MIWS > Document Archive > Economics and Political Economy
"U.S. Imperialism Steps Up Ruthless Plunder and Exploitation of Latin American People," Peking Review, vol. 12, no. 36, 1969 September 3, pp. 22,31
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U.S. Imperialism Steps Up Ruthless Plunder and Exploitation of Latin American People
[MIWS note follows.]
BESET with difficulties at home and abroad and unable to find a way out, U.S. imperialism has intensified its barbarous plunder and exploitation in Latin America in recent years. As a result, the economies of Latin American countries have gone from bad to worse and the broad masses of the working people have been thrown into misery.
Profit Remittances Are 4-7 Times Direct Investments
For a long time now, U.S. imperialism has exported capital to Latin America, plundered its rich resources, extorted super-profits and shifted its economic crisis on to the area. It is reported that in 1968 direct private investments by U.S. monopoly capital in Latin America totalled 610 million U.S. dollars, or nearly three times the amount of the previous year. To date, direct private U.S. investment in Latin America has reached close to 12,000 million U.S. dollars.
Profits from U.S. investments in Latin America have always been fabulous. According to obviously watered down official U.S. figures, from some 10,000 million U.S. dollars in investment in Latin America, the United States extorted 9,772 million dollars in profits in the eight years from 1960 to 1967 — almost a 100 per cent gain. Statistics published early this year by the First National City Bank of New York shows that Latin America ranks first in the rate of profit for direct U.S. investments abroad. In the four years from 1965 to 1968, profit remittances from Latin America to the United States each year ranged from four to seven times the new direct investments made by the United States in the same year, the highest rate of profit in all the areas where the United States has made direct investments. In these four years, the United States altogether put 1,100 million U.S. dollars in direct investment in Latin America but remitted 5,400 million U.S. dollars in profits to the United States, nearly five times the investment. In 1967, the profits remitted to the United States by U.S. corporations in Latin America were 1,000 million dollars more than investment made the same year, and in 1968 the profit remittances were five times the new investments that year. As disclosed recently by political circles in Colombia, a U.S. company operating there earns an annual profit nine times its initial capital. All this proves that U.S. investments are a huge pump through which the blood of the Latin American people is being drained. The U.S. claim that its investments are meant to "help" Latin America's "development" is but unadulterated humbug.
Double Exploitation — Buying Cheap And Selling Dear
U.S. imperialism also gouges huge wealth out of Latin America through unequal trade relations. It has all along made Latin America a supplier of its raw materials and a market for dumping U.S. surplus goods. At the same time, it persistently pursues a policy of buying cheap and selling dear there, causing heavy losses in international payments to the Latin American countries through this double exploitation in imports and exports. As a result of this colonialist trade policy, the United States has long maintained a favourable trade balance with Latin America. According to official U.S. statistics, U.S. exports to Latin America in 1967 increased by 4 per cent as compared with the previous year; in 1968 they went up another 14 per cent as compared with 1967. On the other hand, Latin America's share in the U.S. import market declined from 21.2 per cent in 1962 to 13.2 per cent in 1968.
The Latin American countries have suffered from severer exploitation in import and export prices in¬
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recent years because of the U.S. practice of holding down the prices of Latin American raw materials and raising the prices of U.S. goods. Colombian political circles disclosed in June that since 1954, the export (mainly to the United States) of coffee, the chief product of Colombia, increased by 12 per cent while foreign exchange income from this dropped 42 per cent.
U.S. "Aid" — Usury of the Grossest Kind
"Aid" loans to Latin America are another U.S. imperialist means of enslaving and exploiting the Latin American people. These "aid" loans are actually a usury of the grossest kind which has thrown Latin American countries heavily in debt. Foreign debts, old and new, have been snowballing. According to statistics, foreign debts of Latin American countries have doubled since 1960, totalling approximately 20,000 million U.S. dollars. The outlay for repayment of debts in 1968 amounted to 36 per cent of the total export income of the whole of Latin America as compared to 25 per cent between 1955 and 1959.
In addition to the political conditions which encroach on the sovereignty of Latin American countries, harsh economic terms are also attached to the U.S. "aid." The recipient country, among other things, is required to spend the "aid" money on purchases of U.S. goods which are usually much dearer than goods purchased in other world markets. The U.S. Time magazine admitted in its July 11 issue: Since the launching of the so-called "Alliance for Progress" programme eight years ago, U.S. "aid" to Latin American countries has totalled 11,000 million U.S. dollars. However, this amount of "aid" actually "drifts back north in purchases."
As a result of ruthless plunder and exploitation by U.S. imperialism, the economic situation in Latin American countries has been deteriorating with constant currency devaluations, drastic price increases, more bankruptcies of national industrial and commercial enterprises, mounting unemployment, a sharp increase in foreign debts and the further impoverishment of the broad masses of the working people.
