Colonialism and Dependence

In “Imperialism, the Highest State of Capitalism”, Lenin warned, in refuting Kautsky, that the domination of finance capital not only does not lessen the inequalities and contradictions present in the world economy, but on the contrary accentuates them. Time has passed and proven him right. The inequalities have become sharper. Historical research has shown that the distance that separated the standard of living in the wealthy countries from that of the poor countries toward the middle of the nineteenth century was much smaller than the distance that separates them today.

The gap has widened. In 1850 the per capita income in the industrialized countries was 50 per cent higher than in the underdeveloped countries. To have an idea of the progress that has been achieved in the DEVELOPMENT OF INEQUALITY, we have only to listen to President Richard Nixon: “… and I think about what this hemisphere, the new world, will be like at the end of this century.

And I consider that if the present growth rates of the United States and the rest of the hemisphere have not changed, at the end of this century the per capita income in the United States will be 15 times higher than the income per person of our riends, our neighbors, the members of our family in the rest of the Hemisphere. “(1) The oppressed nations will have to grow much more rapidly just to MAINTAIN their relative backwardness.

Their present low rates of development feed the dynamic of inequality: the oppressor nations are becoming increasingly rich in absolute terms, but they are richer still in relative terms. The overall strength of the imperialist system rests on the necessary inequality of its component parts, and that inequality is achieving ever greater proportions. Capitalism is still capitalism, and unequal development and widespread overty are still its visible fruits.

Centralized” capitalism can afford the luxury of creating and believing its own myths of opulence, but myths cannot be eaten, and the poor nations that constitute the vast capitalist “periphery” are well aware of this fact. Imperialism has “modernized” itself in its methods and characteristics, but it has not magically turned into a universal philanthropic organisation. The system’s greed grows with the system itself. Nowadays imperialism does not require the old-style colonial administrations.

The archaic Portuguese model of control over Angola and Mozambique is no longer the most “convenient”. Lenin described the reality of his time, saying that “naturally… finance capital finds it most ‘convenient’, and is able to extract the greatest profit from a subordination which involves the loss of the political independence of the subjected countries and peoples”. In his report to the Twenty-second Congress of the CPUSSR in 1961, Nikita Khruschev reached the conclusion that “imperialism has irrevocably lost its control over most of the peoples of the world.

According to his report, 40. 7 percent of the population of the world, without counting the socialist countries, had won their independence fter 1919, and the total number of people living in colonies, semi- colonies, and dominions included, at the beginning of the 1960s, less than 3 percent of the world’s population. “The revolutions of national liberation have dealt a demolishing blow to the colonial Bastille”, Khruschev said. “Forty-two sovereign states have emerged on the ruins of the colonial empires. In this connection, it can well be said that Latin America is a prophetic zone within the Third World.

The political independence of almost all the Latin American countries dates back to the beginning of he nineteenth century. It Was As A Result Of That Independence, However, That Latin America Consolidated Its Dependence. Power passed from the “foreign” viceroys to “national” merchants advocating free trade, but it was precisely then that all obstacles were removed for the total incorporation of the entire region into the international division of labour that was centered in England.

The words “sovereignty” and “independence” were not then, and still are not in most cases, more than the lip service that vice pays to virtue. In reality, most Latin American countries have never controlled their wn internal markets nor the destination of the economic surplus generated by their productive forces. The control of their basic resources has always been in foreign hands, either through direct appropriation of the sources of the production of raw materials and food, or through the monopoly of demand in the foreign markets.

The humiliating conditions under which they have received “foreign aid” have always facilitated the penetration of foreign products and capital. Exactly one century after Argentina achieved its “independence”, Lenin was able to describe that country as a British semi-colony, and he arned that “finance capital is such a great, it may be said, such a decisive force in all economic and international relations, that it is capable of subordinating to itself, and actually does subordinate to itself, even states enjoying complete political independence”.

Subsequently this Latin American nation, perhaps the most fortunate in its relations with imperialism, passed through a rather intense process of industrialisation and accelerated urbanization: Buenos Aires is one of the largest and most attractive capitals in the world. But this does not keep Argentina from being today a U. S. semi-colony, at least in egard to its oppressive financial dependency on Washington and the omnipotence that direct investments by U. S. corporations enjoy in its internal market.

The threads that make up the dense web of imperialist power have multiplied and become more subtle. It is not by chance that the world- wide process of capitalist integration under the hegemony of the United States, a process filled with tension and conflict, has coincided with the irreversible decline of the old colonial powers and their methods of control. The eminent Brazilian anthropologist Darcy Ribeiro described the new situation in America as follows: Hegel, in his classic study on the philosophy of history, foresaw the war between the Latin and Anglo-Saxon peoples of the Americas.

