Sunday, December 10, 2006

Brazil: Colony, Empire, Capital 2

2.The Persistence of Obsolescence

The history of modern capitalism is the history of its attachments to, entanglements with, destruction and recreation of it pre-modern, "archaic," ante-bellum property forms. History is class struggle. Economics is concentrated history. The history of capitalism, its past and future economics, the class struggles waged by its ruling classes, is the persistence of the obsolescence of private property. Perpetual backwardness defines the bourgeoisie, permanent counterrevolution is final product of capital's imagined progress.

The history of Brazil is the persistence of the history of Portugal; of Portugal in Africa; of Portugal navigating the Atlantic. The history of Brazil is the history of the persistence of slavery.

Of the estimated 54,000 voyages undertaken during the Atlantic slave trade, Portugal and Brazil account for 30,000.

An estimated 13,000,000 Africans were enslaved and shipped west.

Of that 13,000,000 Portuguese factors and traders supplied an estimated 6,000,000 from Benin, Congo, Angola, and Mozambique.

Of the 13,000,000 African people enslaved and shipped west, an estimated 11,000,000 survived the passage.

Of that surviving 11,000,000, an estimated 4,000,000 were transported to Brazil.

And of that estimated 4,000,000...........?

In the period 1576-1590, an estimated 50,000 slaves arrived in Brazil, yet in 1600 the total slave population measured just 15,000.

In the triangle trading of sugar, rum, slaves; of cowries, slaves, molasses; of cloth, slaves, cotton; of guns, slaves, tobacco, the triangles formed a pyramid with a base of bones. It is the extermination of labor, not just its aggrandizement, not just its consumption but its actual direct extermination in the production processes that defines the "backwardness" of Portugal in Brazil, the backwardness of mercantile capitalism; that persists in the development of capitalism in Brazil and defines the backwardness of private property for once and for all and forever.

S. Artesian December 10, 2006

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Sunday, November 05, 2006

Brazil: Colony, Empire, Capital

1. 1500, a Portuguese fleet enroute India anchored at what is now known at Porto Seguro in the Bahia area of what is now known as Brazil. Off course and on target, the Portuguese established a fortified trading outpost.

In the 16th century, Portugal was lightly populated, with numbers measuring below those of the indigenous people inhabiting the coastal and interior areas of pre-Brazil. These indigenous peoples were organized as tribes, trading and competing with each other for subsistence.

Portugal was a mercantile monarchy, with the king as the merchant- monarch. Titles to land and court were handed out to temper, bait, discipline, and isolate the nobility. Commercially, Portugal functioned as both a maritime and land-based itinerant peddler, conveying goods, and brokering trades for others and its own account, among Africa, Asia and Europe.

The outposts established by the Portuguese in Brazil were isolated points of contact for trade and barter with the indigenous people. Initially, iron pots, bracelets, tools, and fabrics were traded for brazilwood. This wood was the source for the red dye so important to the emerging textile industry of Normandy and Flanders.

Barter might support subsistence based economies and even an itinerant peddler or two, dressed in rags or royal robes, but barter is not commerce.

A critical determinant of Portuguese mercantilism was the lack of internal development, the isolation and separation of city from countryside, the meager surpluses extracted and available from the domestic markets based on subsistence agriculture. These limitations determine mercantilism in Portugal, and everywhere, and are reproduced at every point of its history, in its expansion and decline. Mercantilism staves off its own obsolescence through "horizontal expansion," but the expansion of trade, of mercantile extraction, requires expansion of the need to trade.

Barter contains no such necessity. There is no necessity to reproduce the process of exchange beyond the use of the products bartered. Expanding the need to trade requires a compulsion to labor. Barter contains no compulsion to labor in the service of, on behalf of, trading itself.

The Portuguese commercial outposts quickly became staging areas for the hunting, capture, enslavement, and ultimately, the extermination of the indigenous peoples. With every advancement of its mercantilism into Brazil, Portugal reproduces the content of its own "advanced backwardness;" Portugal's internal imbalance sustains the advance of the "world markets;" Portugal in Brazil proves that compulsory labor is the historical underpinning of free trade.

S.Artesian, November 5, 2006.

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Sunday, October 01, 2006

Trick and Treat

Eager, as always, to make both first call at the bar and an early getaway, the bicameral two ring circus of embezzlers, extortionists, buffoons, car dealers, and lawyers known as the US Congress stirred itself last week to raise its right arm and wield its mighty rubber stamp.

With Sunday football, Halloween, and elections dangling in front of its nose/trunk like a carrot in front of the proverbial elephant's ass, the 109th convention of bozo millionaires passed the Bush administration's military tribunal proposal-- finally bringing bourgeois theory finally into line with bourgeois practice by abrogating the "principle" of habeas corpus.