Our great leader Chairman Mao has pointed out: "The days of imperialism are numbered. The imperialists have committed every evil and the oppressed people of the world will never forgive them." It was not long ago that an unprecedentedly powerful wave of anti-U.S. struggle surged in Latin America, dealing a heavy blow at the big U.S. monopoly capitalist Nelson Rockefeller, "special envoy" of U.S. imperialist chieftain Richard Nixon. This vividly demonstrates the deep hatred of the Latin American people for U.S. imperialism and their determination to fight it.
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[Note: Several articles in Peking Review mention exploitation via high prices of imperialist and socialist-imperialist (Soviet) country exports and low prices of oppressed nation imports. What is notable about this article is that it points to the correct way of looking at trade balances in terms of parasitism. If money were all that mattered and were an accurate indicator of quantities of material goods or labor, then one might conclude at a given time that, because of a positive trade balance with a Third World country, more labor or goods were going to that country than to the u.$. However, as this article suggests, aggregate trade figures in terms of money, if not properly interpreted, can obscure the amount of material wealth going to the imperialist countries. If the prices of Third World goods are lowered, the Third World's share of exports to the u.$. will seem to decline, but actually only in money terms. The Third World exports the same amount, but at lower prices.
Today, the u.$. has a trade deficit with Latin American countries, not a positive trade balance. So, it is both that Latin America is exporting more to the u.$. in money terms, than it imports from the u.$., and that the prices of Latin American exports are lower than they would be without imperialism. Ultimately, looking at the size and sign of trade balances in money terms by itself does not say much about parasitism, which is why there needs to be an analysis in terms of labor. Labor bureaucrats, petty-bourgeois advocates and other chauvinists and Euro-Amerikkkan nationalists try use trade deficits and the outflows of money as proof of the exploitation of amerikan workers by the Third World. Without a correct theory of the role of prices in international transfers of value, pseudo-Marxism is unable to consistently respond.
Two basic issues this article raises are the non-neutrality of international trade and the character of imperialism. For decades, opposing the idea that technology is class-neutral has been a major part of opposing the revisionist theory of the productive forces. Where people need to make progress today is in recognizing that trade, too, is not class-neutral. Both technology and trade are sites of relations of production and class struggle. Wherever trade is loosely promoted as a means of developing the productive forces, as a prerequisite to socialism, trade must be a focus in opposing the theory of the productive forces. The theory of the productive forces is not always openly upheld; so, arguments about trade as benefiting the oppressed nations or economically backward countries must be scrutinized.
While criticizing the trade policies of governments and the actions of multinational corporations, largely for rhetorical purposes, in practice the majority of people calling themselves "communist" accept Ricardo's theory of comparative advantage as their theory of trade, because they have no developed alternative to it and frequently talk about foreign investment as if it were the only way imperialism obtained super-profits. Connected to this is the idea that Lenin only saw capital exports as typical of imperialist parasitism and nothing else. The above Peking Review article discusses unequal trade, involving price differences (high First World good prices, low Third World good prices, not just dumping by the First World with low prices), as another source of profit from Latin America for u.$. imperialism. This particular Peking Review article doesn't use the words "unequal exchange," but the type of operation involved in the unequal trade relations the article describes belongs to the category of unequal exchange discussed by Marxists. In Marxist theory, unequal exchange is a systematic phenomenon, not just a policy or a practice of individual capitalists, and could numerically be more important than the export of capital in terms of parasitism. Arghiri Emmanuel raised the question sharply: What is more characteristic of imperialism, the export of capital, or parasitism in general? The question can't be answered simply by referring to the fact that the export of capital is particular to imperialism. An implication of Arghiri Emmanuel's writings is that foreign investment alone does not account for most of the super-profits.
Lenin never actually wrote that the export of capital was the one thing that was most characteristic of imperialism. In Imperialism, the Highest Stage of Capitalism and "Imperialism and the Split in Socialism," the export of capital appears as one of multiple manifestations of monopoly capitalism. The closest Lenin may have come to identifying one thing that characterized imperialism was to suggest that the growth of capitalist monopolies was characteristic of imperialism ("Materials Relating to the Revision of the Party Programme," 1917 April-May). Monopolies are relevant not just to the export of capital, but to market power, which can be used to establish high prices of exported commodities.
While noting that the international exchange of commodities existed under pre-imperialist capitalism and was not unique to imperialism, Lenin did not explicitly deny that a type of international exchange, typically favoring the imperialist nations, could be characteristic of imperialism. The export of capital was something new compared with international exchange, which existed under non-monopoly capitalism, but a peculiar type of international exchange, or a higher level of that type of exchange, could still belong to imperialism. Unequal exchange's characterizing imperialist parasitism would not be inconsistent with Lenin's theory of imperialism identifying it with monopoly capitalism, finance capital, and the division of the world. Lenin is gone; so, the key to understanding the character of imperialism today lies in the essence of the Marxist-Leninist-Maoist theory of imperialism and concrete reality. Imperialism has always been a stage, the highest and final stage, of capitalism, rather than a policy; it has always been monopoly capitalism, parasitic and decaying capitalism, and moribund capitalism, has always limited competition, and has always bought off imperialist country workers with super-profits. "The exploitation of worse paid labour from backward countries is particularly characteristic of imperialism. On this exploitation rests, to a certain degree, the parasitism of rich imperialist countries which bribe a part of their workers with higher wages while shamelessly and unrestrainedly exploiting the labour of "cheap" foreign workers" (Lenin, "Revision of the Party Programme," 1917 October, italics in original). The question here concerns only the form that imperialist parasitism takes.
