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The character of Argentine industrialization by Louis Proyect 12 April 2002 14:00 UTC |
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http://www.marxists.org/history/etol/document/arg01.htm ---------------------------------------------------------------------------- ---- From Revolutionary History, Volume 2, No 2, Summer 1989. Used by permission. ---------------------------------------------------------------------------- ---- This account, originating in the author's MA thesis at the University of Paris, and which appeared in a duplicated form in Spanish in the first issue of the journal of the Centro de Estudios Historicos y Sociales sobre America Latina, was first published in Paris in September 1980. It was then republished in two parts in a printed form in Internacionalismo, no 3 (August 1981) and in no 4 January-April 1982). The author is a leading member of Politica Obrera, now the Partido Obrera, an Argentine Trotskyist grouping. (At the time of writing, June 1989, the leadership of the Partido Obrera has been arrested by the Argentine government and charged with organising food riots in the shanty towns.) The Partido Obrera is a large Trotskyist organisation by European standards, second only in size in its own country to the Movimento al Socialismo (MAS), once led by the late Nahuel Moreno. Politica Obrera took responsibility for publishing Internacionalismo in exile as the journal of the Fourth Internationalist Tendency. After the fall of the military dictatorship of Videla, Viola and Galtieri, the author added another part and published it in Argentina in two volumes under the title Historia del trotskismo Argentino (1929-60) in 1985, and El trotskismo en la Argentina (1960-1985) in 1986, both by the Centro del America Latina, Buenos Aires What Kind of Industrialization? The intervention of the leadership of the Fourth International did not in any way change the positions of that sector of Argentine Trotskyism with which it maintained favourable relations. However, in characterising the country, the latter based itself, not on Trotsky nor on the Bolshevik tradition of the Third International, but on the Argentine Socialist theoretician who had developed the most coherent characterisation, the reformist Juan B Justo.[59] For Justo, the incorporation of the great majority of national territory into production, largely agrarian, for the world market, was a typical example of 'capitalist colonisation'. The backward character of this capitalism, however, did not escape him. There was a lack of industrial development, agrarian backwardness, and a predominance of anti-democratic political forms. For him, the thrust of economic development, which would allow those defects to be overcome, was foreign capital: 'The entry of great masses of foreign capital is necessary and inevitable...the great construction enterprises that must be carried out in order to complete the development of the country, and the working people who inhabit it, cannot be made by the dissipated and inept local class of the rich...Foreign capital is going to accelerate the economic evolution of the country, and with even greater force it is going to accelerate its political and social evolution.' This schema, formulated at the start of the century, according to which the backward countries would, through the influence of external capital, re-run an economic and political cycle similar to that in the advanced ones, was taken up lock, stock and barrel by the Trotskyists four decades later, though with this distinction that they believed that the industrialisation of the country, and the association of foreign capital with national capital, had strengthened the Argentine bourgeoisie, and permitted it to elevate itself as a fully ruling class, and they saw this process as having been completed. It was on this that they based themselves in order to put forward the 'Socialist revolution' as the next stage of development. It is undoubtable that the leap in Argentinian industrial growth, during the 1930s influenced them in drawing that conclusion. But, had the country been truly industrialised? By the second half of the last century, Argentina had fully entered the international capitalist circuit as a producer of primary products such as leather, cereals and meat, for the industrially advanced nations. The first great industries to develop, such as cold-storage and the railways, were tied to 'pastoral Argentina', that is, they consolidated Argentina as an agricultural off-shoot of industrial development in the world capitalist centres. This period of prosperity of the economy, based on ranching and commercial capital, also gave an impetus to the emergence of certain industries which produced for the home market. It was an industry limited to foodstuffs and to other essential produce, though it was not competitive, due to the cost involved and the distance from the world manufacturing centres. It did not involve industrialisation, as its capacity for expansion was very limited, and '...one produces without the appearance of heavy industry which would have characterised the order of other societies totally different from each other at that same level of per capita income in the nineteenth century, such as the United States and Germany. Argentina will lose its local and regional structures of production and consumption, without