Then, warming to its task, and dedicated to keeping the mean in mean green, Congress passed the defense appropriations bill, a cool $448 billion in guaranteed cost overruns secured through the sale of US Treasury bonds to Japan, China, Russia, and various petroleum exporters. $70 billion or so is committed to ensuring that the destruction of the Iraq and its people can continue in the style to which Americans have become so accustomed, at least for the next 6 months.

But it was the House committee on Commerce and Energy that provided the anti-comic relief to this carnival of vicious venality. The committee, whose members have received some $24 million in campaign donations from the corporations, associations, and individuals subject to its inquiries, investigations, and legislations, called on the former chairperson of Hewlett-Packard, Ms. Patricia Dunn, the company's current CEO, Mark Hurd to explain certain irregularities committed by the corporation in its investigation into the leak of sensitive information. The "irregularities" included the transmission of "tracer" emails to track any secondary distribution made by the recipient, the surveillance of employees and journalists, the use of "pretexting" (the use of fraudulent identities and pretenses) for obtaining personal phone records, and other tactics used so spectacularly, dismally, and everyday by... by the US government.

In the second grandest tradition of American corporate leadership, Ms. Dunn denied any responsibility for the conduct of the investigation. Not only did the buck not stop with her, it didn't start with her, and she never got to keep even a measly quarter. Ms. Dunn was guided in all these matters by HP's general counsel, HP's former general counsel, Ann Baskins. Ms. Baskins resigned her position on the day of the hearings.

In the grandest tradition of American corporate leadership, Ms. Baskins declined to testify before the committee, citing her constitutional right against self-incrimination. While refusing to testify under oath, however, Ms. Baskins did manage to negotiate a separation agreement with Hewlett-Packard. In return for her cooperation with HP's unsworn investigations and her agreement not to sue the company, Ms. Baskins will retain her rights to vested stock options worth $3.7 million, and the company will accelerate her vesting in stock options worth an addition $1 million. America the beautiful for sure of thee I thing.

Hewlett-Packard stated that in taking this strong stand against rewarding unethical and illegal behavior by its employees, it will rightfully resume its position as the brand name in business ethics.

Meanwhile, it's not the crime that bothers the representatives, it's the competition. Stings? Surveillance? Obtaining personal phone records? Sifting trash? False pretexts? Just exactly who do Dunn, Hurd, Baskins et al think they are? Unelected government officials? Missing the kidnappings, the secret prisons, the digital pictures of torture emailed home, and the disappeared bodies, the unhabeased corpses, Hewlett-Packard was really only missing one thing-- the government contract to do all those things.

Somewhere in some corporate executive offices, some corporate executives are wondering why they should continue to absorb the expense of supporting Congress, which shows how little some corporate executives understand of the political economy of modern capitalism.

One of the less brilliant presentations used to explain and bolster Keynes theory argues that the bourgeois economy could be maintained and the value of money retained if half the population was put to work digging holes into the side of a mountain, with the other half put to work filling in the holes. This assertion ignores the criticality of use, of use value, to the bourgeois and to all economies; it ignores the very conflict of use and exchange value in the identity of the commodity, at the very core of capitalist reproduction. But....

But Congress is exactly that Keynesian exercise for corporate capitalism, just that exercise of throwing money into holes, so that money and more money can be taken out as Congress redistributes incomes, sanctions the liquidation of pension funds, authorizes the destruction of countries abroad, and the sacking of cities and populations at home. As the committee members and their cohorts race out of DC, fright wigs on and bags in hand, to ring the corporate doorbells, get their corporate candy, they represent, almost too perfectly, the uselessness of capital.

S. Artesian October 1, 2006
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Sunday, September 10, 2006

96 Tears, Part 3: Restricted Reproduction, Restored Profits

1. The destruction of assets is no more an index to the weakness of capitalism than the accumulation of assets is an index to its strength. Capitalism is necessarily nothing about assets and necessarily everything about value. Exchange value, capital's value, exists necessarily as private property. Capital is everything about the reproduction of value and the preservation of private property.

The strengths and weaknesses of capitalism are not going to be found in the myriad of measures, tables, charts, graphs issued by governments, corporations, economists and pored over by governments, corporations, economists, consultants, traders, hedgers, speculators. That world of numbers constructed by the ideologists of capital is flat; and the "universe" supporting that world begins and ends with the whimper, not the big bang.

The strength of capital exists in its maintenance of its social relation of production; in its organization, and continued organization of labor as wage-labor; in the preservation of labor as destitute, detached, deprived, useless, labor.

The devaluation of assets, given its public, ceremonial, spectacular form in the events of September 11, is the preservation of private property, and in equally spectacular form demonstrates the deprivation, destitution, expulsion of labor essential to every moment of capital's existence.

The essential expulsion of labor is given its spectacular form in ongoing attacks on immigrant laborers.

