Speaking in Washington in preparation for the 1989 General Assembly of the OAS, which he headed, Brazilian President Soares described the 1980s as a "lost decade" for Latin America, with falling personal income and general economic stagnation or decline. In 1988 average income had fallen to the level of 1978. There was a further decline in 1989, and the export of capital continued in a flood, the UN Economic Commission for Latin America and the Caribbean reported.
According to World Bank figures, average per capita income in Argentina fell from $1,990 in 1980 to $1,630 in 1988. Mexico's GNP declined for seven straight years. Real wages in Venezuela has fallen by a third since 1981, to the 1964 level. Argentina allotted 20 percent of its budget to education in 1972, 6 percent in 1986. David Felix, a leading specialist on Latin American economics, writes that per capita output and real investment per worker declined sharply in the 1980s, the latter falling to below 1970 levels in most of the heavily indebted countries, where urban real wages are in many cases 20 percent to 40 percent below 1980 levels, even below 1970 levels. The brain drain quickened and physical and human capital per head shrank because of the decline of public and private investment and collapse of infrastructure. Much of the sharp deterioration of the 1980s, Felix and others conclude, can be traced to the free-market restructuring imposed by the industrial powers.
Mexicans continue to flee to the United States for survival, and macabre stories abound, some hard to believe but important for what they indicate about the prevailing mood. Reporting the annual meeting of the Border Commission on Human Rights in Mexico, Mexico's leading daily (Excelsior) alleges that actions of the U.S. Border Patrol cause the drowning of persons seeking to cross the river to the United States. A representative of the regional Human Rights Committee told the session that 1,000 people had disappeared without a trace after leaving their homes to enter the U.S. illegally. She "also added that the disappearance or theft of women for the extraction of organs for use in transplants in the U.S. is common." Others reported torture, high rates of cancer from chemicals used in the maquiladora industries (mainly subsidiaries of transnationals supplying U.S. factories), secret prisons, kidnapping, and other horror stories. The journal also reports a study by environmental groups, presented to President Salinas, claiming that 100,000 children die every year as a result of pollution in the Mexico City area, along with millions suffering from pollution-induced disease, which has reduced life expectancy by an estimated 10 years. The "main culprit" is the emissions of lead and sulfur from operations of the national petrochemical company Pemex, which is free from the controls imposed elsewhere -- one of the advantages of Third World production that is not lost on investors.
The Mexican Secretariat of Urban Development and the Environment described the situation as "truly catastrophic," Excelsior reports further, estimating that less than 10 percent of Mexican territory is able to support "minimally productive agriculture" because of environmental degradation, while water resources are hazardously low. Many areas are turning into "a real museum of horrors" from pollution because of the blind pursuit of profits on the part of national and international private capital. The Secretariat estimates further that more than 90 percent of industry in the Valley of Mexico, where there are more than 30,000 plants, violate global standards, and in the chemical industry, more than half the labor force suffers irreversible damage to the respiratory system.
Maude Barlow, chairperson of a Canadian study group, reports the results of their inquiry into maquiladoras "built by Fortune 500 to take advantage of a desperate people," for profits hard to match elsewhere. They found factories full of teenage girls, some 14-years-old, "working at eye-damaging, numbingly repetitive work" for wages "well below what is required for even a minimum standard of living." Corporations commonly send the most dangerous jobs here because standards on chemicals are "lax or non-existent." "In one plant," she writes, "we all experienced headaches and nausea from spending an hour on the assembly line" and "we saw young girls working beside open vats of toxic waste, with no protective face covering." Unions are barred, and there is an ample reserve army of desperate people ready to take the place of any who "are not happy, or fall behind in quotas, or become ill or pregnant." The delegation "took pictures of a lagoon of black, bubbling toxic waste dumped by plants in an industrial park," following it to "where it met untreated raw sewage and turned into a small river running past squatters' camps (where children covered in sores drank Pepsi Cola from baby bottles) to empty into the Tijuana River."
It is more fashionable to bemoan the environmental and human catastrophes of Eastern Europe, the results of an evil system now happily overcome in a victory for our humane values.
Colombia is another success story of capitalist democracy, flawed only by the drug cartels -- and for some of those gnats who still fail to appreciate the wonders of our system, by such marginal problems as the murder of "subversives" -- such as 1,000 members of the leading opposition party and 3 of its presidential candidates -- by death squads in league with the security forces.
There is also a background, though one would be hard put to find a discussion of it in recent commentary on U.S. efforts to aid the Colombian military in the "war against drugs." The topic is addressed in a discussion of human rights in Colombia by Alfredo Vasquez Carrizosa, president of the Colombian Permanent Committee for Human Rights. "Behind the facade of a constitutional regime," he observes, "we have a militarized society under the state of siege provided" by the 1886 Constitution. The Constitution grants a wide range of rights, but they have no relation to reality. "In this context poverty and insufficient land reform have made Colombia one of the most tragic countries of Latin America." Land reform, which "has practically been a myth," was legislated in 1961, but "has yet to be implemented, as it is opposed by landowners, who have had the power to stop it" -- again, no defect of `'democracy," by Western standards. The result of the prevailing misery has been violence, including la Violencia of the 1940s and 1950s, which took hundreds of thousands of lives. "This violence has been caused not by any mass indoctrination, but by the dual structure of a prosperous minority and an impoverished, excluded majority, with great differences in political participation," the familiar story.
