Archive for May, 2006|Monthly archive page

The Importance of Being Ecuador, 9

1. Throughout the 1960s, while the political arena in Ecuador suffered the repetition compulsion of Velasco, coup, Velasco, self-coup (the autogolpe), and coup again, the economic scene was changing, but changing within its export framework.

In the later 60s, after the 1965 collapse in export earnings, Ecuadorean banana planters initiated a change in the variety of banana under cultivation. The Gros Michel variety was replaced by the Cavendish. Cavendish yields were triple those of the Gros Michel, but the Cavendish banana bruised easily. Consequently, boxing, and preparation for export had to take place on the plantation itself. The factory had to come to the plantation, and the increased capital investment required a further concentration of ownership and expansion of plantation size to utilize, and circulate, the increased investment.

Packaging, that most modern marvel of modern capitalism, meant to present the same old same old as brand new, actually brought an end to small farm banana production.

The military juntas, likewise iterations of packaging, that had taken and relinquished power throughout the 60s and 70s had intended to rule “evenhandedly;” with one hand, enacting basic social and economic reform, while with the other, maintaining a stranglehold on left-wing militant and labor organizations. Anti-communism was the anti-red thread of populist and oligarchic nationalism.

The Agrarian Reform Measure of 1964 outlawed the huasipungo, the land-tenure/debt peonage system embedded in hacienda and latifundista agriculture. However, with one hand wrapped tightly around the throat of the labor and Marxist militants, there was no agent of execution, no class organized to effect in the field the changes enacted in the junta. Agrarian reform withered and died.

In the years following the reform of 1964, less than 15% of the arable land and less than 20% of the rural population had been affected by reform programs. At the end of the 1970s, Ecuador contained 350,000 farms of an area of 5 hectares or less, and 150,000 of 1 hectare or less.

With and without agrarian reform, the countryside was more and more incapable of supporting the rural population, as domestic industry and infrastructure could not, did not support the expansion of individual, small scale ownership. The decay of both latifundista and minifundista agriculture quickened and mimicked the “normal” migration to the cities that historically accompanies economic development.

Agriculture in pre-conquest pre-Ecuador had not been organized along the property lines of individual ownership. At no point in pre-conquest, conquest, or post-conquest Ecuador does a class of agricultural producers equivalent to the peasantry of Europe achieve a real economic significance. Small-scale “subsistence+” agricultural production, the supposed bedrock of capital development and “freedom,” is imposed upon rural agriculture, and is nothing other than a pastoral equivalent to the sham of representative government and universal suffrage.

In truth, it is not individual ownership of farming units that describes capitalism, advanced or emerging; nor is it surplus production, production for the market. Capitalist agriculture is distinguished precisely by its capitalist nature– that is to say by the separation of laborers and owners; by the separation of laborers from the means of production; through the expulsion of labor from possession of the means of production and reproduction of that expulsion throughout the productive process itself. Land is transformed into a means for the expansion of value through the simultaneous aggrandizement and expulsion of labor transformed itself into a value solely of and for exchange, into wage-labor.

2. Marx, writing in volume 3 of Capital states: “But the contradiction of this capitalist mode of production consists precisely in its tendency to an absolute development of productive forces, a development which come continually in conflict with the specific conditions of production in which capital moves and alone can move.” Now that contradiction is operative in every facet of capitalism’s miserable history. The limitation to capital is capital and not just, not primarily in, and not only when capital has achieved a certain level of development, has overcome all archaic, pre-existing, limitations to its growth. On the contrary, even when capital confronts, attacks, ruptures those fetters it embeds them into itself, and itself into them through the most general and specific conditions in which it moves, private property.

So while Guayaquil resents Quito, so while capital feels the restrictions of the hacienda, confronts limitations to itself in the limitation to “free” “detached” useless labor, capital finds in those specific conditions the fundamental guardian of its own condition of production– private property, private ownership of the means of production. Ultimately, Guayaquil relies on Quito. Both rely upon the bayonet.

Capital in Ecuador, in the Andean countries, is not just an intrusion into the conquest economies, not simply a product of the world market, but simultaneously an extrusion of the conquest economies. Capital develops as an internal concession, enclave capitalism.

The limitations to capital internationally and within the enclave converge. While the growth of the means of production requires ever greater access to “free” wage labor, overproduction demands ever greater restrictions on that labor, ever more contained, confined, and controlled islands of capitalist production and value extraction. Overproduction makes capital incapable of fulfilling the whispered promise of “development.”

The expansion precipitated by the exploration, discovery, and development of petroleum reserves in the Oriente came to fruition with the decline in the rate of profit, the rate of return, that coursed through capitalism in 1970, 1971, 1972. Actually investment and development acted as producers of that decline.

The convergence of expansion and decline, the creation of decline in expansion, brings forth in capitalism the images of the “classic” bourgeois revolution, the reorganization of agriculture, the rapid employment and deployment of detached labor, but it brings these images forth in their negative. “Bourgeois” revolution, the “emancipation of capital,” national economic development, appears as telescoped image viewed light years after the event, so that its existence appears and is apprehended only after its eclipse and extinction.

The military regime that took power in 1972 called itself nationalist and revolutionary. And it proved that in its failure.

Oil policy, sustained by the OPEC price spike of 1973 and Ecuador’s own entry into OPEC, gave voice to the commodity nationalism of the regime. In this case, the full barrel was making a lot of noise. Petroleum profits, sowing the oil in Ecuador as in Venezuela, did not resolve the economic contradictions. Petroleum exacerbated those contradiction.

The oil revenues that had increased sixfold between 1970 and 1975, stalled. International oil companies, led by Texaco, Gulf, Occidental, cut back on oil exports in retaliation for the military’s demands for larger shares of revenues and ownership. In 1975, the military backed down and announced a reduction in tax rates.

In August, 1975, the military, “even-handed,” “nationalist,” “revolutionary” that it was, then announced a dramatic 60 percent duty on luxury imports. Finally, Quito and Guayaquil had found common ground. “Let us eat caviar!” demanded the national bourgeoisie of Ecuador. “Two, three, many Mercedes-Benz!”

The inevitable two coups followed. The first in September failing; the second in January, 1976 succeeding. The inevitable announcement of the intended imminent return to civilian rule was made. And inevitably the return was delayed.

When the return to civilian rule was made, in 1979, it was made grudgingly. The social democratic Izquierda Democratica candidate Jaime Roldos, won the election, but achieved a victory without power. The military junta, before allowing Roldos to take office, awarded itself the power to approve the directors of major state corporations and select the minister of defense.

Roldos thus took power as another president without portfolio, a minister not at large, but at a loss.

S. Artesian
June 10, 2006

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