The devaluation of assets is matched, paralleled, accompanied by the breaking down and up of the alliances, the pacts, the institutions for mediation of the particular interests in trade, production, of capitalism-- the failures of the WTO, the rejections and defiance of IMF/WB loan conditions-- in another public, ceremonial presentation, of the preservation of private property. The lack of "consensus," "hegemony," "convergence" are no more the end to capital, than consensus, hegemony, convergence were the beginning of capital.

2. Expanded reproduction, increased accumulated assets, accumulated as asset values, were the measure of the growth of the 1992-2000 period; expanded reproduction, the accumulated asset values, had exhausted capital's ability to turn the trick of accelerating profits.

Reduced reproduction, restricted investment are the measure of the 2001-2005 period. Or at least part of the measure. The other part is, of course, the redistribution of profits through the pricing of oil.

In the period 1996-2000, private fixed non-residential investment grew by 50 percent. For the 2000-2005 period, the growth measured 4 percent. The measures and relations between investment and growth become at once and simultaneously more complex and revealing when focused on manufacturing investment. That, annual amounts invested in manufacturing in the US had actually peaked in 1996. By 2000, the annual investment in manufacturing was 28 percent below the 1996 level. The amount invested in 2005 was 40% below the 2000 level, and 57 percent below the 1996 peak.

Growth in the value of the net stock of privately produced fixed assets was significantly reduced. Between 1992 and 1997, the average annual rate of growth of this net stock was 4.5 percent. The rate accelerated to 6 percent between 1997 and 2000, falling to 3 percent for the years following 2000. Annual investment amounts to 2000 were consistently 40-50 percent above the amount required to replace the consumption of fixed capital. The over-replacement rate has since fallen to 25 percent .

What had been restored were profits, and more than profits, profitability, rates of profit, rates of return on investment. Corporate profits, fed by the restrictions on investment, the 20 percent reduction in manufacturing employment, inflated by the pricing mechanism of oil, recovered in 2002 from a 2 year decline. In 2004, after-tax corporate profits were 50 percent above the 1999 mark. Profitability, measuring corporate profits against the current costs of net stocks of private non-residential equipment, software, and structures, rated 6.26 percent in 1997, 4.83 percent in 2000, 4.54 percent in 2001 before recovering to 6.7 percent in 2004. After the 20 percent gain profits in 2005, the profitability rate had climbed to 7.69 percent.

In that rate is compressed the predicament of the bourgeoisie's economy-- asset rich, profit poor; cash rich, profitability restored, reproduction encumbered. The great recovery in profitability in 2005 is in fact just one more index of ongoing overproduction and an immediate future of reduced profitability. Profit restored, growth slowed is capital preserved, but preserved inadequately as overproduction increases when reproduction is constrained.

3.The strength of capital is maintained in the midst of its many predicaments, as the decomposition of all its previous "achievements," "harmonies," "alliances," is nothing but the recomposition of profits, the preservation of property, the ongoing expropriation of wage labor.

All those measures of capital's weakness-- the decline of the dollar, the rising price of oil, the supposed "peak" in oil production and exploration, the trade conflicts between "North" and "South," the very notion of a "South," the supposed "defiance" of a supposed "Washington Consensus," the "national salvation" governments of Bolivia, Argentina, and South Africa, the mythic flight from US securities-- were/are in fact elements of capital's reproduction, restoration, preservation. The obvious, painful, corollary is that the political embrace of these supposed alternatives to capital by the left opponents of capital, makes those opponents critical, essential, necessary to the maintenance and restoration of private property against the workers' struggles.

S. Artesian September 23, 2006
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Sunday, August 27, 2006

96 Tears, Part 2

1. The events of September 11, 2001 cleared the air, literally, and settled, figuratively, the immediate, and always present issue confronting political economy and political economists: "Is the economy head for a hard landing or a soft landing?"

A day of infamy... of rejoicing...of atonement...of better being lucky than being better... a day of consequence and convergence... Santiago, Chile 1973, New York, New York 2001.. a day more and less like any other day where and when the truth of free markets, of the "new" "global" "information" economy is made manifest, is uncovered, not in and not by, but made manifest as the rubble around, within, and of private property. A day like all others, a day made of all other days...

(Dinah Washington in the background singing "What A Diff'rence A Day Makes")

The bourgeoisie meet to commemorate their air express guaranteed on time delivery door to door arson, their global insurance fire : "Why was this day different than all others?"

And from a seat unoccupied, the place left open for the expected/unexpected arrival of a prophet, a Messiah, a drunken frat boy, rich drunken frat boy, an answer "Not one bit different. Samey-same. Just like all the others. Just closer to home." Moron/messiah, prophet/frat boy, samey-same indeed.

2. Destruction of assets, immiseration of accumulated and immediate social labor; reproduction of the elements of destruction and immiseration has always part and whole of capital expanding, capital contracting, capital flowering, capital withering, capital advanced and capital recalled.. and of capital overthrown and capital restored.

