From Workers' Liberty 63
Imperialism yesterday and today 8
The political and industrial revolutions in the Third World after 1945 were not automatic processes. Their shape, form and extent were set by class struggle. Three examples of "success stories" in the Third World cast light on the many "failure stories" - and on the questions: Success for whom? At what cost? The examples are Egypt, South Korea and Cuba.
Egypt before its revolution was ruled by a triple alliance of big landowners, wealthy merchants and bankers (along with a few industrialists) and British imperialism. The country had become independent, on paper, in 1923, but British troops remained until 1956, and the British ambassador was able to make and unmake governments. Sixty per cent of the population were landless agricultural labourers or peasants with tiny plots. They received about 6% of the national income between them. Average life expectancy was 36 years; 77% of Egyptians over the age of five were illiterate.
In 1952, a group of middle-ranking army officers seized power. Among them, Gamal Abdul Nasser quickly took the lead. Over the next 10 years, Nasser's regime transformed Egyptian society. British troops were forced out and the Suez Canal nationalised. A series of reforms confiscated the big landlords' land and redistributed it to the peasants, who were later grouped into state-supervised cooperatives. Social services were expanded. Most major industry and commerce was nationalised, without compensation, in 1960-1.
The land reforms produced a considerable redistribution of income, and there were some lasting social improvements. By 1982 average life expectancy was 58 years and, by the late 1970s, adult literacy was 44%. Industry also grew, though not without problems. Between 1953-5 and 1963-5, electricity and steel production trebled, and production of cement and cotton yarn and fabrics doubled. Many capitalists were ruined, especially those (many) who were of foreign origin (Jewish, Greek, Armenian, Lebanese, etc.: there was a xenophobic and anti-semitic edge to Nasser's policies). The Egyptian capitalist class was reconstructed around the state bureaucracy.
From 1967, Nasser's "state capitalist" policy was gradually reversed and replaced by an all-out drive to promote private enterprise and attract foreign investment - though well into the 1980s the state remained by far the dominant force in the economy. The new course widened social inequalities again; increased the number of landless labourers to the same proportions as before the Nasser period; and produced a boom in speculation, commerce and luxury, but very little solid industrial growth. Only Egypt's share in the oil boom of the 1970s moderated the wretchedness.
Egypt's "success story" thus contained a very large dose indeed of failure. But between about 1956 and 1967 Nasser was a figurehead for a whole current of radical politics world-wide. Many other Third World states followed a similar state-capitalist course.
Cuba had been a colony of Spain until 1898, and then was dominated by the USA. The US monopolised Cuba's sugar trade and exercised considerable control over Cuban politics. US interests owned a large part of Cuba's economy. The local capitalist class was a corrupt and disorganised junior partner of the US, the capital, Havana, in the 1950s, an infamously sleazy city of 10,000 prostitutes and vast fortunes made through corruption.
There was a long tradition of popular revolt, of which Castro's revolution in January 1959 was part. The old regime fell relatively easily. But Castro's was a genuine revolution - albeit not a working class one. He acted boldly. He confiscated the big estates and, by the end of 1960, nationalised most of industry. No specially rapid industrial growth followed. The economy was, and is still, much dominated by sugar. But between 1959 and 1962 there was a radical redistribution of income which maybe even doubled the living standards of low-paid workers. The island was already much more developed economically than Egypt. In fact, it was one of the most advanced capitalist countries in the Third World. Infant mortality was lower than in Germany, France, Belgium or Ireland. Some 40% of Cuba's doctors left the island after the revolution, but the new regime established 63 hospitals in rural areas (by the late 1970s) where before there had been only three. Before the revolution 24% of the population had been illiterate. By the early 1960s illiteracy was reduced to 6%. Under the old system at least 25% of the workforce was unemployed for most of the year. By 1978 a sceptical US economist estimated unemployment at 1%. Slavery had been abolished in Cuba only in 1886, and the black third of the population faced severe discrimination. That was reduced.
In South Korea, by contrast, a social revolution was pushed through by US imperialism. When US troops seized the country at the end of World War Two, it was miserably poor -shattered by war and previous decades of brutal Japanese colonialism. Five per cent of farm households owned or managed 60% of the land; the poorer 57% owned less than 6%. There was virtually no industry. The American Military Government immediately distributed all Japanese-owned land to the peasants, limited rents and gave tenants security. In 1950, anxious to create a social base for its war against revolutionary-Stalinist North Korea, the US pushed through a further land reform. All large landholdings were seized with minimal compensation. The landlord class was in effect wiped out. In 1974, despite a trend in the meantime for large landholdings to be reconstituted, 83% of the cultivated land was in smallholdings.
The US saw the creation of a large class of smallholding farmers as their best way to build a social base for private-profit capitalism. They were right about that. US military might and lavish US aid made sure that the land reform was effective and successful. Easy credit was available to the small farmers, especially from the 1960s. This agricultural revolution was the basis for an industrial revolution - an industrial revolution which, despite the official free-enterprise ideology, was tightly managed and directed by the state through its control of credit. Manufacturing industry in South Korea grew 16% a year between 1960 and 1982. Manufactured exports worth $10 million in 1962 and $19 billion in 1981. Practically all South Korea's investment was financed by US aid and military contracts, especially during the Vietnam War. Nevertheless, by the 1980s South Korea had reached a point where its industrial firms could worry US capitalists as serious competitors.
And South Korea's growth (more so than that of some other "newly industrialising countries" like Brazil and Mexico) brought increases in real wages. There were substantial increases even before the growth of independent trade unions in the late 1980s and the 1990s saw big wage rises and improvements in work conditions. Literacy increased to 93% and life expectancy to 67 years (it was 52 years in the late 1950s). The land reform was crucial here. By one estimate it increased peasants' income by 40%. It thus put a floor under living standards and inhibited the growth of the mass of shanty-town misery - people who cannot make a living on the land and flee to the cities to a life of odd jobs and petty crime - which characterises most fast-developing Third World countries.