Portuguese-speaking
landowners. When I arrived at Paraguay's shifting northeastern frontier, I had
banknotes engraved with the face of the defeated Solano López, but found that
only those bearing the likeness of the victorious Emperor Pedro 11 are valid.
After the passage of a century, the outcome of the War of the Triple Alliancetakes on burning actuality. Brazilian guards demand passports from
Paraguayan citizens who want only to move around in their own country. The
flags and the churches are Brazilian. The land piracy also takes in the Guairá
falls, the greatest potential source of energy in all Latin America; it is now
called--in Portuguese--Sete Quedas. There, it has been announced, Brazil willbuild the world's largest hydroelectric station.
Subimperialism has a thousand faces. When President Johnson decided in1965 to drown the Dominicans in blood, Stroessner sent along some
Paraguayan soldiers to help him out. In a sinister jest, the battalion was called"Marshal Solano López." The Paraguayans were under a Brazilian general'sorders, for it was Brazil that received the judas honors: its General Panasco
Alvim headed Latin America's uniformed accomplices in the massacre. There
are other similar examples. Paraguay gave Brazil an oil concession on its
territory, but the fuel distribution and petrochemical business in Brazil is in
U.S. hands. The Brazilian Cultural Mission reigns over the philosophy andeducation departments of Paraguay's university, but North Americans now run
Brazil's universities. The Paraguayan army's general staff receives advice not195only from Pentagon technicians but also from Brazilian generals who, in turn,are to the Pentagon as an echo to a voice. Through open contraband channels,
Brazilian industrial products invade the Paraguayan market, but the São Paulofactories that produce them have belonged to U.S; corporations since thedenationalizing avalanche of recent years.
Stroessner considers himself the heir to López. How can the Paraguay of acentury ago be mentioned in the same breath with the Paraguay of today, theemporium of La Plata basin smuggling and the kingdom of institutionalized
corruption? Yet at a political demonstration where the government party
claimed both Paraguays at once to stormy applause and cheers, a boy openly
hawked contraband cigarettes from a vendor's tray: the fervent gathering
puffed nervously at Kents, Marlboros, Camels, and Benson & Hedges. The
scanty middle class in Asunción drinks Ballantine’s whiskey instead of
Paraguayan aguardiente. In the streets one sees late-model luxury cars made in
the United States or Europe, brought in as contraband or after payment of atrifling customs duty, moving beside ox-drawn carts slowly bringing fruit to
the market: the soil is worked with wooden plows and the taxis are 1970
Impalas. Stroessner defines contraband as "the price of peace": the generals fill
their pockets and hatch no plots. Industry, of course, enters its death throes
before it can grow. The state does not even implement the decree requiring
preference for domestic products in public spending. In this area the only
triumphs proudly displayed by the government are the Coca-Cola and PepsiCola plants, installed at the end of 1966 as a U.S. contribution to the progressof the Paraguayan people.
The state declares that it will only intervene directly in the creation ofenterprises "when the private sector shows no interest,"26 and the Banco
Central informs the International Monetary Fund that it "has decided toestablish a regime of free exchange and abolish restrictions on trade and on
currency transactions." A booklet published by the Ministry of Industry andTrade advises investors that the country grants “special concessions to foreign
capital.” Foreign concerns are exempt from taxes and customs duties so as "tocreate a propitious climate for investment," The National City Bank of New
York recovers all its invested capital in one year of business in Asunción. The
foreign bank appropriates the national savings and extends external credits to

196

Paraguay, credits which further deform its economy and further mortgage its
sovereignty. In the countryside, 1.5 percent of proprietors own 90 percent of
the cultivated land, and less than 2 percent of the total land area is undercultivation. The official colonization plan in the Caaguazú triangle offers
hungry peasants more graves than gain.( Many peasants have finally opted to return tothe minifundio region in the center of the country, or have joined the new exodus to Brazil,
where they offer their cheap labor to Curitiba and Mato Grosso yerba mate plantations or Paranácoffee plantations. Most desperate is the plight of the pioneer, who finds himself face to facewith the jungle, totally without technical know-how or credit assistance, with government"granted" lands from which he must wrest enough to eat his payments--for if he fails to pay the
stipulated price he does not get the land title.) The fatherland denies its children theright to work and daily bread, and Paraguayans emigrate en masse.
The furnaces of the Ibycui foundry, where the cannon used in the defenseof the invaded fatherland was forged, were constructed in a place now called
Mina-cué, which means "It was mine" in Guaraní. There, among the swamps
and mosquitos, near a crumbling wall, you can still see the base of a chimney
blown up by the invaders a century ago, and pieces of rusted steel that werepart of the structure. The few ragged peasants who live in the area don't evenknow which war it was that caused the destruction, but they say that sometimes
at night you can hear the sounds of machinery and hammers, the roar of cannon,
and the shouts of soldiers. The Triple Alliance has been a great success.

HOW LOANS AND RAILROADS DEFORMED
THE LATIN AMERICAN ECONOMY
René Chateaubriand, France's foreign minister under Louis XVIII, wrote inpresumably well-informed disgust: "In the hour of emancipation the Spanish
colonies turned into some sort of British colonies."27 He cited some figures.
Between 1822 and 1826, he said, Britain had extended to the liberated Spanish
colonies ten loans for a nominal value of around £1 million, but after deductionof interest and middlemen's commissions scarcely; £7 million had actuallyreached Latin America. At the same time, more than forty limited stockcompanies had been created in London to exploit Latin America's natural
resources--mines,

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agriculture--and to establish public service enterprises. Banks mushroomed in
Britain: in one year, 1836, forty-eight were founded. British railroads appearedin Panama around mid-century, and the first streetcar line in Latin America
was inaugurated by a British firm in 1868 in the Brazilian city of Recife. The
Bank of England also directly financed government treasuries: Latin American
public bonds actively circulated, with their crises and booms, in the British
financial market. Their public services in British hands, the new states fromtheir inception faced a flood of military expenditures and also had to cope withexternal payment deficits. Free trade involved a frenzied increase in imports,
especially of luxury articles; governments contracted debts, which in turncalled for new loans, so that a minority could live fashionably. The countries
were mortgaging their future in advance, moving away from economic
freedom and political sovereignty. Except in Paraguay (whose contrary effort
was crushed), the process was similar throughout Latin America-and still is,
although the creditors and the mechanisms are different. The need for externalfinancing became, like the addict's need for morphine, indispensable. Holes
were dug for the sake of filling them. Nor is the deterioration of commercial
terms of exchange a phenomenon peculiar to our own day. According to Celso
Furtado, the prices of Brazilian exports fell 40 percent between 1821 and 1830and between 1841 and 1850, while foreign import prices remained stable: Latin
America's vulnerable economies compensated for the decline with loans.28"The finances of these young states," writes Robert Schnerb, "are notsound.... They must resort to inflation, which produces depreciation of thecurrency, and to onerous loans. These republics' history may be said to be thatof the economic obligations they incur to the all-absorbing world of European
finance."29 In fact, bankruptcies, payment suspensions, and desperate
refinancing were frequent. Pounds sterling ran out like water between thefingers. Of the £I million loan that the Buenos Aires government negotiatedwith Baring Brothers in 1824, Argentina received only £570,000, and that not
in gold (as stipulated) but in paper. The loan consisted of drafts on orders sent
to British businessmen in Buenos Aires, who had no gold with which to pay
since their real mission was to send all precious metals that came their way to
London. So Argentina received paper but was required to pay in gold;198

it was not until early in this century that Argentina canceled the debt, which
successive refinancings had inflated to £4 million. Buenos Aires province had
been completely mortgaged--all its revenues, all its public lands--as guaranteeof payment. As the finance minister in the period when the loan was contracted
said: "We are not in a position to take measures against foreign trade,particularly British, because we are bound to that nation by large debts andwould expose ourselves to a rupture which would cause much harm. The use ofdebt as an instrument of blackmail is not, as we can see, a recent U.S. invention.
Such usurious operations put bars around free nations. By the middle of thenineteenth century, servicing of the foreign debt absorbed almost 40 percent ofBrazil's budget, and every country was caught in the same trap. Railroads
formed another decisive part of the cage of dependency: when monopoly
capitalism was in flower, imperialist influence extended into the colonial
economies' remote backyards. Many of the loans were for financing railroads
to bring minerals and foodstuffs to export terminals. The tracks were laid not toconnect internal areas one with another, but to connect production centers withports. The design still resembles the fingers of an open hand: thus railroads, so
often hailed as forerunners of progress, were an impediment to the formationand development of an internal market. The imperialist nations also achieved
this in other ways, especially through a tariff policy cut to the British pattern.
For example, freightage on articles processed in the Argentine interior wasmuch higher than on unfinished goods. Railroad charges became a curse thatmade it impossible to manufacture cigarettes in tobacco-growing areas, to spin
and weave in wool centers, or to finish wood in forest zones. True, theArgentine railroad developed the Santiago del Estero timber industry, but withsuch results that a local author groaned: "Oh, that Santiago had never had atree!"30 The cross-ties were made of wood, and charcoal served as fuel; thelumber camps created by the railroad broke up rural communities, destroyed
agriculture and cattle-farming by razing pastureland and shade trees, enslaved
several generations of Santiagans in the forests, and furthered depopulation.
The mass exodus has not stopped and today Santiago del Estero is one ofArgentina's poorest provinces. When the railroads switched to fuel oil, theregion was plunged into a deep crisis.

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It was not British capital that laid the first tracks across Argentina, Brazil,
Chile, Guatemala, Mexico, and Uruguay. Nor in Paraguay, as we have seen;
but the railroads built by the Paraguayan state, with the help of European
technicians, passed into British hands after the defeat. The other countries'
railroads went the same way without producing a single centavo of new
investment; furthermore, the state contracts took care to assure the companies aminimum profit level, to avoid possible unpleasant surprises. Decades later, atthe end of World War II, when the railroads yielded no more dividends and had
fallen into relative disuse, the public authorities got them back. Almost all of
the states bought the scrap iron from the British and thus nationalized thecompanies' losses.
When the railroads were booming, the British concerns had often obtained
considerable land concessions on either side of the tracks, in addition to therailbeds themselves and the right to build new branch lines. The land was anadditional business bonanza. A fabulous gift to the Brazilian railway in 1911
led to the burning of countless huts and the eviction or death of peasantfamilies in the concession area. It was this that triggered off the "Contestado"
revolt, one of the greatest outbursts of popular fury in Brazilian history.

PROTECTIONISM AND FREE TRADE IN THE UNITED STATES:A SUCCESS DUE NOT TO AN INVISIBLE HAND
When the Triple Alliance was announcing Paraguay's imminent destructionin 1865, General Ulysses S. Grant was celebrating Lee's surrender at
Appomattox. The Civil War brought victory to Northern industrialists-unblushing protectionists--over the free-trade cotton and tobacco planters of
the South. Thus the outbreak of the war that sealed Latin America's colonial
fate coincided with the end of the war that enabled the United States toconsolidate its position as a world power. As the newly elected president said:
For centuries England has relied on protection, has carried it to extremes, andhas obtained satisfactory results from it. There is no doubt that it is to thissystem that it owes its present strength. After two centuries, England has
found it convenient to adopt free trade because it thinks that protection can nolonger offer it anything. Very200

well then, gentlemen, my knowledge of our country leads me to believe thatwithin two hundred years, when America has gotten out of protection all thatit can offer, it too will adopt free trade.31

Two and a half centuries earlier, adolescent English capitalism had sent to
its North American colonies its men, its capital, its way of life, its incentives,and its projects, The thirteen colonies, safety valves for Europe's surplus
population, soon turned to account the "handicap" of their poor soil and subsoil,
and from early days developed an industrializingphilosophywhich themetropolis did little to discourage. In 1631 the recently arrived colonists inBoston launched a thirty-ton sloop, Blessing of the Bay, which they had built
themselves, and from then on the shipping industry grew rapidly. White oak,abundant in the woods, was ideal for the framing and hulls; decks, bowsprits,
and masts were made of pine. Massachusetts subsidized production of hemp
for rigging and ropes, and also encouraged local manufacture of canvas andsails. To the north and south of Boston the coasts were dotted with prosperous
shipyards. The colonial governments extended subsidies and premiums to allkinds of manufacture. There were incentives to promote wool, raw materials
for crude fabrics which, the production of flax and if not over-elegant, were
weatherproof and national. To exploit Lynn iron deposits, the first foundry
went into operation in 1643; soon iron to the whole region. When the stimuli
Massachusetts was supplying to textile production seemed insufficient, thiscolony opted for compulsion: in 1855 it imposed heavy penalties on any family
failing to keep at least one spinning wheel continuously active. In the same
period each county of Virginia had to select children for instruction in textile
manufacture. It was also prohibited to export hides, so that these could be used
domestically for making boots, belts, and saddles.
Economic historian Edward Kirkland wrote that the handicaps with fromevery direction except which colonial industry must contend come Britishcolonial policy. Indeed, 3,000 miles' distance and the difficulties ofcommunication made proscriptive legislation lose nearly all its force andfavored the trend toward self-sufficiency. The Northern colonies sent no gold,
silver, or sugar to England, while their consumption needs produced an excessof imports which had somehow to be checked, Trade across the ocean waslight; hence development of local manufactures was indispensable for survival.
England paid such scant attention to201

these colonies in the eighteenth century that they were able to introduce thelatest metropolitan techniques into their factories, turning restrictive colonial
pacts into scraps of paper. This was far from true of the Latin Americancolonies, which delivered their air, water, and salt to ascendant European
capitalism and, in return, received a largesse of the finest and costliest luxury
goods to pamper their ruling classes. The only expanding activities in Latin
America were those oriented toward export, and so it continued in succeeding
centuries: the economic and political interests of the mining and landlord
bourgeoisie never coincided with the need for internal economic development,
and businessmen were linked less with the New World than with foreign
markets for the metals and foodstuffs they wanted to sell and with foreignsources of the manufactured articles they wanted to buy.
When the United States declared its independence, it had the same
population as Brazil. The Portuguese metropolis--as underdeveloped as the
Spanish--exported its underdevelopment to the colony. Throughout theeighteenth century, Brazil's economy had been orchestrated into the British
symphony as imperial supplier of gold. This function was reflected in thecolony's class structure, Unlike the United States, Brazil's ruling class was notmade up of farmers, manufacturing entrepreneurs, and domestic businessmen.
The chief interpreters of ruling-class ideals in the two countries, Alexander
Hamilton and the Viscount de Cairú (one of the main figures influencing the
opening of the ports in 1808), expressed the difference clearly. Both had been
disciples, in England, of Adam Smith. But while Hamilton had become achampion of industrialization and a promoter of state protection for national
industry, Cairil believed in the invisible hand that worked the magic ofliberalism: laissez faire, laissez passer, laissez vendre.33
By the end of the eighteenth century, the United States had the world's
second merchant fleet, consisting entirely of ships built in its own yards, and its
textile and steel mills were in surging growth, Soon afterward its machineindustry got under way, eliminating the need for its factories to buy capital
goods abroad. The zealous Mayflower pilgrims had laid the foundations of anation in the New England countryside; along its coast of deep bays and great
estuaries an industrial bourgeoisie had continuously grown and prospered. In
this, as we have seen, the Antilles trade--including the sale of African slaves-had

202

played a major role, but the U.S. achievement would not have happened if it
had not been kindled from the outset by a fierce nationalist flame. George
Washington had advised in his farewell address that the United States should
pursue a lone course. Emerson proclaimed in 1837: "We have listened too longto the courtly muses of Europe.... We will walk on our own feet; we will workwith our own hands; we will speak our own minds."34
Public funds broadened the internal market. The states built roads andrailroads, bridges and canals. In mid-century, the state of Pennsylvania
participated in launching more than 150 mixed-economy enterprises, inaddition to administering the $100 million invested in public works. The
military operations which grabbed more than half of Mexico's territory also
contributed substantially to the country's progress. But the state participated in
the development process with more than capital investment and the military
costs of expansion; in the North a tough protectionist policy had been
inaugurated. The landlords of the South, on the contrary, were free traders.
Cotton production doubled every ten years, and while it brought a largecommercial income to the whole country and fed Massachusetts's modern
textile mills, it depended above all on European markets. The Southernaristocracy, like that of Latin America, was primarily linked to the world
market; 80 percent of the cotton spun in European mills came from the toil ofSouthern slaves. When abolition of slavery was added to Northern industrial
protectionism, the contradiction set off the war. North and South confronted
each other as two opposed worlds, two historical eras, two antagonistic
philosophies of the national destiny. The twentieth century won thisnineteenth-century war.
Let every free man sing ...
Old King Cotton is dead and buried,sang a poet of the victoriotis army. After General Lee's defeat customs duties-which had been raised during the conflict to provide revenue and had remainedin force to protect the industry of the victors--became sacred. Congress voted
the ultra-protectionist "McKinley" tariff in 1890, and the Dingley Act further
hiked customs duties in 1897. Soon afterward the developed countries ofEurope felt obliged to erect customs barriers against the invasion ofdangerously competitive U.S.

203

manufactures. The word "trust" had been coined in 1882: petroleum, steel,foodstuffs, railroads, and tobacco were dominated by monopolies that
advanced with giant strides.( The South became an internal colony ofnorthern capitalists.
After the war, propaganda for spinning-mill construction in the rwo Carolinas, Georgia, andAlabama assumed the dimension of a crusade. But this was no victory for a moral cause, and nopure humanitarianism fathered the new industries; the South offered cheaper labor and powerand soaring profies, sometimes amounting to 75 percent. Capital flowed from the North to tie theSouth to the system's center of gravity. The tobacco industry, concentrated in North Carolina,
was directly under the Duke trust, headquartered in New Jersey to take advantage of morefavorable laws; in 1907 Tennessee Coal & Iron, which exploited Alabama's iron and coal, cameunder the control of U.S. Steel, which from then on arranged prices and thus eliminated irksome
competition. At the beginning of our century the South's per capita income had fallen to half ofwhat it was before the Civil War.35)

Before the Civil War Grant had participated in the plunder of Mexico; after
it he was a protectionist president: all part of the same process of nationalaffirmation. Northern industry was conducting the orchestra of history and, as
political master of the state, seeing to its interests from the seat of power. The
agricultural frontier moved westward and southward at the expense of Indians
and Mexicans, but it was with small holdings, not latifundios, that it Filled thenew open spaces. The promised land not only attracted European peasants;
masters of the most varied crafts and workers skilled in mechanics, metallurgy,
and steel production also came from Europe to enrich the country's
industrialization. By the end of the century the United States was the leadingindustrial power; in thirty years after the Civil War its factories had multiplied
its production capacity by seven. It produced as much coal as Britain and twice
as much steel, and had nine times as many miles of railroad. The center of thecapitalist world was beginning to move.
After World War II the United States began to emulate Britain in exporting
the doctrine of free trade and free competition, so that other people could
consume. The International Monetary Fund and World Bank emerged together
to deny to underdeveloped countries the right of protecting their national
industries, and to discourage state action in those countries. Infallible curative
properties were attributed to private enterprise. But the United States did notabandon an economic policy which still remains rigidly protectionist, andwhich listens carefully to the voice of history: in the North the disease wasnever confused with the remedy.

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5. The Contemporary Structure of Plunder
AN IMPOTENT TALISMANOf all the direct private investment in Latin America coming from abroad, lessthan one-fifth was from the United States when Lenin wrote Imperialism in thespring of 1916. Today, nearly three-quarters is from the United States. What
was the imperialism Lenin knew? The rapacity of industrial centers seeking
world markets for their merchandise; the fever to capture all possible sourcesof raw materials; the plunder of iron, coal, and petroleum; the railroads which
linked the control of dominated areas; the voracious loans of the financial
monopolies; the military expeditions; the wars of conquest. It was animperialism that poisoned any place where a colony or semi-colony might dare
to build a factory of its own. Industrialization was the privilege of themetropolis; in the poor countries it was incompatible with the rich countries,
system of domination. The end of World War II found European interests infull retreat from Latin America, and U.S. investments triumphantly advancing.
Since then there has been an important change in the focus of investment. Stepby step, year by year, capital put into public services and mining has lost
importance, while investments in petroleum and, above all, in manufacturing
have grown in proportion. At the present time $1 of every $3 invested in Latin
America is invested in industry. ( Forty years ago U.S. investment in transformationindustries was only 6 percent of the total U.S. capital invested in Latin America. In 1960 itgrazed the 20 percent mark, and has continued rising to become nearly one-third of the total.)205

In return for insignificant investments, the affiliates of giant corporations
jump

over

customs

barriers

erected— paradoxically— against

foreigncompetition, and take over the internal industrializing process. They export
factories or, not infrequently, corner and devour those already existing. For thisthey can rely on the enthusiastic aid of most local governments and on the
power of extortion with which international credit organizations endow them.
Imperialist capital captures markets from within, appropriating the key sectorsof local industry: it conquers or constructs the decisive strongholds from whichto control the rest. The OAS describes the process thus: "Latin American
enterprises continue in control of already established and less sophisticatedindustries and techniques, while private investment from the United States-and probably from other industrialized countries also— rapidly increases its
participation in certain dynamic industries, which require a relatively hightechnical level and are more important in determining the course of economic
development."1 Thus the dynamism of U.S. factories south of.the Río Grande ismuch more intense than that of Latin American industry in general. The figures
for the three biggest countries are eloquent: with an index of 100 in 1961,
Argentina's industrial product amounted to 112.5 in 1965, while in the same
period sales by U.S.-affiliated concerns rose to 166.3. For Brazil the equivalent
figures are 109.2 and 120; for Mexico, 142.2 and 186.8.
The interest of the imperialist corporations in appropriating Latin
American industrial growth and capitalizing it for their own benefit does not,of course, imply a disinterest in traditional forms of exploitation. It is true that
United Fruit's railroad in Guatemala stopped being profitable, and thatnationalization by Brazil was splendid business for Electric Bond and Shareand International Telephone and Telegraph, which received indemnities in puregold for rusty installations and museum-piece machinery. But if public services
are abandoned for more profitable activities, raw materials are a different
matter. How would the Imperium make out without Latin America's oil andminerals? Despite the relative decline in mining investment, the U.S. economy

206

cannot, as we have seen, do without the vital supplies from the south and thejuicy profits they bring. Furthermore, the investments that turn Latin American
factories into mere cogs in the giant corporations’ machinery do not in any way
alter the international division of labour. There is no change in the system ofintercommunicating arteries through which capital and merchandise circulate
between poor countries and rich countries. Latin America continues exporting
its unemployment and poverty: the raw materials that the world market needs,
and on whose sale the regional economy depends. Unequal exchange functions
as before: hunger wages in Latin America help finance high salaries in the
United States and Europe. Brazil, despite its industrialization, continues
substantially dependent on coffee exports, Argentina on sales of meat; Mexico
exports very few manufactures.
There are always politicians and technocrats ready to show that theinvasion of "industrializing" foreign capital benefits the area invaded. In thisversion, the new-model imperialism comes on a genuinely civilizing mission,
is a blessing to the dominated countries, and the true-love declarations by thedominant power of the moment are its real intentions. Guilty consciences arethus relieved of the need for alibis, for no one is guilty: today's imperialism
radiates technology and progress, and even the use of this old, unpleasant word
to define it is in bad taste. But when imperialism begins exalting its own
virtues we should take a look in our pockets. We find that the new model does
not make its colonies more prosperous, although it enriches their poles ofdevelopment; it does not ease social and regional tensions, but aggravates them;it spreads poverty even more widely and concentrates wealth even morenarrowly; it pays wages twenty times lower than in Detroit and charges prices
three times higher than in New York; it takes over the internal market and themainsprings of the productive apparatus; it assumes proprietary rights to chart
the course and fix the frontiers of, progress; it controls national credit andorients external trade at its whim; it denationalizes not only industry but the
profits earned by industry; it fosters the waste of resources by diverting a largepart of the economic surplus abroad; it does not bring in capital fordevelopment but takes it out. As various ECLA reports have shown, thehemorrhage of profits from direct U.S. investments in Latin America has been
five times greater in recent vears than the infusion of new investments. To

207enable the corporations to take out their profits, Latin American countries
mortgage themselves to foreign banks and international credit organizations,thus multiplying the flow of the next bloodlettings. The result is the same forindustrial investment as it is for the "traditional" kind.
In the rigid framework of a global capitalism integrated around the big U.S.
corporations, the industrialization of Latin America has increasingly less to dowith progress and national liberation. The talisman was robbed of its power inthe decisive defeats of the past century, when ports triumphed over interiors
and free trade crushed new-born national industries. Arid the twentieth century
produced no bourgeoisie strong and creative enough to reshoulder the task andfollow it through to its end. Every effort petered out haffivay to the goal. What
happened to Latin America's industrial bourgeoisie was what happens to
dwarfs: it became decrepit without having grown. Our bourgeois of today areagents and functionaries of prepotent foreign corporations. Truth compels us toadmit that they never did anything to deserve a better fate.

THE GUARDS THEMSELVES OPEN THE GATES:THE GUILTY STERILITY OF THE NATIONAL BOURGEOISIEThe present structure of industry in Argentina, Brazil, and Mexico--thethree touted poles of Latin American development--shows deformations
characteristic of a reflected development. With rare exceptions, thesatellization of industry in other, weaker countries has been easily achieved.
There is certainly nothing competitive about a capitalism that today exports
factories as well as merchandise and capital, that penetrates and hogs
everything: this is a global industrial conglomeration by capitalism in the ageof the multinational corporation, of the giant monopoly embracing every kindof activity in every corner of the earth. U.S. capital is more tightly concentratedin Latin America than in the United States itself; a handful of concerns control
the overwhelming majority of investments. For them the nation is not a task toundertake, a flag to defend, or a destiny to fulfill: it is no more than a hurdle toleap--for sovereignty can be inconvenient--or a succulent fruit to devour. But isthe nation a destiny to fulfill to the ruling classes in each208

country? The grand march of imperialist capital has found local industry
defenseless and unaware of its historic role. The bourgeoisie has enlisted in theforeign invasion force without shedding tears or blood; and with the Latin
American economy getting steadily weaker over the past two decades, thestate's influence upon it has been reduced to an all-time low by the good officesof the International Monetary Fund. U.S. corporations went into Europe likeconquistadors and grasped the reins of the old continent's development so
firmly that before long, we are told, U.S. industry in Europe will be the world's
third industrial power after the United States and the USSR.2 If the European
bourgeoisie, with its tradition and power, has not been able to dam the flood,
what hope is there that, at this stage of history, Latin America's bourgeoisie
will lead the impossible venture of independent capitalist development? In fact,
the denationalization process in Latin America has been much speedier andcheaper and has had far worse consequences.
The growth of Latin American manufacturing was sparked, in our century,
from outside, rather than by planned national development policies. It has notbeen a maturing of productive forces; nor was it the result of an explosion ofinternal conflicts--conflicts allegedly “overcome”--between landlords and an
ascendant artisan class, for that class was short-lived. Latin American industry
was delivered from the very womb of the agro-export system, in response to anacute disequilibrium provoked by the fall of external trade. Two world wars,
and especially the capitalist depression that followed "Black Friday" in October
1929, abruptly and violently curtailed the region's exports and consequently its
capacity to import. Prices of suddenly scarce foreign industrial products soared.
No industrial class free from traditional dependency emerged: themanufacturing impetus came from capital accumulated by landlords andimporters. It was the big cattlemen who imposed exchange controls inArgentina. The chairman of the Sociedad Rural, who had become minister ofagriculture, said in 1933: "The isolation in which we have been placed by adislocated world obliges us to manufacture here what we can no longer buy incountries that buy from us.”3 Coffee hacendados hurried to put much of theircapital accumulated from external trade into the industrialization of São Paulo:"In contrast with the industrialization of already developed countries," agovernment document said, "Brazil's industrialization was not a slow

209

process, a part of a general process of economic transformation. It was rather arapid and intense phenomenon, superimposed on the previously existingsocioeconomic structure without entirely modifying it, giving rise to the
profound sectoral and regional differences which characterize Braziliansociety."4
From the start, the new industry dug itself in behind protective customs
barriers erected by the governments, and it grew thanks to measures taken by
the state to restrict and control imports, fix special exchange rates, avoid
taxation, buy or finance production surpluses, build roads for the transport of
raw materials and merchandise, and create or extend sources of energy. The
nationalist and broadly popular governments of Getulio Vargas (1930-1945
and 1951-1954), Lázaro Cárdenas (1934-1940), and Juan Domingo Perón(1946-1955) expressed the need of Brazilian, Mexican, and Argentine industry
to “take off," to develop or consolidate according to place and period. In Latin
America, the "spirit of enterprise" that defines certain basic characteristics of
the industrial bourgeoisie in developed capitalist countries was a characteristicof the state, especially in these decisive periods. Instead of the social class forwhich history clamored with small success, it was the government of the
populist caudillos that embodied the nation and gave the masses political andeconomic access to the benefits of industrialization. The industrial bourgeoisie
hatched in this incubator did not differ essentially from previous ruling classes.
Perón, for example, inspired panic in the Unión Industrial--whose leaders, notwithout reason, saw the ghost of the provincial montoneras reappearing in therebellion of the Buenos Aires suburban proletariat. Before Perón defeated it in
the February 1946 elections, the conservative coalition received a famouscheck from the industrialists' leader; ten years later, when Perón fell, it wasagain clear to them that their contradictions with the oligarchy--of which theyfor better or worse formed a part— were not fundamental. In 1956 the Unión
Industrial made a united front with the Sociedad Rural and the Boisa deComercio in defense of free association, free enterprise, freedom to trade, andfreedom to hire. In Brazil, an important sector of the manufacturing,bourgeoisie closed ranks with the forces that drove Vargas to suicide. The
Mexican experience had distinctive characteristics and promised much more to
the Latin American process of change than it finally contributed. The

210

Cárdenas nationalist cycle was the only one that broke lances with thelandlords by carrying out the agrarian reform for which the country had
agitated since 1910. In other countries--not merely in Argentina and Brazil-industrializing governments left the latifundio structure intact, so that it
continued to strangle the internal market and agricultural production.( Chile,
Colombia, and Uruguay also did some industrializing as a substitute for importing in the periods
referred to here. Uruguayan President José Batlle y Ordóñez (1903-1907 and 1911-1915) had
previously been a prophet of the bourgeois revolution in Latin America. Uruguay put the eighthour day into law before the United States. Batlle's welfare-state experiment was not limited to
implementation ofthe most advanced social laws of the time; it also gave a strong impetus tocultural development and mass education, and nationalized public services and various
economically important productive activities. But it neither touched the power of the landlords,
nor nationalized banking or foreign trade. Today Uruguay suffers the consequences of theprophet's perhaps inevitable omissions and of his successors' betrayals.)