...So that the growth of the 1990s does not occur without the destruction of assets in the former Soviet Union; does not occur absent the dismemberment of Yugoslavia and and the demolition of Serbia.

...So that the capital expanded after 1992 could not occur without the previous contraction, the previous destruction of assets of the "lost decade," the globally lost decade of the 1980s, that monument to the venality, viciousness of Reagan and Thatcher.

...So that the restoration of profit after 2001, and only the restoration of profit explains the "recovery," the persistence of capitalism in general, and of of US capitalism in particular.

...So that the restoration of profit required destruction of assets in part, reducing the rate of accumulation in whole.

...So that expansion and contraction, recovery and decline lose their meanings in and of themselves and only have meaning in their organization in each other, in a composed identity.

...So that cash is trash becomes, determines cash is king.

S. Artesian August 27, 2006
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Sunday, August 06, 2006

96 Tears, Part 1

1.Back in the day.... the days when Greenspan was a genius, when Clinton was an empath, feeling pain with benefits; back in the days when markets were efficient, elastic, ever-expanding, almost perfect; back in the days when investment was everything, when profit was every bourgeois' birthright.. a token of god's esteem... a foreskin returned... sewn back on to expanded reproduction, god's covenant with those pious souls practicing the virtue of selfishness... Back in the day, cash was trash.

Back in those days capital tricked itself out in its poser A-list VIP room, Armani, beach wear, wrestlemania, stock-jobber best and vogued its way across a billion integrated-circuit boards, a billion 200mm wafers, a million miles of unused fiber optic cable, broadbanding its way to nowhere, all the time lip-synching to Irene Cara's "Fame..."

"I'm gonna live fo-ev-ah!" Forever.

2. Meanwhile, a minor "financial crisis" erupted in Asia... a momentary, and mere, wobble in the walk of the super-model capitalism, the cost of doing business in stilettos on uneven payment.

"SOS, " sang the central bankers of Seoul, Jakarta, Bangkok, Taipei... meaning "Save Our Spreads." But the financial genius, godlike in his persona as the stammering obscurantist, divine in the practice of extreme equivocation; a man who started every sentence with the religious incantation "On the one hand....," a man who imagined himself the Kierkegaard of political economy where the words "yes" and "no" were the fear, the trembling, the sickness unto death, a man for whom fiscal policy was a leap-of-faith based exercise, and the empath, now standing not undressed but exposed, so human, so needy of understanding himself, a cheeseburger libertine, a modern Fatty Arbuckle with an air force... these icons of modern decrepit capitalism heard the SOS and thought it was from the song by their favorite girl group, ABBA, which wasn't even a girl group.

"SOS?" said Greenspan. "Where's the Waterloo?"

"SOS?" said the libertine empath zipping up and brushing off the crumbs, "Give me the Dancing Queen."

Only capital can turn bagmen into savants, and sleezebag men into heroes, idols, victims.

Speculation and spectacle are capitalist creation crowned.

3. The wobble, as wobbles will, expanded. What appeared in 1997 as financial crisis, as speculative excess, as currency panic in the "new tiger" economies of Asia was not financial in origin, speculative at core, nor currency driven in sum.... at least no more than any of the other panics, runs, crises that form and inform the shabby history of capitalism.

The assaults of the short sellers were the market, and marketing, reflection of the overproduction that had accompanied, determined, the recovery from the 1991-1992 contraction. More precisely, the rate of overproduction had overtaken, as it always does, the increased profits and profitability initiated in the expansion of capitalist production. As always and forever, sooner and later, expanded capital accumulation, production for the appropriation of value through exchange, had undermined the very purpose of expanded capital accumulation.

The overproduction in the "emerging, industrial" Asian economies, overproduction of semiconductors, cement, electronic components was not separate and apart from the underlying overproduction in the established industrial economies of Europe and the United States.

The assaults on the currencies of the Asian economies were, but not just, indexes to the vulnerability of these economies to overproduction within their "national" markets, indexes to their vulnerability to the overproduction of capital in the world markets. The currency assaults were also essential destruction. Capital and capitalists required a pitiless devaluation of the assets, instruments, means, and objects of production.

Capital has no equilibrium. It oscillates. The frequency of its oscillations is a dynamic disequilibrium; a destruction of labor and the means of labor, devaluation, through speculation, hedges, margin calls, death squads, and carpet bombing, is ever present.

Changes in capital are changes in the rates of the competing, composed, contradictory yet identical process of accumulation and devaluation, where the rates of the topsy quicken that of the turvy and the system of reproduction becomes systematic destruction.

4. So...the wobble of the emerging tigers was the stumbling of capitalism as a whole, and the eventual response of the premiere capitalist economy, the US, was in fact to lock down a certain rate and mass of devaluation of capital as an offset to reinflating the overall accumulation of capital. The lockdown, of course, took place mostly offshore. It was, as many things are, outsourced, secured in the contraction of the Asian economies, despite the rebound impact on US farm exports; applied less than lightly to the economies of Brazil and Venezuela; let loose like a plague against the fixed assets, the standards of living, the social welfare of the former Soviet Union.