transferming itself into an industrial power.' So the thrust of economic development was agrarian production for the needs of the industrial powers, and the growth of industry was subordinated to that, Latifundism was consolidated as a productive unity and the land-owning oligarchy as the ruling class. This led the Argentine economy to be subordinated to the accumulation of capital centred in the industrial nations -- above all, Great Britain. But the latter, owing to the accumulation of capital, which already overflowed their national borders, penetrated the backward countries, obtaining investments for their surplus capital. There was extremely profitable investment in the public services and bonds of the backward countries, whose capitalist economic development was thus born already a slave to international finance capital. In our country, in 1885, 45 per cent of the capital of the railways was in Argentine hands against only 10 per cent by 1890. The interest paid by Argentina to foreign capital represented 20 per cent of the total exports in 1881, 44 per cent in 1885 and 66 per cent in 1886. This process, by making the country more and more dependent upon the export of its primary purchases, destroyed any financial basis for an industry of its own. At the same time, it laid the basis for the political dependence of the state. In 1890, in a global financial crisis, the government emptied the country of foreign exchange in order to pay the foreign debt and thus foreign capital appropriated almost the total national surplus. 'The centre of power appeared to shift itself from the producers to the local representatives of the world centre of decision, such as their lawyers, financiers and intermediaries.' The lineal schema of JB Justo failed by not recognising that, considered on a world scale, capital had already attained its full maturity. In the advanced countries it showed its hostility towards the exploited without pretence, and became chauvinist and reactionary. In the backward countries it competed in obtaining super-profits, that is to say those superior to the world average, for which it allied itself with the most reactionary classes. Thus it consolidated the economic, social and political forms of backwardness, on which their domination was based. The industrial growth, which started from 1930, was limited to replacing those industrial products which could not already be bought on the world market as a consequence of the fall in purchasing power of its primary exports. The international prices of Argentine products fell by 40 per cent between 1926 and 1932, while industrial goods maintained their previous value. The causes of industrial development were not internal but external. 'There was no deliberate will of the governing powers nor an integrated development of industry as a consequence of the natural process of expansion, like that which had occurred in the metropoles. The market existed and it had a measurable and known demand which, until then, had supplied itself from exports and could also be satisfied through local production.' The economic content of this 'industrialisation' was dissimilar to that which occurred in the advanced countries, for in those there was the relative displacement of the production of consumer goods by that of capital goods, such as machines and industrial items. The production of consumer goods continued, and continues, to predominate to an overwhelming extent in our industrial structure. In the last century the industrialisation in the advanced countries meant, in social terms, a transformation of property relations and the expropriation or transformation of the old feudal classes and their displacement from political power, by means of a bourgeois democratic revolution. This laid the basis of the expansion of industrial capital. In Argentina, and in all backward countries, the old oligarchy associated itself with this bastardised process of industrialisation, whose dynamic factor was foreign capital. 'Argentine industry', which was consolidated in the 1930s, was a consequence of the industrial crisis in the advanced countries and an off-shoot of the latter: 'The enormous mass of workers condemned to idleness and the high percentage of unused equipment called for the opening of new markets to recover stability and the level of production of previous years...Thus was born "export substitution" in the metropolitan centres. Given that they could not pay for the complete plants, they installed final-assembly plants in the underdeveloped countries in order to continue sending them parts. This strategy, done by all imperialist countries, requires installing enterprises in other countries and generating captive clients for possible exports.' In the 1930s Argentina anticipated a process that would spread throughout the world in the subsequent decades. The distinctive characteristics of this 'industrialisation' are: (a) The stagnation of industry to a primary level of development. In 1937, establishments with less than 10 workers were 85.5 per cent of the total, and subsequently the proportion grew. To this artisan-type basis of industry one must add that the primary branches continued to be predominant, particularly those which were typical of the dawn of industrial production. In 1937 'Food, Drink and Tobacco' comprised 40 per cent of production, 'Textiles' about 20 per cent, while 'Metals, Vehicles and