Generally speaking, industry landed as an airplane does, without affecting
the airport: conditioned by and serving the needs of a previously existing
internal market, it never broadened that market enough to make great structuralchanges possible. Industrial development required more and more imports ofmachinery, spare parts, fuel, and intermediate products, (+"The transfer ofa
particular product to internal production only 'substitutes' for part ofthe aggregate value
previously generated outside the economy.... To the extent that consumption of this ‘substituted’
product expands rapidly, the resultant demand for imports can rapidly overtake the foreigncurrency economy… ”5) but exports, the source of foreign currency, could not pay

for these since they came from an activity condemned to backwardness by its
masters. Under the Perón regime, the Argentine state achieved a monopoly ofgrain exports but did not touch the land-ownership system; nor did it
nationalize the big U.S. and British meatpacking plants or the wool exporters.
Thus the official push toward heavy industry was extremely weak and the state
did not realize in time that if it did not give birth to a technology of its own, its
nationalist policy would take flight with clipped wings. By 1953 Perón, who
had come to power in direct confrontation with the U.S. ambassador, wasgiving Milton Eisenhower a rousing welcome and soliciting the cooperation offoreign capital in promoting dynamic industries.( The minister of economic affairs
replied thus to a representative of the magazine Vision on November 27, 1953: “Apart from theoil industry, what other industries does Argentina want to develop with the cooperation offoreign capital?"

211

"To be precise, let us cite in order of priority oil… .Secondly, the steel industry… ..Heavy
chemistry.... Manufacture of transport units… ..Manufacture of tires and axles… .And
construction of diesel engines."6) The need for a "partnership" between national

industry and the imperialist corporations became pressing as substitution forimported manufactures was speeded up and as the new factories required risinglevels of technology and organization. The same trend emerged in Getulio
Vargas's industrialization plan, and was dramatized in Vargas's final tragic
decision. Foreign oligopolies, with their ultramodern technology, steadily andnot very secretly took over the national industry of all Latin Americancountries, including Mexico, by the sale of manufacturing techniques, patents,
and new equipment. Wall Street had definitely taken the place of Lombard
Street, and it was the U.S. concerns which settled down to enjoy superpower inthe region. To this penetration of the manufacturing field was added everincreasing interference in banking and commerce: the Latin American market
was being integrated into the internal market of the multinational corporations.
In 1965 Roberto Campos, economic czar of the Castelo Branco
dictatorship, announced that "the era of charismatic leaders surrounded by aromantic aura is giving place to a technocracy."7 The U.S. embassy had
directly participated in the coup against the João Goulart government; the fallof Goulart, Vargas's heir in style and aim, rang down the curtain on populism
and mass politics. "We are a beaten, dominated, conquered, destroyed nation,"a friend wrote to me from Rio de Janeiro some months after the success of themilitary plot: the denationalization of Brazil meant iron-fisted rule by an
unpopular dictatorship. Capitalist development could no longer be fitted inwith the great mass mobilization around a Caudillo like Vargas. To containrunaway inflation at the expense of the greater poverty of the poor, the regime
had to ban strikes and destroy unions and parties, to jail, torture, and kill, to cut
workers' wages by any means necessary. A survey in 1966-1967 showed that84 percent of Brazil's big industrialists thought the Goulart government's
economic policy had been harmful. Undoubtedly, among them were thosecaptains of the national bourgeoisie Goulart tried to lean on in order to stem theimperialist bloodletting of the national economy. The

212

same process of repressing and strangling the people occurred under Onganía
in Argentina--actually, it had begun with Perón's defeat in 1955, just as in
Brazil it began with the shot that killed Vargas in 1954. In Mexico, too,denationalization of industry coincided with increasingly repressive policies by
the party that monopolizes the government.
As Fernando Henrique Cardoso has noted, light or "traditional" industry,
which grew under the benevolent protection of populist governments, requires
increased consumption by the masses, the people who buy shirts or cigarettes.8
But "dynamic" industry--the production of intermediate and capital goods--is
directed toward a restricted market, one which has the big concerns and thestate at its top: a few consumers with big financial resources, Dynamic industry,
now in foreign hands, rests upon and subordinates previously existing
traditional industry. In the traditional sectors, technologically at a low level,
national capital retains some strength; the less the capitalist is tied tointernational modes of production by technological and financial dependence,
the more he tends to favor agrarian reform and the raising of mass consumerpower through the trade union struggle. On the other hand, those with closest
foreign connections, representing dynamic industry, simply want strengthenedbonds between the dependent countries' islands of development and the world
economic system, and they subordinate internal transformations to this priority.
Here are the throats from which the song of the industrial bourgeoisie emerges,
as is shown in all the recent Argentine and Brazilian surveys Cardoso uses as
raw material. The big businessmen are firmly opposed to agrarian reform; mostof them deny that the manufacturing sector has different interests from therural sector and believe that nothing is more important for industrial
development than the cohesion of all productive classes and the strengtheningof the Western bloc. Only 2 percent of the great industrialists in Argentina andBrazil think the workers are of primary political importance. Most of thoseinterviewed were "national entrepreneurs"; and most were bound hand and footto foreign power centers by the myriad bonds of dependency.
Could anything else be expected at this point? The industrial bourgeoisie isa dominant class dominated in turn from abroad. The chief latifundistas on the
Peruvian coast, now being expropriated by the Velasco Alvarado government,
are also owners of thirty-one transformation213

industries and many other assorted enterprises. The situation is similar in
all the other countries: a few hundred families own the factories and lands, thelarge businesses and banks.9 Mexico is no exception: the national bourgeoisie,
subordinated to big U.S. concerns, is much more afraid of mass pressure thanof imperialist oppression, in whose bosom it is developing without
independence--and without the creative imagination attributed to it--and has
efficiently multiplied its interests.( As Alonso Aguilar says: "Mexican capitalists are
more and more versatile and ambitious. With business freedom as their point of departure foracquiring wealth, they--or at least the most prominent--enjoy a nerwork of channels throughwhich to multiply and interweave their interests by friendships, business partnerships, marriage
compaternity [compadrazgo] of children, extension of mutual favors, membership in certain
clubs or groups, frequent social gatherings and, of course, affinity in their political positions."10)

In Argentina, the founder of the Jockey Club, center of latifundista social
prestige, was also the leading industrialist, and thus an immortal tradition wasborn at the end of the past century.( He was Carlos Pellegrini. The Jockey Club honored
him by publishing his speeches; those in which the industrialists' point of view were supported
were omitted.11) Manufacturers with fattened bank accounts marry landlords'

daughters to gain entry to the oligarchy's most exclusive salons, or buy land forthe same purpose; and not a few cattle ranchers have--at least in boom periods-invested capital surpluses accumulated in their hands in industry. FaustinoFano, who made a good part of his fortune as a textile merchant andindustrialist, held the presidency of the Sociedad Rural for four terms before
his death in 1967: "Fano destroyed the false contradiction between agriculture
and industry," his press obituaries proclaimed. Industrial surpluses are turned
into cows. The powerful Di Tella brothers sold their auto and refrigerator
factories to foreign capitalists and now raise prize bulls for Sociedad Rural
shows. Half a century ago the Anchorena family, which owned Buenos Aires
province up to its borders, built one of the city's biggest metallurgical plants.
In Europe and the United States, the industrial bourgeoisie made a very
different kind of entrance onto the stage of history, and grew and consolidated
its power in quite a different way.

214

WHICH FLAG FLIES OVER THE MACHINERY?
(“Which flag flies" is part of a famous saying by José Artigas, (Trans.))
The old woman stooped and fanned the fire with her hand. Back bent,
wrinkled neck extended, she looked like an ancient black tortoise. But her
ragged dress certainly gave less protection than a shell, and, after all, it was
only the years that made her so slow. Behind her the wall of her hovel, made ofbits of wood and tin, sagged like its occupant; beyond were similar hovels of
the São Paulo slum. Before her the water for coffee was boiling in a blackened
kettle. She lifted a small tin can to her lips and, before drinking, shook her headand shut her eyes. "O Brasil é nosso,” she said--Brazil is ours. In the center ofthe same city, and at that same moment, the executive director of Union
Carbide was thinking the same thing--but in another language--as he raised a
crystal glass to drink to the firm's capture of still another Brazilian plastics
factory. One of the two was mistaken.
Since 1964 Brazil's successive military dictators have marked theanniversaries of the various state enterprises by announcing their imminent
denationalization, now known as "recuperation." Ministers flock to celebrate
every opening of a foreign factory. Law 56,570, passed on July 6, 1965,
reserved the petrochemical industry for the state; Law 56,571, passed the sameday, annulled Law 56,570, opening up petro-chemicals to private investment.
Thus directly, or through "partnership" with the state, Dow Chemical, Union
Carbide, the Rockefeller group, and Phillips Petroleum won the most coveted"filet mignon," the oil derivatives industry in which a boom in the 1970s was
anticipated. What happened in the few hours between the two laws? Rustlingcurtains, footsteps in the hallway, desperate hangings on the door, green bills in
swift motion, a flurry in the palace: from Shakespeare to Brecht, many would
have enjoyed describing it. A government minister admits: "In Brazil, apartfrom the state itself, and with honorable exceptions, only foreign capital isstrong."12 And the government does its best to avoid any irksome competition
with U.S. and European corporations.
Foreign capital for manufacturing began copiously flowing into Brazil inthe 1950s, and got a strong impetus from the development plan President
Juscelino Kubitschek put into effect between 1957 and215

1960. Those were the days of growth euphoria. Brasilia emerged as if from amagician's cauldron, in a wilderness where the Indians had not yet heard of thewheel; highways and great dams were built; automobile factories produced a
new car every two minutes. The industrial curve climbed steeply. Doors were
flung open to foreign investment, the dollar invasion was hailed, the dynamismof progress was felt in the air. Banknotes circulated before the ink dried; theleap forward was financed by inflation and a heavy external debt that would be
unloaded on the backs of successor governments. A special type of exchange
for remitting profits to the foreign concerns' head offices and amortizing theirinvestment was introduced and guaranteed by Kubitschek. The state assumed
co-responsibility for payment of debts contracted abroad by these concerns,
and arranged a cheap dollar for amortization and interest on these debts:
according to an ECLA report, over 80 percent of all investment between 195 5
and 1962 came from state-guaranteed loans.13 In other words, more than fourfifths of these concerns' investments came from foreign banks and became afurther addition to the Brazilian state's millstone of external debt. Special
benefits were also granted for the importation of machinery.( Eugenio Gudin, an
economist much in favor of foreign investment, estimates that under this heading alone Brazil
made a present to U.S. and European concerns of no less than $1 billion. According to MoacirPaixão, privileges extended to the auto industry in the period ofits inception were equivalent to
the national budget. Paulo Schilling notes that while the Brazilian state showered benefits on the
big international corporations, permitting them maximum profits with maximum investmenes, it
refused help to the Fibrica Nacional de Motores, created in che Vargas period.14 Later, during theCasrelo Branco regime, this state enterprise was sold to Alfa Romeo.) National enterprises

did not enjoy the benefits extended to General Motors and Volkswagen.
The denationalizing effects of this seduction of imperialist capital emergedin the findings of the university's Instituto de Ciencias Sociales when it
investigated Brazil's great economic groupings.15 Of conglomerates withcapital exceeding 4 billion cruzeiros, more than half were foreign and mostwere U.S.-owned; of those with more than 10 billion cruzeiros, twelve were
foreign and five Brazilian. "The bigger the economic group, the more likely it
is to be foreign," concluded Mauricio Vinhas de Queiroz in analyzing theresults of the investigation. Equally or more eloquent was the fact that of thetwenty-four Brazilian groups with over four billion in capital, only nine were
not linked by shareholdings216

to U.S. European capital, and two of the nine had interlocking foreign directorships.
The survey showed that ten economic groups had a virtual monopoly in theirrespective lines, and that of these, eight were affiliates of big U.S. corporations.
But all this was child's play compared to what came later. Between 1964 andmid-1968, fifteen auto and auto parts factories were swallowed up by Ford,
Chrysler, Willys Overland, Simca, Volkswagen, and Alfa Romeo. In the electricelectronic sector, three important Brazilian concerns passed into Japanese hands.
Wyeth Laboratories, Bristol Meyers, Mead Johnson, and Lever Brothers gobbled
various laboratories, reducing national production of drugs to one-fifth the market,
Anaconda pounced on nonferrous metals and Union Carbide on plastics, chemicals,
and petrochemicals; American Can, American Machine and Foundry, and othercolleagues took over six Brazilian machine and metallurgical concerns; theCompanhia de Mineracão Geral, owner of one of Brazil's biggest metallurgicalplants, was bought for a song by a Bethlehem Steel-Chase Manhattan-Standard Oil
consortium. A parliamentary commission set up to investigate the matter reachedsome sensational conclusions, but the military regime closed the doors of Congress
and the Findings never got to the Brazilian pubic. (The commission found that in 1968
foreign capical controlled 40 percent of the capital market in Brazil, 62 percent of external trade, 82
percent of ocean transport, 67 percent of external air transport, 100 percent of motor vehicle
production, 100 percent of tire manufacturing, more than 80 percent of the pharmaceutical industry,
about 50 percent of the chemical industry, 59 percent of machinery and 62 percent of auto paresproduction, 48 percent of aluminum and 90 percent of cement production. Half of the foreign capital
was that of U.S. concerns, followed by German. It is interesting to note in passing the increasing
weight of the Federal Republic of Germany's investments in Latin America. Of every rwo autos madein Brazil, one comes from the Volkswagen plant, the biggest in the whole region. The first auto factoryin South America was German--Mercedes-Benz Argentina, founded in 1951. The German firms
Bayer, Hoechst, BASF, and Schering control a substantial part of Latin America's chemical industries.)

Under Castelo Branco, an investment-guarantee agreement was signed whichgave foreign concerns virtual extraterritoriality: taxes on their profits were cut andthey were given extraordinary credit facilities, while tourniquets applied by theGoulart government to the profits drain were removed. The dictatorship hawked
the country to foreign capitalists as a pimp offers a woman, and put the stresswhere it belonged: "The treatment of foreigners in Brazil is among the most liberalin theworld . . . no general restrictions are in effect with reference to the nationalityof owners, partners, or shareholders.... There is no limit to the percentage of the217registered capital that may be remitted as profit.... No limitation is placed on
the repatriation of capital, and reinvestment of profits is considered as anincrease of the original capital… ”16
Argentina competes with Brazil for the role of imperialist-investment
favorite, and its military regime did not lag in singing the benefits during thesame period. In his 1967 speech defining Argentine economic policy, Juan
Carlos Ongania reaffirmed that the hens granted equal opportunity to the fox:
"Foreign investments in Argentina will be considered on an equal footing withinvestments of internal origin, in accordance with the traditional policy of ourcountry which has never discriminated against foreign capital."17 As-in Brazil,
Argentina puts no limitations on the entrance of foreign capital, its movement
within the national economy, the export of profits, or the repatriation of capital;
payments for patents, royalties, and technical assistance are made freely. The
government exempts the concerns from taxes and extends to them special
exchange rates, in addition to many other stimuli and exemptions. Between
1963 and 1968, fifty important Argentine enterprises--twenty-nine of which
passed into U.S. hands--were denationalized in such varied sectors as steel,autos and auto parts, petrochemicals, chemicals, the electrical industry, paper,and cigarettes. In 1962 two privatecapital Argentine concerns, Siam Di Tella
and Industrias Kaiser Argentinas, were among the five biggest industrial
enterprises in Latin America; in 1967 both had been generously surrendered toimperialist capital. Of the country's largest enterprises, those with sales
exceeding 7 billion pesos a year, half the total value of the sales belongs toforeign firms, one-third to the state, and barely one-sixth to private companies
with Argentine capital.18
Almost one-third of U.S. investment in Latin American manufacturing is in
Mexico, which also puts no restrictions on the transfer of capital and therepatriation of profits; its exchange restrictions are conspicuous in theirabsence. The obligatory "Mexicanization" of capital, under which nationals
must hold the majority of shares in some industries, has, according to theSecretary of Industry and Commerce, "generally speaking been well received
by foreign investors, who have publicly recognized various advantages in thecreation of mixed enterprises." He218

continued: "It should be noted that even internationally renowned enterprises
have adopted this form of partnership in companies they have established in
Mexico, and it should also be stressed that the policy of Mexicanization ofindustry has not only not discouraged foreign investment in Mexico, but thatafter this investment flow broke a record in 1965, the volume reached in thatyear was again exceeded in 1966."19 Of the hundred most important enterprises
in Mexico in 1962, fifty-six were wholly or partly controlled by foreign capital,
twenty-four belonged to the state, and twenty to private Mexican capital. These
twenty accounted for slightly more than one-seventh of the hundred concerns'
total sales volume.20 Big foreign concerns now control more than half thecapital invested in computers, office equipment, machinery, and industrial
equipment; General Motors, Ford, Chrysler, and Volkswagen haveconsolidated their power over the auto industry and its network of auxiliary
factories; the new chemical industry belongs to Du Pont, Monsanto, Imperial
Chemical Industries (British), Allied Chemical, Union Carbide, and Cyanamid;
the chief laboratories are in the hands of Parke-Davis, Merck, Ross
Laboratories (a subsidiary of Abbott), and Squibb; the influence of Celaneseplastics is decisive in the manufacture of manmade fibers; Lever Brothers andAnderson, Clayton have an increasing hold on edible oils; and foreign capital
participates overwhelmingly in the production of cement, cigarettes, rubber andits derivatives, housewares, and assorted foods.

BOMBARDMENT BY THE INTERNATIONAL MONETARY FUNDHELPS THE CONQUERERS TO LAND
Testifying before the parliamentary commission on the denationalization ofBrazilian industry, two government ministers admitted that indigenously
owned factories had been put at a disadvantage by the Castelo Branco regime's
measure permitting the direct inflow of external credit. They were referring to
the famous Order 289 of early 1965, which allowed foreign concerns operatingin Brazil to get loans from abroad at 7 or 8 percent interest, with a governmentguaranteed exchange arrangement in case the cruzeiro was devalued. Brazilian
concerns had to pay almost 50 percent interest on credits they219

obtained--with difficulty--at home. The inventor of the measure, Roberto
Campos, offered this explanation: "Obviously the world is unequal. Some areborn intelligent, some stupid. Some are born athletes, others crippled. The
world is made up of small and large enterprises. Some die early, in the prime oflife; others drag themselves criminally through a long useless existence. Thereis a basic fundamental inequality in human nature, in the condition of things.
The mechanism of credit cannot escape this. To postulate that national
enterprises must have the same access to foreign credit as foreign enterprises is
simply to ignore the basic realities of economics...... (This testimony appeared in thereport of a parliamentary commission investigating transactions berween national and foreign
enterprises, dated September 6, 1968. Soon afterward Campos published a curious interpretationof the Peruvian government's nationalist stance. According to him, the Velasco Alvarado
government's expropriation of standard Oil was no more than an "exhibition of masculinity." The
only objective of nationalism, he wrote, is to satisfy the human being's primitive need for hate.
However, he added that "pride does not generate investments or increase the flow of capital… ”21)

According to this brief but meaty "Capitalist Manifesto," the law of the jungle
is the natural code governing human life; injustice does not exist, for what weknow as injustice is merely an expression of the cruel harmony of the universe:
poor countries are poor because ... they are poor; our fate is written in the stars
and we are born only to fulfill it. Some are condemned to obey, others areappointed to command. Some put their necks out and others put on the rope.
The author of this theory was the creator of International Monetary Fundpolicy in Brazil.
As in other Latin American countries, application of IMF formulas opened
the gates to let foreign conquerers into an already scorched land. From the endof the 1950s economic recession, monetary instability, the credit drought, and a
decline in internal purchasing power all helped to capsize national industry andput it at the mercy of imperialist corporations. With the magical incantation of"monetary stabilization," the IMF--which not disinterestedly confuses the feverwith the disease, inflation with the crisis of existing structures--has imposed on
Latin America a policy that accentuates imbalances instead of easing them. It
liberalizes trade by banning direct exchanges and barter agreements; it forces
the contraction of internal credits to the point of asphyxia, freezes wages, anddiscourages state activity. To this program it adds sharp

220monetary devaluations which are theoretically supposed to restore the currency
to its real value and stimulate exports. In fact, the devaluations merely
stimulate the internal concentration of capital in the ruling classes' pockets andfacilitate absorption of national enterprises by foreigners who turn up with afistful of dollars.
In all Latin America, the system produces much less than the necessary
monetary demand, and inflation results from this structural impotence. Yet the
IMF, instead of attacking the causes of the production apparatus’s insufficient
supply, launches its cavalry against the consequences, crushing even further
the feeble consumer power of the internal market: in these lands of hungry
multitudes, the IMF lays the blame for inflation at the door of excessive
demand. Its stabilization and development formulas have not only failed tostabilize or develop; they have tightened the external stranglehold on thesecountries, deepened the poverty of the dispossessed masses--bringing social
tensions to the boiling point--and hastened economic and financial
denationalization in the name of the sacred principles of free trade, freecompetition, and freedom of movement for capital. The United States, whichitself operates an enormous protectionist system--tariffs, quotas, internal
subsidies--has never earned a glance from the IMF. Toward Latin America, on
the other hand, the IMF is inflexible: for this it was brought into the world. As
soon as Chile accepted the first IMF mission in 1954, the country swarmed
with its "advisors"; and today most of the governments blindly follow its
directives. The therapy makes the sick man sicker, the better to dose him withthe drug of loans and investments. The IMF extends loans or flashes theindispensable green light for others to extend them. Born in the United States,
headquartered in the United States, and at the service of the United States, theFund effectively operates as an international inspector without whose approval
U.S. banks will not loosen their pursestrings. The World Bank, the Agency forInternational Development, and other philanthropic organizations of global
scope likewise make their credits conditional on the signature andimplementation of the receiving governments’ “letters of intention” to the allpowerful Fund. All the Latin American countries put together do not have half
as many votes as the United States in the direction of the policy of this supreme
genie of world monetary equilibrium. The IMF was created to institutionalize
Wall Street's financial dominion

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over the whole planet, when the dollar first achieved hegemony as international
currency after World War II. It has never been untrue to its master.
It is true that the Latin American national bourgeoisie, with its vocation forliving above its income, has done little to stop the avalanche of foreigners; but
it is also true that imperialist corporations have used a bewildering range of
demolition methods. With the IMF's preliminary bombardment facilitating thepenetration, some enterprises were taken by a mere telephone call, after a sharp
drop in the stock market, in exchange for a little oxygen in the form of shares,
or by calling in some debt for supplies or for the use of patents, brand names,or technical innovations. Such debts, multiplied by currency devaluations-which oblige local enterprises to pay more in national currency for theircommitments in dollars--thus become a death trap. Technological dependency
costs dearly; the corporations' know-how includes expertise in the art ofdevouring one's neighbor. One of the last of the Mohicans of Brazilian national
industry remarked shortly before the military government sent him into exile:"Experience shows that the propit from sales by a national enterprise often
never reaches Brazil, but remains, bearing interest, in the financial market ofthe purchasing country.”22 The creditors collect by taking over the installations
and machinery of the debtors. Banco Central do Brasil figures show that noless than one-fifth of new industrial investments in 1965, 1966, and 1967 wasin reality a conversion of unpaid debts into investment.
On top of the financial and technological blackmail is the unfair "free"competition between strong and weak. As part of a global structure, the bigcorporation affiliate can permit itself the luxury of losing money for a year, or
two, or whatever is necessary. Prices fall, and it sits down to wait for the victim
to surrender. The banks collaborate in the siege: the national enterprise is lesssolvent than it looked, supplies are denied it, and it soon raises the white flag.
The local capitalist becomes a junior partner or functionary of his conquerors.
Or else he brings off the most coveted feat--he retrieves his property in theform of shares in the foreign concern and ends his days as a well-heeled
coupon-clipper. An eloquent story with regard to price "dumping" is that ofUnion Carbide's capture of the Brazilian tape factory, Adesite. Scotch Tape,part of the multitentacled Minnesota Mining and222

Manufacturing, began steadily lowering the price of its products in Brazil.
Adesite's sales kept going down. The banks cut off credit. Scotch Tape
continued lowering its prices--by 30 percent, then by 40 percent. Then Union
Carbide appeared on the scene and bought the desperate Brazilian concern for asong. Later Union Carbide and Scotch Tape got together to share the national
market: they divided up Brazil, taking half each, and agreed to digest what they
had eaten by raising the price of tape by 50 percent. The antitrust law of the old
Vargas days had been annulled years earlier.
The Organization of American States admits that the abundant financial
resources of U.S. affiliates "in times of very low liquidity for national
enterprises, has on occasion enabled some national enterprises to be acquiredby foreign interests." In fact, the scarcity of financial resources, sharpened by
the IMF-imposed contraction of internal credit, smothers local factories. But
the same OAS document tells us that no less than 95.7 percent--80 percent in
the case of manufacturing industries--of the funds U.S. enterprises require for
their normal functioning and development in Latin America come from Latin
American sources in the form of credits, loans, and reinvested profits.

THE UNITED STATES IS GENEROUS
WITH OTHER PEOPLE'S SAVINGS:THE INVASION OF THE BANKS
The siphoning off of national resources into imperialist affiliates is largely
explained by the recent proliferation of U.S. branch banks pushing up theirheads throughout Latin America like mushrooms after rain. The offensive
against local savings in satellite countries is linked with the United States'
chronic balance-of-payments deficit, which compels the restriction of its own
investments abroad, and with the dollar's dramatic deterioration as a world
currency. Latin America provides the saliva as well as the food, and the UnitedStates limits its contribution to the mouth. The denationalization of industry
has turned out to be a gift.
According to the International Banking Survey, there were seventy-eight
branches of U.S. banks south of the Río Grande in 1964. By 1967

223

there were 133; they had $810 million in deposits in 1964 and $1.27 million in
1967.23 In 1968 and 1969 the foreign bankers' advance picked up speed: today
First National City alone has 110 branches scattered through seventeen Latin
American countries--the figure includes various recently acquired local banks.
Chase Manhattan Bank acquired the Banco Lar Brasileiro (34 branches) in
1962, the Banco Continental (42 branches, in Peru) in 1964, the Banco delComercio (120 brances, in Colombia and Panama) and the Banco Atlintida (24branches, in Honduras) in 1967, and the Banco Argentino de Comercio in 1968.
The Cuban Revolution had nationalized twenty U.S. banking agencies, but thebankers more than recovered from this blow: in 1968 alone more than seventy
U.S. bank affiliates were opened in Central America, the Caribbean, and thesmaller South American countries.
No one knows the precise extent of the simultaneous growth of parallel
activities--subsidiaries, holding companies, finance companies, agencies. Whatis known is that an equal or greater amount of Latin American funds have beenabsorbed by banks which, while not operating openly as branches, arecontrolled from abroad through decisive blocks of shares or by the opening ofconditional external lines of credit.
This banking invasion has served to divert Latin American savings to the
U.S. enterprises established in the region, while national enterprises are
strangled by lack of credit. The public relations departments of the various U.S.
banks operating abroad unblushingly announce that their chief aim in the
countries in which they operate is to channel internal savings into themultinational corporations which are their head offices' clients. Let us indulge
in a flight of the imagination: could a Latin American bank establish itself in
New York and capture the national savings of the United States? The bubble
explodes: such an outrage is expressly prohibited. U.S. banks, throughnumerous branches, dispose of Latin America's national savings at theirpleasure. Latin America watches as the United States takes over its finances astenderly as does the United States itself. In June 1966, however, the Banco
Brasileiro de Descontos consulted its shareholders about a great and vigorous
nationalist step which it proposed to take. It printed the phrase “Nós confiamos
em Deus" on all its documents. The bank pointed with pride to the fact that the
dollar bears the motto "In God We Trust."

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The credit policies of such Latin American banks as have not been
captured, infiltrated, or surrounded by foreign capital follow the samelines

as National City, Chase Manhattan, and Bank of America affiliates: they, too,prefer to meet the requirements of foreign industrial and commercial
enterprises, which enjoy solid guarantees and operate on a large-volume basis.

AN EMPIRE THAT IMPORTS CAPITALThe Government Economic Action Program worked out by Roberto
Campos anticipated that, in response to such a benevolent policy, foreign
capital would flow in to promote development and would contribute toeconomic and financial stability in Brazil.24 (Speaking on December 22, 1966, at
Mackenzie University in Sio Paulo, Campos insisted: "Since economies in the process oforganization lack resources to dynamize themselves--for the simple reason that if they had them
they would not be backward--it is right to accept the aid of all who want to run with us the risksof the marvelous adventure that is progress, in order to receive from it a part of the fruits.")

