In the 50s and 60s the US moved to counter what it saw as a trend toward the establishment of left-wing "third-world" governments in its own backyard by installing military or client dictatorships (wherever the Marines could invent a pretext for landing), most notoriously in Guatemala where the Arbenz government, backed by an increasingly active popular movement, threatened to reproduce the Labor and Social Democratic backlash that had occurred in postwar Europe.
This preventive action, however, was not purely negative in scope but corresponded to a program of economic development which, it was claimed, would do for Latin America what the Marshall Plan had done for Europe. Since this involved increased regimentation generally, it was thought that creating or backing client dictatorships where necessary would guarantee a suitable environment for investing capital.
The "Marshall Plan" for Central America and the Caribbean had consisted, in consequence, of a series of timely strategic "surgical strikes", so that the unsuspecting workers (as in Guatemala in 1954 for instance, where they were otherwise too weak and isolated even to sustain their own radical reformism at that date) were bloodied up and hunted down before they knew what had hit them. Ever since then, US action in the area has been aimed at extending and developing its forcibly imposed discipline, invented for the sake of depressing the exchange-value of human life to otherwise un-maintainably low levels.
On the face of it, the local capitalists in certain parts of Latin America have become increasingly dissatisfied with what they have come to regard as the dead-end development policy of the multinationals; their position is, in effect, that the latter have "mismanaged" economic growth in somehow caused it to be mismanaged.
As the multinationals extended their investments, local industry nourished within a limited context of import substitution. This worked will enough as far as it went, but the focus of investment was not production: it was rather international exchange, and — like the old Mercantilist System — it was oriented toward increasing local foreign exchange reserves rather than generating new value.
As the heat from the reformist opposition became here and there became gradually more intense, it became necessary in the late 60s and early 70s for the US to fortify the bulwarks with a new variety of dictatorship whose legitimacy was virtually non-existent. The sunbelt investors from the US wanted to make one last effort to plunder the locals (capitalists with the support of workers in "mass organizations") before the wrath of the latter finally boiled over.
It was in fact the period of overhasty expansion in the 50s and 60s that brought on the faltering of growth in the late 60s and the financial crisis of the later 70s. The international debt crisis thus links up with the popular opposition in Central America, since it revolves precisely around the funding of the capitalization process. “Reformists”, in this context, are held to be those who favor minor or even major alterations in the way in which the multinationals should be allowed to do business, while those who seek to restrict they way in which capital is accumulated enjoy a reputation for being “revolutionaries”.
Guatemala and El Salvador: unstable Coffee Republics
Guatemalan capitalism as it emerged from the Fascist Decade in the 20s made its bed mostly on coffee beans (and somewhat on bananas), as in El Salvador. (The Central American states received the sobriquet of "banana republics" primarily through their association with the United Fruit Company, one of the "modernizers".) The greater social backwardness of Guatemala, however, caused it to miss out on the land-oriented paroxysms which savaged the workers and peasants of El Salvador in the 30s. The Arevalo and Arbenz regimes in Guatemala (1945-54) were on the other hand notable for setting a precedent of constitutional democracy in the region; just at the time when Labor and Social Democrats in Europe were capitalizing on working class weariness with wartime hardships. (The Costa Rican capitalist class struck early and thoroughly in the same period, abolishing the army altogether, earning themselves the nickname of "the Latin Switzerland".) Thus, despite its relatively backward social organization, Guatemala did experience an echo of Labor reformism in the postwar decade.
The coffee oligarchy of Guatemala took this very ill. By 1954 it was ready to kick over the traces and "to liberate the nation". With the Dulles boys in Washington masterminding a combined diplomatic, propaganda and military offensive, the reformers were easily outmaneuvred and overthrown in July of that year.
