Colonial Latin America (Louis)

Julio Huato juliohuato at
Tue Jun 12 07:51:38 MDT 2001

Xxxx Xxxxxx <xxxxxxxxxx at>:

>Julio, the dominant  type of economic relations since the emergence of
>modern capitalism has always been international "capitalist commerce"
>(albeit in changing volumes).
>In so far as the capitalist competition over world's resources continues,
>global capitalism does not render imperalism irrelevant.

Not only changing volumes, but changing proportions.  The weight of direct,
forceful theft has diminished while the weight of 'regular' commerce has

We need a clear idea of the role of natural resources in the modern
capitalist economy.  In Mexico, for instance, many people seem to believe
that having oil in the subsoil entails a lot of wealth.  In fact, that is
not very significant wealth.  For the most part, it's only potential wealth.
  Its realization depends on capitalist production taking place to extract
the resource and transform it.  Only the likelihood (ultimately, the
certainty) that this will happen can turn the natural resource into real
wealth.  Owning the land entitles the owner to a rent only if capitalist
production is allowed to extract the resource.  The rent margin depends on
the market price of the product and the abundance of the resource.

Let me suggest the following mental experiment.  If 'Third World' oil
production disappeared tomorrow, that would cause a big, lasting mess in the
rich countries.  But, eventually, these countries would adapt, substituting
for oil with alternative technologies, reconverting their industries.  Stuff
is stuff.  It's human labor (which, in our times, means mainly and
increasingly human knowledge) which turns raw stuff into useful stuff.
That's the ABC of political economy.  Productivity and not natural resources
is the key.

The competition over natural resources abroad exists.  There's a lot of rent
seeking activity involved (because if, say, the price of oil is up, there's
a lot of rents to bicker for), which moves foreign relations committees,
congresses, and executive branches.  But we have to put it in the
perspective of the total movement of the capitalist society.

>you are subscribing to Adam Smith's theory of  liberal
>internationalism--that capitalism will converge nations through comparative
>advantage-- (as opposed to Lenin's theory of imperialism).

Adam Smith's notions of international trade are based on absolute advantage.
  The theory of comparative advantage was formulated by David Ricardo.
Probably Ricardo was inspired by someone else's ideas, but not Smith's).
With regards to Lenin's theory of imperialism, to get it right, we need to
read what Lenin really wrote.

>The economic logic of  MODERN IMPERIALISM entails a _systematic and
>consistent_  plunder of other country's workers  and resources. It is
>optimal for capitalists to use cheap labor elsewhere to lower the costs of
>production, because this is the main profit drive of capitalism.

This mixes things up.  Cheap labor is not caused by imperialism or
capitalism.  Cheap labor comes from the cost of reproduction of the labor
force, which includes a social and historical element.  The
standard-of-living history of these societies, particularly as it involves
unskilled labor, has much to do.  As a rule, the exploitation of wage labor,
cheap or expensive, is 'regular' capitalist exploitation.

Workers in the oil industry in the US, who are also heavily exploited, have
much higher real wages and better working conditions than their comrades in
Latin America because they are more productive and due to other historical
reasons.  Among these historical reasons consider traditional scarcity of
labor in the US that led to more mechanization, much more capitalist
activity (which competes for labor with the oil industry), trade union
activity and struggles.

When we compare the situation of oil workers in Latin America and the US, we
need to put things in context.  The exploitation of oil workers in Latin
America appears as super-exploitation, but that's to be determined in each
case.  Of course, oil companies will abuse if workers don't defend
themselves.  Workers will be weaker if there are not many other employment
opportunities, their education and productivity is low, and public policies
don't help them.  Oil companies will bribe governments to relax
environmental and labor standards.

In Venezuela and Mexico, the standard of living of oil workers is higher
than in Ecuador.  This has to do with workers' struggles, nationalizations,
and the ability of workers in the industry to share from the oil rents.  Oil
rents fund a large portion of the public budget in Ecuador.  Due to
traditionally weak fiscal systems, taxing the extraction and exports of oil
is an easy way to finance public spending.

Add corruption and lack of accountability over public moneys and you have
oil rents feeding a crude process of primitive accumulation instead of, say,
protecting health and safety of workers and improving their living
conditions in general.  This results from the weakness of democray in
Ecuador, which has something to do with the economic conditions.  It may
also have something to do with the waste of political energy under the
misguidance of the dependency theory and the 'anti-imperialist' strategy.
Workers everywhere need to struggle to improve their standard of living
(including the environment) and their working conditions.  This struggle is
also necessarily a political struggle for democracy and public

>Accordingly, the seperation between the logic of imperialism (which you
>seem to be taking political and non-capitalist) and the logic of capitalism
>(which you seem to be taking as economic) is a plain _economic fallacy_.
>Global economic relations are relations of power (and are political by

Not a fallacy.  What you say only emphasizes the need to open the black box
and see what's inside.
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