New direct investments from abroad of $100 million were announced for 1965;$70 million arrived. There were assurances that the projections for 1965 would
be surpassed in succeeding years, but the conjuring was in vain. In 1967, $76
million came in; the flight of profits and dividends, together with payments fortechnical aid, patents, royalties, and the use of brand names, amounted to morethan four times the new investment. And on top of all this there were theclandestine remittances. The Banco Central admits that $120 million left Brazil
in 1967 outside of legal channels. As we can see, far more went out than camein. Actually, new investments in the key years of industrial denationalization-1965, 1966, 1967--were well below the 1961 level.( According to the Ministry ofplanning and Economic Coordinarion, "The flow of interest, profits and dividends, royalties, andtechnical assistance payments from Brazil has shown a marked increase since 1965, when
legislation altering the foreign investment law of 1962 became effective.”25) Most U.S.

capital in Brazil is invested in industry, but it amounts to less than 4 percent of
global U.S. investment in manufacturing. In Argentina it is a bare 3 percent; inMexico 3.5 percent. Swallowing up Latin America's biggest

225industrial establishments has not meant great sacrifices for Wall Street. It hasbrought in few dollars and taken out many.
"Under modern capitalism, when monopolies prevail, the export of capitalhas become the typical feature," wrote Lenin.26 In our day, as Baran andSweezy have pointed out, imperialism imports capital from the countries it
operates in. In the period 1950-1967, new U.S. investments in Latin America(not including reinvested profits) totaled $3.921 billion. Profits and dividends
sent abroad in the same period totaled $12.819 billion. The siphoned-off profits
were more than three times the new capital invested in the region. (President
Kennedy has already admitted that in 1960, "from the under-developed world, which needs
capital--we tookin

$1,300,000,000

and

we sent

out

incapitalforinvestment$200,000,000. . . .”27) According to ECLA, the profit bloodletting has sinceincreased to five times the new investments; Argentina, Brazil, and Mexico
have suffered the greatest widening of this escape hatch. But this is aconservative calculation. A substantial part of the funds repatriated as debt
amortization is in fact identical with profits on investments, and the figures
include neither remittances abroad for patents, royalties, and technical-aid
payments, nor other invisible transfers customarily concealed under the rubric"errors and omissions."(Between 1955 and 1966, for example, the mysterious "errors andomissions" amounted to over $l billion in Venezuela, $743 million in Argentina, $714 million in
Brazil,and $310 million in Uruguay. 28) Nor do these figures take into account the

profits that accrue to the corporations when they inflate the prices of the
supplies they ship to their affiliates and-with equal enthusiasm-inflate theircosts of operation.
The enterprises are equally imaginative with respect to the investments
themselves. In effect, as the technical progress fever keeps shortening theperiods of fixed capital renewal in advanced economies, most of theinstallations and factory equipment exported to Latin America have alreadycompleted a cycle of their useful life in their place of origin. Thus they havebeen partly or wholly amortized. This factor in investment abroad isoverlooked: the value arbitrarily placed upon machinery is often a small
fraction of what it is if the wear it has previously undergone is taken into
account. Furthermore, the head office has no reason to involve itself in the
expense of producing in Latin America the226goods formerly sold to it from afar. And Latin American governments
undertake to prevent this by advancing resources to the local affiliate, which
has access to local credit from the moment it puts up a sign on the lot chosen
for its factory. It gets exchange privileges for its imports--purchases theenterprise customarily makes from itself--and in some countries can even be
assured of a special exchange arrangement to pay its external debts, which areoften debts to the Financial arm of the same corporation. A Brazilian magazine
estimated that foreign currency input by the auto industry in Argentin between
1961 and 1964 was 3.5 times more than would have been needed to build
seventeen thermoelectric and six hydroelectric stations, with a total power ofmore than 2,200 megawatts; and that it equaled in value the machinery andequipment that the dynamic industries would have to import over an elevenyear period to produce a 2.8 percent annual increment in product per
inhabitant.29

TECHNOCRATS ARE BETTER HOLD-UP ARTISTS THAN
MARINESIn taking out many more dollars than they bring in, the enterprises whet theregion's chronic dollar hunger; the "benefited" countries are decapitalized
instead of capitalized. And here the loan mechanism goes to work.
International credit organizations are important in helping to dismantle theweak citadels of nationally capitalized industry and in solidifying neocolonial
structures. "Aid" works like the philanthropist who put a wooden leg on his
piglet because he was eating it bit by bit. The U.S. balance-of-payments deficit
is the result of military spending and foreign aid, and is a critical sword of
Damocles over U.S. prosperity. At the same time, it makes that prosperity
possible: the Imperium sends forth its Marines to save its monopolists' dollars;
more effectively, it sends its technocrats and loans to extend business andassume raw materials and markets.
At its global center of power the capitalism of our day exhibits a clear
identity of interest between private monopolies and the state apparatus.
Multinational corporations make direct use of the state to accumulate, multiply,
and concentrate capital, to deepen the technological revolution to militarize theeconomy, and by various means to assure success227

in the crusade to control the capitalist world. The Export-Import Bank
(Eximbank), AID, and other smaller organizations function in this role, as dosome purportedly international organizations in which the United States has
unchallenged hegemony: the International Monetary Fund, its rwin theInternational Bank for Reconstruction and Development (IBRD), and the InterAmerican Development Bank (IDB). These assume the right to decide theeconomic policy of countries asking for credits, pouncing successfully on the
countries' central banks and decisive ministers. They get hold of all the secret
economic and financial data, draft and impose national laws, and ban or
authorize steps proposed by governments whose course they chart down to thelast detail.
International charity does not exist; it begins at home, for the United States
as for everyone else. The role of foreign aid is primarily domestic--the U.S.
economy aids itself--and it was defined by none other than Roberto Campos,
when he was the ambassador for Goulart's nationalist government, as aprogram of broadening foreign markets to absorb U.S. surpluses and alleviate
superproduction in U.S. exporting industries. In the early days of the Alliancefor Progress, the U.S. Department of Commerce pointed to its successful
creation of new businesses and job sources for private enterprise in forty-fourstates.30 In January 1968, President Johnson assured Congress that more than90 percent of U.S. foreign aid in 1969 would be applied to financing purchasesin the United States, and that he had personally and directly intensified efforts
to increase this percentage. In October 1969 cables sizzled with statements by
Carlos Sanz de Santamarfa, chairman of the Alliance's Inter-American
Committee, who said in New York that the aid had turned out to be excellent
business for the U.S. economy and for its treasury. After the disequilibrium of
the U.S. balance of payments became critical at the end of the 1950s, loans
were conditioned upon buying U.S. industrial goods, usually costing more thansimilar products from other countries. More recently, certain mechanisms were
put into effect, among them "negative lists" to see that the credits are not used
for exporting articles which the United States can sell on the world market
under good competitive conditions without recourse to autophilanthropy.
Subsequent "positive lists" have made possible the sale through "aid" of certain
U.S. manufactures at prices from 30 to 50 percent higher than the same goods
from other sources.

228

"Tied aid" (so called by the OAS document cited earlier) bestows "ageneral subsidy on U.S. exports." In Brazil, "sales of U.S. capital exporters are
faced with increasing competition from other exporters...[and] are at a serious
disadvantage unless they can take advantage of the more liberal financing
available under the various aid programs."31 When, in a speech late in 1969,
Richard Nixon promised to "untie" the aid, he referred only to the possibility ofalternative purchases in Latin American countries. Such had been the case withthe loans that the Inter-American Development Bank granted and charged to its
Special Operations Funds. But experience shows that the United States--or theLatin American affiliates of its corporations--always ends up as the chosen
supplier in the contracts, Loans from AID and Eximbank, and most of thosefrom the IDB, also require that at least half of the shipments be made in U.S.
bottoms. Freight rates on U.S. ships run as much as double those of otheravailable shipping lines. The firms insuring the transported merchandise, andthe banks through which the operations are effected, are also usually U.S.owned.
The OAS has made a revealing estimate of the extent of real aid received
by Latin America. When chaff is separated from grain, one must conclude thata mere 38 percent of the nominal aid can be considered as real aid. Only onefifth of the authorized total of loans for industry, mining, and communications,and compensatory credits, constitutes aid. In the case of Eximbank, the aid
travels from south to north: the financing it extends, says OAS, means not aid
but extra costs for the region in view of the inflated prices of U.S. articles
exported via the bank.
Latin America provides most of the ordinary capital resources of the IDB.
But IDB documents carry the Alliance for Progress emblem in addition to its
own insignia, and the United States is the only member country with vetopower; the votes of the Latin American countries, in proportion to theircontributions of capital, fall short of the two-thirds majority necessary forimportant resolutions. In his famous report to President Nixon in August 1969,
Nelson Rockefeller admitted that “while the United States'veto power over
IDB loans has not been used, the threat of its use for political purposes has
influenced decisions.” On most of the loans it extends, the IDB imposes thesame conditions as do openly U.S. organs: the money must be spent on U.S.
merchandise, at least half of which must be transported in ships flying the Stars
and

229

Stripes--and the Afliance for Progress is expressly mentioned in the publicity.
The IDB determines the tariff and tax policy of the services it touches with its
fairy wand: it decides how much must be charged for water and fixes the taxes
for water mains and housing on the basis of proposals by U.S. consultants
named with its gracious approval. It approves work plans, drafts the bidding
terms, administers the funds, and keeps watch on how the job is done.( Forexample, in Uruguay, the text of the contract signed on May 21, 1963, berween the IDB and che
Montevideo departmental government for the extension of water mains.) In the task ofrestructuring higher education in the region according to the standards ofcultural neocolonialism, the IDB has played a fruitful role. Its loans touniversities block the possibility of modifying laws and statutes without its
knowledge and permission; at the same time, it imposes specific pedagogical,
administrative, and financial reforms.( For example, in Bolivia, the text of the contract
signed on April 1, 1966, benveen the IBD and San Simón University, Cochabamba, to improve
the teaching of agricultural sciences.) In the case of a difference of opinion, the OAS's

general secretary names the arbitrator.
Agency for International Development contracts'not only mandate U.S.
merchandise and freightage, but also ban trade with Cuba and North Vietnam
and make the administrative tutelage of AID technicians obligatory. To
compensate for the divergence of price between U.S. tractors or fertilizers andthose more cheaply obtainable on the world market, the elimination of taxes
and customs duties for products imported with credits is stipulated. AID aid
includes jeeps and modern weapons for use by the police in safeguarding law
and order in the countries concerned. Not for nothing is one-third of the credits
payable immediately, while the other two-thirds are conditional on approval by
the IMF--whose recipes normally kindle a fire of social agitation. And as if the
IMF had not succeeded in dismantling all the mechanisms of sovereignty as
one dismantles a watch, AID generally throws in the requirement of approvalof specific laws and decrees. AID is the chief vehicle for Alliance for Progress
funds. To cite but one example of the labyrinths of generosity, the Alliance's
Inter-American Committee got the Uruguayan government to sign acommitment whereby the income and expenditures of state bodies, and theofficial policy on tariffs, wages, and investments, would pass under the controlof this foreign organization.32

230

But the most pernicious conditions rarely appear in the published texts ofcontracts and commitments, and are hidden in secret codicils. The Uruguayan
parliament never knew that in March 1968 the government had agreed to limit
rice exports in that year so that the country could receive flour, corn, andsorghum under the U.S. agricultural surplus law.
Numerous daggers glint beneath the cloak of aid to poor countries.
Teodoro Moscoso, who was chairman of the Alliance for Progress, onfessed:"It may happen that the United States needs the vote of a particular country in
the UN or the OAS, and it is possible that the government of that country(following the sacred tradition of cold war diplomacy may ask a price inexchange."33 In 1962 the Haitian delegate to the OAS Punta del Este
conference changed his vote in return for a new airport, and thus the UnitedStates got its majority in its attempt to expel Cuba.( TheDuvalier dictatorship was
also promised, as a token of gratitude, a road out to the airport. Several authors agree thay thiswas a case of bribery.34 But che United States did not keep its promise to Haiti, and "Papa Doc"
Duvalier, guardian of death in voodoo mythology, felt he had been swindled. The old sorcerer issaid to have invoked the Devil's aid to bring vengeance on President Kennedy, and to havesmiled contentedly when the bullets in Dallas felled the president.) Ex-director MiguelYdigoras Fuentes of Guatemala said he had to threaten the United States withwithholding his country's vote at Alliance for Progress conferences to make theUnited States keep its promise to buy more Guatemalan sugar.35
It might at first sight seem paradoxical that during the Goulart regime
Brazil was the country most favored by the Alliance for Progress. But theparadox vanishes as soon as one realizes the internal distribution of the aid
received: Alliance credits were sown in Goulart's path like explosive mines.
Carlos Lacerda, governor of Guanabara and at that time leader of the extreme
right, got seven times more than all of the Northeast: Guanabara, with scarcely
4 million inhabitants, was thus able to create beautiful gardens for tourists on
the shores of the world's most spectacular bay, while the Northeast remained
the open sore of Latin America. In June 1964, after the coup d'6tat thatsuccessfully put Castelo Branco in power, Thomas Mann, undersecretary ofstate for international affairs and right arm of President Johnson, explained:"The United States distributed among the efficient governors of certain
Brazilian states the aid that had been destined for the government of Goulart,
thinking to finance democracy in this way; Washington

231gave no money for the balance of payments or the federal budget, because that
could directly benefit the central government."36 The U.S. administration had
decided to deny any kind of cooperation to Belaúnde's government in Peru
"unless it would give the esire assurances of following an indulgent policy
towards the IPC. This Belaúnde refused to do and, as a result, by late 1965 he
was still not receiving the share ofailiance for Progress funds that his
government has earned the right to expect."37 Later, as we know, Belaúnde
compromised--and lost both oil and power: he had obeyed in order to survive,
In Bolivia, U.S. loans did not provide a centavo for the country to build its own
tin smelter, so that crude tin continued journeying to Liverpool and from there,
smelted, to New York. "Aid" gave birth to a parasitic commercial bourgeoisie,
inflated the bureaucracy, built large edifices and modern auto highways andother white elephants in a country that competes with Haiti for the highest rateof infant mortality in Latin America. The credits from the United States and its"international" organs denied Bolivia the right to accept Soviet, Czech, andPolish offers to create a petrochemical industry, extract and smelt zinc, lead,and iron, and install smelters for tin and antimony. At the same time, Bolivia
was obliged to import products exclusively from the United States. When the
Movimiento Nacionalista Revolucionario (MNR) government finally fell, its
foundations eaten away by U.S. aid, U.S. Ambassador Douglas Henderson
began to attend René Barrientos's cabinet meetings regularly.

The loans indicate as precisely as thermometers the general businessclimate of each country, and help clear political rainclouds or
revolutionary storms from the blue sky of the millionaires. "The UnitedStates," announced a group of businessmen led by David Rockefeller in
1963, "will arrange its economic aid program in countries showing thegreatest inclination to favor the investment climate, and will withdraw
aid from other countries not showing a satisfactory performance."( David
Rockcfeller's daughter Peggy decided shortly afterward to go and live in a Rio de Janeiro favela
called Jacarezinho. Her father, one of the world's richest men, went to Brazil to look after his
multimillion-dollar affairs and personally visited the humble family house Peggy had chosen; hesampled the modest dinner and discovered wieh alarm that the house leaked and rats enteredunder the door. On his departure he left a chcck with a string of zeros on the table. Peggy lived
there for some months, collaborating with the Peace Corps. The checks kept coming in, each one
worth as much as the master of the house could earn by ten years' work. When Peggy Finally left,
the Jacarezinho house and family had been transformed. Never had the favela known such232

opulence. Peggy had come straight from heaven. It was like having won all the lotteries at once.
The master of the house then became the mascot of the regime. TV and radio reportage,
newspaper and magazine articles, publicity ran wild: the man was a model whom all Brazilians
should imitate. He had emerged from poverty thanks to his indomitable will to work and his
capacity to save: look, look, he doesn't spend what he earns on booze, and now he has a TV, arefrigerator, new furniture, shoes for the kids! The propaganda left out one detail: the visit ofPeggy, the fairy godmother. Brazil has 90 million inhabitants and the miracle had been
performed for only one of them.) The text of the foreign aid law provides

categorically for the suspension of aid to any government that has
nationalized, expropriated, or acquired property or control of property
belonging to any U.S. citizen, or any corporation, society, or
association" that belongs not less than 50 percent to U.S. citizens.38 (It is
no accident that this legal text explicitly refers to measures adopted against U.S. interests "onJanuary 1, 1962, or a later date." On February 16, 1962, Governor Leonel Brizola had
expropriated the phone company, a subsidiary of ITT, in the Brazilian state of Reo Grande doSul, and this had hardened relations berween Washington and Brasilia. The Firm did not accept
the indemnity proposed by the government.) Not for nothing does the Alliance for

Progress Trade Committee include among its most distinguishedmembers top executives of Chase Manhattan, National City Bank,
Standard Oil, Anaconda, and Grace. AID clears the road for U.S.
capitalists in many ways--for instance, by requiring approval ofagreements guaranteeing investments against possible loss through wars,
revolutions, insurrections, or monetary crises. In 1966, according to the
U.S. Department of Commerce, U.S. private investors received theseguarantees in Fifteen Latin American countries, for one hundred projects
involving more than $300 million, under the AID Investment Guaranty
Program.39
ADELA is not a Mexican revolutionary song, but the name of aninternational investment consortium. It was started by First National City Bank,
Standard Oil of New Jersey, and the Ford Motor Company. The Mellon groupjoined enthusiastically, and so did major European corporations because, as
Senator Jacob Javits remarked, "Latin America provides an excellent
opportunity for the United States to show, by inviting Europe to 'enter,' that it
does not seek a dominant or exclusive position."40 In its 1968 annual report
ADELA offered special thanks to the IDB for the parallel loans it had extended
to promote the consortium's

233

business in Latin America, and also saluted the performance along the samelines of the International Finance Corporation, an arm of the World Bank.
ADELA is in continuous contact with both institutions to avoid duplication ofeffort and to evaluate investment opportunities.41
Many more examples of such holy alliances could be given. In Argentina,
Latin American contributions to the resources of the IDB have served as very
convenient loans benefiting such concerns as the Electric Bond and Shareaffiliate Petrosur (over $10 million for construction of a petrochemicalcomplex), and The Budd Company (Phila-delphia) affiliate Armetal (to finance
an auto parts plant). AID credits made possible the expansion of Richfield'schemical plant in Brazil, and Eximbank extended loans to ICOMI, a Bethlehem
Steel affiliate in the same country. Also in Brazil, contributions from theAlliance for Progress and the World Bank enabled the Dutch Phillips Industries
to install Latin America's biggest complex of fertilizer factories in 1966. It allcomes under the heading of "aid"--and all adds further to the weight of external
debt on the countries so favored.
In the first days of the Cuban Revolution, Fidel Castro took the problem of
rebuilding foreign currency reserves drained by the Batista dictatorship to theWorld Bank and the IMF; they replied that he must first accept a stabilization
program, which implied--as it did everywhere else--the dismantling of the state
and a freeze on structural reform.42 The World Bank and the IMF function inclose harmony and for common ends; they were born together at Bretton
Woods. The United States has one-fourth of the votes in the World Bank: thetwenty-two countries of Latin America have less than one-tenth. The WorldBank responds to the United States like thunder to lightning.
As the Bank explains it, most of the loans are for building roads and othercommunications links, and for developing sources of electrical energy, anessential condition for the growth of private enterprise. In effect, theseinfrastructure projects facilitate the movement of raw materials to ports andworld markets and the progress of already denationalized industry in the poor
countries. The World Bank believes thatto the greatest extent practicable, competitive industry should be left to private
enterprise. This is not to say that the Bank has an absolute bar against loans togovernment-owned industries, but it will undertake such financing only incases where private capital is not available, and if it is satisfied, after thoroughexamination,

234

that the government's participation will be compatible with efficient operation
and will not have an unduly deterrent effect upon the expansion of private
initiative and enterprise.

Loans are conditional upon application of the IMF stabilizing formula andprompt payment of the external debt, and are incompatible with policies ofcontrol of the enterprises' profits, "so restrictive that the utilities cannot operate
on a sound basis, still less provide for future expansion."43 Since 1968 theWorld Bank has to a considerable extent channeled its loans toward birthcontrol promotion, educational plans, agro-business, and tourism.
Like all the other one-armed bandits of international high finance, the Bankis also an efficient instrument of extortion for the benefit of very specificcircles. Its chairmen since 1946 have been prominent U.S, businessmen.
Eugene R. Black, chairman from 1949 to 1962, later became a director ofseveral private corporations, one of which--Electric Bond and Share--is theworld's top monopolist of electrical energy. (According to Black, "Foreign aid
stimulates the development of new overseas markets for U.S. companies and orients national
economies toward a free enterprise system in which U.S. firms can prosper,"44) By chance orotherwise, in 1966 the World Bank made Guatemala accept a "gentlemen's
agreement" with Electric Bond and Share as a condition for implementing the
Jurún-Marinalá hydroelectric project: the agreement was to pay the firm a fat
indemnity for possible damages in a river basin site which had been given it asa present some years earlier, and included a state commitment not to interferewith Electric Bond and Share in its fixing of electricity rates. By chance orotherwise, the World Bank, in 1967, made Colombia pay a $36 million
indemnity to the Electric Bond and Share affiliate Compañia Colombiana deElectricidad for its old, recently nationalized machinery. The Colombian statethus bought what belonged to it-but the concession to the enterprise had run out
in 1944. Three World Bank chairmen are stars in the Rockefeller power
constellation. John J. McCloy, who presided from 1947 to 1949, moved on intoa director's chair at Chase Manhattan Bank. His successor, Black, crossed theroad in the opposite direction, coming from the Chase Manhattan board. Blackwas succeeded in 1963 by another Rockefeller man, George D. Woods. By
chance or otherwise, the World

235

Bank directly participates--with one-tenth of the capital and substantial loans-in the biggest Rockefeller venture in Brazil: South America's most important
petrochemical complex, Petroquímica União.
More than half the loans Latin America receives come--after the IMF's
green light--from private and official U.S. sources; international banks also
provide an important percentage. The IMF and the World Bank put more andmore pressure on Latin American countries to reshape their economies andfinances in terms of payment of the foreign debt. But the fulfillment ofcommitments--the essence of international good conduct--gets more and moredifficult and at the same time more necessary. The region is experiencing thephenomenon that economists call the "debt explosion." It is a strangulating
vicious circle. Loans increase, investments follow investments, so thatpayments grow for amortization, interest, dividends, and other services. To pay
off these debts, new injections of foreign capital are resorted to, generating
bigger strong commitments, and so on and on. Servicing the debt consumes a
growing proportion of income from exports, which in any case, due to theunremitting fall of prices, cannot finance the necessary imports; new loans toenable the countries to supply themselves thus become as indispensable as air
to the lungs. In 1955 one-fifth of exports went for amortization, interest, andprofit on investments; the proportion has kept growing and is approaching the
explosion point. In 1968 these payments amounted to 37 percent of exports.45
If Latin America continues resorting to foreign capital to fill the "trade gap"
and finance the flight of profits on imperialist investment, by 1980 no less than
80 percent of the foreign currency will remain in foreign creditors' hands, andthe total debt will be more than six times the value of exports. The World Bank
had foreseen that in 1980 debt-servicing payments would completely cancelout the flow of new foreign capital to the underdeveloped world. But in fact theflow of new loans to Latin America in1965 was already less than the capitaldrained out merely as amortization and interest to fulfill previous commitments.

236

THE ORGANIZED INEQUALITY OF THE WORLD MARKETIS UNCHANGED BY INDUSTRIALIZATIONThe exchange of merchandise, along with loans and direct investments
abroad, are the straitjacket of the international division of labor. Third world
countries exchange rather more than one-fifth of their exports among eachother, and three-quarters of their foreign sales are made to the imperialist
centers whose tributaries they are. Most Latin American countries are
identified in the world market with a single raw material or foodstuff.( In thethree years 1 966-1968, coffee earned Colombia 64 percent of its total export income, Brazil 43
percent, El Salvador 48 percent, Guatemala 42 percent, and Costa Rica 36 percent. Bananas
earned 61 percent of its foreign currency for Ecuador, 54 percent for Panama, and 47 percent for
Honduras. Nicaragua depended 42 percent on cotton, the Dominican Republic 56 percent on
sugar. Meat, hides, and wool brought Uruguay and Argentina 83 percent and 38 percent
respectively of their foreign currency. Copper was responsible for 74 percent of Chile's
commercial income and for 26 percent of Peru's; for Bolivia tin represented 54 percent of thevalue of its exports, and 93 percent of Venczuela's foreign currency came from petroleum.46
As for Mexico, it "depends more than 30 percent on three products, more than 40 percent on fiveproducts, and more than 50 percent on ten products, mostly unmanufactured and having theirmain outlet in the U.S. market."47) Latin America has abundant wool, cotton, andnatural fibers, and a traditional textile industry, but only a 0.6 percent share inEuropean and U.S. purchases of yarns and fabrics. The region has beencondemned to sell primary products to keep foreign factories humming; and it
happens that those products "are mostly exported by strong consortiums withinternational connections, which have the necessary world-market relations toplace their products under the most convenient conditions"48--the mostconvenient for them, suiting the interest of buyer countries: that is the to say, atthe lowest prices. In international markets there is a virtual monopoly of
demand for raw materials and of supply of industrial products, while suppliersof basic products, who are also buyers of finished goods, operate separately.
The former, grouped around, and dominated by, the United States— which
consumes almost as much as all the rest of the world--are strong; the latter are
isolated and weak: the oppressed competing against the oppressed. The socalled free play of supply and demand in the so-called international market
does not exist; the reality is a dictatorship of one group over the other, always
for the benefit of the developed capitalist237

countries. The decision-making centers, where prices are fixed, are in
Washington, New York, London, Paris, Amsterdam, Hamburg, in cabinet
meetings and on the stock exchanges. It means little or nothing thatinternational agreements have been signed to protect the prices of wheat (1949),
sugar (1953), tin (1956), olive oil (1956), and coffee (1 962). A glance at thedescending curve of these products'relative value shows that the agreements
have only been symbolic excuses offered by strong countries when the pricesof the weak countries, products sank scandalously low. What Latin America
sells gets constantly cheaper and--also in relative terms--what it buys getsconstantly dearer.
For the price of twenty-two bullocks, Uruguay could have bought a Ford
Major tractor in 1954; today more than twice as many are needed. A group of
Chilean economists who made a survey for the trade unions calculated that, if
the price of Latin American exports had risen since 1928 at the same rate as theprice of imports, Latin America would have received $57 billion more for its
sales abroad between 1958 and 1967 that it actually received. Without goingback that far, and taking l950 prices as a base, the United Nations estimatesthat due to exchange deterioration Latin America lost more than $18 billion in
the decade 1955-1964. The fall continued after that. The "trade gap"--thedifference between import needs and income from exports--will continue towiden if present external trade structures do not change, and each year theabyss gets deeper. If in the immediate future the region attempted to slightly
step up its development pace over that of the past fifteen years--which has beensnail-slow--the import needs it would confront would considerably exceed theforeseeable growth of its foreign currency income from exports. According to
the Instituto Latinoamericano de Planificación Económica y Social, the trade
gap will rise to $4.6 billion in 1975 and to $8.3 billion in 1980. This last figure
is no less than half the value of exports foreseen for that year. Thus the Latin
American countries, hats in hand, will be knocking ever more desperately on
the doors of the international loan sharks.
Arghiri Emmanuel holds that the curse of low prices does not weigh upon
particular products but upon particular countries.50 After all, coal--until
recently one of Britain's chief exports--is no less a raw material than wool orcopper, and there is more labor in sugar than in Scotch whiskey or French wine.
Sweden and Canada export timber, a238

raw material, at excellent prices. According to Emmanuel, the world market
bases the trading in equality on th eexchange of more work-hours in poor
countries for less work-hours in rich countries: the key to the exploitation isthat while there is an enormous difference between the wage levels of the poorand rich countries, it is not accompanied by differences of the same magnitudein the productivity of the work. It is the low wages that determine the low
prices, says Emmanuel, not the reverse: the poor countries export their poverty-further impoverishing themselves in the process--while the rich countries get
the opposite result. According to Samir Amin, if the products exported byunderdeveloped countries in 1966 had been produced by developed countries
with the same techniques but with their much higher wage levels, the prices
would have differed to such an extent that the developed countries would havereceived $14 billion more. 51
Certainly the rich countries have used and are using tariff barriers toprotect their high wage scales in areas in which they cannot compete with poor
countries. The United States uses the IMF, the World Bank, and GATT
(General Agreement on Tariffs and Trade) agreements to impose the free tradeand free competition doctrine on Latin America, forcing the reduction ofmultiple exchanges, quotas, and import and export permits, and of tariffs andcustoms duties. But it in no way practices what it preaches, In the same waythat it discourages state activity in other countries while protecting monopolies
at home through a vast subsidy and privileged-price system, in its foreign trade
the United States practices an aggressive protectionism with high tariffs andsevere restrictions. Customs duties are combined with other taxes, and withquotas and embargoes. What would happen to the prosperity of Midwest
cattlemen if the United States permitted access to its internal market--without
tariffs and fanciful sanitary prohibitions--of better and cheaper meat from
Argentina and Uruguay? Iron enters the U.S. market freely, but if it has been
converted into ingots it pays $16 a ton, and the tariff rises in direct proportion
to the stage of refinement. The same is true for copper and countless otherproducts: let bananas be dried, tobacco cut, cacao sweetened, timber sawed, or
dates stoned, and tariffs are implacably piled on them. In January 1969, the U.S.
government ordered the suspension ofpurchases ofmexican tomatoes--which239

give jobs to 170,000 peasants in Sinaloa state--until Florida tomato growers got
the Mexicans to raise the price to avoid competition.
But the most startling contradiction between theory and reality in the world
market emerged in the open "soluble coffee war" in 1967. It then became clearthat only the rich countries have the right to exploit for their own benefit the"naturalcomparativeadvantages"

which

theoreticallydeterminetheinternational division of labor. The sensationally expanding soluble coffee
market is in the hands of Nestlé and General Foods: before long, it is believed,these two will be supplying more than half the coffee consumed in the world.
The United States and Europe buy coffee beans in Brazil and Africa,
concentrate it in their industrial plants, and sell it worldwide in soluble form.
Brazil, the biggest coffee producer, does not have the right to compete byexporting its own soluble coffee, thereby taking advantage of its obviously
lower costs and providing an outlet for the surpluses which it once destroyed
and now stores in state warehouses. Brazil only has the right to supply the raw
material to enrich foreign factories. When Brazilian factories— a mere 5 in aworld total of 110--began offering soluble coffee on the international market,
they were accused of unfair competition. The rich countries yelled to highheaven and Brazil accepted a humiliating imposition: it placed a huge internal
tax on its soluble coffee to put it out of the running in the U.S. market.
In erecting customs, tax, and sanitation barriers against Latin American
products, Europe does not lag behind. The Common Market piles on importduties to defend the high internal prices of its agricultural products, and at thesame time subsidizes those products in order to export them at competitive
prices: it finances the subsidies with what it gets from the duties. Thus the poor
countries pay their rich customers to compete against them. The price of apound of sirloin in Buenos Aires or Montevideo is multiplied by five when it
hangs from a butcher's hook in Hamburg or Munich. As a Chilean government
delegate at an international conference justifiably complained: "The developed
countries are willing to let us sell them jet planes and computers, but nothingthat we have any likelihood of being able to produce.”52
Imperialist investments in Latin American industry have in no way
modified the terms of its international trade. The region continues to die as it
exchanges its primary products for the specialized products of240

metropolitan economies. The expansion of sales by U.S. concerns south of
the Rio Grande is concentrated in local markets, not in exports. Indeed, theproportion that is exported has tended to shrink: according to the OAS, U.S.
affiliates exported 10 percent of their total sale's in 1962 and only 7.5 percent
three years later.53 (A thorough survey of U.S. subsidiaries in Mexico, made for the National
Chamber Foundation in 1969, showed that half the concerns answering the questionnaire werebarred by their U.S. head offices from selling their products abroad. The affiliates had not been
set up for that.54
The relation between exports of manufactures and gross industrial product did not exceed 2
percent in 1963 in Argentina, Brazil, Peru, Colombia, and Ecuador; it was 3.7 percent in Mexicoand 3.2 percent in Chile.55) Trade in Latin American industrial products only grows

inside Latin America: in 1955, manufactures were 10 percent of the exchange
among countries of the area; in 1966 the proportion had risen to 30 percent.
John Abbink, head of a U.S. technical mission in Brazil, had a prophetic
moment in 1950: "The United States must be prepared to guide' the inevitableindustrialization of the undeveloped countries if we want to avoid the shock ofintensive economic development outside U.S. aegis.... Industrialization, if notcontrolled in some way, would bring a substantial reduction of U.S. export
markets."56Indeed, would not industrialization--even though teleguided fromabroad--substitute national products for merchandise that each country
previously had to import? Celso Furtado has noted that to the extent that Latin
America advances in substitution for more complex imported products,"dependence on input from the head offices tends to increase." Between 1957
and 1964, the sales of U.S. affiliates doubled while their importsapart fromequipment--more than tripled. According to Celso Furtado, "This tendency
would seem to indicate that 'substitutive' efficiency is a declining function ofindustrial expansion controlled by foreign countries."57
Dependence is not broken but undergoes a qualitative change: the UnitedStates today sells to Latin America a greater proportion of more sophisticatedand technologically higher-level products. "In the long run," the Department ofCommerce says, "as Mexican industrial production goes up, opportunities are
greater for additional U.S. exports of industrial raw materials orcomponents ....”58 Argentina, Mexico,241

and Brazil are very good customers for industrial machinery, electricalmachinery, motors, equipment, and spare parts made in the United States. The
affiliates of big corporations supply themselves from their head offices atdeliberately inflated prices. As Ismael Viñas and Eugenio Gastiazoro havewritten about foreign auto concerns in Argentina: "Paying for these imports atvery high prices, they sent funds abroad. The payments were often so large thatthe enterprises not only showed a loss (despite the prices for which cars weresold here), but began to go bankrupt, with rapid depreciation of shares held in
the country.... The result was that of the twenty-two enterprises 'established,'ten now remain, some on the brink of bankruptcy."59
Thus for the corporations' greater glory their subsidiaries dispose of thescanty foreign currency of the Latin American countries. The operating plan ofsatellized industry does not differ much from the traditional system ofimperialist exploitation of raw materials. Antonio García maintains that
"Colombian" export of crude petroleum has in fact always been the physicaltransfer of crude oil from a U.S. oil field to refining, marketing, andconsumption centers in the United States, and "Honduran" or "Guatemalan"banana export has been a transfer by U.S. companies from certain colonial
plantations to certain U.S. marketing and consumption areas. 60 But the"Argentine," "Brazilian," and "Mexican" factories--to mention only the mostimportant--also occupy an economic space that has nothing to do with theirgeographical location. Along with many other threads, they make up aninternational web of corporations whose head offices transfer profits from one
country to another, invoicing sales above or below the real prices according to
the direction in which they want the profits to flow.( The mechanism is certainly notnew. The Anglo meatpacking plant has always run at a loss in Uruguay in order to get subsidies
from the state and pyramid the profics of its 6,000 London butcher shops, where each pound of
Uruguayan meat sells for four times the price at which Uruguay exports it.61)

Themainsprings of external trade thus remain in the hands of U.S. or European
concerns, which orient the countries' trade policies according to the criteria ofgovernments and directorates outside Latin America. Just as U.S. affiliates do
not export copper to the USSR, nor sell oil to Cuba, neither do they get raw
materials and machinery from the cheapest and most convenient sources.