Subsequently, however, the coffee barons discovered they had called in the United States only to leap, by the end of the 60s, from the political frying pan into the economic fire: the US had lent its support, not to promote their tranquility, but the growth of industrial manufactures (thereby serving its own convenience) — an assist which could only finish by leaving coffee production further and further behind in the preoccupations of the state. To accomplish this, the US government pursued a policy of regional "self-enrichment" and diversification, "integrating" the region's economies (the self-styled "Central American Common Market"), encouraging import substitution and blocking the spontaneous upgrading of labor-power throughout the regional economy. This process the coffee barons at first mistook for an identification with their interests. Once the blood of the working-class and peasant corpses was good and congealed, however, Washington unceremoniously thrust them aside and the rightwing "National Liberation Movement" (MLN) — which had done the dirty work and built up a political machine in the eastern part of the country — found itself, by the early 70s, a humiliated opposition party within its own regime. And now Guatemala's generals have cut themselves into a very large slice of the profit pie indeed, to the intense annoyance of their fellow capitalists.
It is this general situation of pell-mell accumulation, rather than a supposed structural dependence of Guatemalan capital on an imperialist metropolis ruled by finance capitalists, that explains the endemic instability of Guatemala's ruling class.
The same thing could also be said for El Salvador. In the post-war years, a "modernizing" sector of the coffee exporters and other commercial interests pulled off a palace revolution and installed its own regime in place of the blood-soaked Martinez dictatorship. In this we have what there was of El Salvador's "social-democratic" period, which in the developed economies was characterized by a surge of working-class opinion in favor of more or less broad reforms. In this case, the initiative came from the capitalist class but was supported by the working-class organizations (tiny and persecuted as they were). The fact that circulating capital was mostly tied up in agriculture, that only an exiguous portion of it went to wages in industry, and that it was still mostly tied to fixed capital invested in agriculture, is what accounts for the focus of this initiative on the reform-minded section of the capitalist class rather than on a European-style labor movement.
In terms of social organization, El Salvador in fact came closer than Guatemala to being already "modernized", in that its capitalist class had systematically created Central America's most proletarianized economy — even if it was only for the sake of coffee.
But recently, since the 1979 coup, it has dawned on the coffee magnates that Washington did not offer to give them a hand out of altruism in their emaciated war against the specter of "communism". By the March 1982 elections, the struggle had clearly ceased to be a mere question of a coffee aristocracy clinging tenaciously to its privileged position. Washington at length had decided that condoning extreme right positions was now a liability and definitely cut the coffee oligarchy adrift to face the rigors of "modernization".
The coffee planters have thus acquired the stigma of the greater evil, from the vantage point of international capital. Big business in the US has not changed its tune and decided that what El Salvador needs is a good dose of old-fashioned moderation. It has on the contrary merely revised its criterion of what kind of economic development it thinks would deliver its investments the most effectively from the immediate threat of expropriation.
The structural instability of the capitalist class in both Guatemala and El Salvador demonstrates in microcosm a formative or transitional stage of economic development; and the opposition's allegation of corruption and mismanagement on the part of the governing section of the ruling class acts itself as a catalyst in bringing that transition about: nationalism will never be more than the handmaiden of profit.
The present crisis — which, in the tradition of all great social revolutions, has degenerated to the point where rival factions are now scrambling to get control of the government's budget and so gain the controlling share in shaping the state's economic policy — can thus be explained entirely in terms of profit. From a socialist point of view, its outcome cannot be a revolution resulting in the introduction of common ownership of the means of production, however democratic its ideology may be.
Nicaragua and the class of latent capitalists
The main capitalist opposition in Central America to corporate dominance over the local economy comes, not as we might naively expect, from the existing capitalist class — the official bourgeoisie (the one which is presently constituted and which acts out its role on the stage of world history). It comes chiefly from the concealed capitalist class — the one which favors state-managed capital accumulation on the pretext that this will actually benefit the working class and (what little may remain of) the peasantry.
This class of latent capitalists is none other than the self-styled revolutionary left, most prominently the Leninists, but not by any means those of them who have served as such excellent bull's-eyes for the Reagan administration's target practice. (Moscow-oriented "Communist" parties in Central America — since the massacres of the 30s — have shown themselves incapable, on the whole, of forming more than a loyal opposition bound hand and foot to the status quo, a sort of left-wing Christian Democracy.) There is, in any case, a very definite tendency for the left to nationalize the accumulation of capital conceptually, before any actual question of a transfer of power arises.