The story has another familiar thread. "But in addition to internal factors," Vasquez Carrizosa continues, "violence has been exacerbated by external factors. In the 1960s the United States, during the Kennedy administration, took great pains to transform our regular armies into counterinsurgency brigades, accepting the new strategy of the death squads." These Kennedy initiatives "ushered in what is known in Latin America as the National Security Doctrine, ...not defense against an external enemy, but a way to make the military establishment the masters of the game... [with] the right to combat the internal enemy, as set forth in the Brazilian doctrine, the Argentine doctrine, the Uruguayan doctrine, and the Colombian doctrine: it is the right to fight and to exterminate social workers, trade unionists, men and women who are not supportive of the establishment, and who are assumed to be communist extremists. And this could mean anyone, including human rights activists such as myself."
A study by Evan Vallianatos of the U.S. government Office of Technology Assessment amplifies the dimensions of the victory of capitalist democracy here. "Colombia's twentieth century history is above all stained in the blood of the peasant poor," he writes, reviewing the gruesome record of atrocities and massacre to keep the mass of the population in its place. The U.S. Aid program, the Ford Foundation, and others have sought to deal with the plight of the rural population "by refining the largely discredited trickle-down technology and knowledge transfer process," investing in the elite and trusting in "competition, private property, and the mechanism of the free market" -- a system in which "the big fish eats the small one," as one poor farmer observes. These policies have made the dreadful conditions still worse, creating "the most gross inequalities that the beast in man has made possible." It is not only the rural poor who have suffered beyond endurance. To illustrate the kind of development fostered by the multinational corporations and the technocrats, Vallianatos offers the example of the small industrial city of Yumbo, "rapidly becoming unfit for human habitation" because of uncontrolled pollution, decay, and "corrosive slums" in which "the town's spent humanity has all but given up."
Another victory for our side.
Brazil is another country with rich resources and potential, long subject to European influence, then U.S. intervention, primarily since the Kennedy years. We cannot, however, simply speak of "Brazil." There are two very different Brazils. In a major scholarly study of the Brazilian economy, Peter Evans writes that "the fundamental conflict in Brazil is between the 1, or perhaps 5, percent of the population that comprises the elite and the 80 percent that has been left out of the `Brazilian model' of development." The Brazilian journal Veja reports on these two Brazils, the first modern and westernized, the second sunk in the deepest misery. Seventy percent of the population consumes fewer calories than Iranians, Mexicans, or Paraguayans. Over half the population have family incomes below the minimum wage. For 40 percent of the population, the median annual salary is $287, while inflation skyrockets and necessities are beyond reach. A World Bank report on the Brazilian educational system compares it unfavorably to Ethiopia and Pakistan, with a dropout rate of 80 percent in primary school, growing illiteracy, and falling budgets. The Ministry of Education reports that the government spends over a third of the education budget on school meals, because most of the students will either eat at school or not at all.
The journal South, which describes itself as "The Business Magazine of the Developing World," reports on Brazil under the heading "The Underside of Paradise." A country with enormous wealth, no security concerns, a relatively homogeneous population, and a favorable climate, Brazil nevertheless has problems: "The problem is that this cornucopia is inhabited by a population enduring social conditions among the worst in the world. Two-thirds do not get enough to eat. Brazil has a higher infant mortality rate than Sri Lanka, a higher illiteracy rate than Paraguay, and worse social indicators than many far poorer African countries. Fewer children finish first-grade school than in Ethiopia, fewer are vaccinated than in Tanzania and Botswana. Thirty-two percent of the population lives below the poverty line. Seven million abandoned children beg, steal and sniff glue on the streets. For scores of millions, home is a shack in a slum, a room in the inner city, or increasingly, a patch of ground under a bridge."
The share of the poorer classes in the national income is "steadily falling, giving Brazil probably the highest concentration of income in the world." It has no progressive income tax or capital gains tax, but it does have galloping inflation and a huge foreign debt, while participating in a "Marshall Plan in reverse," in the words of former President Jose Samey, referring to debt payments.
For three-quarters of the population of this cornucopia, the conditions of Eastern Europe are dreams beyond reach, another triumph of the Free World.
A UN "Report on Human Development" ranks Brazil, with the world's eighth-largest economy, in 80th place in general welfare (as measured by education, health, and hygiene), near Albania, Paraguay, and Thailand. The UN Food and Agriculture Organization (FAO) announced on October 18 that more than 40 percent of the population (almost 53 million people) are hungry. The Brazilian Health Ministry estimates that 840,000 children aged 1-4 and 420,000 newborns will die of hunger this year.
Here too it is widely alleged that babies are sacrificed for organ banks, a belief that can hardly be true but that reveals much about the conditions under which it can take root. The Honduran press reported that Brazilian babies had been rescued from a gang that "intended to sacrifice them to organ banks in the United States, according to a charge in the courts." Brazil's Justice Ministry ordered federal police to investigate allegations that adopted children are being used for organ transplants in Europe, a practice "known to exist in Mexico and Thailand," the London Guardian reports, adding that "handicapped children are said to be preferred for transplant operations" and reviewing the process by which children in Brazil are kidnapped, "disappeared," or given up by impoverished mothers, then adopted or used for transplants.
It would only be fair to add that the authorities are concerned with the mounting problem of homeless and starving children and are trying to reduce their numbers. Amnesty International reports that death squads, often run by the police, are killing street children at a rate of about one a day, while "many more children, forced onto the streets to support their families, are being beaten and tortured by the police" (Reuters, citing AI). "Poor children in Brazil are treated with contempt by the authorities, risking their lives simply by being on the streets," AI alleges. Most of the torture takes place under police custody or in state institutions. There are few complaints by victims or witnesses because of fear of the police, and the few cases that are investigated judicially result in light sentences.