But the U.S. of thee I sing? Accumulation restored and maintained. The AARG of the GDP (year to year rate of growth) measured at 3.7% in 1996, 4.5% in 1997, 4.2% in 1998, 4.5% in 1999. Real private fixed non-residential investment increased so much so that by 2000 the real amount invested in equipment and software was 60% above the 1996 level. Investment in transportation equipment was 30% above the 1996 level. Changes in the net stock of produced assets increased 27.5%. But.......

But corporate profits were not quite capable of recovering in mass or in proportion to the expanded accumulation. In 1997, profits had reached and peaked at $552 billion, declining to $470 billion in 1998, recovering to $517 billion in 1999. And the rate of profit was similarly unable to achieve the ecstacy of 1997 level, declining from 6.26% of net value of the stock of non-residential equipment and software to 5.22% in 1999 ... whereupon the empath and the genius almost heard the artist formerly known as the artist formerly known as Prince singing 1999... "2 thousand zero zero, party over oops out of time, so tonight I'm going to party like it's 1999." Almost. The libertine had programmed the CD player for continuous replay of "Little Red Corvette."

Into that quandry of expanding investment and reduced profits, the US bourgeoise brought their trusted battering, bartering, ram, OPEC. Once, twice, third charming time, the US had used oil price changes, up and down, to rearrange, redistribute profits; to devalue the overaccumulated fixed assets. The 1998 collapse of oil prices below $10 per barrel, a collapse triggered by the emerging identity of expanded reproduction and overproduction, where price and value converge, made OPEC's actions more than inevitable. It made them mandatory.

Cash was trash all right, but OPEC was, is the US's garbage collector.

5. Two thousand zero, zero, and ONE, the departing Pres greets the arriving Pres. They meet, naturally, in the entrance ramp to the official White House garage. The departing Pres and the first lady on their matching Harley's, wearing their matching maroon leathers, bouncing the noise of the engine revs off the concrete. The arriving Pres and that first lady show up in their Cadillac, the very same one driven by James Dean in Giant, this time sporting stolen Florida plates.

"Nice ride," says the outbound Prez.

"Like it?" says the inbound Prez, powering down the window. "Gift from my brother."

The outbound nods. "Here," he says, handing over the keys to to the official White House Hummer, code-named 'The Big Lewinsky' by the Secret Service. "The tank is half-full."

"Or half-empty," says the inbound.

Outbound nods again, throttles down his Harley, listens to the music coming from the Cadillac's stereo.

"Sam the Sham? Wooly Bully?" he asks.

"Yeah," says the inbound. "More than music. My role model. Whole way of life in Texas. And as in Texas so too in America. What about you?" asks the inbound. "What's playing in your headphones?"

"Jr. Walker and the All-Stars. My favorite tune, "Pucker up, Buttercup."

Inbound nods too.

"Word of advice?" offers outbound.

Inbound puts his finger to his lips and blows.."Ssshh. Don't ask, don't tell."

"Egg-zackly," says outbound. He and Mrs. Outbound then wheelie out of the garage, heading for the nearest drive-thru window before hitting that big ribbon of concrete called I-95.

August 13, 2006

S. Artesian

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Sunday, June 25, 2006

The Importance of Being Ecuador, 10

1. The discovery and development of petroleum fields in the Oriente reprised the theme of export capitalism, export enclave capitalism, but with a vengeance. What was to have been a cash asset, a capital plow, turning over the rotted remains of the hacienda, of the mita, of the conquest economy, became instead the vector, the vehicle for the infiltration and subjugation of the entire economy by international debt. In this modern form of capital, debt, there was preserved, secured, the impossibility of national, capitalist development. It, the petroleum based expansion of the Ecuadorean economy, was the old rags to new oil-soaked rags story.

Earnings are a sometimes thing, but debt is forever. Between 1967 and 1974, Ecuador's foreign exchange earnings increased tenfold. The average annual rate of growth (AARG) for real GDP during this period exceed nine percent. Manufacturing GDP AARG exceeded 13 percent. But the growth of external debt far outstripped GDP growth and foreign exchange earnings. By 1979, external had grown to $4.5 billion dollars, an AARG of 60 percent in a decade.

Ecuador's debt doubled again between 1979 and 1986. Petroleum revenues increased in relation to GDP while revenues from non-petroleum commodity exports declined by 25 percent. The government increased public expenditures as a portion of the revenues from oil exports were used to subsidize consumption and finance public works. Transportation and utility infrastructure were improved as were water, and sewer systems.

By 1989, 50 percent of the goverment's budget was financed by oil export revenues, and 38 percent of expenditures were dedicated to foreign debt service.

