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Primary economies: the limits to democracy

Primary economies: the limits to democracy

By: José R. Oro
Quito, (Prensa Latina) One of the most serious problems facing the social and political ideals of the left in Latin America is the survival and hegemony of the primary-exporting economies, under private control, in most countries.

Its conformation has a long history in the region, marked by the process of European conquest and colonization, in which Spain and Portugal stand out.

Colonial economies, subject to state regulations, specialized according to mercantilist requirements and varied over time. The colonies were flooded with products from the metropolis, had strangled domestic markets and exported few products, at undervalued prices, also fixed by the authorities.

Under such conditions the original accumulation of capital occurred in Europe, but in Latin America no labor and wage markets were created, since pre-capitalist relations based on serfdom dominated.

Once the independence processes were concluded, the Latin American republics benefited from economic liberation from the former monopoly control of the metropolis; but the nascent new economies had to work in an international system of division of labor, with capital centers and dependent peripheries, which confirmed the elaboration of primary-exporting economies, subject to few products: sugar, coffee, cocoa, wood, furs, meat, saltpeter, tobacco and also precious stones and other minerals such as silver.

Exotic exhibitions

The “international fairs” of the large countries acquired relevance coinciding with the rise of Latin American liberalism.

Paris organized them in 1855, 1867, 1878, 1889 and 1900, attracting millions of visitors. At the “Universal Exhibitions of Paris”, 1889, for the Centenary of the French Revolution, one of the exotic attractions was the “exhibit” of indigenous people.

The US held its international fairs in Boston (1883), New Orleans (1885), Chicago (1893), Atlanta (1896) and Saint Louis (1904).

Following the flow, Guatemala hosted the “Central American Exposition” in 1897. But the Latin American countries participating in international fairs could barely exhibit natural products, agricultural, handicrafts and works of art, compared to English, American or European machines.

In the 20th century, new products were incorporated, all primary: seafood, oils, flowers, rubber, tin, saltpeter, copper and, above all, petroleum, exploited by foreign companies that acted as if they were in reconquered countries, creating a history of corruption, privileges, business deals, exploitation and blood.

At the beginning of the 20th century, only Argentina, Brazil and Mexico stood out as countries with industrial progress because the vast majority of nations were underdeveloped.

The organic States

That base of primary economies with hegemonic landowners, mining monopolies, merchants, importers and exporters, as well as bankers, without manufacturing or developed industry and, even worse, with no modern technologies, explains the consolidation of oligarchic states.

Those wealthy economic elites, family clans and “caudillos” (political bosses) who despised the popular sectors and repressed the movements of rural peasants, urban workers and middle classes identified with them, established despotic and authoritarian governments, guided by class and racist oligarchic values and principles, which have lasted a long time.

Strong, let alone popular, democracy and institutions could not be erected, given the predominance of private interests, clientelism, “gamonalism” (village chiefs),

The State as an instrument of plunder

The State was literally an instrument of plunder, enrichment and privilege. The import-substituting industrialization started, with different rhythms, in the 1920s an 1930s, as well as the “developmentalisms” of the 60s and 70s. Although they achieved some industrial progress and the formation of the national bourgeoisies, they were the result of promoter states with governments that had to superimpose capitalist modernization upon the resistant traditional oligarchies. Foreign capital supported new business and external dependence.

From the 80s, the penetration of neoliberalism did not respond to the existence of thriving Latin American bourgeoisies capable of promoting social changes for some social welfare. Quite the opposite. It has served to transfer old oligarchic values to the “modern” business classes.

Industrialization and the really productive sectors have been hit in favor of new business formulas, simply those of landowners, agro-exporters, miners, merchants and, above all, bankers.

Minimum States, with labor flexibility, reduction or elimination of taxes, environmental exploitation and privatization/concession of public resources, goods and services, became the tools to strengthen powerful and interlinked business groups that control the State, the economy, the society, the media and the governments.

The arrival of the new century

At the beginning of the 21st century, the experience of the first progressive cycle provoked the reaction of those sectors, who learned to confront the middle and popular classes. So, they are not willing to admit changes in the relations of power or wealth, regardless of the effects on institutional democracy. They have even managed to redefine in their favor the armed forces and the police, who come from an outdated anti-leftist and anti-communist tradition, formed in the 1960s, from which they have not detached.

In these scenarios, we must understand the persecution of the most important leaders of the progressive cycle, the “soft-coups” and lawfare, as well as the most recent events: attempted murder of Cristina Fernandez; coup d etat in Peru against president Pedro Castillo, along with the massacre of civilians accused of being “terrorists”; Bolsonaro´s mobilization against Luiz Inacio Lula da Silva in Brazil, led by agro-business sectors and with evangelical principles; regional racist uprisings against the Luis Arce government in Bolivia; and even the frustrating constitutionalist process attempted in Chile; besides the permanent aggression against the government of Manuel Lopez Obrador in Mexico and against Alberto Fernandez in Argentina; one they are trying to arouse in Colombia against president Gustavo Petro, or the attacks (and also persecution) of the business-inclined government of Guillermo Lasso in Ecuador against all those who oppose his tricky popular consultation (scheduled for February 5, 2023), denounce the impunity of corruption scandals or manifest their political opposition.

It does not turn out to be an exclusively political phenomenon that is happening in the region nor can it be explained only by the behavior of the right and anti-progressive governments.

What it looks like and what it really is

There is a long-term historical phenomenon which is the worsening of the conflict between the elites already described and the broader social sectors of middle and popular segments. Their interests are better defined.

It appears as a conflict between two opposing models: the neoliberal and the social economy. But, basically, it is responding to the structures of primary-exporting economies that do not allow economic diversification, industrialization or technology.

Consequently, there is a material base that strangles the possibilities of building societies with well-being, because it continues to function at the service of the traditional economic groups, which concentrate capital and wealth.

Strictly speaking, it is not the productive sector that defines the economic path, but the wealthy and speculative elites, who control agro-exports, mining, trade, the most varied services and, above all, the banks.

*Well-known Ecuadorean historian and political analyst.


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