Background: Imperialism yesterday and today 4

Submitted by martin on 16 June, 2003 - 11:48

From Workers' Liberty 63

Imperialism yesterday and today 4

Looting El Dorado

In 1519-21 Spain conquered Mexico, and over the following decades it rapidly built up in America the first great colonial empire of the capitalist era. In India and Africa and the Middle East, as we have seen, the colonial regimes acted as a sort of funnel, strapped onto a modified local pre-capitalist economy, pumping out wealth into the channels of European capitalism. Spanish America was not quite the same. Nor, generally, did it follow the other example of European colonialism, in North America and Australia, where the local population was almost completely wiped out and replaced by European settlers pursuing capitalist development.
The Americas had perhaps 100 million people before the Europeans arrived. Fewer than three million of these lived in North America or in present-day Argentina, Brazil or Chile. The vast majority were in present-day Mexico, Central America and Peru, where they had elaborate civilisations (Inca, Aztec) but were technologically not very advanced. These densely-populated areas became the main centres of Spanish America. The native ("Indian") population was decimated by war, forced labour and imported diseases - in Mexico it was reduced from 25 million to one and a half million in one century - but remained the basic labour force for the Spanish regime. Elsewhere in the Americas, where the native population was sparse or was wiped out completely (as on many Caribbean islands), African slaves were imported. But in the Spanish possessions, African slavery was a relatively minor element, except in Cuba. Today "mestizos" - people of mixed race - are the dominant ethnic type in Latin America; but countries vary widely, with Bolivia and Guatemala having an Indian majority in the population and Argentina and Uruguay being almost entirely white.
"At first the Spaniards simply picked up the gold already mined by the Incas and used for ritual," records Immanuel Wallerstein. "It was a bonanza. Just as this was running out, the Spaniards succeeded in discovering the method of silver amalgam which enabled them profitably to mine the silver which existed in such abundance." A yearly succession of treasure fleets made their way across the Atlantic, laden with silver. Potosi - now a small, poverty-stricken town in the Bolivian highlands - became, in its heyday around 1600, as large and perhaps as rich as any city in Western Europe. It was producing half the world's total supply of silver. The human cost? Eight million Indians killed by forced labour in the silver mines of Potosi alone.
The huge gains made from the silver trade have convinced many Marxists that Spanish America was fully capitalist. Capital is not just wealth from trade, but wealth which constantly expands itself through reinvestment. Although fortunes based on the silver trade played a big role in the emergence of the capitalist world economy, they were generally not capital there. To quote Marx again: "The treasures captured outside Europe... flowed back to the mother-country and were turned into capital there." In fact it was more in Italy and in north-west Europe than in Spain that the silver quickened capitalism. Much of it went to Antwerp, which in the 16th century was "as much (if not more) the true capital of the Atlantic as Seville or Lisbon... a system of exchange, circulation and banking came into being, centred on the Scheldt port, and extending as far as Germany, England and even Lyons" (Fernand Braudel). Even metropolitan Spain's economy was still based on feudal privilege rather than capitalist enterprise. The treasure of the "Indies" (as the Spanish called America) was consumed in luxury and military display. Spaniards of the time complained that their country was "the Indies of other foreign kingdoms".
Feudal Spain established a new feudalism in Spanish America. Spanish settlers grabbed huge areas of land - the "latifundia". A fantastically unequal distribution of landownership was set up which continues in most of Spanish America to this day. In 1970, over 60% of Latin America's land was in big holdings (more than 500 hectares), whereas in Africa and Asia 75-80% of land was in holdings smaller than 20 hectares. The Indian and mestizo peasants were tied to the latifundia by a system called debt-peonage. The Spanish land-grabber would grant the peasant a little land, some implements and some seed or livestock, in return for labour and loan repayments. Formally, the peasants are wage labourers. In fact they can never get out of debt, and the landowner is local magistrate and governor as well as employer. This system is by no means abolished in Latin America even now.
At the beginning of the 19th century almost all the Spanish-American colonies won independence. But the land-owning oligarchies remained the dominant force. Spanish-American feudalism, resting as it did on the super-exploitation of the Indians, lacked the dynamic conflict between cities and countryside typical of West European feudalism. Landowners generally lived in the cities. There was not much of an autonomous urban merchant/industrial class fretting against feudal limitations. Independence produced no great stride forward into capitalist development. In fact, manufacturing industry - quite active under Spanish rule, though in feudal guild forms - initially declined. The British politician George Canning greeted Spanish American independence with some excitement: "England will be a workshop, and Latin America her farm." Britain did not need to establish its own colonial rule in America in place of Spain's. The competitive supremacy of its industry would give it economic dominance, and with that political influence. Trade increased. Spanish-American manufacturing industry, relatively robust against the feeble competition of Spain, was crushed by the competition of Britain's new factories. Most Latin-American countries became economies dependent on a single export - coffee, bananas, tin for Bolivia, nitrates and later copper for Chile. But the cities were still rich; and capital did circulate increasingly in Latin America under this "imperialism of free trade". Towards the end of the century, new industries arose in Mexico, Brazil, Chile and in Argentina.
Capitalist development had been limited because of the devastating competition of Britain - which nevertheless suited the landowning oligarchies quite well, giving them easy access to modern manufactured goods and markets in return for their agricultural exports - and also for another reason. Some leaders of the independence struggle had hoped to unite former Spanish America into a single state. They failed. The division of the region into several states led to those states being integrated into the world as separate (relatively weak and small) provinces, relating more to outside big powers than to each other. A South American "common market" of some vigour, Mercosur, has now been created under Brazilian hegemony, but as late as 1966 only 10% of the trade of the Latin American Free Trade Area was within LAFTA, whereas over 60% of Western Europe's trade was internal.
And then worse: from the late 19th century, as rapidly-expanding North America became a great industrial power, large parts of Latin America became semi-colonies of the US. In 1895 an official US diplomatic note declared: "Today the US is practically sovereign on this continent, and its fiat is law." The US never quite acquired that full control, and especially not over the larger states to the south, but it was a powerful force backing up the oligarchies, and in Central America it regularly intervened with military force at the least sign of reform.
The depression of the 1930s threw the old oligarchic export economies into crisis. Between 1928-9 and 1932-3 exports declined by more than 60% for every major economy in Latin America. Nationalist revolutions and reform efforts, from below and from above, followed. The local industrial capitalist class began to play a bigger role.
Latin America today, alongside tracts of poverty as bad as any in the world, has much modern industry and a sizeable middle class not very different in living standards from Western Europe. But the old oligarchies only faded, in most countries, after the Cuban Revolution in 1959.