Recall that these are the conditions that hold on the 25th anniversary of "the single most decisive victory of freedom in the mid-twentieth century" (Kennedy Ambassador Lincoln Gordon), that is, the overthrow of parliamentary democracy by Brazilian generals backed by the United States, which then praised the "economic miracle" produced by the neo-Nazi national security state they established. In the months before the generals' coup, Washington assured its traditional military allies of its support and provided them with aid, because the military was essential to "the strategy for restraining left-wing excesses" of the elected Goulart government, Gordon cabled the State Department. The U.S. actively supported the coup, preparing to intervene directly if its help was needed for what Gordon described as the "democratic rebellion" of the generals. This "de facto ouster" of the elected president was "a great victory for the free world," Gordon reported with joy, adding that it should "create a greatly improved climate for private investment." U.S. labor leaders also demanded their proper share of the credit for the overthrow of the parliamentary regime, as the new government placed in power by the generals proceeded to smash the labor movement and subordinate poor and working people to the overriding needs of business interests, primarily foreign. Secretary of State Dean Rusk justified U.S. recognition for the obviously illegal regime on the grounds that "the succession there occurred as foreseen by the [Brazilian] Constitution," which had just been blatantly violated. The U.S. proceeded to provide ample aid as torture and repression mounted, the relics of constitutional Government faded away, and the climate for investors improved under the rule of what Washington hailed as the "democratic forces."
These events in Latin America's most powerful state initiated a domino effect throughout the continent, leading to an unprecedented plague of repression under the National Security doctrines crafted by the military and political leaders of the hemisphere and their U.S. advisers.
The circumstances of the poor in Brazil continue to regress as austerity measures are imposed on the standard International Monetary Fund formula in an effort to deal somehow with this catastrophe of capitalism. The austerity measures initiated by President Collor de Mello were initially described as "populist," harmful mostly to the wealthy. Predictably, reality took a different course. Ken Silverstein reports that half a year after the measures were inaugurated, "the rich are reassured." The IMF measures primarily harmed the poor, while wealthy individuals and large companies were able to find ways to enrich themselves by exploiting measures that in theory were devised to impose the main burden on them. A study by the J. Walter Thompson agency concluded that "Collor's policies are not a threat to the wealthy.... The rich are now leading absolutely normal lives" (agency vice-president Celia Chiavolle). Businessmen, bankers, and the U.S. Chamber of Commerce express their pleasure in the course of policy, while "the working class has been pushed to the wall," Silverstein adds, with hundreds of thousands fired and purchasing power reduced to a historic low, well below minimal needs for about half the population.
The situation is similar in Argentina, where the Christian Democratic Party called on its members to resign from the cabinet in March "in order not to validate, by their presence in the government, the anti-popular [economic] measures of the regime." In a further protest over these measures, the Party expelled the current Minister of the Economy. Experts say that the socioeconomic situation has become "unbearable."
The terrible fate of Argentina is addressed in a report in the Washington Post by Eugene Robinson. One of the ten richest countries in the world at the turn of the century, with rich resources and great advantages, Argentina is becoming a Third World country, Robinson observes. About one-third of its 31 million inhabitants live below the poverty line. Some 18,000 children die each year before their first birthday, most from malnutrition and preventable disease The capital, once considered "the most elegant and European city this side of the Atlantic," is "ringed by a widening belt of shantytowns, called villas miserias, or `miseryvilles,' where the homes are cobbled- together huts and the sewers are open ditches." Here too the IMF-style reforms "have made life even more precarious for the poor"
Robinson's article is paired with another entitled "A Glimpse Into the Lower Depths," devoted to a mining town in the Soviet Union Subtitled "A mining town on the steppes reveals `the whole sick system'," the article stresses the comparison to capitalist success. The article on Argentina, however, says nothing about any "sick system." The only hint of a reason for the catastrophe in Argentina, or the general "economic malaise" in Latin America, is in a statement by a planning minister that "we destroyed ourselves" by "economic mismanagement." Again the usual pattern: their crimes reveal their evil nature, ours are the result of personal failings and the poor human material with which we are forced to work in the Third World.
David Felix concludes that Argentina's decline results from "political factors such as prolonged class warfare and a lack of national commitment on the part of Argentina's elite," which took advantage of the free-market policies of the murderous military dictatorship that were much admired here. These led to massive redistribution of income towards the wealthy and a sharp fall of per capita income, along with a huge increase in debt as a result of capital flight, tax evasion, and consumption by the rich beneficiaries of the "sick system" -- Reaganomics, in essence.
In oil-rich Venezuela, over 40 percent live in extreme poverty according to official figures, and the food situation is considered "hyper-critical," the Chamber of Food Industries reported in 1989. Malnutrition is so common that it is often not noted in medical histories, according to hospital officials, who warn that "the future is horrible." Prostitution has also increased, reaching the level of about 170,000 women or more, according to the Ministry of Health. The Ministry also reports an innovation, beyond the classic prostitution of women of low in-come. Many "executive secretaries and housewives and college students accompany tourists and executives during a weekend, earning at times up to [about $150] per contact." Child prostitution is also increasing and is now "extremely widespread," along with child abuse.