A revolution supposedly carried out on behalf of a working class which does not form even a substantial minority of the population, as in a substantial part of the "third world" today (though not so much in Central America), cannot possibly be anti-capitalist. If the workers (wage earners plus professionals and any others who work for someone else) do not make up the majority, then neither can industrial capitalism form the basis of the state. Since the first order of business of a revolution in a state which is still pre-capitalist is necessarily the establishment of a capitalist economy it is nothing if not a pro-capitalist revolution: in an historical context of undeveloped capitalist production, such movements appear as anti-liberal revolutions. One of the warts of Leninism is precisely its confusion of the concepts of "liberalism" and "capitalism".
Capitalism, regardless of its degree of development, is any social system in which the bulk of social wealth is produced for exchange on the market at a profit, conducted through the payment of wages. So long as it observes this basic condition, it may assume any form or character whatever. If this implies totally reorganizing the personnel roster of the accumulators, then so be it! If the state must step in and directly manage all phases and facets of the economy, then that's how it must be! Capital does not care what its administrators look like: it seeks only to reproduce itself in ever-growing measure through the well-known mechanisms of accumulation.
Who makes such revolutions but those who intend to accumulate capital themselves? A minority political party heading a minority working class is itself the nucleus of a potential stratum of accumulators. Capital is equally well served by either sort of lackey. The full transfer of state power to such jerry-built ruling classes is indeed rare — or more precisely, it is an extremely complex event which does not take place most of the time. It is an example of the fortunes of an ideology, not of revolutionary socialist class consciousness.
The revolution in Nicaragua is an interesting study in Leninist doubletalk. Comparing Nicaragua with Guatemala and El Salvador, we note its relatively lesser degree of advancement at the time of the Sandinista Revolution in 1979. That is to say, Nicaragua was still more backward than El Salvador, where a civil war is now underway, yet its neo-capitalist revolution has already been successfully begun, while in Guatemala class conflict has yet to break out into open civil war. What explains this disparity?
A major factor in favour of the Sandinistas, certainly, was the very identification of primitive accumulation — vested as it was in the coffee barons — with a concrete clique of individuals (the clan of the Somozas backed by the United States). More decisive, however, was the extreme disgruntlement of the Nicaraguan capitalist class as a whole.
The Sandinistas are attempting to displace the original crew of black sheep with a group that will be more interested in keeping surplus value within Nicaragua. However, "limiting the intervention of the bourgeoisie in the government" — which is their self-attributed objective — is nothing but a collection of buzzwords, since none of them is seriously proposing to limit the role of capital accumulation in formulating government policy. The question revolves entirely around who will accumulate capital, and for what reasons. The Sandinistas thus represent the left wing of the capitalist class, itching to get on with the business of totally converting over to pure state capitalism.
A member of the Sandinistas' National Direction is quoted as saying that, now that they have control of the banks, they have "surrounded the bourgeoisie" (quoted by Roger Burbach in "Nicaragua: El Curso de la revolución". Revista Mensuel/Monthly Review, July 1980). This is a highly ironic remark, in view of the fact that one group of capitalists (the nascent state capitalists) is saying that about the other (the official bourgeoisie). It also illustrates the Leninist belief that the concentration of finance capital is somehow different from the accumulation of capital in general. What is definitely not being encircled, however, is the function of capital accumulating itself. A society of continuing wage-slavery is the fatal economic issue of the Sandinista revolution, given that the institution of production for profit remains sacred.
If wages as the basis of capital accumulation (through the production of surplus value) are not abolished, via the introduction of common ownership of the means of production, it is utterly specious to distinguish '"reformism" and "the revolutionary process". It is all reformism until society no longer depends on the possession of money as a prerequisite for obtaining goods and services.
Throughout all the vicissitudes of the "revolutionary process", none of the "revolutionary" parties — even the most radical — apparently would would dream of abandoning commodity exchange and its inevitable consequence, production for profit. They confine themselves without exception to squabbling over the right to direct this process (as in El Salvador), with one position favoring total state capitalism — eventually and an opposite position favoring a minimal state presence in the economy (or so they say). An "authentically socialist perspective" (a widespread demand for common ownership and democratic control of the means of wealth production) does not figure in any of their programs.
Ron Elbert
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