This war is already taking place. However, instead of troops movements and pitched battles, it is being waged by conspiracies, bribery, contracts, intimidation, coups, programs of sociological studies, economic plans, and publicity campaigns. Through these means of pressure and compulsion, the United States is implementing, extending, and strengthening its own plan for exploiting our resources, organizing our societies, regulating our political life, determining the size of our opulation, and determining our destiny. (2)

The Investments Change Their Direction The First World war was followed by the well-known withdrawal of European interests from certain underdeveloped areas of the world. In Latin America, due to obvious geopolitical reasons, the devastating advance of U. S. imperialism took place before and with greater speed than it did in other regions; already by the end of the nineteenth century the Caribbean was the MARE NOSTRUM of the United States.

When Lenin wrote his book on imperialism, however, U. S. apital still represented less than a fifth of all private, direct, foreign investment n Latin America; today it represents close to three fourths. What concerns us most here is to point out that after the Second World War there was an important change in the direction of these investments. The tendency is clear. Capital invested in public services and mining has been losing its relative importance, while the proportion invested in petroleum and, above all, in manufacturing industries is increasing.

Forty years ago U. S. investments in manufacturing represented only 6 percent of the total value of U. S. capital in Latin America; in 1960 the proportion had come close to 20 percent; and at present almost a hird of total U. S. investments is in manufacturing. The three largest countries in Latin America -Argentina, Brazil, and Mexico- are the ones that offer the most attractive markets for foreign industrial capital.

The Organization of American States (OAS), the United States’ traditional “Ministry of Colonies”, describes the process as follows: “Latin American enterprises are beginning to achieve superiority over already established industries and technologies of lesser sophistication, and private North American investments and probably also investments from other industrialized countries are rapidly ncreasing their participation in certain dynamic industries that require a relatively high degree of technology and are more important in determining the course of economic development. (3) The penetration has been successful; the potential of U. S. factories located south of the Rio Grande is much greater than that of Latin American-owned industry in general.

It can be seen from data released by the U. S. Department of Commerce and the Inter-American Committee of the Alliance for Progress that, based on an index of 1961=100, industrial production in Argentina rose to 112. 5 in 1965, while during he same period sales by U. S. subsidiaries in Argentina rose to 166. 3. The respective figures for Brazil are 109. and 120; and for Mexico, 142. 2 and 186. 8. Of the fifty largest Argentinian businesses (those with a sales volume in excess of 7 billion pesos annually), half of the sales volume originates in foreign businesses, a third in state enterprises, and only a sixth in private Argentinian businesses. (4)

In 1962, two enterprises operating with private Argentinian capital ranked among the five largest industrial enterprises in Latin America; by 1967 both of them had been taken over by foreign capital. ) A study carried out by the Institute of Social Sciences of the Federal University of Rio de Janeiro and published in 1965 revealed that of the fifty-five multi-billionaire private groups in the Brazilian economy, twenty-nine were foreign, twenty-four Brazilian, and two of mixed foreign and Brazilian capital; of the Brazilian groups, only nine had no links through stockholders with foreign groups or enterprises.

A subsequent study by the Brazilian Congress provided new data which spoke eloquently of the denationalization process that is proceeding at breakneck speed in that country’s industry. ) A minister of the Brazilian government said publicly in 1969 that “with a few honourable exceptions, the only strong sector in Brazil, besides the government itself, is foreign capital”. (7) His statement is valid not only for Brazil. According to figures published in 1962, fifty-six of the hundred most important enterprises in Mexico are totally or partially controlled by foreign capital, twenty-four belong to the state, and twenty to Mexican private capital. 8)

These twenty private Mexican concerns account for barely 13. 5 percent of the total sales volume of the one undred enterprises under consideration. Except in the case of petroleum and some public services -activities in which the state clearly predominates in Argentina, Brazil, and Mexico- almost all of the other enterprises included in the above-mentioned studies are manufacturing industries, and it is precisely in this sector that foreign capital is most prominent.

If this is the situation in the strongest countries in Latin America, it would be redundant to offer examples of foreign penetration of the few industries in the weaker countries. By far the largest part of these investments in manufacturing belongs to U. S. corporations, although there are European enterprises with quite considerable interests in Latin America. For example, Volkswagen do Brasil, the largest manufacturer of automobiles in Latin America, is a German concern.

The interest of imperialist corporations in appropriating the fruits of Latin American industrial growth for themselves and capitalizing it for their benefit does not imply, certainly, a lack of interest on their part in all the other traditional forms of exploitation. It is true that the railway which used to belong to United Fruit in Guatemala was no onger profitable and that Electric Bond and Share and the International Telephone and Telegraph Corporation made a splendid profit when their properties were nationalized in Brazil and they were paid indemnities in gold for outmoded installations.

But this abandonment of public services in search of more lucrative activities does not occur in the case of many raw materials and foodstuffs. While a relative decline has been registered in the total volume of new investments in minerals, the U. S. economy cannot do without the supply of vital materials coming from the southern part of the hemisphere.

Be the first to comment on "Colonialism and Dependence"

Leave a comment

Your email address will not be published.


*