Brutal exploitation of women is a standard feature of the "economic miracles"
in the realms of capitalist democracy. The huge flow of women from impoverished
rural areas in Thailand to service the prostitution industry -- one of the
success stories of the economic takeoff sparked by the Indochina wars -- is one
of the many scandals that escape notice in the admiration for the Free World
triumph. The savage conditions of work for young women largely from the rural
areas are notorious; >young
Environmental degradation is also a severe problem in Chile. The Chilean journal Apsi devoted a recent issue to the environmental crisis accelerated by the "radical neoliberalism" of the period following the U.S.-backed coup that overthrew the parliamentary democracy. Recent studies show that about half the country is becoming a desert, a problem that "seems much farther away than the daily poisoning of those who live in Santiago," the capital city, which competes with Sao Paolo (Brazil) and Mexico City for the pollution prize for the hemisphere (for the world, the journal alleges). "The liquid that emerges from the millions of faucets in the homes and alleys of Santiago have levels of copper, iron, magnesium and lead which exceed by many times the maximum tolerable norms." The land that "supplies the fruits and vegetables of the Metropolitan Region are irrigated with waters that exceed by 1,000 times the maximum quantity of coliforms acceptable," which is why Santiago "has levels of hepatitis, typhoid, and parasites which are not seen in any other part of the continent" (one of every three children has parasites in the capital). Economists and environmentalists attribute the problem to the "development model," crucially, its "transnational style," "in which the most important decisions tend to be adopted outside the ambit of the countries themselves," consistent with the assigned "function" of the Third World: to serve the needs of the industrial West.
The fashion at home, as noted, is to attribute the problems of Eastern Europe to the "sick system" (quite accurately), while ignoring the catastrophes of capitalism or, on the rare occasions when some problem is noticed, attributing it to any cause other than the system that consistently brings it about. Latin American economists who have attributed the problems of the region to the "development model" are generally ignored, but some of them have been useful for ideological warfare and therefore have attained respectability in the U.S. political culture. One example is Francisco Mayorga, a Yale Ph.D. in economics, who became one of the most respected commentators on the economic affairs of Nicaragua in the 1980s because he could be quoted on the economic debacle caused by the Sandinistas. He remained a U.S. favorite as he became the economic Czar after the victory for the U.S. candidate in the February 1990 election, though he disappeared from view when he was removed after the failure of his highly-touted recovery policies (which failed, in large part, because of U.S. foot-dragging, the UNO government being nowhere near harsh and brutal enough for Washington's tastes).
But Mayorga was never quoted on what he actually wrote about the Nicaraguan economy, which is not without interest. His 1986 Yale doctoral dissertation is a study of the consequences for Nicaragua of the development model of the U.S.-backed Somoza regime, and of the likely consequences of alternative policy choices for the 1980s. He concludes that "by 1978 the economy was on the verge of collapse" because of the "exhaustion of the agroindustrial model" and the "monetarist paradigm" that the U.S. favored. This model had led to huge debt and insolvency, and "the drastic downturn of the terms of trade that was around the corner was clearly going to deal a crucial blow to the agroindustrial model developed in the previous three decades," leading "inexorably" to an "economic slump in the 1980s." The immense costs of the U.S.-backed Somoza repression of 1978-9 and the contra war made the "inexorable" even more destructive. Mayorga estimates capital flight from 1977 to 1979 at $500 million, and calculates the "direct economic burden" of war from 1978 to 1984 at more than $3.3 billion. That figure, he points out, is one and a half times the "record GDP level of the country in 1977," a year of "exceptional affluence" because of the destruction of the Brazilian coffee crop, hence regularly used by U.S. propagandists (including some who masquerade as scholars) as a base line to prove Sandinista failures. The course of the economy from 1980, Mayorga concludes, was the result of the collapse of the agroindustrial export model, the severe downturn in the terms of trade, and the unbearable burden of the 1978-9 war and then the contra war (his study ends before the U.S. embargo exacerbated the crisis further). Sandinista policies, he concludes, were ineffective in dealing with the "inexorable" collapse: they "had a favorable impact on output and a negative effect on rural wages and farming profits," favoring industrial profits and redistributing income "from the rural to the urban sector." Had there been "no war and no change in economic regime," his studies show, "the Nicaraguan economy would have entered a sharp slump."
These conclusions being useless or worse, Mayorga's actual work on the Nicaraguan economy passes into the same oblivion as all other inquiries into the catastrophes of capitalism. The example is noteworthy because of Mayorga's prominence, at the very same time, insofar as he could serve a propaganda function for the media.
The Fruits Of Victory: The Caribbean
Brazil and Chile are not the only countries to have basked in praise for their achievements after U.S. intervention set them on the right course. Another is the Dominican Republic. After the latest U.S. invasion under Lyndon Johnson in 1965, and a dose of death squads and torture, democratic forms were established, and U.S. commentators have expressed much pride in the peaceful transfer of power -- or better, governmental authority, power lying elsewhere. The economy is stagnant and near bankrupt, public services function only intermittently, poverty is endemic, malnutrition is increasing, and the standard of living of the poor continues its downward slide. In the capital city, electricity supply is down to four hours a day; water is available for only an hour a day in many areas. Unemployment is rising, the foreign debt has reached $4 billion, the 1989 trade deficit was $1 billion, up from $700 million the year before. Estimates of the number who have fled illegally to the U.S. range up to a million. Without the remittances of Dominicans working in Puerto Rico and on the U.S. mainland -- illegally for the most part -- "the country could not survive," the London Economics reports.
U.S. investors, assisted by Woodrow Wilson's invasion and its aftermath, later Johnson's, had long controlled most of the economy. Now foreign investment in 17 free trade zones is attracted by 15-year tax holidays and average wages of 65 cents an hour. Some "remain upbeat about the Dominican Republic's situation," the Business Magazine of the Developing World (South) reports, citing U.S. ambassador Paul Taylor, who described the new free trade zones as an economic miracle in a talk to the chamber of commerce. There are some objective grounds for Taylor's cheerful view of the prospects, South observes: "Optimists point to the political and labour harmony in the Dominican Republic, the substantial pool of cheap workers and the transport, banking and communications services as continuing strong incentives to investors. Indeed, as a Dominican factory manager notes: `Anyone who gets involved in unions here knows that they'll lose their job and won't work in the free trade zone any more.' "
As in Brazil and elsewhere, the American Institute for Free Labor Development (AIFLD), the AFL-CIO foreign affairs arm supported by the government and major corporations, "has been instrumental in discouraging hostile [sic] union activity in order to help U.S. companies maximise their profits," South reports. With friends like these, Dominican workers have little to fear.