242

This efficient coordination of global activities, completely outside of any"free play of market forces," is not of course translated into lower prices for
local consumers, but into profits for foreign shareholders. The auto industry isa graphic example. Latin American countries offer an abundant and extremely
cheap labor force and an official policy in every way favoring expansion of
investments-free gifts of land, privileged electricity rates, state rediscounts tofinance sales on credit, easily accessible money; and as if this were not enough,some countries have even exempted the companies from income or sales taxes.
Control of the market is further facilitated in advance by the magical prestige
attached, in the eyes of the middle classes, to makes and models promoted by
global publicity campaigns. Yet far from making Latin American-producedcars cheaper than those produced in the companies' home countries, all thesefactors make them far more expensive. True, Latin American markets are muchsmaller; but it is also true that in these countries the corporations' appetite for
profits is more leonine than anywhere else. A Ford Falcon made in Latin
America costs three times as much as in the United States, 62 an Argentinemade Valiant or Fiat more than double its price in the United States or in
Italy,63 and the same goes for the relation between the Brazilian Volkswagen
and its price tag in Germany.64

THE GODDESS TECHNOLOGY DOESN'T SPEAK SPANISH
Congressman Wright Patman considers that 5 percent of the shares in a big
corporation can often suffice for an individual, family, or economic group tocontrol it.65 If 5 percent is enough to control one of the United States' mighty
enterprises, what percentage is needed to dominate a Latin American enterprise?
In fact, it can be done with less: the "mixed" company, one of the few
remaining ob'ects of pride for the Latin American bourgeoisie, merely adorns
foreign power with a national capital participation that may constitute themajority but is never decisive over the foreign elements. Often the state itself
goes into partnership with an imperialist enterprise which, thus transformed
into a national" concern, gets all the desirable guarantees and a cooperative-even an affectionate--climate. The "minority" participation of243foreign capital is usually justified by the need for technical and patent transfers.
The Latin American bourgeoisie, a bourgeoisie of merchants lacking any
creative character, umbilically tied to the power of the land, prostrates itself
before the goddess technology. If foreign shareholdings (however small) andtechnological dependence (rarely small) are evidence of denationalization, howmany factories can really be considered national in Latin America? In Mexico,
for example, foreign owners of the technology often demand shares in anenterprise, in addition to decisive technical and administrative controls, the saleof the product to specific foreign middlemen, and the importation of machineryand other goods from their head offices, in return for contracts to transmit
patents or "know-how."66 And not only in Mexico. Countries of the so-called
Andean Group (Bolivia, Colombia, Chile, Ecuador, and Peru) have worked out
a plan for common treatment of foreign capital in the area, stressing rejectionof technology-transfer contracts that contain such clauses. But to countries thatwill not accept the plan, it proposes that foreign concerns holding patents
should fix the prices of products resulting from the patents, or ban their export
to specific areas.
The first system of patents to protect ownership of inventions was createdalmost four centuries ago by Sir Francis Bacon. Bacon liked to remark that
"Knowledge is power," and it has since become clear how right he was. Thereis little universality in scientific universals; objectively they are confinedwithin the frontiers of the advanced nations. Latin America does not apply the
results of scientific research to its own advantage for the simple reason that it
has none; consequently it is condemned to suffer the technology of thepowerful, which attacks and removes natural raw materials, and is incapable ofcreating its own technology to sustain and defend its own development. The
transplantation of the advanced countries' technology not only involves
cultural--and, most definitely, conomic--subordination. It has also been shown,
after four and a half centuries' experience of proliferating modernized oases
amid deserts of backwardness and ignorance, to resolve none of the problems
of underdevelopment. This vast region of illiterates invests 200 times less thanthe United States invests in technological research. There are less than 1,000
computers in Latin America and 50,000 in the United States; the electronicmodels and programming languages that Latin America imports are, of course,244designed and created in the United States. Latin American underdevelopment
is not a stage can the road to development, but the counterpart of development
elsewhere; the region "progresses" without freeing itself from the structure ofits backwardness and, as Manuel Sadosky points out, the "advantage" of notparticipating in progress with its own programs and goals is illusory.67 (Toillustrate the nature of the developmental illusion, Sadosky cites the testimony of an OAS
specialist: The underdeveloped countries,' says George Landau, 'have some advantages overdeveloped countries because when they introduce some new process or technique they usually
select the most advanced of its type, and thus reap the benefit of years of investigation and thefruit of considerable investments that more industrialized countries had to make to achieve thoseresylts’”)

The symbols of prosperity are symbols of dependence. Modern

technology is received as railroads were received in the past century, at theservice of foreign interests which model and remodel the colonial status ofthese countries. "What happens to us is what happens to a watch that loses timeand is not regulated," Sadosky writes. "Although its hands continue moving
forward, the difference grows between the time it shows and the real time,"
On a small scale, Latin American universities turn out mathematicians,
engineers, and programmers who can only find work in exile: we giveourselves the luxury of providing the United States with our best technicians
and ablest scientists, who are lured to emigrate by the high salaries and broadresearch possibilities available in the north. At the same time, whenever a Latin
American university or center of higher learning tries to stimulate the basic
sciences, to lay the foundations for a technology that is not copied from foreign
patterns and interests, a timely coup d'état destroys the experiment on thepretext that it is an incubator of subversion. The University of Brasilia, crushed
in 1964, was an example of this. And the truth is that the armor-platedarchangels who guard the established order are not mistaken: an autonomous
cultural policy, when it is genuine, requires and promotes deep changes in all
existing structures.
The alternative is to depend on foreign sources: to imitate, apelike, theadvances spread by the great corporations, which monopolize the most modern
techniques of creating new products and improving the quality or reducing thecost of existing ones. The electronic brain has infallible i-nethods ofcalculating costs and profits, and thus Latin

245

America imports production techniques designed to economize on labor,
although it has labor to spare and in several countries the unemployed maysoon be the overwhelming majority. And thus our own impotence puts the
progress of the region at the will or whim of foreign investors. For obvious
reasons, control of the technological levers gives the multinational corporations
a hold on other decisive levers of our economy. The head offices never, ofcourse, give their affiliates the latest innovations or promote an independence
which would not suit them. A survey made by Business International for the
IDB concluded that "clearly the subsidiaries of international corporations
operating in the region make no significant efforts in the direction of 'researchand development.' In fact, most of them lack any department for this purposeand only in very rare cases take on the job of technical adaptation, while
another small minority of enterprises--almost invariably located in Argentina,
Brazil, andMexico--undertake modest research activities."68 Raúl Prebisch notes that
"U.S. enterprises in Europe install laboratories and undertake research whichhelps strengthen the scientific and technical capacity of those countries,
something that has not happened in Latin America," and makes a very serious
point: "For lack of specialized knowledge ('know-how') on the part of national
entrepreneurs, most of the transferred technology consists of techniques thatare in the public domain but are licensed as specialized knowledge."69
Technological dependence costs dearly in more ways than one: in hard-cash
dollars, for instance, although the companies' versatile sleight-of-hand in
declaring their remittances abroad makes the amount hard to estimate. Official
figures nevertheless indicate that the dollar drain for technical aid to Mexicorose fifteen-fold between 1950 and 1964, while in the same period newinvestments were not even doubled. Three-quarters of the foreign capital in
Mexico today is in manufacturing industry, a rise from one-quarter in 1950.
This concentration of resources in industry implies only a reflectedmodernization, using second-hand technology, for which the country pays as if
it were the very latest. The auto industry has drained $1 billion from Mexico in
one way or another, but a United Auto Workers leader wrote after touring the
new General Motors in Toluca: "It was worse than archaic. Worse, because it
was deliberately

246archaic, with the obsolescence carefully built in.... Mexico's plants aredeliberately equipped, with low-production machinery."70 (The foreign affiliates are,however, far more modern than the nacional enterprises. For example, in the textile industry-one of the last bastions of national capital--the degree of automation is abysmally low.
According ro ECLA reports, in 1962 and 1963 four European countries invested six times morein new equipment for rheir textile industries than all of Latin America invested for that purposein 1964.) What should we say of the gratitude Latin America owes to Coca-Colaand Pepsi, which collect astronomical industrial licensing fees from theirconcessionaries for providing them with a paste that dissolves in water and ismixed with sugar and carbonation?

SURPLUS PEOPLE, SURPLUS REGIONS"Grow with Brazil." Display ads in NewYork newspapers exhort U.S.
businessmen to join the precipitous growth of the giant of the tropics. The cityof São Paulo sleeps with its eyes open. The din of development shatters its
eardrums; factories and skyscrapers, bridges and highways, sprout with thesuddenness of tropical plants. But if accuracy had a place in publicity, theslogan would be: "Grow at the expense of Brazil." Despite its deceptive
splendors, this development is a banquet to which few are invited and whose
main dishes are reserved for foreign stomachs. Brazil already had 90 million
inhabitants and will double that number by the end of the century, but its
modern factories economize on labor and, in the hinterland, the intact
latifundio is no more promising a source of jobs. A small boy in rags gazeswith shining eyes at the world's longest tunnel, recently opened in Rio deJaneiro. The ragged boy is rightly proud of his country, but he is illiterate andsteals in order to eat.
Throughout Latin America the invasion of foreign capital for
manufacturing, received with so much enthusiasm, has sharpened the contrast
between "classical models" of industrialization as described by the developed
countries' historians, and the process characteristic of our part of the world.
The system vomits men, but in Latin America industry sacrifices labor morethan it does in Europe. There is no coherent relation between the labor
available and the technology applied, unless the convenience of using one of
the world's cheapest labor forces can be247

so described. Rich land, richer subsoil, poverty-stricken people, in thiskingdom of abundance and dereliction: the legion of workers the system
sweeps onto the roadside frustrates the development of an internal market andholds down the wage level. The perpetuation of the established landholding
system not only aggravates the chronic problem of low rural productivity
through waste of land and capital in large unproductive haciendas, and of laborin proliferating miniflindios; it also involves a copious and increasing stream ofunemployed workers toward the cities. Rural underemployment turns into
urban underemployment. Bureaucracy grows, slums spread out as bottomlesssewers for people robbed of the right to work. Factories cannot absorb the
surplus labor, but the existence of this huge, always available reserve army
keeps wages fifteen or twenty times lower than those of workers in the UnitedStates or Germany. Wages can remain low while productivity rises, andproductivity rises at the expense of cuts in the labor force. The nature of"satellized" industrialization is to exclude: in this region with the highest
demographic growth rate on earth, the masses multiply at dizzying speed but
the development of dependent capitalism--a voyage with more shipwrecks thannavigators--marks many more people "surplus" than it is able to use. The
proportion of workers in manufacturing industry to Latin America's active
population falls rather than rises: in the 1950s, 14.5 percent were factory
workers; today it is only 11.5 percent. In Brazil, according to a recent study,
the total number of new jobs that need to be created will average 1.5 million ayear during the next decade." Yet the total number of workers employed byfactories in Brazil, Latin America's most industrialized country, is barely 2.5
million.
A myriad of laborers flees the poorest areas of each country: the cities
attract and cheat whole families with hopes of work, of a chance to better theircondition, of a place in the magic circle of urban civilization. But
hallucinations do not fill stomachs. The city makes the poor even poorer,cruelly confronting them with mirages of wealth to which they will never haveaccess--cars, mansions, machines as powerful as God or the Devil--while
denying them secure jobs, decent roofs over their heads, full plates on the
midday dinner table. At least 25 percent of Latin American city populations,according to a United Nations estim ate, live in "quarters that fall short ofmodern standards of urban248

construction"72--a technician's lengthy euphemism for slums: the favelas of Riode Janeiro, the callampas of Santiago de Chile, the jacales of Mexico, thebarrios of Caracas, the barriadas of Lima, the villas miserias of Buenos Aires,and the cantegriles of Montevideo. In tin, mud and board, hovel-colonies on
the cities' outskirts sprout new additions every night; the marginal populations
drawn by poverty and hope keep piling up. Huaico means landslide in theQuechua language, and that is what 1'eruvians call the human avalanche letloose from the mountains upon the coastal capital: nearly 70 percent of Lima's
inhabitants come from the provinces. In Caracas they are called toderos
because they do a bit of everything (todo). The surplus people get anoccasional nibble at a job, or perform sordid or illegal tasks; they become
servants, sell lemonade or what-have-you, get pick-and-shovel or bricklaying
or electrical or sanitary or wall-painting odd-jobs, beg, steal, mind parked cars-available hands for whatever turns up. Since the human surplus grows fasterthan the "integrated" element, the United Nations survey foresees that within a
few years "the makeshift camps will house the majority of the urban
population." The defeated will be the majority. Meanwhile, the system prefers
to hide the dirt under the rug. It is clearing the favelas from the bay area andthe villas miserias from the national capital at gunpoint, sweeping the humansurplus out of sight by the thousands upon thousands. Rio de Janeiro andBuenos Aires conjure away the spectacle of the poverty the system produces:soon only the mastications of prosperity, but not its excrement, will be seen inthese cities where the wealth created by all of Brazil and Argentina issquandered.
The international system of domination suffered by each country is
reproduced within each. The concentration of industry in particular areas
reflects the previous concentration of demand in the big ports or export zones.
Eighty percent of Brazilian industry is located in the southeastern triangle--São
Paulo, Rio de Janeiro, and Belo Horlzonte--while the famished Northeast
participates less and less in the national industrial product. Two-thirds ofArgentine industry is in Buenos Aires and Rosario. Montevideo embraces
three-quarters of Uruguayan industry, as do Santiago and Valparafso in Chile.
In Lima and its port is concentrated 60 percent of Peruvian industry.73 The
growing relative backwardness of the great hinterlands, submerged in poverty,
is not, as some maintain, due to their isolation, but on the249

contrary to direct or indirect exploitation by the old colonial centers now
converted into industrial centers. According to an Argentine trade union leader:"A century and a half of our history has witnessed the violation of all thesolidarity agreements, the breaking of the faith sworn in hymns andconstitutions, the domination of the provinces by Buenos Aires. Armies andcustoms houses, laws made by few and endured by many, governments thatwith some exceptions have been agents of foreign powers, built this proud
metropolis that accumulates wealth and power. But if we seek the explanationof that grandeur and the penalty of that pride, we will find it in the
missionaries' yerba mate plantations, in the dead communities of the Forestal
Land, Timber, and Railways Company, in the despair of Tucumán sugarmills
and Jujuy mines, in the abandoned ports of the Paraná, in the exodus from
Berisso (Berisso is a meatpacking center with high unemployment (Trans.)) a whole mapof misery surrounding a center of opulence secured by the exercise of aninternal domination which can no longer be dissimulated or accepted."74 In his
study of the development of Brazilian underdevelopment, Andre Gunder Frankobserved that while Brazil is a U.S satellite, the Northeast plays internally therole of satellite to the "internal metropolis" located in the southeast. The
polarization shows itself in numerous phenomena: not only in theconcentration of the immense majority of private and public investments in São
Paulo, but also in the city's fraudulent appropriation--through unfavorable tradeexchange, an arbitrary price policy, privileged internal tax scales, and a
massive cornering of skilled brain and labor power--of capital generated in thewhole country.
Dependent industrialization further concentrates income at the renal andsocial level. The wealth it generates does not spread through the whole country
or the whole society, but consolidates and deepens existing inequalities. Not
even its own--ever less numerous--"integrated" workers benefit to an equal
extent from industrial growth; the fruits of higher productivity, bitter for somany, go to the highest strata of the social pyramid. In Brazil between 1955
and 1966, the mechanical, electrical, communications, and auto industries
raised productivity by about 130 percent, but in the same period their workers'
wages only grew 6 percent in real value. Latin America offers cheap labor: in1961 the250

average hourly wage in the United States was $2; in Argentina it was $.32, in
Brazil $.28, in Colombia $.17, in Mexico $.16, and in Guatemala barely $.10.
Since then the gap has widened. To earn what a French worker gets in one hour,
the Brazilian now has to work 2.5 days. A little more than ten hours' work gets
the U.S. worker the equivalent of a month's work by a Brazilian. And to earnmore than a Rio de Janeiro worker gets for an eight-hour day, the British or
German workers puts in less than half an hour. Latin America's low wage scaleis reflected in the low prices the region gets for its raw materials in theinternational market, to the benefit of consumers in the rich countries. In theinternal markets, where denationalized industry sells manufactured goods,
prices are kept high to maintain the inflated profits of the imperialist
corporations.
All economists agree on the importance of growing demand as a catapultof industrial development. But Latin America's foreign-dominated industry
shows no interest in widening and deepening the mass market, for this could
only be achieved on the basis of practical steps to transform the socioeconomic
structure, which would involve troublesome political storms. With trade unions
dominated or annihilated or tamed in the more industrialized cities, the growthof a wage earner's purchasing power is too small, and prices of industrial
articles do not go down. This, then, is a vast region with an enormous potential
market and a realmarket shrunken by the poverty of its masses. The consumers
to whom big auto and refrigerator plants direct their products are only 5
percent of the Latin American population. Hardly one in four Brazilians canreally be considered a consumer. Forty-Five million Brazilians have the samecombined income as 900,000 privileged citizens at the other end of the social
scale.75(According to this same ECLA study, "A significant process of progressive income
redistribution took place in Argentina in the years prior to 1953. Of the three years for whichmore detailed information is available, this was precisely the one in which there was least
inequality, while it was much greater in 1959 ... in Mexico, in the more extended perriod from1940 to 1964 ... there are indications to suggest that the loss was not only relative but also
absolute for 20 percent of the lowest-income families,")251THE INTEGRATION OF LATIN AMERICA
UNDER THE STARS AND STRIPES
Some innocents still believe that all countries end at their frontiers. They saythat the United States has little or nothing to do with Latin American
integration, for the simple reason that the United States is not a member of theLatin American Free Trade Area (LAFTA), or of the Central American
Common Market. Integration, they say, is as the liberator Simón Bolívar
wanted it: it goes no further than the border separating Mexico from its
powerful northern neighbor. Those who sustain this seraphic notion suffer froma form of amnesia which may not be wholly disinterested. They forget that alegion of pirates, merchants, bankers, Marines, technocrats, Green Berets,
ambassadors, and captains of industry have, in a long black page of history,
taken over the life and destiny of most of the peoples of the south, and that at
this moment Latin America's industry lies at the bottom of the Imperium's
digestive apparatus. "Our" union makes "their" strength to the extent that ourcountries, not having broken from the molds of underdevelopment anddependence, integrate their own respective serfdoms.
Official LAFTA documents exalt the role of private capital in thedevelopment of integration--and we have seen in previous chapters in whose
hands that private capital lies. In mid-April 1969, the Consultative Council on
Business Affairs met in Asunción. Among other things, it reaffirmed "theorientation of the Latin American economy, in the sense that economic
integration of the zone must be achieved fundamentally on the basis of thedevelopment of private enterprise." It recommended that the governments
introduce'common legislation for the formation of "multinational enterprises,
made up predominantly [sic] of capital and entrepreneurs from the member
states." All the keys were handed over to the thief. Back in April 1967, in the
final declaration of the Punta del Este conference--on which Lyndon Johnson
himself placed his golden seal--the creation of a common market of shares waseven proposed, a kind of integration of stock exchanges, so that enterprises
located anywhere in Latin America could be purchased anywhere in Latin
America. Official documents went so far as to recommend openly the
denationalization of public enterprises. The first gathering of the meat industry
within LAFTA, in Montevideo in April

252

1969, resolved "to request the governments . . . to study suitable methods toachieve progressive transference of state meatpacking plants to the private
sector." At the same time, the Uruguyan government, one of whose members
chaired the meeting, pursued an all-out policy of sabotage of the state-owned
Frigorifico Nacional packing plant in favor of those privately owned byforeigners.
Tariff disarmament, which is gradually freeing the circulation ofmerchandise within the LAFTA area, is intended to reorganize the distributionof Latin American production centers and markets for the benefit of the great
multinational corporations, The "escalation economy" now prevails: the firstphase, carried out during these recent years, has seen the consolidation offoreign power over the launching platforms--the industrialized cities--fromwhich the regional market as a whole is to be dominated. The enterprises in
Brazil with the greatest interest in Latin American integration are precisely theforeign ones and, above all, the most powerful ones.76 Of the multinational
corporations--mostly

U.S.-owned— replying

toanall-Latin

Americanquestionnaire sent out by the IDB, more than half were planning or proposingthat their activities in the second half of the 1960s be in the extended LAFTA
market, creating or strengthening regional departments.77 (Sixry-four percent of theenterprises, taking advantage of LAFTA concessions, were exporting within the region chemical
products and petrochemicals, artificial fibers, electronic materials, industrial and agricultural
machinery, office equipment, motors, measuring instruments, steel pipes, and other products.)

In September 1969, Henry Ford II announced at a Rio de Janeiro press
conference that he wanted to join in the Brazilian economic process "because
the situation is very good. Our initial participation consisted of purchasing
Willys Overland do Brasil." He said he would be exporting Brazilian vehicles
to several Latin American countries. Caterpillar Tractors-- "a firm that has
always treated the world as one single market," according to Business
International--took advantage of the tariff reductions as soon as they werenegotiated, and in 1965 was already supplying various South Americancountries with bulldozers and tractor spare parts from its plant in São Paulo.
With equal speed, Union Carbide began showering electrotechnical productson Latin American countries from its Mexican factory, availing itself ofcustoms, tax, and advance-deposit exemptions in the LAFTA area.78

253

The

Latin

Americancountries--impoverished,incommunicado,

decapitalized, and facing serious structural problems within their own
frontiers-progressively dismantle their economic, financial, and fiscal barriersin the monopolies’ favor. The result is that the monopolies, which are still
strangling each country separately, can move outward and consolidate a newdivision of labor on a regional scale by specializing their activities by countries
and spheres of activity, fixing optimum sizes for their affiliated enterprises,
reducing costs, eliminating competitors outside the area, and stabilizing
markets. The affiliates of the multinational corporations can point to theconquest of the Latin American market in certain spheres and under certain
conditions not affecting the global policies of their head offices. As we saw inan earlier chapter, the international division of labor continues functioning as it
always did for Latin America: the changes are only within the region. The
presidents declared at Punta del Este that "foreign private initiative will be able
to perform an important function to assure achievement of the objectives ofintegration,” and they agreed that the IDB should increase "the sums available
for export credits in intra-Latin American trade."
Fortune in 1967 assessed the "enticing new opportunities" which the Latin
American Common Market opens to northern business: "In many a boardroom,
the common market is becoming a serious element in planning for the future.
Ford Motor do Brasil, which makes Galaxies, thinks it could mesh nicely with
Ford of Argentina, which makes Falcons, thus deriving economies of scale byproducing both cars for larger markets. Kodak, which now makes photographic
paper in Brazil, would like to make exportable film in Mexico and cameras andprojecrs in Argentina."79 The magazine cited other examples of "rationalizing"or "expanding" operations by corporations such as ITT, General Electric,
Remington Rand, Otis Elevator, Worthington, Firestone, Deere, Westinghouse,
Air Brake, and American Machine and Foundry. Nine years ago Ra6l Prebisch,a vigorous advocate of LAFTA, wrote: "Another argument I often hear, from
Mexico to Buenos Aires, passing through São Paulo and Santiago, is that theCommon Market will offer foreign industry opportunities for expansion that it
does not now have in our limited markets.... It is feared that the benefits
offered by the Common Market will be taken advantage of principally byforeign in dustry, and not by national industries.... I shared and share this fear,

254

not only in imagination but because I have verified the reality of that fact inpractice."80 This verification did not prevent Prebisch from later signing a
document concerning integration in progress in which it is stated that "foreign
capital undoubtedly has an important role in the development of oureconomies,"81 and proposing that mixed companies be founded in which "theLatin American entrepreneur may participate efficiently and equitably."
Equitably? Yes, "equality of opportunity" must of course be preserved. Anatole
France aptly said that the law in its majestic equality forbids the rich as well as
the poor from sleeping under bridges, begging in the streets, and stealing bread.
But it happens that on this planet and in this epoch one enterprise alone,
General Motors, employs as many workers throughout the world as the entire
active population of Uruguay, and earns in a single year four times as muchmoney as the whole gross national product of Bolivia.
The corporations know, from their experience of previous integrations, theadvantages of acting as "insiders" in the capitalist development of other areas.
The fact that the total sales of worldwide U.S. affiliates are six times the valueof U.S. exports tells its own story." In Latin America as elsewhere, the UnitedStates' inconvenient antitrust laws do not apply. Here, with full impunity,
countries become pseudonyms for the foreign concerns that dominate them.
The first LAFTA implimentation agreement was signed in August 1962 by
Argentina, Brazil, Chile, and Uruguay, but in fact it was an agreement between
IBM, IBM, IBM, and IBM. It eliminated import duties in the four countries on
computers and their components, while raising duties on these machinesimported from outside the area: IBM "suggested to the governments that if theyeliminated duties on trade between themselves, it would build plants in Brazil
and Argentina. . . ."83 Mexico added its signature on the second agreement: thistime it was RCA and Phillips (Dutch) which promoted the exemption for radio
and TV equipment, And so on. The ninth agreement, in the spring of 1969,
divided the Latin American market in electrical generating, transmission, anddistribution equipment between Union Carbide, General Electric, and Siemens(German).
The Central American Common Market, an effort to join the rachitic anddeformed economies of five countries, has served to blow down with one puff
the feeble national producers of cloth, paint, medicines,

255cosmetics, and biscuits, and to expand the profits and trading orbit of General
Tire and Rubber, Procter and Gamble, Grace, Colgate-Palmolive, Sterling
Products, and National Biscuit. In Central America, liberation from customs
duties has also gone hand in hand with raising the barriers against "external
foreign" competition (as it might be called) so that "internal foreign" firms maysell at higher prices and greater profits: "The subsidy received through tariff
protection exceeds the total value added by the domestic production process.”84
No one has a better sense of proportion than these foreign enterprises: theirown and other enterprises' proportions. What, for example, would be the pointof installing a big auto plant, steel blast furnaces, or an important chemicalfactory in Uruguay, Bolivia, Paraguay, or Ecuador, with their minusculemarkets? The springboard sites are chosen elsewhere on the basis of the sizeand growth potential of the internal markets. FUNSA, the Uruguayan tire plant,
depends substantially on Firestone but it is Firestone's affiliates in Brazil andArgentina that expand with a view to integration. The growth of the Uruguayan
plant is braked, applying the same criterion that determines that Olivetti, theItalian firm invaded by General Electric, will make its typewriters in Brazil andits calculating machines in Argentina. "The efficient assignment of resources
requires an unequal development of the different parts of a country or region,"says Paul Rosenstein-Rodan, and an integrated Latin America will also have
its Northeasts and its poles of development.85 Weighing the eight years of lifeof the Montevideo Treaty which sparked LAFTA, the Uruguayan delegate said
that "differences in degrees of development" between the various countries"tend to sharpen," for the mere increase of trade in an interchange of reciprocal
concessions can only augment the previously existing inequgiry between
privileged poles and submerged areas. The Paraguayan ambassador made asimilar complaint: absurdly, he said, the weak countries were subsidizing theindustrial development of the free trade zone's most advanced countries,
absorbing their high internal costs through customs exemptions. He added thatthe deterioration of the terms of trade punished his country as severely within
LAFTA as outside it: "For every ton of products imported from the zone,
Paraguay pays with two." The reality, said the spokesman for Ecuador, wasthat of "eleven countries in different degrees of development, which means
greater or lesser

256

capacities to take advantage of the free trade area and leads to polarization of
the benefits and handicaps." The Colombian ambassador drew "just one
conclusion: the program of liberation benefits the three big countries inconspicuous disproportion."86 (Integration as a simple process of reducing trade barriers
will maintain "highly developed enclaves within a generally depressed continent," according to
the director of UNCTAD.87) As integration proceeds, the small countries will berenouncing their customs income— which in Paraguay finances nearly half thenational budget--in exchange for the doubtful advantage of receiving, forexample, cars from São Paulo, Buenos Aires, or Mexico made by the samefirms that sell them from Detroit, Wolfsburg, or Milan at half the price.(The auto
industry is 100 percent foreign in Brazil and Argentina, and mainly foreign in Mexico.88) Thisis the solid fact beneath the frictions increasingly provoked by the integration
process. The successful emergence of the Andean Pact, bringing together the
Pacific nations, is one result of the three big countries' visible hegemony in the
broader framework of LAFTA: the small countries propose to unite separately.
But despite all the problems, thorny as they may appear, the markets
expand as the satellites keep bringing new satellites into their orbit ofdependent power. Under the Castelo Branco dictatorship, Brazil signed anagreement guaranteeing foreign investments which saddles the state with therisks and handicaps of each business deal. Significantly, the official who
arranged the agreement defended its humiliating conditions before Congresswith the statement that "in the near future Brazil will be investing capital in
Bolivia, Paraguay, or Chile and will then need agreements of this type."89( Forexample, Uruguay agreed to increase its imports of machinery from Brazil in exchange for suchfavors as a supply of Brazilian electrical ener6y to northern Uruguay. Today the Uruguayan
departments of Arrigas and Rivera cannot raisc their consumption of energy without Brazil's
permission.) In the Brazilian governments following the coup d'état of 1964, atendency has in fact developed to assign to Brazil a "sub-imperialist" function
vis-á-vis its neighbors. A very influential military clique pictures the country as
the great administrator of U.S. interests in the region, and calls on Brazil tobecome the same sort of boss over the south as the United States is over Brazil
itself. In this connection, General Goibery do Couto e Silva has invoked a new257

"manifest

destiny":

"All

the

more

so,"

wrote

this

ideologueof"subimperialism" in 1952, "when our manifest destiny does not conflict in the
Caribbean with that of our northern elder brothers...... The General is now
chairman of Dow Chemical in Brazil. Certainly the desired subdominion
structure has plentiful historical antecedents, from the annihilation of Paraguay
on behalf of British bankers after the war of 1865 to the sending of Brazilian
troops, just a century later, to head the solidarity operation when U.S. Marines
invaded Santo Domingo.
Recent years have seen a revival of the competition between the agents forimperialist interests installed in the Brazilian and Argentine governments on
the troublesome question of continental leadership. Everything suggests thatArgentina is in no condition to resist the powerful Brazilian challenge: Brazil
has double the land area and-four times the population, produces nearly threetimes as much steel, double the cement, more than double the electric energy,
and renews its merchant fleet fifteen times as fast. Furthermore, in the past two
decades, its rate of economic growth has been considerably greater thanArgentina's. Until recently Argentina produced more cars and trucks thanBrazil, but at the present rate Brazil's auto industry will be three times larger
than Argentina's by 1975 and its fleet--equal to Argentina's in 1966--will be as
big as that of all Latin America put together. Brazil offers foreign investors its
far-flung potential market, its fabulous natural wealth, the strategic importanceof its territory--sharing boundaries as it does with all the South Americancountries except Ecuador and Chile--and all the conditions for U.S. enterprises
on its soil to advance with seven league boots. It has cheaper and moreabundant labor than its rival: the average wage level is three times lower thanin Argentina and the unemployed run into the millions. It is no accident that
one-third of the processed and semiprocessed products sold within the LAFTA
zone come from Brazil. This is the country called upon to become the axis of
all Latin America's liberation or servitude. Perhaps Senator Fulbright was notaware of the full significance of his words when, in public statements in 1965,
he attributed to Brazil the mission of directing the Common Market of Latin
America.