OPEC 2, the oil price spikes of were the overture to the contraction of the world markets and the collapse of rates of growth. More than overture, OPEC 2 was the coda, signifying more than the end of the post WW2 expansion, more than the end of the post OPEC 1 recycling of petro-dollars, and more than just the inability of capitalism to sustain reproduction of capital. The coda of capital was announced in the attack on living standards, in the transfer of wealth from poorer to richer, in the creation of a "lost decade"stretching in space and time through the 1980s and from Seattle to Buenos Aires.

Overproduction of oil, overexpansion of the productive assets for extraction, transportation, and distribution of oil; overexpansion of manufacturing as a whole, of the assets for production, transportation, and distribution, created a declining rate of return on investment and production, and had created that decline globally.

The decline of oil earnings after OPEC 2, slowly at first, then dramatically in 1986, and then catastrophically in 1988-89, was marked by the usual government efforts of devaluation, austerity, and the attack on living standards. The sucre was devalued twice between 1981 and 1983. Government spending was reduced and domestic interest rates climbed. IMF debt was rescheduled which then allowed the government to reschedule foreign private bank debt in 1985.

In 1987, however, the decline in oil revenues forced the government to suspend interest payments to the private lenders and impose import surcharges. The Trans-Ecuadorian Petroleum Pipeline was partially destroyed by the earthquake of March, costing the economy approximately $700 million in export revenues. GDP declined 5.2 percent from the 1986 level, despite increased government spending to stabilize the contracting economy.

2. The cycle of austerity, constrained economic recovery, expanding debt continued for Ecuador throughout the 1990s. AARG of manufacturing reached 6.9 percent in 1995. The percentage of gross fixed investment dedicated to machinery and equipment climbed from 43 percent in 1990 to 60 percent in 1995 and was maintained at 60 percent until 1999.

The financial crisis of the Asian economies in 1996-97-98, in reality the result of the peak and decline in the rate of profit throughout capitalism as a whole, and in the US in particular, worked its way east and west. The determinant of this contraction, overproduction, was particularly acute once again in petroleum production. Oil prices again head down, this time falling below the $12 a barrel mark touched a decade earlier.

Capital stumbled. Ecuador's capitalism staggered and neared collapse in 1999. The contribution of external financing to domestic investment actually turned negative. The negative net transfer of resources in 2000 was 20 times larger than the 1995 measure. Per capita growth of GDP, barely positive 1991-1995, turned negative and stayed negative 1996-2000.

With each successive iteration of commodity nationalism, the capitalism of Ecuador has become always and only that much more integrated into and dependent upon the world market, upon international capital. The economic collapse of 1999 and the dollarization of the economy were not actually variations on a theme, but the theme itself.

The theme of course is the maintenance of capital through the assault on wage rates and living standards, by the deconstruction of even the incremental development afforded by the "upswing" in world markets. Between 1997 and 1999 labor income declined by half. Even after the "recovery" of 2000, 2001, labor income was still 30 percent below its 1997 mark.

The dollarization of 2000 "stabilized" the economy, in effect, by guaranteeing the value of debt repayment.

With the contraction of world markets in 2001 and its reduced rate of growth since then, capital, international and national, in Ecuador, is at it was: the heir and the servant to the conquest economy and its legacy. Capital, international and national, in Ecuador, find its task to be more and more, and never less, the constraint of the very expansion of growth that requires an actual reorganization of property to move development out of an enclave, out of a concession, out of zone. Those concessions require more and more and never less military bases, and military organizations to "protect" the pipelines, the production facilities in the Oriente, in Sucumbios, Orellana; bases and organizations that will be used to "pacify" Putumayo, to sever Beni and Santa Cruz from Bolivia.

The UN in its 2006 report on the state of the world's cities wrote: "Around the world, the wealthy have created an architecture of fear by retreating behind fortified residential enclaves." Residential property is merely the reflection of the private property in production. It is in the hacienda that capital finds its security, its lost future.

S. Artesian
July 15, 2006

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Saturday, May 27, 2006

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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Sunday, April 23, 2006

Return to Ecuador, 8

1. In all its iterations, the nation represents for capital nothing more or less than a market. The geographical, ethnic, cultural compositions of a nation are, like biology, accidental, temporary, and limiting: more or less useful, more or less useless, depending upon the rates of return.

The viability, and practicality, of the nation are its economic, social determinants, and chief among those is the strength of the domestic market. The domestic market is itself the product of the transformation of agriculture, the transformation of the land itself, simple property, into expanded, compounded property; from a useful object into value producing value; into a means of reproducing the expropriation of labor.

The domestic market requires that labor itself be detached, expelled, expropriated, "freed" from the necessity or ability to sustain itself; that is to say, the labor must be useless to itself other than as means of exchange. Useful production, collective or individual for the collective, is a limit to the creation of the domestic market, to the expansion of production.