A more recent beneficiary of U.S. invasion, Panama, also has its share of optimists, as discussed in the first part of this series, notably the tiny white minority now restored to power and the U.S. businesspeople who have revived Panama City's night-life. As elsewhere in Latin America, the plight of the unimportant people is deplored by sections of the Church who persist in their old-fashioned "preferential option for the poor," not understanding the merits of the promising new "trickle down" techniques of raising them from their misery.
Elsewhere in the Caribbean basin, we find much the same picture, including Grenada, also liberated by U.S. benevolence, then restored to its proper status (see my article in Z, March 1990). The U.S. pursued a different path to ensure virtuous behavior in the case of Jamaica. Upstarts led by the social democrat Michael Manley and his People's National Party (PNP) sought to explore the forbidden path of independent development and social reform in the 1970s, eliciting the usual hostility from the United States and sufficient pressures to achieve an electoral victory for U.S. favorite Edward Seaga, who pledged to put an end to such nonsense. Seaga's pursuit of proper free market principles was lauded by the Reagan administration, which announced grandly that it would use this opportunity to create a showcase for democracy and capitalism in the Caribbean. Massive aid flowed. USAID spent more on Jamaica than on any other Caribbean program. The World Bank also joined in to oversee and expedite this estimable project. Seaga followed all the rules, introducing austerity measures, establishing Free Trade Zones where non-union labor, mostly women, work in sweatshops for miserable wages in foreign-run plants subsidized by the Jamaican government, and generally keeping to the IMF prescriptions.
There was some economic growth, "mainly as a result of laundered `ganja' dollars from the marijuana trade, increased tourism earnings, lower fuel import costs, and higher prices for bauxite and alumina," the North American Congress on Latin America (NACLA) reports. The rest was the usual catastrophe of capitalism, including one of the highest per capita foreign debts in the world, collapse of infrastructure, and general impoverishment. According to USAID, by March 1988, along with its "crippling debt burden," Jamaica was a country where economic output was "far below the production level of 1972," "distribution of wealth and income is highly unequal," "shortages of key medical and technical personnel plague the health system," "physical decay and social violence deter investment," and there are "severe deficits in infrastructure and housing." The assessment was made six months before hurricane Gilbert dealt a further blow.
At this point, Michael Manley, now properly tamed, was granted the right to return to power to administer the ruins, all hope for constructive change having been lost. Manley "is making all the right noises" to reassure the Bank and foreign investors, Roger Robinson, World Bank senior economist for Jamaica, said in a June 1988 pre-election interview. He explained further that "Five years ago, people were still thinking about `meeting local needs,' but not any more. Now the lawyers and others with access to resources are interested in external export investment. Once you have that ingrained in a population, you can't go back easily, even if the PNP and Michael Manley come in again. Now there's an understanding among individuals who save, invest, and develop their careers that capital will start leaving again if the PNP, or even [Seaga's] JLP, intervenes too much."
Returned to office, Manley recognized the handwriting on the wall, outdoing Seaga as an enthusiast for free market capitalism. "The old gospel that government should be operated in the interests of the poor is being modified, even if not expressly rejected, by the dawning realization that the only way to help the poor is to operate the government in the interest of the productive!" the journal of the Private Sector of Jamaica exulted -- here the term "productive" does not refer to the people who produce, but to those who manage, control investment, and reap profits. The public sector is "on the verge of collapse," the Private Sector report continues, with schools, health care and other services rapidly declining. But with the "nonsensical rhetoric of the recent past" abandoned, and privatization of everything in sight on the way, there is hope -- for "the productive," in the special intended sense.
Manley has won new respect from the important people now that he has learned to play the role of "violin president," in Latin American terminology: "put up by the left but played by the right." The conditions of capital flight and foreign pressures -- state, private, and international economic institutions -- have regularly sufficed to bar any other course.
The Fruits Of Victory: Asia
Turning to Asia, a serious inquiry into the victory of freedom, capitalism, and democracy will naturally begin with the Philippines, which has benefited from U.S. solicitude for close to a century. The desperate state of Filipinos is reviewed in the Far Eastern Economic Review, firmly dedicated to economic liberalism and the priorities of the business community, under the heading "Power to the plutocrats." Its reports conclude that "Much of the country's problems now...seem to be rooted in the fact that the country has had in its entire history no form of social revolution." The consequences of this failure include "the jinxed land reform programme," a failure that "profoundly affects the prognosis for the incidence of poverty" among the 67 percent of poor Filipino families living in rural areas, condemning them to permanent misery, huge foreign debt, "massive capital flight," an increase in severe malnutrition among pre-school children since the Aquino Government took power, widespread underemployment, and survival for many on incomes far below Government-defined poverty thresholds, "the growth of a virtual society of beggars and criminals," and the rest of the familiar story. Government and academic experts expect things to get considerably worse. For the "rapidly expanding disadvantaged," the only way out is to seek work abroad: "legal and illegal workers from the Philippines now comprise the greatest annual labour exodus in Asia." With social programs abandoned, the only hope is if "the big-business elite, in a situation of little government interference, foregoes the Philippine elite traditional proclivity towards conspicuous consumption, and instead use profits both for their employees' welfare and to accumulate capital for industrial development."