In Imperialism, Lenin writes: "The export of capital, one of the most essential economic bases of imperialism, still more completely isolates the rentiers from production and sets the seal of parasitism on the whole country that lives by exploiting the labour of several overseas countries and colonies." To be clear, most "Marxist-Leninists," so-called Maoists, and "communists" and "socialists," don't even agree with the "seal of parasitism on the whole country" part even in the sense of the imperialist country's becoming increasingly parasitic. This discussion of whether the export of capital or unequal exchange is more typical of parasitism is beyond them for all practical purposes; they are in the bourgeois camp to begin with ideologically. Nonetheless, people who think of themselves as scientific communists should be attempting to make progress understanding unequal exchange. It would not bode well for there to be communists who say that the export of capital is characteristic of imperialism, but uphold the theory of comparative advantage as their only theory of international trade, apart from criticizing some individual "neo-liberal" policies and practices, while saying nothing about unequal exchange or other sources of profit that don't directly involve capital exports. It provides an opening for people to deny the majority of parasitism, if foreign investment profit is small or decreases. While it is an advance just for people to recognize that the majority of First Worlders are exploiters and that the majority of economic activity in the First World is parasitic, in the proletarian scientific context people need to have a fuller concrete understanding of parasitism and how it works or they may not be able to avoid capitalist restoration in the future. The economy is dynamic. As changes in the economy take place, the exploiters' latest justifications for parasitism and pro-imperialist practices need to be challenged with concepts and methods of analysis that are anchored in reality.
A quantitative question is involved here. The relative role that each mechanism or source of profit plays in parasitism, the relative contribution each one makes -- this involves a quantitative question whether people admit it or not. So does the question of the overall magnitude of parasitism and its relation to class structure and changes in the economy. It is comparatively easy to say imperialist countries are "parasitic" and give examples of pieces of parasitism with numerical figures for agitation purposes. It is easy to find a few figures to talk about foreign investment and unequal trade. It is more difficult -- not just technically, but ideologically, because of the influence of chauvinism and non-scientific thinking -- to say something concrete about imperialism or parasitism as a whole. The Peking Review article gives some examples, but does not say anything about the incomes of the u.$. population.
More generally, it is relatively easy to mobilize people for a vague idea of class society and for the goal of communism, but mobilizing people for class struggle as it actually exists, and working with people to understand the scientific content of communism, are vastly more difficult. Without a scientific revolutionary communist practice, the proletariat is doomed to repeated capitalist restorations.
In connection to this, MIWS predicts that the theory of the productive forces will arise, if the humyn species survives long enough to establish another dictatorship of the proletariat, even among those who acknowledge that First Worlders are exploiters and that upward equalization to First World levels of development and living standards isn't possible. Some of Arghiri Emmanuel's writing occasionally points in this direction, and MIWS sees potential problems. Still, MIWS is encouraging study of Arghiri Emmanuel's writing, firmly based on the labor theory of value, because it is more correct and complete than 99% of what "Marxists" and "communists" say about international economics in English; the important thing is to inspire scientific thinking, in a positive direction, about the world economy and the global class structure. The majority of so-called Marxists consciously or unconsciously uphold the theory of the productive forces or commodity fetishism as a result of their failure to address adequately the social relationships that exist across international boundaries.
MIWS would like to emphasize that none of this is "academic." Whether the majority of First Worlders are exploiters, whether most of the First World economy is parasitic, whether most of that economy is unproductive, whether people should also examine international exchange as a source of super-profits -- none of these different questions and others are "academic." They have everything to do with correctly knowing the international relations of production and the concrete contradictions of imperialism -- knowledge that is needed for correct revolutionary practice and preventing capitalist restoration. The questions have a bearing on correctly analyzing class forces and capitalist crisis to develop revolutionary strategy for today and on combating bourgeois forces under socialism in the future. While some treat questions pertaining to imperialist parasitism as if the questions were "academic," often with an underlying aversion to quantitative analysis or concrete analysis using the labor theory of value, currently people are promoting books that revise the theory in Marx's Capital to deny that the majority of the First World economy is parasitic, do not say anything scientific about transfers to the First World population, and support social-democracy and income redistribution for First World nations while drawing from myths about First World worker productivity. There is a sharp difference between what MIWS is saying and what these others are saying that has vast implications for practice and opposing or not opposing the theory of the productive forces. Part of the struggle to recognize this lies in opposing nihilism and becoming more aware of documents from struggles that have already taken place. Peking Review is useful in this regard.
2007 November]
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