258

AS SIMÓ N BOLÍVAR PROPHESIED:"WE SHALL NEVER BE HAPPY, NEVER!"
For U.S. imperialism to be able to "integrate and rule" Latin America today, it
was necessary for the British Empire to help divide and rule us yesterday. An
archipelago of disconnected countries came into being as a result of thefrustration of our national unity. When the peoples in arms won independence,
Latin America stood on the stage of history with a common bond of tradition
between its diverse regions, territorially united, speaking two languages of thesame origin Spanish and Portuguese, But lacking one essential condition toform one great— nation--economic community.
The poles of prosperity that flourished to supply Europe's need for metals
and foodstuffs were not terconnected: the ribs of the fan had their vertex acrossthe ocean. People and capital were displaced according to the rising and fallingfate of 'gold or sugar, silver or indigo, and only the ports and the capitals, theleeches of the productive regions, had a permanent existence. Latin America
was born as a single territory in the imaginations and hopes of Simón Bolivar,
José Artigas, and José de San Martin, but was broken in advance by the basic
deforrhations of the colonial system. The oligarchies of the free trade ports
consolidated this structure of fragmentation, which was their source of profit:
those sagacious, traders could not incubate the national unity that was theessence of the European and U.S. bourgeoisie. Throughout the past century the
British, Spain's and Portugal's heirs since before independence, perfected thisstructure by means of diplomars' white-gloved intrigues, bankers' extortions,and the merchants' capacity for seduction. "For us the fatherland is America,"
Bolivar proclaimed; but Gran Colombia was divided into five countries and theliberator died defeated: "We shall never be happy, never!" he said to General
Urdaneta. Betrayed by Buenos Aires, San Martín stripped off the insignia ofcommand and Artigas, who called his soldiers Americans, went to a solitary
exile's death in Paraguay: the Río de la Plata viceroyalty had been divided into
four. Francisco de Morazin, creator of the federal republic of Central America,
died before a firing squad,( As Gregorio Bustamante Maceo described it: "He orderedthem to ready their arms, bared his head, ordered them to aim, corrected the aim, gave thecommand to fire, and fell; still he raised his bleeding head and said, I am alive; another volley
ended his life."91259

In the plaza of Tegucigalpa, the band plays light music every Sunday night at the foor of
Morazán's bronze statue. But the inscription is wrong; this is not the equestrian likeness of thechampion of Central American unity. The Hondurans who went to Paris soon after the shooting
to commission a sculptor on the government's behalf spent the money on a spree and ended upbuying a statue of Marshal Ney in the flea market. Central America's tragedy rapidly became
farce.) and the waist ofamerica was split into five pieces--Panama, the canalwith the rank of republic invented by Teddy Roosevelt, was added later.
Today the world sees the result: any of the multinational corporations
operates with more coherence and sense of unity than the congeries of islands
that is Latin America, broken up by so many frontiers and such a lack ofcommunication. What integration can be achieved among themselves bycountries that have not even been able to integrate internally? Each cou ntry
suffers from deep, fissures in its own body, bitter social divisions andunresolved tensions between its great marginal deserts and its urban oases. The
drama is reproduced on the regional level. The railroads and highways, createdto transport foreign products by the shortest routes, still bear irrefutable witness
to Latin America's impotence or incapacity to make the national dream of its
heroes come true. Brazil has no permanent land connections with three of its
neighbors, Colombia, Peru, and Venezuela; Atlantic seaboard cities have no
direct cable communications with Pacific cities, so that telegrams between
Buenos Aires and Lima, or Rio de Janeiro and Bogotá, have to go through New
York; the same with telephone communications between the Caribbean and thesouth. Each Latin American country still identifies itself with its own port--anegation of its roots and real identity--to such an extent that almost all
intraregional trade goes by sea: inland transport is virtually nonexistent.
Furthermore, the global freight cartel flxes rates and itineraries to suit itself,and Latin America merely endures the exorbitant charges and ridiculous routes.
Of the 118 regular shipping lines operating in the region only seventeen fly
regional flags; freightage bleeds the Latin American economy of $2.6 billion ayear.92 Thus merchandise shipped from Pôrto Alegre to Montevideo arrives
faster if it goes via Hamburg, and the same for Uruguayan wool bound for theUnited States; freightage from Buenos Aires to a Mexican gulf port is morethan 25 percent lower if the shipment goes260

via Southampton.93 Shipment of timber from Mexico to Venezuela costs morethan double the shipment of timber from Finland to Venezuela, although themaps still insist that Mexico is closer. A direct shipment of chemical products
from Buenos Aires to Tampico in Mexico costs far more than if it is routed via
New Orleans.94
What the United States set out to achieve for itself, and did achieve, iscertainly different. Seven years after their independence, the thirteen colonies
had doubled their territory, already extending beyond the Alleghenies to thebanks of the Mississippi, and four years after that they forged their unity bycreating a common market. Purchase of the Louisiana Territory from France in1803 again doubled the land area; then came Florida and, at midcentury, theinvasion and amputation of half of Mexico in the name of "manifest destiny."
Then the purchase of Alaska and the usurpation of Hawaii, Puerto Rico, and
the Philippines. The colonies made themselves a nation, and the nation madeitself an empire, putting into practice aims clearly expressed and pursued fromthe remote days of the "founding fathers." While the north of America grew,
developing internally within its expanding frontiers, the south developed
outwardly and blew into fragments like a grenade.
In the present process of integration we neither re-encounter our origins
nor come nearer to our goals. Bolívar prophesied shrewdly that the UnitedStates seemed fated by Providence to plague America with woes in the name ofliberty. General Motors or IBM will not step graciously into our shoes andraise the old banners of unity and emancipation which fell in battle; nor canheroes betrayed yesterday be redeemed by the traitors of today. It is a big loadof rottenness that has to be sent to the bottom of the sea on the march to Latin
America's reconstruction. The task lies in the hands of the dispossessed, thehumiliated, the accursed. The Latin American cause is above all a social cause:
the rebirth of Latin America must start with the overthrow of its masters,
country by country. We are entering times of rebellion and change. There arethose who believe that destiny rests on the knees of the gods; but the truth isthat it confronts the conscience of man with a burning challenge.

261

PART III~
Seven Years After

262

Seven years have gone by since Open Veins of Latin America was firstpublished.
This book was written to have a talk with people. A non-specialized writerwanted to tell a non-specialized public about certain facts that official history,
history as told by conquerors, hides or lies about.
The most heartening response came not from the book pages in the press
but from real incidents in the streets. The girl who was quietly reading Open
Veins to her companion in a bus in Bogotá, and finally stood up and read it
aloud to all the passengers. The woman who fled from Santiago in the days of
the Chilean bloodbath with this book wrapped inside her baby's diapers. The
student who went from one bookstore to another for a week in Buenos Aires's
Calle Corrientes, reading bits of it in each store because he hadn't the money tobuy it.
And the most favorable reviews came not from any prestigious critic but
from the military dictatorships that praised the book by banning it. For example,
Open Veins is unobtainable either in my country, Uruguay, or in Chile; inArgentina the authorities denounced it on TV and in the press as a corrupter ofyouth, As Blas de Otero remarked, "They don't let people see what I write
because I write what I see."I don't think there is a vanity in the pleasure I have had, as time went by, inseeing that Open Veins has not been a mute book.

263

I know I can be accused of sacrilege in writing about political economy inthe style of a novel about love or pirates. But I confess I get a pain fromreading valuable works by certain sociologists, political experts, economists,and historians who write in code. Hermetic language isn't the invariable andinevitable price of profundity. In some cases it can simply conceal incapacity
for communication raised to the category of intellectual virtue. I suspect thatboredom can thus often serve to sanctify the established order, confirming thatknowledge is a privilege of the elite.
Something similar occurs, one might add, with a certain militant literature
aimed at a public of the converted. For all its revolutionary rhetoric, a languagethat mechanically repeats the same clichés, adjectives, and declamatory
formulas for the same ears seems conformist to me. It could be that thisparochial literature is as remote from revolution as pornography is remote fromeroticism.
One writes to try and answer the questions that buzz in one's head,obstinate flies that disturb one's sleep; and what one writes can take oncollective sense when it coincides in some way with the social necessity for a
reply. I wrote Open Veins to spread some ideas of other people, and someexperiences of my own, which might dispel a little of the fog from questions
always pursuing us: Is Latin America a region condemned to humiliation andpoverty? Condemned by whom? Is God, is Nature, to blame? The oppressive
climate, racial inferiority? Religion, customs? Or may not its plight be a
product of history, made by human beings and so, unmakable by human beings?
Veneration for the past has always seemed to me reactionary. The rightchooses to talk about the past because it prefers dead people: a quiet world, a
quiet time. The powerful who legitimize their privileges by heredity cultivate
nostalgia. History is studied as if we were visiting a museum; but thiscollection of mummies is a swindle. They lie to us about the past as they lie tous about the present: they mask the face of reality. They force the oppressed
victims to absorb an alien, dessicated, sterile memory fabricated by the
oppressor, so that they will resign themselves to a life that isn't theirs as if itwere the only one possible.
Open Veins seeks to portray the past as something always convoked by thepresent, a live memory of our own day. A search for keys in past264

history to help explain our time--a time that also makes history-on the basisthat the first condition for changing reality is to understand it. This is no
catalog of heroes, dressed as if for a masked ball, who die in battle making
long solemn pronouncements; rather it probes for the sound and footprints ofthe multitudes who traced the paths we walk today. Open Veins has its roots inreality but also in other books--better books than this one--which have helped
us recognize what we are so as to know what we can be, and see where wecome from so as to reckon more clearly where we're going, That reality andthose books show that underdevelopment in Latin America is a consequence ofdevelopment elsewhere, that we Latin Americans are poor because the ground
we tread is rich, and that places privileged by nature have been cursed byhistory. In this world of ours, a world of powerful centers and subjugatedoutposts, there is no wealth that must not be held in some suspicion.
In the years since the first edition of Open Veins, history has not ceased to be acruel mistress to us.
The system has multiplied hunger and fear; wealth has become more andmore concentrated, poverty more and more widespread. That is recognized by
the documents of specialized international organizations, in whose aseptic
vocabulary our oppressed territories are "countries in process of development"
and the pitiless impoverishment of the working class is "regressive income
distribution."
The international Moloch-machine has kept on grinding: countries at theservice of commodities, people at the service of things.
With the passage of time methods of exporting crises are perfected.
Monopoly capital reaches its highest peak of concentration, and international
domination of markets, credits, and investment makes possible the systematicand growing transfer of contradictions: the outposts pay the price for theprosperity of the centers.
The international market remains one of the master keys to this operation.
There the multinational corporations impose their dictatorship--multinational(as Paul Sweezy explains) because they operate in many countries, yet highly
and assuredly national in ownership and control. The global organization of
inequality is not affected by the fact that (for example) Brazil now exports
Volkswagens to other South American countries and to the distant markets ofAfrica and the Middle

265East. In the last analysis it is the German Volkswagen concern that has
considered it more convenient to export cars to certain markets from its
Brazilian affiliate: the low production costs and cheap labor are Brazilian, thehigh profits are German.
Nor is the straitjacket magically broken when some raw material manages
to escape from the curse of low prices. This has been the case with petroleum
since 1973. Isn't petroleum an international business? Standard Oil of New
Jersey (now known as Exxon), Royal Dutch/Shell, Gulf. Are they Arabian or
Latin American enterprises? Who takes home the lion's share? The hubbub
raised against oil-producing countries has in fact been most revealing. They
dared defend their prices and immediately became the scapegoats for inflation
and unemployment in Europe and the United States. Did the most developed
countries ever consult with anyone before raising the price of any of theirproducts? For twenty years the price of oil sagged and sagged. Its paltry market
quotation represented a giant subsidy for the world's great industrial centers
whose products at the same time got dearer and dearer. Relative to theceaseless price rises of U.S. and European products, the new price of oil has no
more than brought it back to its 1952 levels. Crude oil merely recovered in1973 the purchasing power it had two decades earlier.
Among the important events of these seven years was the nationalization of oilin Venezuela. It didn't break Venezuela's dependency with respect to refining
and marketing, but it opened a new space of autonomy. From soon after its
birth the state concern Petróleos de Venezuela took first place among Latin
America's 500 biggest enterprises. It began seeking markets apart from thetraditional ones and rapidly found fifty new customers.
But as always when the state takes over a country s principal wealth, it isappropriate to ask who runs the state. Nationalization of basic resources doesn't
in itself imply redistribution of income for the majority's benefit, nor does it
necessarily endanger the power and privileges of the dominant minority. In
Venezuela the economy of waste and extravagance continues intact. The neonlit center is as resplendent as ever with the squandermania of a multimillionaire
class. In 1976 imports rose by 25 percent, largely to finance the super-luxury
articles266which inundate the Venezuelan market. Commodity fetishism as a symbol ofpower, human existence reduced to competitive and consumer relationships. In
the ocean of underdevelopment the privileged minority apes the lifestyle andfashions of the richest members of the world's most opulent societies. In the
bedlam of Caracas, as in New York, commodities that are "natural" bydefinition--air, light, silence become ever costlier and costlier. "Watch out,"
warns Juan Pablo Pérez Alfonso, patriarch of Venezuela's nationalism andprophet of the recovery of its oil, "one can die from indigestion as well as fromhunger."1
I finished writing Open Veins in the last days of 1970.
In the last days of 1977 Juan Velasco Alvarado died on an operating table.
His coffin was carried shoulder-high to the cemetery by the greatest multitude
ever seen in the streets of Lima. Born in a humble house in north Peru's dry
lands, General Velasco Alvarado had headed a process of social and economic
reforms. It was the deepest and most far-reaching attempt at change in his
country's recent history. After the 1968 revolt the military government pushed
a genuine agrarian reform and opened a road to recovery of the natural
resources usurped by foreign capital. But some time before Velasco Alvarado
died, the funeral of the revolution had been held. The creative process had afleeting life: it ended up strangled by the blackmail of loan sharks andmerchants and by the implicit fragility of any paternalistic project with noorganized popular base.
On the eve of Christmas, 1977, while General Velasco Alvarado's heart
was beating its last in Peru, the fist of another general who in no way
resembled him pounded on a desk in Bolivia. General Hugo Banzer, dictator of
Bolivia, said NO to amnesty for the prisoners, the exiled, and the fired workers.
Four women and fourteen children, who had come to La Paz from the tin mines,
then started a hunger strike.
"This isn't the moment," pronounced the wiseacres. "We'll let you know
when. . . ."The women sat down on the floor.
"We're not asking you," they said, "we're telling you. The decision has
been taken. Up there at the mine it's a permanent hunger strike. You get born
and the hunger strike starts right then and there. And that's where we have to
die too. It's slower, but we have to die too."267

The government reacted with castigations and threats, but the hunger strike
let loose forces that were long pent up. All Bolivia was shaken and showed its
teeth. Ten days later there were no longer four women and fourteen children:
1,400 workers and students had gone on hunger strike. The dictatorship felt the
ground wobbling beneath its feet. And the general amnesty was won.
Thus two Andean countries crossed the frontier between 1977 and 1978.
Further north in the Caribbean, Panama awaited the promised liquidation of thecolonial status of its canal after thorny negotiations with the new U.S.
government; and in Cuba the people were having a party: the unconqueredsocialist revolution was celebrating its first nineteen years of life. A few days
later in Nicaragua a furious multitude poured out into the streets. Dictator
Somoza, son of dictator Somoza, peered out through the keyhole. Various
businesses were put to the torch by the angry people. One of them,
Plasmaféresis by name, specialized in vampirism. This concern which went up
in smoke at the beginning of 1978 was the property of Cuban exiles, and its
business was selling Nicaraguan blood to the United States. (In the bloodbusiness, as in all others, what the producers receive is barely a tip. The Hemo
Caribbean outfit, for example, pays Haitians $3 per liter of blood, which it
resells for $25 in the U.S. market.)
In August of 1976 Orlando Letelier published an article describing the terror of
the Pinochet dictatorship and the "economic liberty" of small privileged groups
as two sides of the same coin.2 Letelier, who had been a minister in Salvador
Allende's government, was exiled in the United States. There he was blown topieces shortly afterwards. He submitted in his article that it was absurd to talkof free competition in an economy such as Chile's, subjected to the monopolies
which play with prices at their whim, and laughable to mention workers' rights
in a country where genuine unions are outside the law and the military junta
fixes wages by decree. Letelier described the massive destruction of gains
made by the Chilean people during the Popular Unity government. The
dictatorship had returned to their former owners half of the industrial
monopolies and oligopolies which Allende nationalized, and put the other half
up for sale. Firestone had bought the national tire factory, Parsons andWhittemore, a big paper plant. The Chilean268

economy, wrote Letelier, is more concentrated and monopolized now than on
the eve of the Allende government.4 Business free as never before, people injail as never before; in Latin America free enterprise is incompatible with civil
liberties. Free market? The price of milk has not been controlled in Chile since
early in 1975. The result is as expected. Two firms dominate the market. The
price of milk for consumers went up immediately by 40 percent, while for the
producers it went down by 22 percent.
Infant mortality, substantially reduced during the Popular Unity regime, rose
dramatically with Pinochet. When Letelier was assassinated in a Washington
street, one quarter of Chile's population was getting no income and survived
thanks to foreign charity or their own stubbornness and guile.
The abyss that exists in Latin America between the well-being of the few
and the misery of the many is infinitely greater than in Europe or the UnitedStates. Hence the methods necessary to maintain it are much more ruthless.
Brazil has an enormous and excellently equipped army but devotes only 5
percent of the national budget to education. In Uruguay half the budget now
goes for the armed forces and police, and the function of one fifth of the active
population is to watch, trail, and punish the others.
Undoubtedly among Latin America's most important and tragic events ofthese years of the seventies was the military insurrection that overthrew
Salvador Allende's democratic government on September 11, 1973, andsubmerged Chile in a bath of blood.
A little earlier, in June, a coup d'état in Uruguay had dissolved theparliament, put unions outside the law, and banned all political activity.5 In
March of 1976 the Argentine generals returned to power: the government ofJuan Domingo Perón's widow had become a stench and it fell, unregretted andunsung.
The three southern countries are today a festering sore upon the globe,
cronic bad news. Torture, kidnapping, murder, and exile have become the dailyround. These dictatorships are tumors to be extirpated from healthy organs--or
are they the pus that betrays the infection of the system?

269

There is always, I believe, a close relationship between the intensity of thethreat and the brutality of the response. I doubt if present events in Brazil and
Bolivia can be grasped without taking into account the experience of the JoãoGoulart and Juan José Torres regimes. Before they fell, these governments had
put into effect a series of social reforms and promoted a nationalist political
economy, during a process that was cut off in 1964 in Brazil and in 1971 in
Bolivia. In the same way we could well say that Chile, Argentina, and Uruguay
are expiating the sin of hope. The cycle of deep changes under Allende, thebanners of justice that mobilized Argentina's working masses and rose highduring the Short-lived Héctor Cámpora government in 1973, and the stepped
up politicization of Uruguayan youth, were all challenges not to be tolerated bya system that was impotent and in crisis. The potent oxygen of liberty was
explosive for the specters, and the pretorian guard was summoned to save law
and order. The clean-up plan is a plan of extermination.
The Congressional Record of the United States is replete with irrefutableevidence of interventions in Latin America. Guilt-ridden consciences purge
themselves in the imperial confessionals. Recently official admissions of U.S.
responsibility for various disasters have multiplied. Full public confessions
have proved among other things that the U.S. government directly participatedin Chilean politics by bribery, espionage, and blackmail. The strategy for thecrime was planned in Washington. Kissinger and the intelligence services were
carefully preparing the fall of Allende ever since 1970. Millions of dollars were
distributed among enemies of the legal Popular Unity government. That, forexample, was how the truck owners in 1973 could keep going their long strike
which paralyzed much of the country's economy. The assurance of impunity
loosens tongues. When the coup took place against Goulart, the United States
had in Brazil its largest embassy anywhere on earth. Lincoln Gordon, theambassador, admitted to a journalist thirteen years later that his government
had long been financing the forces opposing the reforms. "What the hell," said
Gordon, "that was more or less a habit in those days....The CIA used to doleout political funds."6 In the same interview Gordon explained that when thecoup took place the Pentagon had a huge aircraft carrier and four270

supply ships stationed off the Brazilian coast "in case the anti-Goulart forces
should ask for our help." That help, he said, "wouldn't be just moral. We wouldback them up logistically, with supplies, munitions, oil."
Since President Jimmy Carter announced a policy of human rights, it has
become the custom for Latin American regimes imposed by U.S. intervention
to formulate indignant pronouncements against U.S. intervention in theirinternal affairs.
The U.S. Congress resolved in 1976 and 1977 to suspend economic andmilitary aid to various Countries. But most U.S. external aid doesn't go throughthe congressional filter. So despite pronouncements, resolutions, and protests
General Pinochet's regime got $290 million of direct U.S. aid in 1976 without
congressional authorization. When General Videla's dictatorship in Argentina
was a year old it had received $500 million from private U.S. banks and $415
million from two institutions (World Bank and Bank for International
Development) in which the United States has decisive influence. Argentina's
special rights for International Monetary Fund loans, $64 million in 1975, hadrisen to $700 million two years later.
President Carter's concern about the butchery in some Latin Americancountries seems healthy, but the present dictators are not self-taught: they havelearned the techniques of repression and the arts of government at academies
run by the Pentagon in the United States and the Panama Canal Zone. These
courses are still being given today, and no change is known to have been madein their content. The Latin American military men who are now causing ascandal in the United States have been good pupils. A few years ago when he
was defense secretary, Robert McNamara, now president of the World Bank,
spelled it out: "They are the new leaders. I don't need to expatiate on the valueof having in leadership positions men who have previously become closely
acquainted with how we Americans think and do things. Making friends withthose men is beyond price."7
One wonders if those who made us paralytic might offer us a wheelchair?
The bishops of France speak about another sort of responsibility, deeper andless visible: "We, who belong to nations purporting to be the world's mostadvanced, form a part of those who benefit from271

exploitation of the developing countries. We do not see the sufferings that thisinflicts on the flesh and spirit of entire peoples. We help to reinforce thedivision of the present world in which the domination of poor by rich, of weakby strong, is conspicuous. Do we know that our squandering of resources andraw materials would not be possible without the control of international
exchange by the Western countries? Do we not see who profits from the arms
traffic, of which our country has provided sad examples? Do we perhaps
understand that the militarization of poor countries' regimes is one of theconsequences of economic and cultural domination by the industrializedcountries, where life is ruled by the lust for profits and the power of money?"8
Dictators, torturers, inquisitors: the terror has its officials, just as it has
post offices and banks, and they apply it because it is necessary. It isn't a caseof a plot by the perverse. General Pinochet may look like a figure in Goya's"black art," a prize specimen for psychoanalysts, or the inheritor of a savage
tradition from the banana republics. But the clinical or folkloric roots of this orthat dictator, which provide seasoning for history, are not history. Who would
dare maintain today that World War I broke out because of the complexes ofKaiser Wilhelm, who had one arm shorter than the other? As Bertolt Brecht
wrote at the end of 1940 in his working diary: "In democratic ountries theviolent character inherent in the economy doesn't show itself; in authoritarian
countries the same holds true for the economic character of violence."
In Latin America's southern lands the centurions have taken over power asa function of the needs of the system: the terrorism of the state is put into
action when the dominant classes can pursue their business by no other means.
Torture wouldn't exist in our countries if it weren't effective, formal democracy
would continue if it could be guaranteed not to get out of the hands that holdpower. In difficult times democracy becomes a crime against national security-that is, against the security of internal privilege and foreign investment. Our
devices for mincing human flesh are part of an international machinery. The
whole society is militarized, the state of exception is made permanent, and therepressive apparatus is endowed with hegemony by the turn of a screw in thecenters of the imperial system. When crisis begins to throw its shadow, thepillage of poor countries must be intensified to guarantee full employment,
public liberties, and high rates of development in the rich countries. The
sinister272

dialectic of victim-hangman relations: a structure of successive humiliations
that starts in international markets and financial centers and ends in every
citizen’s home.
Haiti is the poorest country in the Western hemisphere. It has more footwashers than shoe shiners: little boys who, for a penny, will wash the feet ofcustomers lacking shoes to shine. Haitians, on the average, live a bit more than
thirty years. Nine out of every ten can't read or write. For internal consumption
the barren mountain sides are cultivated. For export, the fertile valleys: the best
lands are given to coffee, sugar, cacao, and other products needed by the U.S.
market. No one plays baseball in Haiti, but Haiti is the world's chief producerof baseballs. There is no shortage of workshops where children assemble
cassettes and electronic parts for a dollar a day. These are naturally for export;
and naturally the profits are also exported, after the administrators of the terror
have duly got theirs. The slightest breath of protest in Haiti means prison ordeath. Incredible as it sounds, Haitian workers' wages lost 25 percent of theirwretched real value between 1971 and 1975.9 Significantly, in that period a
new flow of U.S. capital into the country began.
I recall an editorial in a Buenos Aires daily a couple of years ago. An old
conservative newspaper was bellowing with fury because some international
document depicted Argentina as an underdeveloped country. How could acultured, European, prosperous, white society be measured by the sameyardstick as a poor black country such as Haiti?
Of course the differences are enormous, although they have little to do withthe analytical categories of Buenos Aires's arrogant oligarchy. But with all thediversities and contradictions one could mention, Argentina isn't outside thevicious circle that strangles the Latin American economy as a whole. No
intellectual exorcism can remove it from the reality that, to a greater or smaller
extent, the other countries of the region share with it.
General Videla's massacres are, after all, no more civilized than those of"Papa Doc" Duvalier or his successor to the throne, although in Argentina thetechnological level of the repression is higher. Essentially both dictatorships
act at the service of the same objective: to supply cheap labor to aninternational market that demands cheap products.