Their failure to do so can perhaps be explained by the fact that the United States has had so little time to exercise its tutelage; only 90 years, after all. That its ministrations might have something to do with what we find is a possibility not to be addressed. In the real world, these desperate conditions can be traced in no small measure to the U.S. invasion at the turn of the century with its vast slaughter and destruction, the long colonial occupation, and the subsequent policies including the postwar counterinsurgency campaign and support for the Marcos dictatorship as long as it was viable. But the Philippines did gain the (intermittent) gift of democracy. In the same business journal, a columnist for the Manila Daily Globe, Conrado de Quiros, reflects on this matter under the heading "The wisdom of democracy." He compares the disaster of the Philippines to the economic success story of Singapore under Lee Kuan Yew, whose harsh tyranny is another of those famous triumphs of democracy and capitalism. De Quiros quotes the Singapore Minister of Trade and Industry, Lee's son, who condemns the U.S. model imposed on the Philippines for many flaws, the "worst crime" being that it granted the Filipinos a free press; in his own words, "An American-style free-wheeling press purveyed junk in the marketplace of ideas, which led to confusion and bewilderment, not to enlightenment and truth." With a better appreciation of the merits of fascism, his Singapore government is too wise to fall into this error.
The Americans did introduce a form of democracy, de Quiros continues. However, it "was not designed to make Filipinos free but to make them comfortable with their new chains." It may have given the Filipinos more newspapers, but "it has given them less money with which to buy them. It has made the rich richer," with "one of the world's worst cases of inequity in the distribution of wealth," according to the World Bank. Democracy "was an instrument of colonisation," and was not intended to have substantive content: "For most Filipinos, American-style democracy meant little more than elections every few years. Beyond this, the colonial authorities made sure that only the candidates who represented colonial interests first and last won. This practice did not die with colonialism. The ensuing political order, which persisted long after independence, was one where a handful of families effectively and ruthlessly ruled a society riven by inequality. It was democratic in form, borrowing as many American practices as it could, but autocratic in practice.
That these were indeed the policy goals is a rational conclusion in the light of historical practice and the documentary record. We may then describe the Philippines as another success story of democracy and capitalism, and number its people too among the victors in the Cold War.
Under Philippine democracy, most of the population is not represented. The politicians are lawyers or wealthy businessmen or landowners. As the political structure bequeathed to the Philippines by the American occupation was reconstituted after the overthrow of the U.S.-backed dictator by "people power," Gary Hawes writes in the scholarly journal Pacific Affairs, "it is only those with money and muscle who can be elected." Candidates are mainly "former elected officials, relatives of powerful political families and/or members of the economic elite," unrepresentative of the rural majority or even "the citizens who had demonstrated to bring down Marcos and who had risked their lives to protect their ballots for Corazon Aquino." There was a party (PnB) based on the popular organizations that arose against the dictatorship, with broad support from the peasantry, the labor force, and large reformist sections of the middle class, but it was to have no political role. In the elections, PnB was outspent by the traditional conservative parties by a ratio of up to 20 to 1. Its supporters were subjected to intimidation and threats of loss of jobs, housing, and city licenses. The military presence also served to inhibit PnB campaigning. Interviews with poor farmers and workers revealed a preference for PnB candidates, but a recognition that since the military and the rural elite opposed them, "the next best choice was to take the money or the rewards and vote for the candidates endorsed by the Aquino government.
The playing field having been properly levelled, our celebrated "yearning for democracy" is satisfied.
Under the reconstituted elite democracy, Hawes continues, "the voices of the rural dwellers" -- almost two-thirds of the population -- "have seldom been heard," and the same is true of the urban poor. The cure for agitation in the countryside is militarization and the rise of vigilantes, leading to a record of human rights violations "as bad as, if not worse than, during the time of Marcos," a 1988 human rights mission reported, with torture, summary executions, and forced evacuations. There is economic growth, but its fruits "have seldom trickled down to the most needy." Peasants continue to starve while paying 70 percent of their crop to the landlord. Agrarian reform is barely a joke. Support for the National Democratic Front (NDF) and its guerrillas is mounting after years of rural organizing.
De Quiros suggests that there has been "substantive democracy in the Philippines -- despite colonialism and elite politics." "This is so because democracy took a life of its own, expressing itself in peasant revolts and popular demand for reforms." It is just this substantive democracy that the United States and its allies are dedicated to repress and contain. Hence the absence of any social revolution of the kind that he and several other commentators in this most respectable business journal see as sorely lacking in the Philippines -- though if it can join the club of "capitalist democracies" of the Singapore variety, the tune will likely change.
Meanwhile, Survival International reports that tribal peoples are being attacked by the private army of a logging company, which, in a six month campaign of terror, has killed and tortured villagers, burned down houses, destroyed rice stores, and driven thousands from their homes. The same tribal people are among the many victims of bombing of villages and other practices of the government counterinsurgency campaigns. Appeals to the Aquino government have been ignored. An appeal to the U.S. government, or Western circles generally, cannot be seriously proposed. The same is true in Thailand, where the government announced a plan to expel six million people from forests where it wants to establish softwood plantations.