The Spanish conquistadors confronted and destroyed just such an agricultural system of collective useful production. The conquest destroyed the collective agriculture labor and the useful production of the indigenous peoples of the Andes substituting the hacienda, the mita, the encomienda, the huasipungo. The conquest did not detach, "free" that collective labor, but bound it in ever greater misery and dependency to subsistence and subsistence production.

2. The urban centers of the conquest economy emerge, grown, and function as either administration centers for the destruction of the indigenous culture and economy through installation of the hacienda; or as transit centers, warehouses, depots, transfer points for the extraction of the natural resources, for the liquidation of the accumulated values of the indigenous cultures, and the export of commodities.

The distinction between Sierra and Costa in Ecuador is just this distinction between administration and export; between hacienda and export crop production. In neither Sierra nor Costa does the city function as the permanent market. In neither Sierra or Costa are the cities the centers for establishing reciprocating reproduction of value, where labor expelled from the land, from agricultural production, is aggrandized in the expansion of manufacturing, with the manufacturing sustaining the expansion in agricultural output, with the increased agricultural output supporting increasing urban populations. It is not just poverty that distinguishes the stunted capitalism of Ecuador. It is the incapacity of capitalism to absorb that poverty, to detach the poverty from its rural roots, to reproduce the poverty as expanded value that so defines capitalism in Ecuador as the decayed offspring of the conquest.

3. The poverty of national development in Ecuador, Bolivia, Peru, Venezuela, in the Andean countries all, is not the deformation, suppression, of an embryonic but modern "healthy" national capitalism under the weight of the developed economies of Europe and North America. Capitalism creates itself, to be sure, but not out of thin air, and not as it might like to be. Capital, after all, is not born as or from a homunculus, a "little man." In its specific deformations, capitalism maintains and reproduces the conditions of its own pre-history. The specific distortions of capitalist, national undevelopment in Ecuador contain, the truth and the lie, the limits and potential of capital to create any of the material pre-requisites of development. Thus the inadequacy of the domestic market is the ultimate product of the market system itself; the persistent indenturing of labor to landed property is the proof positive, and negative, of the congenital inadequacy of the wage-system.

Production for export-- textile, cacao, bananas, petroleum-- is based on the inability of capital to overcome the limit of its own existence, private property. Underdevelopment is not so much imposed as it is achieved. It, underdevelopment, is the national project of the bourgeoisie.

S. Artesian
May 27, 2006

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Saturday, April 15, 2006

Beginning a New Interruption, Closer to Home

1. US capital, after 30 years of pounding down the living standards of workers at home and abroad; after driving Latin American into the lost decade of the 1980s, and leading it into the advanced export deprivation of the 1990s; after ruining village, small scale agriculture; after IMF/WB austerity program after austerity program dismantling mine and factory; after a one dozen, two dozen years of NAFTA, the Plaza Accords, the Washington Consensus; after decades of "special zones," "entrepreneur enclaves," "development areas," turning borders and entire countries into maquilladoras, sweatshops, and massage parlors, finally found itself face to face in its home territory with the labor it had imported as the result of the capital it had exported.

Capital, sparkling white and dripping blood and dirt from every pore, was confronted in the streets of its home land by the workers who had migrated, never by choice, but always be need-- economics is never discretionary, always compulsory-- to the land of opportunity, the land of opportunity of sub-minimum wages, unpaid labor, threats, assaults. A place like home.

When capital, recognizing that compulsion without discrimination, that wage-labor without intimidation, was really private property without protection, decided to formalize its degradation of labor and indigenous cultures at home and abroad, just that immigrant wage labor, now concentrated in the cities of the US, took to the streets in the colors of its orgins-- red, yellow, brown, and black.

2. The "immigration issue" is first, last, foremost and everwhere in between an issue of labor. The attacks on migrants are the attacks of capital on labor. The struggle is no more successfully resolved by any piece of legislation, more or less liberal, than that of the Delphi workers can be resolved by pension bailout guarantees, legislated "retraining" or buy-out packages, or contract compromises.

While "leftists" and "Marxists" ponder slogans, actions, demands; while retread Maoists all dressed up in guayaberas excuse their own ignorance by advocating "learn from the masses," the issue of immigration, the struggle of migrants is the issue and the struggle of labor itself. It is the struggle against the wage system itself.

No legislation deserves endorsement. No liberal democrat or Democrat deserves support. Exactly the opposite is required-- the class based rejection of democrat/Democrats.

The opposition to all forms of border control, all punitive measures against migrant peoples, the demand for the reorganization of education, health care, social services, regulatory agencies under the control of workers, with workers represented in their own political party, are the first steps, the lowest common denominators, the minimal demands against the rule of capital.

Open borders are the prerequisite to expelling the capitalists.