273

Fresh from taking power, the Videla dictatorship hastened to ban strikes
and decree freedom of prices while putting wages behind bars. Five months
after the coup d'état, the new foreign investment law put foreign and national
enterprises on an equal footing. Thus free competition put an end to the unfair
handicap suffered by certain multinational corporations vis-à-vis local
concerns--for example, poor unprotected General Motors, whose world sales
volume equals the entire gross national product of Argentina. Also now
liberated, with gossamer limitations, is the remission of profits abroad and therepatriation of invested capital.
When the regime was a year old the real value of wages had fallen by 40
percent. The feat was accomplished by terror. "Fifteen thousand disappeared,
10,000 jailed, 4,000 dead, tens of thousands exited--that is the naked balance
sheet of the terror," as the writer Rodolfo Walsh totted it up in an open letter.
Walsh sent the letter on March 29, 1977, to the three chiefs of the governing
junta. On the same day he was kidnapped and disappeared.
Unimpeachable sources confirm that a diminutive part of the new direct
foreign investments in Latin America really comes from their country of origin.
According to a U.S. Department of Commerce survey10 a mere l2 percent of
the funds comes from the enterprises' U.S. headquarters, 22 percent comesfrom profits made in Latin America, and the remaining 66 percent frominternal-credit, and above all international-credit, sources. The proportion issimilar for investments of European or Japanese origin. And it must be bornein mind that 12 percent of investment coming from the enterprises'
headquarters is often nothing more than the result of transfer of already usedmachinery or simply reflect the arbitrary appraisal placed by the enterprises
upon their industrial "know-how," their patents, and their brand names. Thus
the multinational corporations not only usurp the internal credit of countries
where they operate, in exchange for a distinctly dubious capital contribution,
but also multiply those countries external debts.
Latin America's external debt in 1975 was almost three times greater than in
1969.11 In 1975 approximately half of Brazil's, Mexico's, Chile's, andUruguay's incomes from exports went for amortization and interest274

on the debt, and for paying the profits of foreign concerns operating in thosecountries. Servicing of debt and profit remittances in that year swallowed 55
percent of Panama's exports and 60 percent of Peru's.12 In 1969 every Bolivian
owed $137 to foreigners; in 1977, $483. The inhabitants of Bolivia weren't
consulted, nor did they see a centavo of those loans that put the rope aroundtheir necks.
Citibank doesn't appear as a candidate on any list, in the few Latin
American Countries that still have elections; and none of the generals who run
the dictatorships is named International Monetary Fund. But whose is the handthat executes, whose the mind that gives the orders? He who lends, commands.
In order to pay, more must be exported; and more must be exported in order tofinance imports and to confront the hemorrhage of profits and "royalties" thatthe foreign concerns drain into their central coffers. The increase of exports,
whose purchasing power shrinks, implies hunger wages. Massive poverty, thekey to success for an economy skewed to the outside, prevents such growth of
the internal consumer market as is necessary for smooth economic
development. Our countries are becoming echoes and losing their own voice.
They depend on others, they exist to the extent that they respond to others'
needs. And in turn the remodeling of the economy as a function of external
demand brings us back to the original hangman's rope: it opens the doors forpillage by foreign monopolies and forces us to seek new and larger loans fromthe international bankers. The vicious circle is perfect: foreign debt and foreign
investment oblige us to multiply exports that they themselves devour. The task
can't be accomplished with gentlemanly matters. To fulfill their function as
hostages of foreign prosperity, Latin American workers must be held prisoner,
either inside or outside the bars of the jails.
Savage exploitation of labor is not incompatible with intensive technology.
It never was, in our countries: consider the legions of Bolivian workers wholeft their lungs in the Oruro mines in the time of Simón Patiño in a system ofwage-slavery, yet with very modern machinery. The "tin baron" knew how to
combine the highest levels of technology in his day with the lowest levels of
wages. 13
Furthermore in our day, importation of the most advanced 'economies'
technology coincides with expropriation of locally capitalized275

industries by the all-powerful multinationals. The capital-centralizing
movement is achieved by "ruthless wiping out of 'obsolete' entrepreneurial
levels which, not by accident, are precisely those of national ownership."14 The
speeded-up denationalization of Latin American industry carries with it agrowing technological dependency. Technology, the decisive key to power, ismonopolized in the capitalist world by the metropolitan centers. It comes to us
second-hand but those centers charge for the copies as if they were theoriginals. In 1970 Mexico paid twice as much as in 1968 for importation offoreign technology. Between 1965 and 1969 Brazil doubled its payments, andso did Argentina over the same period.
Technology transfer swells the astronomical foreign debts and has
devastating effects on the labor market. In a system organized to drain off
profits abroad, the labor force of "traditional" enterprise has ever less
opportunities for employment. In exchange for a dubious shot in the arm forthe rest of the economy, the islets of modern industry sacrifice workers as they
reduce the labor time necessary for production. The existence of a large andgrowing army of unemployed in turn facilitates the destruction of the real valueof wages.
Even the documents of the UN's Economic Commission for Latin America(ECLA) now talk about a new international division of labor. The technicians
hazard the hope that, within a few years, Latin America will perhaps export asmuch manufactures as it now sells raw materials and food.
The wage differentials between developed countries and those in development,
including Latin America, may bring about a new division of activities
between countries, displacing from the former to the latter for competitive
reasons those industries in which labor costs are very important. Labor costs
for manufacturing industry, for example, are generally much lower in Mexico
or Brazil than in the United States.15

Sparkplug of progress or neocolonial adventure? Electrical and nonelectrical machinery is already one of Mexico's chief exports. And in Brazil,
the sale abroad of vehicles and armaments grows. Some Latin Americancountries are experiencing a new stage of industrialization, largely induced andoriented by foreign needs and the foreign masters of the means of production.
Won't this be another chapter to add to our long history of "development
toward the outside"? In world markets

276the constantly rising prices don't correspond generically with "manufactured
products" but with commodities of a more sophisticated and technologicalnature which is exclusive to the more developed economies. Whatever Latin
America sells--raw materials or manufactures--its chief export product isreally cheap labor.
Hasn't our experience throughout history been one of mutilation anddisintegration disguised as development? Centuries ago the conquest cleared
our lands to plant crops for export and annihilated the indigenous populationsin the mines to satisfy the demand abroad for saver and gold. The diet of the
pre-Columbian population that could survive the exterminations deteriorated
as the foreigners progressed. In our day the people of Peru produce fishmealvery rich in protein, for the cattle of the United States and Europe, but proteinsare conspicuously absent from the diet of most Peruvians. The Volkswagen
affiliate in Switzerland plants a tree for every car it sells-- gracious ecologicalgesture--while the Volkswagen affiliate in Brazil uproots thousands of acres offorest to dedicate them to intensive production of meat for export. The
Brazilian people, who very rarely eat meat, sell more and more meat abroad.
Recently Darcy Ribeiro remarked to me that there isn't much difference
between a "Volkswagen republic" and a "banana republic." For every dollar
produced from exporting bananas, just eleven cents remain in the producing
country," and of those eleven cents only a meager part goes to the plantation
workers. Do the proportions change when a Latin American country exports
automobiles?
Slave ships no longer ply the ocean. Today the slavers operate from theministries of labor, African wages, European prices. What are the Latin
American coups d'état but successive episodes in a war of pillage? The
dictators hardly grasp their scepters before they invite foreign concerns to
exploit the local, cheap, and abundant work force, the unlimited credit, the tax
exemptions, and the natural resources that await them on a silver tray.
Employees of the Chilean government I s emergency plan get a wage
equivalent to $30 a month. A kilo of bread costs half a dollar, so they get two
kilos of bread a day. The minimum monthly wage in Uruguay and Argentina is
the present equivalent of six kilos of coffee. In Brazil it is $60 a month but theboias frias, migrant rural workers, get from277

fifty cents to $1 a day on the coffee, soybean, and other export-crop plantations.
The fodder consumed by Mexican cattle contains more protein than the diet ofcampesinos who tend them. The meat of these cattle is destined for a few
privileged mouths within the country and above all for the international market.
Agriculture for export flourishes in Mexico beneath the shield of a generous
policy of credits and official facilities, while the amount of protein available
per inhabitant fell between 1970 and 1976, and in rural areas only one of every
five Mexican kids has normal weight and height.17 In Guatemala rice, corn, andbeans for internal consumption are left to the will of God, but, coffee, cotton,
and other export products absorb 87 percent of the credit. Of every ten
Guatemalan families who work at raising and harvesting coffee, the country's
chief source of foreign exchange, hardly one gets a minimally adequate diet.18
In Brazil only 5 percent of agricultural credit goes for rice, beans, and manioc,
which constitute the basic diet of Brazilians; the rest goes for export products.
The recent collapse of world sugar prices did not, as it once did, set off afamine among Cuba's campesinos. In Cuba malnutrition no longer exists. On
the other hand the almost simultaneous rise of world coffee prices did nothing
to ease the chronic poverty of Brazilian coffee workers, The rise in coffee
prices In 1976--a euphoria brought about by frosts that devastated Brazilian
crops-- "was not directly reflected in wages," as a high official of the Brazilian
Coffee Institute recognized.19
Actually export crops are not in themselves incompatible with the welfareof the population, nor do they in themselves contradict an "inward" economic
development. Sugar sales abroad have in fact given Cuba leverage to create a
new world in which all have access to the fruits of development, and solidarity
is the axis of human relations.
So we know who is condemned to pay for the crisis of system-adjustment.
The prices of most of the products Latin America sells decline implacably in
relation to the prices of what it buys from countries that monopolize
technology, trade, investment, and credit. To make up the difference and meetthe obligations to foreign capital, Latin America must cover in quantity what it
loses in price. In this framework the southern dictatorships have cut workers'
wages in half and turned every production center into a forced labor camp. The
workers also have to278Compensate for the fall in value of their labor power, which is the product theysell in the market. They must make up in quantity--quantity of hours--what theylose in purchasing power of their wages. The laws of the international market
are thus reproduced in the microworld of every Latin American worker’s life.
For workers who have "the luck" to count on a regular job, the eight-hour day
exists only in the dead letter of the laws. They often work ten, twelve, evenfourteen hours; and not a few have lost their Sundays.
Simultaneously on-the-job accidents have multiplied-human blood offeredon the altar of productivity. Three examples in Uruguay at the end of 1977:* Railroad quarries producing stones and ballast double their output. In
early spring. Fifteen workers die in a gelignite explosion.
* Lines of unemployed outside a fireworks factory; children working on
the production lines; records broken. On December 20, an explosion: five
workers dead, dozens wounded.
* At 7 a.m. on December 28, workers refuse to enter a fish-canning factory
because they smell a strong odor of gas. They are threatened: if they don't go in,they lose their jobs. They continue to refuse. Renewed threats: we'll call it thearmy. The firm has already summoned the army on other occasions. The
workers enter. Four dead, many hospitalized. Ammonia gas was escaping. 20
Maria Carolina de Jesus was born amid garbage and vultures.
She grew, suffered, worked hard; loved men, had kids. She kept a
notebook where she jotted down, in crude handwriting, an account of her tasks
and her days.
A journalist happened to read the notebooks and Maria Carolina de Jesus
became a famous writer. Her book Quarto de Despejo, (Published in English as
child of the Dark (New York: Dutton, 1962).) diary of five years in a sordid São Pauloslum, was read in forty countries and translated into thirteen languages.
A Cinderella in Brazil, transformed into a global consumer product, Maria
Carolina de Jesus left the slum to tour the world, be interviewed andphotographed and garlanded by critics, regaled by the gentry and received bypresidents.

279

The years passed. Early in 1977, on a Sunday morning, Maria Carolina deJesus died, amid garbage and vultures. No one remembered the woman who
had written: "Hunger is the dynamite of the human body."
She who had lived on leftovers could ephemerally become one of the elect.
She was allowed to sit at the table. After the dessert, the magic was broken.
And while her dream lasted, Brazil had continued to be a country where one
hundred workers are injured every day in work accidents and where four of
every ten children are obliged from birth to become beggars, thieves, ormagicians.
The statistics may wear a smile, but the people get taken. In systems
organized upside down, when the economy grows, social injustice grows with
it. In the most successful phase of the Brazilian "miracle," infant mortality rosein the slums of the country's wealthiest city. The sudden oil boom in Ecuador
brought color TV instead of schools and hospitals.
The cities swell up to the point of explosion. In 1950 Latin America had
six cities with a population of more than a million. In 1980 it will have twentyfive.21 On the edges of great urban centers the hordes of workers expelled fromthe countryside share the fate that the system reserves for "surplus" city youth.
In the Latin American picaresque style the hustlers perfect ways to survive.
"The productive system has demonstrated patent insufficiency to generate
productive employment which absorbs the region's growing labor force,
especially the large contingents of urban labor. . . ."22
An International Labor Organization study recently showed that Latin
America has more than 110 million persons in a condition of serious poverty.
Seventy million of them can be considered “indigent.”23 What percentage of the
population eat less than they need? In the technicians' language, thosereceiving "incomes below the cost of minimal balanced diet" are 42 percent of
the population of Brazil, 43 percent of Colombians, 49 percent of Hondurans,
31 percent of Mexicans, 45 percent of Peruvians, 29 percent of Chileans, 35
percent of Ecuadoreans. 24
How to stifle the rebellious explosion of the great condemned majorities?
How to head off those explosions? How to avoid those majorities becoming
ever larger, if the system doesn't function for them? Leaving aside charity, thepolice remains.

280

In our countries the terror industry pays dearly, like any other, for foreign"know-how." U.S. repression technology, tested at the four corners of the earth,is bought and applied. But it would be unjust not to credit Latin America's
ruling classes with a certain creative capacity in this field.
Independent economic development was beyond the capacity of ourbourgeoisies, and their attempts to create a national industry had a short low
flight, like a hen's. Throughout our historical process the masters of power
have likewise demonstrated their lack of political imagination and their cultural
sterility. On the other hand they did know how to set up a giant fear machine
and have made their own contributions to the technique of exterminating
persons and ideas. In this sense the recent experience of the Río de la Plata
countries is revealing.
"The task of disinfection will take us a long time," the Argentine brass
warned when they took the stage. The armed forces were successively
summoned by Uruguay's and Argentina's ruling classes to crush the forces ofchange, tear them up by the roots, perpetuate the internal orders of privilege,
and generate economic and political conditions that would seduce foreign
capital: scorched earth, tranquility and order, workers cheap and meek. There isnothing more orderly than a cemetery. The population immediately became theinternal enemy. Any sign of life, of protest, or even mere doubt, is a dangerous
challenge from the standpoint of military doctrine and national security. So
complicated mechanisms of prevention and punishment have been developed.
A deep rationality lurks behind appearances. To operate effectively, therepression must appear arbitrary. Apart from breathing, any human activity
can constitute a crime. In Uruguay torture is applied as a routine system ofinterrogation: anyone may be its victim, not only those suspected or guilty ofacts of opposition. In this way panic fear of torture is spread through the whole
population, like a paralyzing gas that invades every home and implants itself inevery citizen’s soul.
In Chile the hunt for human prey left a balance of 30,000 dead, but inArgentina they don't shoot: they kidnap, The victims "disappear.” The invisible
armies of the night carry out the task. There are no corpses and no one is
responsible. In this way the bloodbath has the more impunity for not being"official," and thus collective anxiety is more potently spread around. No one
renders accounts, no one offers explanations.

281

Each crime builds horrible uncertainty in persons close to the victim and isalso a warning for everyone else. State terrorism aims to paralyze thepopulation with fear.
To get a job and keep it in Uruguay, one needs to stay in the good graces ofthe military. In a country where it's so tough to find work outside of thebarracks and police stations, this not only serves to drive into exile a good partof the 300,000 citizens listed as leftists. It is also useful as a threat hanging
over those who stay. Montevideo newspapers often feature public penitencesand declarations by citizens who beat their breasts just in case: "I have neverbeen, I am not, I never will be. . .”In Argentina it is no longer necessary to ban any book by decree. The newPenal Code penalizes, as always, the writer and publisher of a book considered
subversive. But it also penalizes the printer (so that no one will dare to print atext that is merely doubtful) and the distributor and the bookstore (so that noone will dare sell it); and as if this weren't enough, it also penalizes the reader,so that no one will dare read it, much less keep it. Thus the consumer of a bookgets the same treatment the law applies to consumers of drugs, 25 In thisprogram for a society of deaf mutes, each citizen has to become his own
Torquemada.
In Uruguay it is a crime not to inform on your neighbor. Students entering
the university swear in writing that they will denounce anyone who indulges on
campus in "any activity outside the functions of study." The student assumes
co-responsibility for whatever occurs in his presence. In this program for asociety of sleepwalkers, all citizens must be their own and others’ policema.
However, the system--with good reason--is mistrustful. There are 100,000
police and soldiers in Uruguay, but there are also 100,000 informers. Spies
work the streets, cafes and buses, factories and high schools, offices and theuniversity. Anyone voicing a complaint about life being so expensive and so
hard ends up in jail: he or she has committed a "crime against the moral forceof the Armed Forces," for which the price is three to six years behind bars.
In the January 1978 referendum, one voted "Yes" for the Pinochet dictatorshipby marking a cross beneath the Chilean flag. To vote "No," one put the crossbeneath a black rectangle.

282

The system would like to be confused with the country. The system is thecountry, says the official propaganda that bombards the citizenry day and night.
The enemy of the system is a traitor to the fatherland. Capacity for indignation
against injustice and a desire for change are proofs of desertion. In many Latin
American countries, citizens who aren't exiled beyond the frontiers live as
exiles on their own soil.
But even while Pinochet celebrated his victory, strikes which thedictatorship called "collective labor absenteeism" were breaking out all over
Chile, despite the terror. The great majority of kidnapped and disappeared
people in Argentina are workers who performed some union activity. The
limitless popular imagination keeps hatching new forms of struggle--the "SadFaces Workday," the "Angry Faces Workday"--and solidarity finds newchannels for the escape from fear. Numerous unanimous strikes occurred inArgentina through 1977, when fear of losing one's life was as real as the risk oflosing one's job. A stroke of the pen can't destroy the power of response of anorganized working class with a long fighting tradition. In May of the same year,
when the Uruguayan dictatorship was balancing up its program of emptying
minds and performing collective castration, it was forced to recognize that "37
percent of the country’s citizens are still interested in politics."26
In these lands we are not experiencing the primitive infancy of capitalism
but its vicious senility. Underdevelopment isn't a stage of development, but its
consequence. Latin America's underdevelopment arises from external
development, and continues to feed it. A system made impotent by its functionof international servitude, and moribund since birth, has feet of clay. It
pretends to be destiny and would like to be thought eternal. All memory issubversive, because it is different, and likewise any program for the future. The
zombie is made to eat without salt: salt is dangerous, it could awaken him. The
system has its paradigm in the immutable society of ants. For that reason it
accords ill with the history of humankind, because that is always changing.
And because in the history of humankind every act of destruction meets its
response, sooner or later, in an act of creation.

283

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Nations, San Francisco, June 25, 1965.
Notes to Chipter 1: Lust for Gold, Lust for Silver, pp. 11-58
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2. Daniel Vidart, Ideologia y realidad de América (Montevideo, 1968).
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6. According to the Indian informants of Fray Bernardino de Sahagún in the
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7. See Rafael Pineda Yáñez, La isla y Colón (Buenos Aires, 1955).
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Sahagún, cited in Léon-Portilla, Visión de los vencidos.
9. Léon-Portilla, El reverso de la conquista: reląciones aztecas, mayas e
incas (México, 1964).
10. Ibid.

284

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1501-1650 (1934; reprint ed., New York: Octagon, 1965).
12. Quoted in Gustavo Adolfo Otero, Vida social en el coloniaje (La Paz,
1958).
13. These are the words of José de Gálvez, Charles III's Visitor-General in
New Spain, as quoted in John Lynch, Spanish Colonial Administration,
1782-1810 (London: Athlone Press, 1958).
14. Ernest Mandel, Marxist Eco Theory, 2 vols. (New York: Monthly Review
Press, 1968), 2: 443-44.
15. Ernest Mandel, "La teoría marxiana de la acumulación primitiva y laindustrialización del Tercer Mundo," Amaru (Lima), April-June 1968.
16. Celso Furtado, The Economic Development of Latin America: A Survey
from Colonial Times to the Cuban Revolution (Cambridge: Cambridge
University Press, 1970), P. II
17. J. Beaujeau-Garnier, L’économíe de l’Amérique Latine (Paris, 1949).
18. Sergio Bagú, Economía de la sociedad colonial: ensayo de historia
comparada de América Latina (Buenos Aires, 1949).
19. Alexander von Humboldt, Political Essay on the Kingdom of New Spain(London, 1811), Book II Chapter VII, P. 22.
20. Andre Gunder Frank, Capitalism and Underdevelopment in Latin America(New York and London: Monthly Review Press, 1967).
21. Alvaro Alonso Barba, Arte de los metales (Potosí, 1967).
22. Otero, Vida social
23. Humboldt, Political Essay, Book IV, Chapter XI. See also Fernando
Carmona, Introduction to Diego López Rosado, Historia y pensamiento
económico de Mexico (México, 1968).
24. Don Joseph Ribera Bernárdez (Count Santiago de La Laguna), Descripción
breve de la muy noble y leal ciudad de Zacatecas, in Gabriel Salinas de la
Torre, Testimonios de Zacatecas (Mexico, 1946).
25. John Collier, The Indians of the Americas (New York: W.W. Norton,
1947), p. 138.
26. Emilio Romero, Historia económica del perú (Buenos Aires, 1941).
27. Enrique Finot, Nueva historia de Bolivia (Buenos Aires, 1946).
28. According to a member of the United States Soil Conservation Service,cited in Collier, The Indians of the Americas, p. 53.
29. Daniel Valcárcel, La rebelión de Túpac Amaru (Mexico, 1947).

285

30. Alexander von Humboldt, Ansichten der Natur (Aspects of nature), vol. II;
quoted in Adolf Meyer-Abich et al., Alejandro de Humboldt, 1769-1859(Bad Godesberg, 1969).
31. Ernest Gruening, Mexico and Its Heritage (New York: Appleton-CenturyCrofts, 1928), p.38.
32. Arturo Bonilla Sánchez, "Un problema que se agrava: la subocupación
rural,” in Neolatifundismo y explotación, de Emiliano Zapata a Anderson
Clayton & Co. (México, 1968).
33. René Dumont, Lands Alive (New York: Monthly Review Press, 1965), p.
10.
34. "Don Volcán necesita carne humana bien tostadita," in Carlos Guzmán
Boeckler and Jean-Loup Herbert, Guatemala: una interpretación históricosocial (México, 1970).
35. As quoted in C.R. Boxer, The Golden Age of Brazil 1695-1750 (Berkeley
and Los Angeles: University of California Press, 1962), p. 163.
36. As quoted in ibid., pp. 184-85.
37. Ibid., p. 165.
38. Esteban Montejo, The Autobiography of a Runaway Slave, ed. Miguel
Barnet (New York: World Publishing, 1969), p. 42.
39. Boxer, The Golden Age of Brazil, p. 219. For further information see
Joaquím Felício dos Santos, Memórias do Distrito Diamantino (Rio deJaneiro, 1956),
40. Augusto de Lima Jr., Vila Rica de Ouro Prêto: síntese histórica e
descritiva (Belo Horizonte, 1957).
41. Franklin de Oliveira, A tragédia da renovação brasileira. Minas Gerais e
São Paulo: a miséria dentro do progresso (Rio de Janeiro, 1970).
Additional Bibliography for Chapter 1
Aguilar Monteverde, Alonso.Dialéctica de la economía mexicana, México,
1968.
Banco de Comercio. La economía del estado de Guanajuato. México, 1968.
- La economia del estado Zacatecas. México, 1968.
Baran, Paul A. The Political Economy of Growth. New York: Monthly Review
Press, 1962.

286

Cañete y Domínguez, Pedro Vicente.Potosí colonial: guía histórica,
geogràfica, political civil y legal del gobierno e intendencia de laprovinciade Potosí. La Paz, 1939.
Capitan, L., and Lorin, H. El trabajo en América, antes y depués de Colón.
Buenos Aires, 1948.
Capoche, Luis. Relación general de la Villa Imperial de Potosí. Madrid, 1959.
Chávez Orozco, Luis. Revolución industrial--revolución politica. México:
Biblioreca del Obrero y Campesino, n.d.
de Martínez Arzana y Vela, Nicolás. Historia de la Villa Imperial de Potosí.
Buenos Aires, 1943.
Elliott, J. H. Imperial Spain. London, 1963.
Furtado, Celso. The Economic Growth of Brazil. Berkeley & Los Angeles:
University of California Press, 1963.
Galeano, Eduardo. Guatemala: Occupied Country. New York and London:
Monthly Review Press, 1969.
Gerbi, Antonio, La disputa del Nuevo Mundo. Mexico, 1960.
Halperin Donghi, Tullio. Historia contemporánea de América Latina. Madrid,
1969.
Hanke, Lewis. Estudios sobre fray Bartolomé de Las Casas y sobre la lucha
por la justicia en la conquista española de América. Caracas, 1968.
Hawkes, Jacquetta. "Prehistoria." In Historia de la Humanidad Buenos Aires:
UNESCO, 1966.
Huamán Poma. "El primer nueva crónica y buen gobierno." In El reverse de laconquista: relaciones aztecas, mayas, e incas, edited by Miguel Léon
Portilla. México, 1964.
Manchester, Allan K. British Preeminence in Brazil: Its Rise and Fall. Chapel
Hill, N.C.: University of North Carolina Press, 1933.
Marmolejo, Lucio. Efemérides guanajuatenses, o datos para fomar la historia
de la cuidad de Guanajuato. Guanajuato, 1883.
Molins, Jaime. La ciudad única. Potosí, 1951.
Mora, José María Luis. México y sus revoluciones. México, 1965.
Mousnier, Roland. Los siglos xvi y xvii. Historia general de las civilizaciones,edited by Maurice Crouzet, vol. 4. Barcelona, 1967.
Ots Capdequí, J.M. El estado español en la Indias. México, 1941.
Quesada, Vicente G. Crónicas potosinas. París, 1890.

287

Ramos, Jorge Abelardo. Historia de la nación latinoamericana. Buenos Aires,
1958.
Ribeiro, Darcy. The Americas and Civilization. New York: Dutton, 1971.
Ruas, Eponina. Ouro Prêto: sua história, seus templos e monumentos. Rio deJaneiro, 1950.
Simonsen, Roberto S. História econômica do Brasil 1500-1820. São Paulo,
1962.
Turner, John Kenneth. Barbarous Mexico. 1910; reprint ed. Austin: Universityof Texas Press, 1969.
Vázquez Franco, Guillermo. La conquista justificada, Montevideo, 1968.
Vicens Vives, J. Historia social y económica de España y América. Barcelona,
1957.
Notes to Chapter 2: King Sugar and Other Agricultural Monarchs, pp. 59133
1. According to investigations by Pernambuco's Instituto joaquim Nabuco dePesquisas Sociais, cited by Kit Sims Taylor, "Brazil's Northeast: Sugar andSurplus Value," Monthly Review, March 1969.
2. René Dumont, Lands Alive (New York: Monthly Review Press, 1965), p.
34.
3. Karl Marx, "On the Question of Free Trade," in The Poverty of Philosophy(New York: International Publishers, 1963), p. 223.
4. As quoted in Tadeusz Lepkowski, Haiti (Havana, 1968), vol. I.
5. Manuel Moreno Fraginals, El ingenio (Havana, 1964).
6. See José Pedro Barrán and Benjamín Nahum, Historia rural del Uruguay
moderno, 1851-1885 (Montevideo, 1967).
7. Enrique Ruiz García, América Latina: anatomía de una revolución(Madrid, 1966).
8. Fidel Castro, "History Will Absolve Me" (Havana, n.d.).
9. Quoted in K.S. Karol, Guerrillas in Power: The Course of the Cuban
Revolution (New York: Hill and Wang, 1970), p. 224.
10. L. Capitán and H. Lorin, El trabajo en América, antes y después de Colón(Buenos Aires, 1948).
11. Adam Smith, The Wealth of Nations, Cannon edition (New York: Modern
Library, 1937), p. 591.

288

12. Daniel P. Mannix, in collaboration with Malcolm Cowley, Black Cargoes:
A History of the Atlantic Slave Trade, 1518-1865 (New York: Viking,1962), p. 22,
13. Quoted in ibid., p. 48.
14. For documentation of this information, see Eric Williams, Capitalism andSlavery (Chapel Hill: University of North Carolina Press, 1944).
15. Philip Reno, The Ordeal of British Guiana (New York: Monthly Review
Press, 1964), p, 4.
16. Décio de Freitas, "A guerra dos escravos," unpublished manuscript.
17. Esteban Montejo, The Autobiograpby of a Runaway Slave, ed. Miguel
Barnet (New York: World Publishing, 1969), pp. 44 and 45.
18. Roberto C. Simonsen, História económica do Brasil, 1500-1820 (SãoPaulo, 1962).
19. Moreno Fraginals, El ingenio.
20. Quoted in Rodolfo Teófilo, Historia da sêca do Ceará, 1877-1880 (Rio deJaneiro, 1922).
21. Agence France Presse, 21 April 1970.
22, Aurélio Pinheiro, A margem do Amazonas (São Paulo, 1937).
23, Domingo Alberto Rangel, El proceso del capitalismo contemporàneo en
Venezuela (Caracas, 1968).
24. ECLA, Economic Survey of Latin America, 1969 (New York: United
Nations, 1970).
25. José Carlos Mariátegui, Seven Interpretive Essays on Peruvian Reality(Austin and London: University of Texas Press, 197 1).
26. OAS, Inter-American Committee for Agricultural Development, Peru:
Land Tenure Conditions and Socio-Economic Development of theAgricultural Sector (Washington, 1966).
27. Quoted in Mario Arrubla, Estudios sobre el subdesarrollo colombiano(Medellín, 1969).
28. Data from Banco Central, Instituto Brasileiro do Café, and the United
Nations Food and Agricultural Organization. See Fator (Rio de Janeiro),
November-December 1968.
29. According to a Federal Trade Commission investigation, cited in Cid
Silveira, Café: un drama na economia nacional (Rio de Janeiro, 1962).
30. ECLA, El comercio internacional y el desarrollo de América Latina(México/Buenos Aires, 1964).

289

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32. Luis Eduardo Nieto Arteta, Ensayos sobre la economia colombiana(Medellin, 1969).
33. United Nations, Analysis and Projections of Economic Development, vol.
III, in Economic Development of Colombia (New York, 1957).
34. Germán W. Rama, "Educación y movilidad social en Colombia," Eco(Bogotá), December 1969.
35. William Howard Taft, as quoted in Gregorio Selser, Diplomacia, Garrote yDólares en América Latina (Buenos Aires: Editorial Palestra, 1962), pp.
46-47; retranslated from the Spanish.
36. Quoted in Leo Huberman, Man’s Worldy Goods (New York: Monthly
Review Press, 1952), p. 265.
37. Ibid.
38. Miguel Angel Asturias, The Green Pope (New York: Delacorte, 1971), pp.
134-35.
39. Miguel Angel Asturias, Strong Wind (New York: Delacorte, 1968), p. 47.
40. John Dos Passos, The 42nd Parallel (New York: Harper & Brothers, 1930),
p. 252.
41. William Krehm, Democracia y tiranías en el Caribe (Buenos Aires, 1959).
42. Speech to the American Booksellers Association, Washington, D.C., 10
June 1963, cited in David Wise and Thomas B. Ross, The Invisible
Government (New York: Random House, 1964), p. 166.
43. J.P. and W.P. Robertson, Letters on Paraguay (London: John Murray,1838).
44. John Kenneth Turner, Barbarous Mexico (1910; reprint ed., Austi n:
University of Texas Press, 1969), p. 219.
45, Ibid., P. 223.
46. Ibid., p. 225.
47. John Womack, Jr., Zapata and the Mexican Revolution (New York:
Vintage, 1968), p. 127.
48. Ibid., pp. 228-29.
49. Fernando Carmona, El drama de América Latina: el caso de México
(México, 1964).
50. Edmundo Flores, "Adónde va la economía de México?" Comercio exterior(México), January 1970.