Miracles of capitalism are also to be found elsewhere in Asia. Charles Gray, responsible for Asian affairs in the pro-business AFL-CIO foreign affairs branch (AIFLD), observes in the Far Eastern Economic Review that transnational corporations "generally insist the host government suppress the right of workers to organise and join unions, even when that right is guaranteed in the country's own constitution and laws." The organization that coordinates trade in the Free World (GATT) does not have a single rule that "covers the subsidies that transnational corporations get though pressures on Third World governments to permit 19th century-type exploitation of labour." In Malaysia, "U.S. and other foreign corporations forced the Labour Ministry in 1988 to continue the government's long-standing prohibition of unions in the electronics industry by threatening to shift their jobs and investments to another country." In Bangladesh, contractors for the transnationals "discriminate against women and girls by paying them starvation wages as low as 9 U.S. cents an hour." In China's Guangdong province, when the government found that "the factory of a leading toy manufacturer was engaged in labour law violations -- such as 14-hour workdays and 7-day workweeks -- it approached the managers to ask them to respect the law. The managers refused, and said that if they were unable to operate the way they wanted they would close their Chinese factories and move to Thailand," where there are no such unreasonable demands.
Low prices for imported toys have doubtless brought much Christmas cheer in the industrial West.
The Fruits Of Victory: Africa
The scene in Africa is worse still. To mention only one small element of a growing catastrophe, a study of the U.N. Economic Commission for Africa estimates that "South Africa's military aggression and destabilization of its neighbors cost the region $10 billion in 1988 and over $60 billion and 1.5 million lives in the first nine years of this decade." Such figures are considered too insignificant to merit notice in the Newspaper of Record, which avoided the matter. Congress imposed sanctions on South Africa in 1986 over Reagan's veto, but their impact has been limited. The American Committee on Africa reports that only 25 percent of U.S.-South African trade has been affected, and that iron, steel, and (until late 1989) half-finished uranium continued to be imported. After the sanctions were put in place, U.S. exports to South Africa increased from $1.28 billion in 1987 to $1.71 billion in 1989, according to the U.S. Commerce Department.
While the South African government and the minority White groups it represents face mounting problems, they may see some rays of hope as well. New diplomatic ties between South Africa and Hungary, now that it has achieved independence, may prove to be "the wedge that breaks trade sanctions and the international isolation of the South African government," the Christian Science Monitor reports in a lead story, citing an economist at the Hungarian Academy of Sciences who foresees expanding trade between South Africa and Eastern Europe.
The economic catastrophe of much of Africa is commonly attributed to "socialism," a term used freely to apply to anything we are not supposed to like. But there is an exception, "an island of freewheeling capitalism in a sea of one-party socialist states," Africa correspondent Howard Witt of the conservative Chicago Tribune writes. He is referring to Liberia, which, like the Philippines, can attribute its happy state to the fact that it was "America's only toehold on the African continent" -- for a century and a half, in this case. Liberia took on special significance during the Cold War years, Witt continues, particularly after President Samuel Doe, a "brutish, nearly illiterate army sergeant...seized power in 1980 after disemboweling the previous president in his bed" (more recently suffering a similar fate himself), and proceeded to elevate his fellow tribesmen -- 4 percent of the population -- into a new ruling elite, and to persecute and savagely oppress the rest of the population. The Reagan administration, much impressed, determined to turn Liberia, like Jamaica, into a showcase of capitalism and democracy. In the first six years of Doe's regime, the U.S. poured military and economic aid into "the backward country," "even as evidence mounted that Doe and his ministers were stealing much of the money, and after he "brazenly stole" the 1985 election with Washington's approval, in a replay of the Noriega story a year earlier. A "respected expatriate Liberian dissident and former government minister," Ellen Johnson-Sirleaf, says: "At the time, an American official told me bluntly, `Our strategic interests are more important than democracy'."
The results of the aid are evident, Witt writes: "The soldiers of President Samuel Doe's army wear the uniforms of American GIs as they go about their business murdering Liberian civilians on the streets of the capital, Monrovia," named after President Monroe, and "the bodies of many of the civilian victims are dumped in the morgue at the American-built John F. Kennedy Hospital," where "combat-hardened doctors" say "they have never witnessed such brutality." Monrovia is a death trap, Witt writes. Those who are not struck down by starvation, cholera, or typhoid try to escape the army or the rebel forces under Charles Taylor, a former Doe aide -- or later, those under the command of a breakaway unit led by Prince Johnson.
The results of the U.S. aid became even clearer when reporters entered Monrovia with the African peacekeeping force after Doe was tortured and murdered by Johnson's guerrillas. They found "a bloody legacy" of the "10 years in power" of the U.S. favorite, UPI reporter Mark Huband writes: piles of bleached bones and skulls, many smashed; "half-clothed, decomposed heaps of flesh...littered with millions of maggots"; "contorted bodies...huddled beneath church pews" and "piled up in a dark corner beside the altar"; bodies "rotting into their mattresses"; "a large meeting hall for women and children [where] clothes clung to the skeletons of female and underaged victims."
Not everyone, of course, has suffered in this "island of freewheeling capitalism." For a century and a half, the oligarchy of freed American slaves and their descendants "oppressed and exploited the indigenous population," while "the U.S. looked the other way." And lately, the Reagan favorites did quite well for themselves until their turn came to be dispatched. Others merely benefited, escaping any such unpleasant fate: "U.S. corporations like Firestone and B.F. Goodrich made healthy profits from the expansive Liberian operations," Witt observes, proving that freewheeling capitalism has its virtues. The U.S. built a huge Voice of America transmitter in Liberia, perhaps to broadcast the happy message of what can be achieved under capitalist democracy. We can chalk up another victory for the Free World.
Current U.S. policy, Johnson-Sirleaf says, is "a lack of policy." "It's kind of, `Oh, those Africans are at it again. Let them fight, and may the best man win'." To judge by the commentary on all of this, there is nothing here to teach us anything about ourselves, our legendary benevolence, or the marvels of freewheeling capitalism.