Machinery' did not make up 15 per cent. (b) Consequently there was low productivity in industry generally. In 1937 the productivity per worker in Argentina was 4.5 times lower than in the USA -- a ratio which could not but worsen. (c) This freezing of the structure of economic development over-valued land and farming production. This was already noted in 1933 by the Commercial Attache of the British Embassy: 'However rapid the growth of manufacturing industry has been, a large series of requirements exist which can only be satisfied abroad. Almost all first class articles require for their production iron and steel goods; the lack of a local coal and iron industry has hindered the development of a machineproducing industry on an extensive scale. The only means whereby Argentina can obtain the products of the latter abroad is by exporting its grain and meat surpluses.' But it was precisely the prices of those exports that had fallen dramatically on which, one must add, the state was financially dependent. The same report points out: 'Argentina possesses great reserves of gold. Approximately half the reserves were impounded in 1930 and 1931, mainly in order to pay the debt services and to prevent the currency being devalued.'[60] Just as in 1890, finance capital, with the complicity of the oligarchic government, delivered a mortal blow to independent industrial development and destroyed its financial base. The consequence of the whole process was the political prostration of the state. The need to maintain the British market for primary products led the Argentine government to sign the Roca-Runciman pact in 1933 and, in exchange, the Argentine government made all types of concessions to Britain, including customs concessions, a transport monopoly in Buenos Aires, some types of preferential exchange, the closure of the market to Britain's competitors, and so on. It thus renounced the right to determine freely the policies of its own state. The supposed industrialisation of Argentina was a typical example of the combined development common in the backward countries, where the last word in technology is combined with agrarian and industrial backwardness. The backwardness of industry did not prevent the fact that already in 1936 47 factories, or 0.1 per cent of the total, employed 15 per cent of the workers, and thus the degree of concentration exceeded, by more than 10 times, that of North American industry. [61] This was an industry which was born monopolised, without passing through the stage of free competition, which was the motor of its development in the advanced countries. The industrial census of 1935 indicated that 671 limited companies controlled 2300 establishments which yielded between them more than 50 per cent of the total production. Based on agrarian and industrial backwardness, this small group of monopolies obtained enormous profits. The first produced a constant flow of cheap labour from the country to the town, while the second saw that market prices were fixed for 90 per cent of the artisan-type enterprises. The enormous difference in price between the latter and large-scale industry was pocketed by the monopolies. It was an industry which lived off its backwardness, exactly the opposite of the youthful stage of industrial capital in the metropoles, which had fought to destroy the backward forms of industrial production, such as artisan guilds, and backward agrarian production, like feudal latifundia. Argentine industry expanded within the limits fixed by imperialist capital. Far from aiding the economic independence of the country, it increased its dependence, by adding to the manufactured goods and the industrial items and products that had to be bought abroad. Far from securing the Argentine bourgeoisie control of the state, the political weight of foreign capital was strengthened, as much by the decisive weight of its participation in industry as by the increase of dependence on international finance capital. All this escaped the attention of the great majority of Argentine Trotskyists in the 1930s, who thought exactly the opposite. In a kind of way, they were themselves victims of the ideology and propaganda of the ruling classes, who also saw in their association with foreign capital a triumph of 'self-determination'. This influence was possible owing to the lack of a programme which characterised the country and its classes, and which indicated the objective tasks of the revolution. The light-mindedness with which they wielded certain figures -- claiming 2.5 million industrial workers when the 1935 census gives the exact figure of 526 594 'employed in industry' -- revealed the lack of concern for programme, which left them open to all kinds of impressionism. Lacking their own programme, they adopted the only one the Argentine left had produced until then, that is to say that of reformist Socialism, and tried to draw some 'revolutionary' conclusions from it. So adaptationist was their enterprise that they retreated even as regards Juan B Justo's programme, as the latter had pointed out the incapacity of the native ruling class to create a 'modern' capitalist country. So the Trotskyists presented it as an examplary bourgeois class, which had fully completed the objectives of national liberation and the democratic revolution. Louis Proyect Marxism mailing list: http://www.marxmail.org
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