290

51. Rodolfo Stavenhagen, Fernando Paz Sánchez, Cuauhtémoc Cárdenas, andArturo Bonilla, Neolatifindismo y explotación: de Emiliano Zapata aAnderson Clayton & Co. (México, 1968).
52. Carlos Fuentes, The Death of Artemio Cruz (New York: Farrar Straus,1964).
53. D.F. Maza Zavala, Explosión demogràfica y crecimiento economico(Caracas, 1970).
54. Paul Bairoch, Diagnostic de l’évolution économique du Tiers Monde,
1900-1966 (Paris, 1967).
55. Instituto de Economía de la Universidad del Uruguay, El proceso
económico del Uruguay: contribución al estudio de su evolución yperspectivas (Montevideo, 1969).
56. Quoted in Dardo Cúneo, Comportamiento y crisis de la clase empresaria(Buenos Aires, 1967).
57. ECLA, Economic Survey of Latin America, 1964 and 1966, andECLA/FAO Agricultural Division in collaboration with the Inter-American
Development Bank, El uso de firtilizantes en América Latina (Santiago deChile, 1966).
58. Darcy Ribeiro, The Americas and Civilization (New York: Dutton, 1971),
p. 211.
Additional Bibliography for Chapter 2
Aguilar Monteverde, Alonso, and Carmona, Fernando. México: riqueza ymiseria. México, 1968. Bagú, Sergio. Economia de la sociedad colonial:
ensayo de historia comparada de América Latina. Buenos Aires, 1949,
BaltraCortés,Alberto.

Problemasdelsubdesarrollo

económico

latinoamericano. Buenos Aires, 1966. Banco Cafetero. La industria
cafetera en Colombia. Bogotá, 1962,
Carneiro, Edison. 0 quilombo dos Palmares. Rio de Janeiro, 1966.
de Castro, Josué. The Geography of Hunger. Boston: Little Brown, 1952,de la Torre, Nelson. Evolución económica de La Banda Oriental. Montevideo,
1967.
-. Estructura económico-social de la Colonia. Montevideo, 1968.
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de Oliveira, Franklin. Revolucióny contrarrevolución en el Brasil. Buenos
Aires, 1965,
Duarte Pereira, Osny, Quem faz as leis no Brasil? Rio de Janeiro, 1966.
Facó, Rui. Cangaceiros e fandticos. Riode Janeiro, 1965.
Flores, Ana Maria. La magnitud del hambre en México. México, 1961..
Furtado, Celso. The Development of Underdevelopment. Berkeley & Los
Angeles: The University of California Press, 1964.
--. The Economic Development of Latin America: A Survey from Colonial
Times to the Cuban Revolution. New York: Cambridge University Press,
1970,-. The Economic Growth of Brazil. Berkeley & Los Angeles: The University ofCalifornia Press, 1963.
-.Um projecto para o Brasil. Rio de Janeiro, 1969.
Galeano, Eduardo. "Los dioses y los diablos en las favelas de Rio." Amaru,
June 1969.
-. Guatemala: Occupied Country. New York & London: Monthly Review
Press, 1969.
-. "Uruguay:

Promise and Betrayal." In Latin America: Reform or

Revolution? edited by James Petras and Maurice Zeitlin. New York:
Fawcett, 1969.
Guzmán Boeckler, Carlos, and Herbert, Jean-Loup. Guatemala: unainterpretación histórico-social. México, 1970.
Guzmán Campos, Germán; Fals Borda, Orlando; Umaña Luna, Eduardo. La
violencia en Colombia: estudio de un proceso social Bogotá, 1963-64.
Harlow, Vincent T. History of Barbados. Oxford, 1926.Inter-American
Committee for Agricultural Development.
Guatemala:Land Tenure Conditions and Socio-Economic Development of

the Agricultural Sector. Washington, 1965.
Jenks, Leland H. Our Cuban Colony. New York: Vanguard Press, 1928.
Julien, Claude. America’s Empire. New York: Pantheon, 1971.
Kirkland, Edward C. A History of American Economic Life. 1932; reprint ed.
New York: Appleton, 1969.
Monbeig, Pierre. Pionniers et planteurs de São Paulo. Paris, 1952.
Núñez jiménez, A. Geografia de Cuba. Havana, 1959.

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1970.
Panorama Económico Latinoamericano (Havana), September 1963.
Prado, Caio Jr. Formação do Brasil contemporaneo. São Paulo, 1942.
- Historia económica del Brasil. Buenos Aires, 1960.
Prensa Latina, 13 October 1970. Report by Cuba to the Eleventh Food andAgricultural Organization Regional Conference.
Rangel, Domingo Alberto. Capital y desarrollo. Caracas, 1969.
Reyes Abadie, Washington; Bruschera, Oscar H.; and Melogno, Tabaré. El
ciclo artiguista. Montevideo, 1968.
Rodrigues, Nina. Os africanos no Brasil Rio de Janeiro, 1932.
Schilling, Paulo. "Un nuevo genocidio." Marcha (Montevideo), 10 July 1970.
Seers, Dudley; Bianchi, Andrés; Jolly, Richard; and Wolff, Max. Cuba: The
Economic and Social Revolution. Chapel Hill: The University of North
Carolina Press, 1964.
Selser, Gregorio. Diplomacia, garrote y dólares en América Latina. Buenos
Aires, 1962.
-. Sandino, general de hombres libres. Buenos Aires, 1959.
Silva

Herzog,Jesús.

Breve

historiadelaRevolución

Mexicana.

México/Buenos Aires, 1969.
Torres-Rivas, Edelberto. Interpretación del desarrollo social centroamericano.
Santiago de Chile, 1969.
Trías, Vivian. Reforma agraria en el Uruguay. Montevideo, 1962.
United Nations Food and Agricultural Organization. Yearbook of Production,
1965.
Wettstein, Germán, and Rudolf, Juan. "La sociedad rural." Nuestra Tierra(Montevideo), no. 16 (1969).
Notes to Chapter 3: The Invisible Sources of Power, pp. 134-70
1. Philip Courtney, paper presented to the Second International Congress on
Savings and Investment, Brussels, 1959.
2. Parliamentary Investigation Commission report of the sale of Brazilian
land to physically or juridically foreign persons, Brasilia, 3 June 1968.
3. Correio da Manhã (Rio de Janciro), 30 January 1968.
4. Quoted in Emilio Romero, Historia económica del Perú (Buenos Aires,
1949).

293

5. Oscar Berúdez, Historia del salitre desde sus origenes hasta la Guerra delPacifico (Santiago de Chile, 1963).
6, Hernán Ramírez Necochea, Balmaceda y la contrarrevolución de 1891
(Santiago de Chile, 1969).
7. Sergio Almaraz Paz, El poder y la caida: el estaño en la historia de
Bolivia (La Paz/Cochabamba, 1967).
8. Almaraz Paz, Réquiem para una república (La Paz, 1969).
9. "Immovable Mountains," Fortune, April 1965, p. 63,
10. Quoted in Mário Pedrosa, A opção brasileira (Rio de Janeiro, 1966).
11. New York Times, 3 April 1964.
12. According to the daily 0 estado de São Paulo, 4 May 1964.
13. Eugene Methvin in Selecciones del Reader’s Digest, December 1966.
14. According to data published by the Organization of Petroleum ExportingCountries and quoted in Francisco Mieres, El petróleo y la problemática
estructural venezolana (Caracas, 1969).
15. Harvey O'Connor, World Crisis in Oil (New York: Monthly Review Press,
1962), p. 112.
16. Jesús Silva Herzog, Historia de la expropiación de las empresas petroleras(México, 1964).
17. See Conjuntura econômica (Rio de janeiro), no. 9, 1970, for a list of thefifty biggest enterprises; Petrobras heads the list.
18. Correio da Manhã, February 19, 1967, published a long excerpt from thereport.
19. Statement by Márcio Leite Cesarino, an engineer, in Correio da Manhã, 28January 1967.
20. O'Connor, Worrd Crisis in Oil p. 172.
21. René Zavaleta Mercado, Bolivia: el desarrollo de la conciencia nacional(Montevideo, 1967).
22. Quoted in Guarania (Buenos Aires), November 1934.
23. NACLA Newsletter (New York), February 1969. The Newsletter publisheda photostat of this letter, taken from the Truman Library.
24. Marcelo Quiroga Santa Cruz, quoted in Revista jurídica (Cochabamba),
special edition, 1967.
25. See Richard N. Goodwin, "Letter from Peru," New Yorker, 17 May 1969.
26. Time (Latin American edition), I 1 September 1953.

294

Additional Bibliography for Chapter 3
Alameda Ospina, Raúl. Esquina (Bogotá), 1968.
Alves, Hermano. "Aerofotogrametria." Correio da Manhã (Rio de Janciro), 8
June 1967.
Araujo, Orlando. Operación Puerto Rico sobre Venezuela. Caracas, 1967.
Baran, Paul A. and Sweezy, Paul M. Monopoly Capitat New York: Monthly
Review Press, 1966.
Brito, Federico. Venezuela siglo XX. Havana, 1967.
Cademartori, josé. La economia chilena. Santiago de Chile, 1968.
Duarte Pereira, Osny Ferro e indepêndENcia: um desafio à dignidad nacional
Rio de Janeiro, 1967.
ECLA. Economic Survey of Latin America 1969. New York/Santiago de Chile,
1970.
Faicón Urbano, M. A. Desarrollo e industrialización de Venezuela. Caracas,
1969.
Geyer, Georgie Anne. "Seized U.S. Oil Firm Made Napalm." New York Post, 7
April 1969,
Julien, Claude. America’s Empire. New York: Pantheon, 1971.
Krehm, William. Democracia y tiranías en el Caribe. Buenos Aires, 1959.
Lieuwen, Edwin. The United States and the Challenge to the Security af Latin
America. Columbus: Ohio State University Press, 1966.
Magdoff, Harry. The Age of Imperialism. New York: Monthly Review Press,
1969.
Maza Zavala, D. F.; de la Plaza, Salvador; Mejía, Pedro Esteban; and Montiel
Ortega, Leonardo. Perfiles de la economia venezolana. Caracas, 1964.
Mariátegui, José Carlos. Seven Interpretive Essays on the Peruvian Reality.
Austin and London: University of Texas Press, 197 I.
O'Connor, Harvey. The Empire of 0il. New York: Monthly Review Press, 1955.
Quintero, Rodolfo. La cultura del petróleo. Caracas, 1968.
Ramírez Necochea, Hernán. Historia del imperialismo en Chile. Santiago deChile, 1960.
Rangel, Domingo Alberto. El proceso del capitalismo contemporáneo en
Venezuela, Caracas, 1968.
Reno, Philip. "Aluminum Profits and Caribbean People." Monthly Review,
October 1963.
-. The Ordeal of British Guiana. New York: Monthly Review Press, 1964.

295

Samhaber, Ernst. Sudamérica, biografia de un continente. Buenos Aires, 1946.
Schilling, Paulo R. Brasil para extranjeros. Montevideo, 1966.
Siekman, Philip. "When Executives Turn Revolutionaries." Fortune, July 1964.
Stacchini, José. Mobilização de auddcia. São Paulo, 1965.
Suttie, R.I, "Copper Substitution." In Finance and Development.Washington,
D.C.: International
Bank for Reconstruction and Development, June 1969.
Tanzer, Michael. The Political Economy of international Oil and theUnderdeveloped Countries. Boston: Beacon Press, 1969.
Trías, Vivian, Imperialismo y petróleo en el Uruguay. Montevideo, 1963.
Uslar Pictri, Arturo. "Tiene un porvenir la juventud venezolana?"
CuadernosAmericanos (Mexico), March-April 1968.
Vera, Mario and Catalán, Elmo. La encrucijada del cobre. Santiago deChile 1965.
Notes to Chapter 4: Tales of Premature Death, pp. 173-204
1 . Letter from Canning to Lord Grenville, as quoted in William W.
Kaufmann, British Policy and the Independence of Latin America, 18041828 (New Haven: Yale University Press, 1951), p. 178.
2. Manfred Kossok, El Virreinato del Rio de la Plata: su estructura
económico-social (Buenos Aires, 1959).
3. H.S. Ferns, Britain and Argentina in the Nineteenth Century (Oxford:
Clarendon Press, 1960), p. 11.
4. Alexander von Humboldt, Political Essay on the Kingdom of new Spain(London, 1811), Book IV, Chapter XII
5. Caio Prado Jr., Historia económica del Brasil (Buenos Aires, 1960).
6. The University Society, Bolivia en el primer centenario de su
independencia (La Paz, 1925).
7. Sir Woodbine Parish, Buenos Ayres and the Provinces of the Rio de laPlata (London: John Murray, 1839), p. 338.
8. Paulo Schilling, Brasil para extranjeros (Montevideo, 1966).
9. Gustavo Beyhaut, Raíces contempordneas de América Latina (Buenos
Aires, 1964).
10. Hernán Ramírez Necochea, Historiadel imperialismo en Chile (Santiago
de Chile, 1960).

296

11. Karl Marx, "On the Question of Free Trade," in The Poverty of Philosopby(New York: International Publishers, 1963), p. 223.
12. Luis Chávez Orozco, La industria de transforrmción mexicana, 1821-1867.
Colección de documentos para la historia del comercio exterior de México,Vol. 7 (México: Banco Nacional de Comercio Exterior, 1962).
13. Alonso Aguilar Monteverde, Dialéctica de la economía mexicana (México,1968).
14. Banco Nacional de Comercio Exterior, Colección, Vol. 3.
15. Dardo de la Vega Díaz, La Rioja Heroica (Mendoza, 1965).
16. Literal translation. (Trans.)
17. Quoted in Miron Burgin, The Economic Aspects of Argentine Federalism,
1820-1852 (Cambridge, MA: Harvard University Press, 1946), p. 141.
18. Juan Alvarez, Las guerras civiles argentinas (Buenos Aires, 1912).
19. John F. Cady, La intervención extranjera en el Rio de la Plata (Buenos
Aires, 1943).
20. Vivian Trías, Juan Manuel de Rosas (Montevideo, 1970).
21. SpeechbyGervasioA.

dePosadas,

cited

in

Dardo

Cúneo,

Comportamiento y crisis de la clase empresaria (Buenos Aires, 1967).
22. Domingo Faustino Sarmiento, Facundo (Buenos Aires, 1952).
23. Mario Marguls, Migración y marginalidad en la sociedad argentine(Buenos Aires, 1968).
24. Pablo Neruda, Obras completes, vol. I (Buenos Aires, 1967), section
entitled "La Arena traicionada. "25. Jorge Abelardo Ramos, Historia de la nación latinoamericana (Buenos
Aires, 1968).
26. National Technical Planning Secretariat, Plan nacional de desarrollo
económico y social (Asunción, 1966).
27. Quoted in R. Scalabrini Ortiz, Política británica en el Rio de la Plata(Buenos Aires, 1940).
28. Celso Furtado, The Economic Growth of Brazil (Berkeley & Los Angeles:
University of California Press, 1963),p. 117.
29. Robert Schnerb, Le XlXe. Siècle: l’apogée de l’expansion européenne,
1815-1914 (Paris, 1968).
30. J. Eduardo Retondo, El bosque y la industria forestal en Santiago delEstero (Santiago del Estero, 1962).

297

31. Quoted in Andre Gunder Frank, Capitalism and Underdevelopment in
Latin America (New York and London: Monthly Review Press, 1967), p.
164, and retranslated from the Spanish.
32. Edward C. Krkland, A History of American Economic Life (1932; reprinted., New York: Appleton, 1969).
33. Furtado, Economic Growtb of Brazil, p. 109.
34. Ralph Waldo Emerson,"'The American Scholar," in The Complete Essays
and Other Writings of Ralf Waldo Emerson (New York: Modem Library,1950), pp. 62-63.
35. See C. Vann Woodward, Origins of the New South, 1879-1913 (Baton
Rouge: Louisiana State University Press, 1951).
Additional Bibliography for Chapter 4
Alberdi, Juan Bautista. Historia de la guerra del Paraguay. Buenos Aires,
1962.
Alen Lascano, Luis C. Imperialismo y comercio libre. Buenos Aires, 1963.
Bazán, Armando Raúl. "Las bases sociales de la montonera." . Revista dehistoria Americana y argentine (Mendoza), 1962./1963.
Bazant, Jan. "Estudio sobre la productividad de la industria algodonera
mexicana en 1843-1845." In Coleción de documentos para la historia delcomercio exterior de México. México: Banco Nacional de Comercio
Exterior, 1962.
Box, Pelham Horton. Los orígenes de la Guerra de la Triple Alianza. Buenos
Aires/Asunción, 1958.
Busaniche, José Luis. Rosas visto por sus contemporáneos. Buenos Aires,
1955.
Cardozo, Efraím. El imperio del Brasil y el Rio de la Plata, Buenos Aires,
1961.
Chaves, Julio César. El Presidente López. Buenos Aires, 1955.
Levene, Ricardo. "Introduction" to Docuntentos para la historia argentine(1919). Buenos Aires, 1962.
Manchester, Alan K. British Preeminence in Brazil: Its Rise and Fall. Chapel
Hill: University of North Carolina Press, 1933.
Mitre, Barrolomé and Gómez, Juan Carlos. Cartas polémicas sobre la guerradel Paraguay. Buenos Aires, 1940.
Normano, J. F. Evolução económica do Brasil. Sdo Paulo, 1934.

298

Ortega Peña, Rodolfo and Duhalde, Eduardo Luis. Felipe Varela contra elImperio Británico. Buenos Aires, 1966.
Pereyra, Carlos. Francisco Solano López y la guerra del Paraguay. Buenos
Aires, 1945.
Pérez Acosta, Juan F. Carlos Antonio López, obrero máxzmo: laboradministrative y constructive. Asunción, 1948.
Pierce, H. H. The Railroads of New York: A Study of Government Aid, 18261875. Cambridge: Harvard University Press, 1953.
Ramírez Necochea, Hernán, Antecedentes económicos de la independencia deChile. Santiago de Chile, 1959.
Rippy, J. Fred. British Investments in Latin America: A Case Study in the
Operation Of Private Enterprise in Retarded Regions, 1822-1949,
Minneapolis: University of Minnesota Press, 1959.
Romero, Emilio. Historia económica del Perú. Buenos Aires, 1949.
Rosa, José María. La guerra del Paraguay y las montoneras argentinas.
Buenos Aires, 1965.
Santos Martinez, Pedro, Las industries durante el Virreinato, 1776-1810.
Buenos Aires, 1969,
Véliz, Claudio. "La mesa de tres patas." Desarrollo económico (Santiago deChile), September 1963,
Notes to Chapter 5: The Contemporary Structure of Plunder, pp. 205-61
1. OAS Secretariat-General, El financiamiento externo para el desarrollo dela América Latina (Washington, 1969); restricted document of the Sixth
Annual Meeting of the Inter-American Economic and Social Council at the
Ministerial Level.
2. J.-J. Servan-Schreiber, The American Challenge (New York: Atheneum,1968), p. 3.
3. Quoted in Alfredo Parera Dennis, "Naturateza de las relaciones entre lasclases dominantes argentinas y las metrópolis," Fichas de investigación
económica y social (Buenos Alres), December 1964.
4. Ministry of Planning and Economic Coordination, A industrialização
brasileira: diagnóstico e perspectivas (Rio de Janeiro, 1969).
5. Maria de Conceição Tavares, 0 processo de substituição de importaçôes,como modelo de desenvolvimento recente na América Latina (Rio deJaneiro: ECLA/ILPES, n.d.),299

6. Reply of the Minister of Economic Affairs to a representative of themagazine Visión, 27 November 1953; quoted in Parera Dennis,"Naturaleza de las relaciones."
7. Quoted in Octavio Ianni, 0 colapso do populismo no Brasil (Rio de Janeiro,
1968).
8. Fernando Henrique Cardoso, Politica e desenvolvimento em sociedades
dependentes: ideologies do empresariado industrial argentine e brasileiro(São Paulo, 1968).
9. For irrefutable examples, see Ricardo Lagos Escobar, La concentratión delpoder económico. Su teoría. Realidad chilena (Santiago de Chile, 1961);
and Vivian Trías, Reforma agraria en el Uruguay (Montevideo, 1962).
10. Alonso Aguilar Monteverde, in Alonso Aguilar Monteverde et al., El
milagro mexicano (Mixico, 1970).
11. See Dardo Cúneo, Comportamiento y crisis de la clase empresaria (Buenos
Aires, 1967).
12. Speech by Minister Hé1io Beltrão to the Asociación Comercial de Rio deJaneiro, as reported in Correio do Povo, May 24,1969.
13. ECLA/BNDE, Quince años de politica económica en el Brasil (Santiago
de Chile, 1965).
14. Paulo Schilling, Brasil para extranjeros (Montevideo, 1966).
15. Maurício Vinhas de Queiroz, "Os grupos multibilionarios," Revista do
Instituto de Ciências Sociais (Universidade Federal do Rio de Janeiro),
January 1965.
16. New York Times, 19 January 1969, p. 12E.
17. Sergio Nicolau, La inversión extranjera directa en los países de la ALALC(México, 1968).
18. ECIA, Economic Survey of Latin America 1968 (New York: United
Nations, 1969).
19. Visión, 3 February 1967.
20. José Luis Ceceña, Los monopolios en México (México, 1962).
21. 0 Globo, 25 February 1969.
22. Fernando Gasparian in Correio da Manhã 1 May 1968.
23. Journal of Commerce, International Banking Survey, 25 February 1968.
24. Ministry of Planning and Economic Coordination, Programa de AçãoEconômica do Govêrno, Rio de Janeiro, November 1964.
25. International Commerce, 24 April 1967, p. 26.

300

26. V.I. Lenin, Imperialism: The Highest Stage of Capitalism in Selected
Works, Vol. V (New York, n.d.), p. 56.
27. Speech to the AFL-CIO Congress in Miami, as reported in the New YorkTimes, 8 December 1961, p.18.
28. ECLA, Estudio económico de América Latina 1968 (New York/Santiago
de Chile, 1969).
29. Fichas de investigación económica y social June 1965.
30. International Commerce, 3 February 1963, p. 2 1.
31. Ibid., 17 July 1967, p. 10.
32. This document was published in the daily Ya (Montevideo), 28 May 1970.
33. Panorama (Centro de Estudios y Documentación Sociales, México),November-December 1965.
34. Irving Pflaum, Arena of Decision: Latin American Crisis (Englewood
Cliffs, NJ: Prentice Hall, 1964); John Gerassi, The Great Fear in Latin
America (New York: Macmillan, 1965).
35. Georgie Anne Geyer, in Miami Herald, 24 December 1966.
36. Statement to a House of Representatives subcommittee, cited in Nelson
Werneck Sodré, História militar do Brasil (Rio de Janeiro, 1965).
37. Frederick B. Pike, The Modern History of Peru (New York: Praeger, 1967),
p. 319,38. Hickenlooper Amendment, Section 620 of the Foreign Assistance Act.
39. International Commerce, 10 April 1967, p. 44.
40. NACLA Newsletter (New York), May-June 1970.
41. ADELA Annual Report, quoted in ibid.
42. Harry Magdoff, The Age of imperialism (New York and London: Monthly
Review Press, 1968), pp. 145-46.
43. World Bank, IFC, IDA, Policies and Operations (Washington, D.C., 1962).
44. Eugene R. Black, "The Domestic Dividends of Foreign Aid," Columbia
Joournal of World Business, no. 1, 1965, p. 23.
45. ECLA, Fconomic Survey of Latin America, 1968, 1969.
46. Ibid.
47. Pablo González Casanova, La democracia en Mexico (México, 1965).
48. Marco D. Pollner, in INTAL/BID, Los empresarios y la integración deAmérica Latina (Buenos Aires, 1967).
49. Central Unica de Trabajadores de Chile, América Latina, un rnundo que
ganar (Santiago de Chile, 1968).

301

50. Arghiri Emmanuel, Unequal Exchange (New York: Monthly Review Press,
1972).
51. Samir Amin, L’accumulation à l‘échelle mondiale (Paris, 1970).
52. New York Times, 3 April 1968.
53. OAS Secretariat-General, El financiamiento externo.
54. Miguel S. Wionczek, "La inversión extranjera privada en México:
problemas y perspectives," Comercio exterior (México), October 1970.
55. Aldo Ferrer in INTAL/BID, Los empresarios.
56. Jornal do Comercio (Rio de janeiro), 23 March 1950.
57. Celso Furtado, Um projeto para o Brasil (Rio de Janeiro, 1968).
58. International Commerce, 24 April 1967.
59. Ismael Viñas and Eugenio Gastiazoro, Economia y dependencia, 19001918 (Buenos Aires, 1968).
60. Antonio Garcia, "Las constelaciones del poder y el desarrollo
latinoamericano," Comercio exterior, November 1969.
61. Guillermo Bernhard, Los monopolies y la industria ftigorifica (Montevideo,1970).
62. Statement made by President Salvador Allende as reported in Agence
France Presse dispatch, 12 December 1970.
63. La Rzón (Buenos Aires), 2 March 1970,
64. "Resultados de indústria automobilística," special study in Conjunturaeconômica, February 1969.
65. NACL,4 Newsletter, April-May 1969.
66. Miguel S. Wionczek, "La trasmisión de la tecnología a los países endesarrollo:proyecto de un estudio sobre México," Comercio exterior, May
1968.
67. Manuel Sadosky, "América Latina y la computación," Gaceta de la
Universidad (Montevideo), May 1970.
68. Quoted in Gustavo Lagos et al., Las inversiones multinacionales en eldesarrollo y la integración de América Latina (Bogota, 1968).
69. Raúl

Prébisch,"La

cooperacióninternacionaleneldesarrollo

latinoamericano," Desarrollo (Bogotá), January 1970.
70. Leo Fenster in The Nation, 2 July 1969.
71. F.S. O'Brien, The Brazilian PopuLation and Labor Force in 1968, Ministryof Planning and Economic Coordination document for internal discussion.

302

72. ECLA, Estudio económico de América Latina, 1967 (New York/Santiago
de Chile, 1968).
73. Ibid.
74. Raimundo Ongaro, "Letter from Prison," De Frente (Buenos Aires), 25
September 1969.
75. ECLA, Estudio sobre la distribución del ingreso en América Latina(Santiago de Chile, 1967).
76. Vinhas de Queiroz, "Os grupos multibilionarios."
77. Lagos et al., Las inversiones multinacionales.
78. "LAFTA: Key to Latin America's 200 Million Consumers." Businessinternational, June 1966.
79. "A Latin-American Common Market Makes Common Sense--for U.S.
Business Too," Fortune, June 1967, p. 56.
80. Raúl Prébisch, "Problemas de la integración económica," Actualidades
económicas financieras (Montevideo), January 1962.
81. Raúl Prébisch et al., Proposiciones para la creación del Mercado Común
Latinoamericano, document presented to President Frei in 1966.
82. United States Department of State, Office of External Research, The
Multinational Corporation (Washington, D.C., 1969).
83. "LAFTA: Key to Latin America's 200 Million Consumers."
84. Roger Hansen, "Time of Trial for the 'Other' Common Market," Columbia
Journal of World Business (September-October 1967), cited in NACLA
Newsletter, January 1970.
85. Paul N. Rosenstein-Rodan, Reflections on Regional Development, cited in
Lagos et al., Las inversiones multinacionales.
86. LAFTA Permanent Executive Committee, Extraordinary Sessions, Julyand September 1969, Apreciaciones sobre el proceso de integración de la
ALALC [LAFTA] (Montevideo, 1969).
87. Sidney Dell, "Obstacles to Latin American Integration," in The Movement
Toward Latin American Unity, ed. Ronald Hilton (New York:Praeger,1969).
88. LAFTA, La industria automorri.z en la ALALC [LAFTA] (Montevideo,1969).
89. Vivian Trias, Imperialismo y geopolitica en América Latina (Montevideo,1967).

303

90. Golbery do Couto e Silva, Aspectos geopoliticos do Brasil (Fio de Janeiro,
1952).
91. Gregorio Bustamante Maceo Historia militar de El Salvador (San Salvador,
1951).
92. ECLA, Los fletes maritimos en el comercio exterior de América Latina(Santiago de Chile, 1968).
93. Enrique Angulo H., in Integración de América Latina: experiencias yperspectives (México, 1964).
94. Sidney Dell, Latin American Common Market (New York: Oxford
University Press, 1966).
Additional Bibliography for Chapter 5
Aguilar Monteverde, Alonso, and Carmona, Fernando. México, riqueza ymiseria. México, 1968.
Baptista Gumucio, Mariano, et al. Guerrilleros y generates sobre Bolivia.
Buenos Aires, 1968.
Baran, Paul A., and Sweezy, Paul M. Monopoly Capital. New York: Monthly
Review Press, 1966.
Bourricaud, François; Bravo Bresani, Jorge; Favre, Henri; and Piel, Jean. La
oligarquía en el Perú. Lima, 1969.
Canelas, Amado. Radiografia de la
Alianza para el atraso. La Paz. 1963.
Ceceña, José Luis. México en la órbita imperial. México, 1970.
Cheprakov, V.A. El capitalismo mono-polista de estado. Moscow, n.d.
ECLA. El financiamiento externo de América Latina. New York/Santiago deChile:United Nations, 1964.
Frank, Andre Gunder. Capitalism and Underdevelopment in Latin America.
New York and London: Monthly Review Press, 1967.
García Lupo, Rogelio. Contra la ocupación extranjera. Buenos Aires, 1968,
Gunther, John. Inside South America. New York: Harper & Row, 1967.
Instituto Latinamericano de Planificación Económica y Social. La brecba
commercial y la integración Latinoamericana. México/Santiago de Chile,
1967.
Inter-American Development Bank. Annual Report, 1969. Washington, 1970.
Jalée, Pierre. The Pillage of the Third World. New York and London: Monthly
Review Press, 1968.