Behind the "lack of policy," there is, however, the usual policy toward the Third World, which we can trace back as usual to the early postwar period when the global order was being shaped in the interests of the rich and powerful in the West. Like other parts of the Third World, Africa had its "function." It was to be "exploited" for the reconstruction of Europe, George Kennan explained in a major State Department study on the international order. He added that the opportunity to exploit Africa should provide a psychological lift for the European powers, affording them "that tangible objective for which everyone has been rather unsuccessfully groping...." History might have suggested a different project: that Africa should "exploit" Europe to enable it to reconstruct from centuries of devastation at the hands of European conquerors, perhaps also improving its psychological state through this process. Needless to say, nothing of the sort was remotely thinkable, and the actual proposals have received little notice, apparently being regarded as uncontroversial.
In discussion of African policy particularly, the element of racism cannot be discounted. Dean Acheson warned the former Prime Minister of the racist government of Rhodesia in 1971 to beware of the "American public," who "decide that the only correct decision of any issue must be one which favors the colored point of view." He urged that Rhodesia not "get led down the garden path by any of our constitutional cliches -- equal protection of the laws, etc. -- which have caused us so much trouble...." This venerated figure of American liberalism was particularly disturbed by the Supreme Court's use of "vague constitutional provisions" which "hastened racial equality and has invaded the political field by the one-man-one-vote doctrine," which made "Negroes...impatient for still more rapid progress and led to the newly popular techniques of demonstration and violence" (September 1968). The "pall of racism...hovering over" African affairs under the Nixon administration, "and over the most basic public issues foreign and domestic," has been discussed by State Department official Roger Morris, including Nixon's request to Kissinger to assure that his first presidential message to Congress on foreign policy have "something in it for the jigs" (eliciting "the usual respectful `Yes'" from this abject flunkey); Kissinger's disbelief that the Ibos, "more gifted and accomplished" than other Nigerians, could also be "more Negroid"; and Alexander Haig's "quietly pretend[ing] to beat drums on the table as African affairs were brought up at NSC staff meetings.
The "Unrelenting Nightmare"
The World Health Organization estimates that 11 million children die every year in the world of the Cold War victors ("the developing world") because of the unwillingness of the rich to help them. The catastrophe could be brought to a quick end, the WHO study concludes, because the diseases from which the children suffer and die are easily treated. Four million die from diarrhea; about two-thirds of them could be saved from the lethal dehydration it causes by sugar and salt tablets that cost a few pennies. Three million die each year from infectious diseases that could be overcome by vaccination, at a cost of about $10 a head. Reporting in the London Observer on this "virtually unnoticed" study, Annabel Ferriman quotes WHO director-general Hiroshi Nakajima, who observes that this "silent genocide" is "a preventable tragedy because the developed world has the resources and technology to end common diseases worldwide," but lacks "the will to help the developing countries."
The basic story was summarized succinctly by President Yoweri Museveni of Uganda, chairman of the Organization of African Unity. Speaking at the UN conference of the world's 41 least-developed countries, he called the 1980s "an unrelenting nightmare" for the poorest countries. There was a plea to the industrial powers to more than double their aid to a munificent 2/10 of 1 percent of their GNP, but no agreement was reached, the New York Times reports "principally because of opposition from the United States."
As capitalism and freedom won their Grand Victory, the World Bank reported that the share of the world's wealth controlled by poor and medium-income countries declined from 23 percent to 18 percent (1980 to 1988). The Bank's 1990 report adds that in 1989, resources transferred from the "developing countries" to the industrialized world reached a new record. Debt service payments are estimated to have exceeded new flows of funds by $42.9 billion, an increase of $5 billion from 1988, and new funds from the wealthy fell to the lowest level in the decade.
These are some of the joys of capitalism that are somehow missing in the flood of self-praise and the encomia to the wonders of our system -- of which all of this is a noteworthy component -- as we celebrate its triumph. The media and journals are inundated with laments (with an admixture of barely concealed glee) over the sad state of the Soviet Union and its domains, where even a salary of $100 a month enjoyed by the luckier workers is "scandalously high by the niggardly standards of Communism." One will have to search far, however, for a look at the scene nearer to home, or for derisive commentary on "the niggardly standards of capitalism" and the suffering endured by the huge mass of humanity who have been cast aside by the dominant powers, long the richest and most favored societies of the world, and not without a share of responsibility for the circumstances of most of the others, all too easy to ignore.
The missing view also unveils a possible future that may await much of Eastern Europe, which has endured many horrors, but is still regarded with envy in large parts of the Third World domains of the West that had comparable levels of development in the past, and are no less well endowed with resources and the material conditions for satisfying human needs. "Why have the leaders, the media, the citizens of the Great Western Democracies cared long and ardently for the people of Central Europe, but cared nothing for the people of Central America?" the experienced correspondent Martha Gellhorn asks: "Most of them are bone poor, and most of them do not have white skin. Their lives and their deaths have not touched the conscience of the world. I can testify that it was far better and safer to be a peasant in communist Poland than it is to be a peasant in capitalist El Salvador."
Her question is, unfortunately, all too easy to answer. It has been demonstrated beyond any lingering doubt that what sears the sensitive soul is the crimes of the enemy, not our own, for reasons that are all too obvious and much too uncomfortable to face. The comparison that Gellhorn draws is scarcely to be found in Western commentary, let alone the reasons for it.
As in Latin America, some sectors of Eastern European society should come to share the economic and cultural standards of privileged classes in the rich industrial world that they see across their borders, much of the former Communist Party bureaucracy probably among them. Many others might look to the second Brazil, and its counterparts elsewhere, for a glimpse of a different future, which may come to pass if matters proceed on their present course.
Go to Part III