304

Lichtensztejn, Samuel and Couriel, Alberto. El FMI y la crisis económica
nacional Montevideo, 1967.
Lízano F., E. "El problema de las inversiones extranjeras en Centro América."
Revista del Banco Central (Costa Rica), September 1966.
Maggiolo, Oscar J. In Hucia una politica cultural autónoma para América
Latina. Montevideo, 1969.
Martins, Luciano. Industrializaçao,burguesia nacional e desenvolvimento.Rio
de Janeiro, 1968.
Quijano, Carlos. "Las victimas del sistema." Marcba (Montevideo), 23 October
1970.
Romanova, Z. La expansión económica de Estados Unidos en América Latina.
Moscow, n.d.
Trias, Vivian. La crisis del imperio.Montevideo, 1970.
Urquidi, Victor L. In Obstacles to Change in Latin America, edited by Claudio
Vé1iz, et al. New York: Oxford University Press, 1965.
Notes to Part III: Seven Years After pp. 265-87
1. Interview with Jean-Pierre Clerc, Le Monde (Paris), 8-9 May 1977.
2. The Nation (New York), 28 August 1976.
3. The crime occurred in Washington on 21 September 1976. Various
Uruguayan, Chilean, and Bolivian political exiles had previously beenmurdered in Argentina. Most noteworthy among them were General Carlos
Prats, key figure in the Allende government's military setup, whose car
blew up in a Buenos Aires garage on 27 September 1974; General Juan
José Torres, who had headed a short-lived anti-imperialist government in
Bolivia and was riddled with bullets on 15 June 1976; and the Uruguayan
legislators Zelmar Michelini and Héctor Gutiérrez Ruiz, kidnapped,
tortured, and murdered in Buenos Aires between 18 and 21 March 1976.
4. The agrarian reform, started under the Christian Democratic governmentand deepened by Popular Unity, was also destroyed. See Maria Beatriz de
Albuquerque W., "La agriculture chilena: modernización capitalists oregresión a formas tradicionales? Comentarios sobre la contra-reforma en
Chile," Ibero-Americana, vol. 6, no. 2, 1976, Institute of Latin American
Studies, Stockholm.
5. Three months later there were elections in the university. They were theonly elections remaining. The dictatorship's candidates got 2.5 percent of305

the university votes. So to defend democracy, the dictatorship added
substantially to the jail population and handed over the university to the 2.5
percent.
6. Veja no. 444 (São Paulo), 9 March 1977.
7. U.S. House of Representatives, Committee on Appropriations, Foreign
Appropriations for 1963, Hearings 87th Congress, 2nd Session, Part 1.
8. Déclaration de Lourdes (October 1976).
9. Le Nouvelliste (Port-au-Prince, Haiti), 19-20 March 1977. Data cited by
Agustin Cueva in El desarralle del capitalismo en América Latina (México:
Siglo XXI, 1977).
10. Ida May Mantel, Sources and Uses of Funds for a Sample of MajorityOwned Foreign Affiliates of U.S. Companies, 1966-1972, U.S. Dept. ofCommerce, Survey of Current Business, July 1975.
11. United Nations, Economic Commission for Latin America, El desarrollo
económico y social y las relaciones externas de América Latina (Santo
Domingo, Dominican Republic), February 1977.
12. Money, which has its little wings, travels without a passport. A sizable partof the profits generated by the exploitation of our resources escapes to theUnited States, Switzerland, Federal Republic of Germany, or othercountries where it performs a circus somersault and returns to our shores
converted into loans.
13. Agustín Cueva, El desarrollo.
14, Ibid.
15. United Nations, ECLA, El desarrollo económico.
16. UNCTAD, The Marketing and Distribution System for Bananas,
December 1974.
17. "Reflexiones sobre la desnutrición en México," Comercio Exterior, Banco
Nacional de Comercio Exterior, S.A., Vol. 28, no. 2 (México), February
1978.
18. Roger Burbach and Patricia Flynn, "Agribusiness Targets Latin America,"
NACLA Report, Vol. 13, no. I (New York), January-February 1978.
19. Ibid.
20. Data from trade union and journalism sources published in Uruguay
Informations, nos. 21 and 25 (Paris).
21. United Nations, ECLA, El desarrollo económico.

306

22. Ibid.
23. ILO, Empleo, crecimiento y necesidades esenciales (Geneva, 1976).
24. United Nations, ECLA, El desarrollo económico.
25. In Uruguay the inquisitors have modernized themselves: an odd mixture of
Middle Ages and capitalist business sense. The military don't burn books:
now they sell them to paper factories, which shred and convert them into
pulp for return to the consumer market. It isn't true that Marx is notavailable to the public. True, not in the form of books, but in the form of
paper napkins.
26. Press conference of President Aparicio Méndez, 21 May 1977 in Paysandú.
"We are saving the country from the tragedy of political passion," said thePresident, "Good folk don't talk about dictatorships, don't think about
dictatorships, and don't claim human rights."307

INDEX
Abbink, John, 241
Abercromby, Ralph, 174
Acevedo, Manuel Antonio, 184
ADELA (investment consortium), 233-34
Africa, 1 5, 28. See also Slave trade
Agency for International Development (AID),221,230
Agrarian reform: Artigas uprising, 115-20; Guatemala, 113-15; Paraguay, 195;
Zapata, 120-25 Agricultural products, 59-133. See also specific products
Aguilar, Alonso, 125, 180, 216n
Alamin, Lucas, 37, 179-82
Allende, Salvador, 130, 144, 145,272-73, 274
Alliance for Progress, 5, 7, 127, 152, 228, 230,231,233
Aluminum, 134, 137, 145. See also Bauxite
Aluminum Company of America (Alcoa), 137
Alvarado, Pedro de, 16, 18, 19
Alvim, Panasco, 195
Amado, Jorge, 93n
Amazonia. See Brazil
American Coffee Corporation, 96
American Cordage Trust, 121
American Smelting and Refining, 146, 147
Amin, Samir, 239
Anaconda (Wire and Cable), 144, 146, 147
ANCAP (Uruguayan state refinery), 160-61
Andean Group, 244
Anderson, Clayton and Company, 95, 96,125
Angola, 54
Animal products, 69, 176,177,178, 184

308

Antilles, 15, 28, 38, 62, 86
Arabs, 12, 25
Arbenz Guzmán, Jacobo, 113, 114
Arévalo, Juan José, 113
Argentina, 4, 32, 43, 48, 48n, 61, 128-30, 188, 193-94,199, 210, 226, 246, 271,
275; American aid to, 273; censorship, 284; civil wars, 182-86;
disappearance in, 276; foreign capital, 218; importation of technology, 278;
industrial output, 208; nineteenth century British relations, 177-78, 185;
petroleum, 136, 162; repression in, 283; strikes, 285; textiles, 177; wages
and prices, 279; wheat, 95
Artigas, José,115-20, 124,184,186, 259
Atahualpa, 17, 19Atlantic Oil Company, 161
Aztecs, 18-20, 43-44
Bagú, Sergio, 44, 79
Bahamas, I 1
Bairoch, Paul, 127
Balaguer, Joaquín, 78nBall, George W, 5
Balmaceda, Jose Manuel, 142
Bananas, 94, 100, 107; "bananization," 108-11
Bandeira, Manuel, 136
Bank for International Development, 273
Banking: international, 223-36
Bank of England, 198
Banzer, Hugo, 271
Baran, Paul, 29-30, 226
Barba, Alvaro Alonso, 32-33
Barbados, 59, 60, 62, 65, 82
Barbosa, Horta, 161
Barrientos, René, 136
Batista, Fulgencio, 70, 75, 77, 136
Bauxite, 134, 136, 137. See also Aluminum
Beet sugar, 71
Belaunde Terry, Fernando, 136309

Belgium, 6
Betancourt, Rómulo, 169
Bethlehem Steel Company, 57, 135, 153-54, 156
Birth control. See Family planningBlack, Eugene, 235
Blacks, 28-31, 38; Brazil, 52-55; cotton plantations, 94; religion in Brazil, 86;
sugar plantations, 59-60, 65-67. See also Slaves; Slave trade
Blood: as commodity, 270 Bolfvar, Sim6n, 116, 252, 261,
Bolívia, 6, 22-23, 32, 42, 88n, 188, 25 In, 269-70, 272; agrarian reform, 130;
debt, 277; labor exploitation, 277; minerals, 136; mining industry, 147-53;
nitrates, 140; petroleum, 163-65; textiles, 176
Bonaparte, Napoleon, 66, 173 Bonaparte, Pauline, 66
Bosch, Juan, 78n
Botí, Regino, 73
Bourgeoisie: national capital participation of, 242; role in Latin America of,
208-14, 222
Brazil, 3, 4, 6, 38, 43, 178, 192, 193-94, 206, 207, 208, 210, 211, 212-13, 22223,224,225,226,229,231-32, 272; African cults, 86; agrarian reform, 128;
agricultural exports, 280; cacao, 92-94; coffee, 96-98, 240, 280; cotton, 9496; debt, 276-77; first Portuguese communities, 16; food costs, 64; foreign
capital, 215-19; fruit plantations, 61; gold, 49, 56, 137, 202; importation oftechnology, 278; Indians, 49; iron, 153-56; mining, 52-55; nineteenth
century British relations, 178, 193-94, 199-200; petroleum, 161-62; rubber,
61, 87-91; slavery, 52-55, 86; soil ravagement, 61-65; sugar, 60-62;
textiles, 178; U.S. control of minerals, 135 -39, 153-54; Volkswagen
production in, 269-70; wages and prices, 279-80
Brecht, Bertolt, 274
Britain. See England
British Petroleum (Anglo-Iranian), 158
Brizola, Leone], 154
Bueno do Prado, Bartolomeu, 84
Butler, Smedley D,, 108
Cacao (chocolate), 31,61,79, 80,91-94, 166
Cairú, Viscount de, 202
Caldera, Rafael, 169

310

Calderón, Francisco Garcia, 90n
Calvinism, 24
Cámpora, Héctor, 272
Campos, Roberto, 212, 220n, 225, 228
Canada,95
Canary Islands, 59
Canning, George, 173
Capital: import and export, 225-27. See also Banking; Direct foreign
investments; Loans
Capoche, Luis, 39, 40
Caracas (Venezuela), 61, 91
Carca Indians, 47
Cárdenas, Lázaro, 124, 125, 159-60, 210,211
Cardoso, Fernando Henrique, 213
Cardozo, Efraím, 192
Carpentier, Alejo, 66n
Carranza, Venustiano, 123,124
Carter, Jimmy, 273
Castillo Armas, Rodolfo, 113, 114
Castro, Fidel, 72, 73, 74, 76, 236
Castro, Josué de, 4Catholicism. See Roman Catholicism
Cattle, 65, 91
Censorship, 284
Central America: effects of world market on, 105-7; fruit plantations, 61, 100.
See also specific countries
Central American Common Market, 258
Central Intelligence Agency (CIA), 136-37, 272
Cepeda Samudio, Alvaro, 109n
Cervantes Saavedra, Miguel de, 26-27
Ceylon, 89
Chaco War, 163
Charles II, 39, 80
Charles III, 47
Charles V, 24, 25, 26, 79, 83
Charruas Indians, 47-48

311

Chateaubriand, René, 197
Chile, 3, 6, 32, 42, 178, 21 In; agrarian reform, 130; American aid to Pinochet,273; copper, 136, 141, 144-47, 174; debt, 278-79; nitrates, 140-43;
Pinocher dictatorship, 270-71, 285; poverty, 282; relations with England,
178-79; repression in, 283; textiles, 176; wages and prices, 279
China, 23
Chocolate. See Cacao
Chrome, 134, 137
CIA, 136-37, 272
Cigars, 176, 177
Citibank, 277
Cities: population growth, 284; poverty in, 248-49
Class: role of national bourgeoisie, 208-15, 224; terrorism and state and, 2747 5. See also Labor
Coca (cocaine), 47, 151, 152
Cochineal, 105
Coffee, 61, 79, 80, 88, 209; Brazil, 96, 97-99, 174,240,282; prices, 99-102
Colbert, Jean-Baptiste, 24, 79
Colombia, 42, 48, 100, 211 n, 260; civil war, 102-5; coffee, 98-99, 102; labormarket and unemployment, 105; petroleum, 242; poverty, 282 Columbus,
Christopher, 11, 12, 13-14, 15,48,59
Columbus, Diego, 83
Commodities: transport and delivery system, 260-61
Commodity fetishism: as symbol of power, 271
Common Market, 240
Copper, 1, 134; Chile, 136,141,144-47, 178
Cortés, Hernán, 8, 13, 14, 15, 16, 18-19, 42,43,122
Costa Rica, 97; bananas, 106
Cotton, 61, 79, 80, 94-96, 97
Creole Oil Company, 169
Crowder, Enoch, 70
Cruz, Artemio, 125-26
Cuba, 2, 15n, 54n, 270, 280; African cults, 86; changes in economy, 74-78;
education, 73; minerals, 72; nickel, 136; petroleum, 159; revolution, 72, 76,
159, 224, 234; slave revolts, 84-85; sugar, 67-78

312

Currency:disposal by multinational corporations of, 242
Cuzco (Peru), 19, 20, 44, 47
Dantas, Maneca, 93
Davis, Arthur, 137n
Debt: Latin American external, 276-77
Diamonds, 94, 130, 137; Minas Gerais, 54-55, 56; smuggling, 138
Díaz, Porfirio, 120-21, 122
Díaz del Castillo, Bernal, 13
Directforeign investments, 215-19, 276; International Monetary Fund, 220-23
Disease, 18, 37, 46-47, 49, 50, 54, 58, 63,87,90,98,152
Dominican Republic, 59, 61, 65, 77-78, 83; U.S. Marines, 108
Dos Passos, John, 109
Dow Chemical, 215
Dulles, Allen, 74, 113
Dulles, John Foster, II 4
Dumont, René,15n, 48,64
Dutra, Eurico, 135
Duvalier, Francois, 275
Economic Mission for Latin America (ECLA), See United Nations
Ecuador, 6, 42, 100; agrarian reform, 128; bananas, 61, 110; cacao, 94; poverty,
282
Education: Cuba, 73; higher, 245
Eisenhower, Dwight D., 6, 113, 159
Eisenhower, Milton, 211
Electric Bond and Share, 206, 234, 235 Eliécer Gaitán, Jorge, 103
Elizabeth 1, 26, 80
El Salvador, 6, 97, 98, 107, 1 11 Emerson, Ralph Waldo, 203
Emmanuel, Arghiri, 238
Engels, Frederick, 38
England, 6; Brazilian gold, 55-57; cacao, 93-94; coffee, 105; commerce with
Latin America, 173-75; cotton, 94; exports, 26, 177-78; Industrial
Revolution, 173-74; industry, 60, 173-79; loans to Latin America, 197-200;
Methuen Treaty, 55; nineenth century Argentine relations, 174-78, 185;

313

nineteenth century Brazilian relations, 178, 193-94, 199-200; protectionism,200-4; slave trade, 79-82
Estrada Palma, Tomás, 72
Export-Import Bank (Eximbank), 228, 229
External debt, 276-77
Exxon. See Standard Oil of New Jersey
Family planning, 5, 138
Ferdinand (King of Aragon), 12, 25 Ferré, Pedro, 184
Ferreira Micbado, Simão, 52
Firestone, 270
Flores, Edmurido, 125
Ford, Henry, II, 253
Ford Foundation, 6
Foreign aid: United States, 227-36 Foreign capital. See Direct foreign
investments
Foreign investments. See Direct foreign investments
Fortune, 254
Fraginals, Manuel Moreno, 67
France, 4, 28, 60, 1 36
Francia, Gaspar Rodriguez de, 1 88-89
Francisco Sugar Company, 74
Franco, Francisco, 25
Frank, Andre Gunder, 31-32, 250 Free trade and protectionism, 179-82, 200-4;
IMF and, 220-23; market inequality and, 237-43; nineteenth century, 17582
Frei, Eduardo, 130
Fuentes, Carlos, 125-26
Fuentes, Miguel Ydigoras, 77, 231
Furtado, Celso, 30, 56, 198, 241
Garcia, Antonio, 242
Garcia, Gregorio, 41
Garmendia, Salvador, 170
General Agreement on Tariffs and Trade (GATT), 239
General Motors, 276

314

Ginés de Sepúlveda, Juan, 41
Gold, 1, 11, 13, 14, 15, 18-20, 24, 29, 37, 60, 144; Brazilian, 49, 56, 130, 137;
Mexican exports, 36; Minas Gerais, 51-58; Nicaraguan, 47
Gómez, Juan Vicente, 168
Good Neighbor policy, I I 0- I I
Goodyear, Charles, 88
Gordon, Lincoln, 272
Goulart, Jango, 272
Goulart, João, 135, 212, 217
Grant, Ulysses S., 200, 204
Great Britain. See England
Guadeloupe, 59, 65
Guanajuato (Mexico), 36-37, 60
Guano, 139-41, 174. See also Nitrates
GuaraníIndians, 190n
Guatemala, 7, 19, 77, 112, 206, 231; agricultural exports, 280; bananas, 106,
108; coffee, 97, 98; cotton, 95; Indians, 50; years of violence, 113-15
Guevara, Ernesto Che, 70, 78, 124, 136
Guinea, 83
Gulf Oil Company, 158, 163-64, 166, 168, 268
Guyana (British Guiana), 136-37
Gypsum, 137
Haiti, 2, 6, 12-13. 15, 59, 60, 65, 108; coffee, 97, 98; poverty, 275; revolution,
66; slave settlement, 83; voodoo,86
Hamilton, Alexander, 202
Hancock, Thomas, 88
Hanna Mining Company, 57, 135, 154-56
Harvey, Robert, 141
Hawkins, John, 80
Hearst, William Randolph, 121 n
Hematite, 137
Hemo Caribbean, 270
Henequen, 61, 121
Henry VIII, 26
Hernández Martínez, Maximiliano, 110, 111-12

315Hidalgo, Miguel, 46, 116, 120
Hides, 174, 186
Holland, 56; cacao, 94; Dutch Guiana, 83-84; industry, 60; slave revolts, 83-84;
slave trade, 56, 62, 80 Holy Inquisition, 12, 24
Homestead Act (1862), 131
Honduras, 106, 107, 108, 110; poverty, 282
Huayna Cápaj, 21
Huerta, Victoriano, 122-23
Humboldt, Alexander von, 8, 31, 36-37, 45, 175, 180
Humphrey, George, 154
IMF. See International Monetary FundImperialism: early twentieth century nature of, 205; foreign banking, 223-27;
International Monetary Fund, 220-23; role of national bourgeoisie, 21 5-19,
222; technocracy, 227-36; technology and, 243-47
Incas, 15, 16, 17, 21, 42, 43, 44 Indians, 30, 31, 32, 33, 38-50, 98, 1 1 1; Peru,
116; Veracruz, 19. See also specific Indians
Indigo, 91, 102, 105, 133
Indonesia, 28
Industrialization: labor force, 247-51; and market inequality, 237-43 Industrial
Revolution, 173-74 Inquisition. See Holy Inquisition
Inter-American Committee for Agricultural Development, 96
Inter-American Development Bank (IDB), 152, 160, 228, 229-30
International Bank for Reconstruction and Development (IBRD), 228
International Coffee Agreement, I 00
International Labor Organization (ILO), 282
International Monetary Fund (IMF), 7, 209, 219-23, 273, 277. See also WorldBankInternational Telephone and Telegraph (ITT), 206,233n
Investments. See Direct foreign investments
Iron, 1, 57, 134, 135, 153-56
Isabella (Queen of Castile), 12, 16, 25
Jagan, Cheddi, 136
Jamaica, 14, 59, 66, 82
James, William, 108
Japan, 6, 11316

Jesuit missions, 190
Jesus, Maria Carolina de, 281-83
Jews, 12, 18, 25, 41
Johnson, Lyndon B., 6, 78n, 136, 155, 195,228,231
Keith, Minor, 109
Kennecott Wire and Cable Company, 144, 145
Kennedy, John F., 226n
Kirkland, Edward, 201
Kissinger, Henry, 272
Kruel, Riograndino, 138-39
Labor: exploitation, 277; labor force, 247-57; miners, 147-53; prices andwages, 279-81; strikes, 285 Lacerda, Carlos, 231
Lane, Arthur Bliss, I I I
Language:and political discourse, 266
Latin American Free Trade Area (LAFTA), 252-58
Lead, 136
Leeward Islands, 65, 66
Lenin, V.I,, 205, 226
Letelier, Orlando, 272-73
Lisboa, Antonio Francisco (Aleijadinho), 57-58
List, Friedrich, 179
Loans, 227-29, 232, 234-35; railroads and, 197-200. See also Banking
López, Carlos Antonio, 189
López, Francisco Solano, 189, 192, 193 Louis XIV, 79
McCloy, John J., 235
McKinley, William, 71-72
McNamara, Robert, 5, 273
Magellan, Ferdinand, 14, 16
Magnetite, 137
Malaria, 50, 87
Malaya, 89
Manganese, 134, 135, 154Mann, Thomas, 231

317

Mariátegui, José Carlos, 95, 140, 141
Market:cheap labor for, 275. industrialization and inequality of, 237-43;
monopoly capital and, 267-68; prices and wages, 279-81
Marti, José, 69, 70
Marx, Karl, 28, 65, 180
Mayas, 17, 18, 43, 48, 50, 121
Meat industry, 1, 65, 68, 69
Médicis, Lorenzo de, 14
Melchor de Jovellanos, Gaspar, 118
Melville, Thomas, II 4
Méndez Montenegro, Julio César, 1 12
Mercury, 32, 39, 40, 137
Mexico, 4, 13, 14, 15, 32, 38, 36-37, 4 1, 46, 48, 116, 208, 210, 226; agrarianreform, 120; agricultural exports, 280; cotton, 94, 95, 96; debt, 276-77;
foreign capital, 218-19; importation of technology, 278; petroleum, 159-60;
poverty, 282; sulphur, 136n; textiles, 175, 181-82
Middle East, 157
Minas Gerais (Brazil), 51, 52, 55, 56, 57, 135-36, 154, 155
Minerals:mining industry, 147-53; United States need for, 134-35, 137-38. See
also specific minerals
Mitre, Bartolomé, 191, 192, 193
Molybdenum, 145Montezuma, 15, 17, 18, 19Montoneros, 182-87
Morelos, José María, 46, 116
Moscoso, Teodoro, 231
National City Bank, 108, 196
National Sugar Refining Company, 77n
Natural gas, 156
Netherlands, See Holland
New York Times, 148n
Nicaragua, 47, 95, 107, 110, 270
Nickel, 75, 134, 136
Nieto Arreta, Luis Eduardo, 102, 104
Niobium, 139318

Nitrates, 3, 139-44, 174. See also guano
Nixoni Richard M.,,3, 5, 229
North, John Thomas, 141, 142
OAS. See Organization of American States
Oil, See Petroleum
Ongania, Juan Carlos, 128-29
Open Veins of Latin America: aftermath of publication, 267
Opium War, 194
Organization ofamerican States (OAS), 3, 78, 113, 114, 206, 223, 229, 230-31
Ouro Preto (Brazil), 51, 55, 6o
Ovando, Alfredo, 163, 164
Palmer, Bruce, 77
Panama, 107, 108, 109, 270; debt, 277 Pan-American Coffee Bureau, 99nParaguay, 6, 42, 61, 118; cotton, 95; move for independence, 188-97;
petroleum, 163
Parsons and Whittemore, 270
Patents, 244
Patifio, Antenor, 148
Patifio, Simon Ituri, 147
Patman, Wright, 243
Pearls, 11-12, 14
Pedro II, 93, 195
Pemex (Petróleos Mexicanos), 160
Pefialoza, "El Chacho," 187
Pepina y Pibernat, Juan, 85
Pepper, 12, 14
Pérez Alfonso, Juan Pablo, 269
Pérez de Holguin, Melchor, 33
Pérezjimónez, Marcos, 169
Perón, Juan Domingo, 129, 162, 210-11, 273
Peru, 6,20, 31, 32,45, 269, 279; cotton, 95-96; debt, 277; guano, 139-40;
Indians, 115; minerals, 136; nitrates, 139-44, 175; petroleum, 136; poverty,
282; sugar, 59, 61; textiles, 175-76
Petrobras, 161-62

319

Petroleos de Venezuela, 268
Petroleum, 1, 3, 96, 156-70, 270;
Argentina, 136, 162; Bolivia, 163-64; Brazil, 161-62; Colombia, 160, 242;
Cuba, 159; Mexico, 160-6 1; Middle East, 157; Paraguay, 163; Peru, 136;
United States, 157-69, 217-18, 243; Uruguay, 160-61; Venezuela, 92, 136,
157, 159, 165-70
Philippines, 23, 71
Philip 11, 24, 25, 26, 38 Philip 111, 39
Philip IV, 27, 39
Pinochet, Augusto, 270-71, 273, 274, 285
Pizarro, Francisco, 15, 16, 19, 20, 35, 45 Plan de Ayala, 122-23
Plasmaféresis, 272
Polo, Marco, 11-12
Portugal, 15, 29, 38, 56, 61, 84, 117, 132; Methuen Treaty, 5 5; slave trade, 79
Potosi (Bolivia), 14, 20-22, 46, 53, 56, 60, 140, 166; coca, 47; development,
20-22; Indians, 39-40; ruin of, 31-37
Poverty: statistics, 282; urban, 250-51
Prebisch, Raó, 246, 254-55
Prices: wages and, 279-81
Priestley, J.B., 88
Protectionism. See Free trade and protectionism
Protestantism, 25
Puerto Rico, 59, 65, 71
Pyrochlore, 139
Quadros, Jinio, 135
Quinine, 102
Railroads, 199-202
Raleigh, Walter, 14
Reader’s Digest, 105n, 112
Repression: endemic nature of, 283-84
Restrepo, Lleras, 99
Ribeiro, Darcy, 18, 44, 131, 279
Rockefeller, David, 232
Rockefeller, Nelson, 159, 229

320

Rockefeller, Peggy, 232-33
Rockefeller family: Foundation, 6; oil interests, 158, 215
Rodriguez de Campomames, Pedro, I 1 8 Roman Catholicism, 12, 25, 30, 3 1;
in Brazil, 53, 86; fees, 67; land ownership in Mexico, 31; Mayan religion
and, 50; Potosi, 33-35 Roosevelt, Theodore, 107
Rosas, Juan Manuel de, 185-86, 191 Royal African Company, 80
Royal Dutch/Shell. See Shell Oil Company
Rubber, 3, 49, 61, 86, 87-91 Salt, 12, 29
Saltpeter, 139
Sandino, Augusto C6sar, II 0- II
San Salvador, 13
Santo Domingo (Dominican Republic), 59,61,65,78,83
Sanz de Santamaria, Carlos, 228
Sarmiento, Domingo Faustino, 187
Sartre, Jean-Paul, 73
Schilling, Paulo, 128
Schnerb, Robert, 198
Shell Oil Company, 157-60, 166, 268 Shipping, 260-61
Silver, 29; Amazonian, 137; Andean 41tiplano, 15; Bolivian, 14, 20-22,
32,33,34,36,39,40,44,136,145; German, 36; Mexican, 14-15, 22, 37
Slaves, 30, 31, 34, 38, 48, 52, 53-54; Central America, 107; cotton plantations,94; revolts, 83; sugar plantations, 59, 60, 61, 66, 67, 79 Slave trade, 28;
Angola-Brazil, 54, Dutch, 56, 62, 80; English, 56, 79-82, 174; French, 28;
Guinea-Brazil, 54; sugar plantation, 79; United States, 202 Smith, Adam,
79, 180 Smith, Earl, 72
Smith, Walter Bedell, 113
Solano López, Francisco, 189, 192, 193, 194, 195
Somoza, Anasruio, 110-1 1, 270
South Sea Company, 80
Soviet Union, 75n, 159, 160, 209
Spain, 12, 15, 22-28, 29, 115, 132
Spices, 12, 14
Standard Oil of California, 158, 162
Standard Oil of New Jersey (Exxon), 136, 157-61, 162, 165-66, 168, 268

321

Standard Oil of New York (Mobil), 158
State: terrorism and, 274-75
Strikes, 285
Stroessner, Alfredo, 194, 195, 196
Sugar, 3, 29, 109; Brazil, 50, 52, 54, 56, 61-65, 130; Caribbean, 65-67; Cuba,
67-78, 176; development, 59-61; "sugar islands," 65Sulphur, 136n
Sweezy, Paul, 226, 267
Taft, William H., 107
Tantalite, 137, 139
Taxes, 1, 157, 165, 168, 174, 239
Technocrats, 227-37
Technology: dependency, 277-78; foreign ownership and control, 243-47
Tenochtitlin, 19, 44
Terrorism: state and class and, 274-75; in system of repression, 283-84
Texaco, 158, 161, 166
Textiles, 175-78, 201, 239
Thorium, 137, 138
Thornton, Edward, 191, 192
Timber, 51, 68
Tin, 33, 147-52
Tires, 88
Titanium, 137
Tobacco, 54, 68, 67, 79, 91, 102
Torres, Juan José, 274
Torture, 283-84
Toussaint L’Ouverture, 66
Transport system: for commodities, 250-61
Trías, Vivian, 186
Trinidad-Tobago, 65, 174
TripleAlliance, 188, 195, 197, 200 Tupac Amaru, 44-45
Turner, John Kenneth, 121
Ubico Castañeda, Jorge, 110, 112-13, 114
Underdevelopment, 245, 285

322

Union Carbide, 217
United Fruit Company, 100, 106, 108-10, 206
United Nations, 3; Economic Mission for Latin America (ECLA), 93, 1 0 1,
207, 216, 251n, 278; Food and Agriculture Organization (FAO), 64;
UNESCO, 73
United States, 4-8, 49, 261; cacao, 93; and Central America, 107-10, 113-14;
CIA, 136-37; coffee, 100-101, 105, 110; cotton, 95; and Cuba, 70-75, 77;
family planning, 5; foreign aid, 228-29; foreign banking, 223-27; and Haiti,
66; industrial development, 202-4; investments, 205-10, 218-19, 276; and
LAFTA, 252-58; Latin American interventions, 272-73; Marine Corps, 77,
111, 123; and Mexico, 121; mineral imports, 134-38, 144-46, 149, 153-56;
mineral need, 134-35,137-38;petroleum,157-69; protectionism, 200-4;
railroads, 106; shipping, 202-3; slavery, 79; technology investment anddevelopment, 245; textiles, 202-3; westward expansion, 131-32 U.S. Steel,91, 153
Uranium, 139
Uruguay, 6-7, 48, 128, 188, 191, 21 1, 230n; agrarian reform, 1 17-20; debt,
276-77; military and police budget, 271; petroleum, 160-61; repression in,
283, 284; rice, 95; wages and prices, 279
Varela, Felipe, 184
Vargas, Getulio, 99, 154, 210-13, 216n Velasco Alvarado, Juan, 95, 136, 164,
220n,269
Venezuela, 6, 14, 31; agrarian reform, 128; cacao, 91; imports, 268-69; Indians,
49; iron, 153-56; nationalization of oil, 268; petroleum, 91, 136, 157, 159,
165-70
Vespucci, Amerigo, 14
Videla, Jorge, 273, 275, 276
Vietnam, 6
Villa Francisco ("Pancho"), 123
Vinhas de Queiroz, Mauricio, 216
Volkswagen: Brazilian production, 267-68, 279
Wages, 250, 251; prices and, 279-81
Walker, William, 107
Wal h, Rodolfo, 276

323

War of the Triple Alliance, 188-97
Washington, George, 203
Washington Post, 11 5Watt, James, 81, 94
Webb, James Watson, 178
West Germany, 4, 93
West Indies, 65
Wickham, Henry, 89
Wilhelm (Kaiser), 274
Wilson, Henry Lane, 123
Wilson, Woodrow, 2Wood, Leonard, 71
Woods, George D., 235
Working class. See Class; Labor
World Bank, 5-6, 221, 235-36, 239, 273. See also International Monetary FundWorld Coffee Information Center, I 00
World Market, 237-43
Yaqui Indians, 48, 61, 121
YucarAn (Mexico), 48, 61, 121
Zander, Arnold, 136
Zapata, Emiliano, 120, 122-24
Zavala, Maza, 126
Zavaleta, Ren@, 163
Zinc, 134, 136, 137
Zuazo, Alonso, 83
Zumbi (Indian chief), 84324