S. Artesian
April 15, 2006

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Next: Return to Ecuador

Sunday, March 19, 2006

The Importance of Being Ecuador, 7

1. Love and Chocolate

Divided by their particular attachments to specific forms of private property, the ruling classes of Ecuador were, and remain, united in, by, and around private property itself. Church, state, faux aristocrats, haciendistas, all swoon, indulge, and shared with the liberal planters, manufacturers, exporters of Guayaquil in the richness brought by the cacao trade. And where chocolate leads, love is sure to follow. And follow it did.

The commercial and industrial bourgeoisie of the costa intermingled and interbred with the latifundistas of the Quito region.

Money can't always buy love, but it can always buy land. The purchase of land by the traders and manufacturers of Guayaquil was an essential step in attaching status to the accumulation of capital. The newly enriched bought land and stature, turning economic success into position by marrying into the older, and debt-strapped, established families. Kinship and marriage made the bourgeoisie again what they always had been, servants and financiers of backwardness. The pre-nuptial agreement, and the marriage bed, were the consummation of illegitimacy-- the marriage of the bastard offspring from the conquistadors' original destruction of the indigenous communities.

2. What a Difference a Year Or Two Make

In May 1944 Jose Maria Velasco assumed the presidency for a second time. He promised a government of "national resurrection," saving the "national honor." Conservative opponents of Velasco's Democratic Alliance were jailed, silenced, or otherwise removed from government. A constituent assembly, dominated by left-wing elements, was convened.

One year later, Velasco dismissed the assembly and called for new elections. These elections produced a right-wing constituent assembly, reflecting the rightward movement of the Democratic Alliance. And the constitution produced by this assembly was far more palatable to Velasco and the elites of Quito and Guayaquil.

For the next two years this poor imitation of that apotheosis of poor imitations, Louis Bonaparte, ruled by the bayonet and the concrete pour. Military parade and public works, the imitations of wealth and empire, were the closest capital could come to "national resurrection." Salvation was found, but only in the bank accounts of the elites. By 1947, the national treasury had been emptied of the revenues brought by the increased demand and higher prices paid for commodities during WW2 and Velasco was on his way out.

Overthrown by his own minister of defense in 1947, Velasco resumed the presidency for a third time in 1952.

He, Velasco, proclaimed himself "the national personification." And in his inabilities, Velasco personified the congenital incapability of capital, of the Ecuadorean bourgeoisie to resolve the conflicts between city and countryside; landed property and free, detached, labor; private property and social need.

Some things had changed in the Ecuadorean economy. Bananas had replaced cacao as the country's primary export. As diseases ravaged the banana plantations of Central America, Ecuador's banana exports to the US accelerated. Whatever the source of revenues, the contradictions remained.

Again, export earnings supported government financed infrastructure construction and military armaments.

Again Velasco moved against his own left-wing, mobilizing conservatives, social Christians, and the thugs of the nationalist, anti-communist ARNE (Accion Revolucionaria Nacionalista Ecuatoriana) against students and workers.

Again, Velasco left office, suceeded by a conservative ally and cabinet member, Camilo Ponce Enriquez, and again Velasco reappeared as the "national personification" of opposition to his follower.

Again export earnings fell, and the end of the banana boom created enough social conflict to restore Velasco's national personification. In 1960, Velasco was elected yet again to the presidency.

Again Velasco lurched left, abrogating the hated 1942 Rio protocol under which Ecuador had been compelled to cede 200,000 square kilometers to Peru. And again, the social forces behind Velasco's "national personification" split left and right, and a military junta took power.

History is not supposed to be simply a repetition compulsion, but capital in its very origin the product of the unresolved conflicts, the legacy of the conquest, rather than the resolution of those conflicts, the overthrow of that conquest, acts as an historical neurosis. Velasco's periodic overthrows and restorations become a social tic, a clock resetting itself backwards...

S. Artesian
April 09, 2006

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Sunday, March 05, 2006

The Importance of Being Ecuador, 6

1. Politics

When Clausewitz asserted that war is the continuation of politics by other means, he left something out. War is the continuation of political economy by the meanest of means. War is the compressed expropriation and destruction of labor so essential to political economy. And the officer corps of the military is the condensed expression of the weakness, the brutal incompetence of the bourgeois class by just those same meanest means.

In 1926, the junta of the League of Young Officers ruling Ecuador appointed Isidro Ayora to the presidency. Possessed of great wealth by marriage, and a social conscience by temperament, Ayora imagined himself establishing a dictatorship of reform bourgeoisie. But once and forever incapable of establishing a independent class program, the bourgeoisie could not create their own reforms. Instead, Ayora imported a reform commission from Princeton University of New Jersey.

The Princeton commission created the Banco Central, expropriating and transferring to the government the private banks' currency issuing power. The commission also transferred the customs and revenue collection functions from la argolla of Guayanquil to the government in Quito.

The golden era that followed this redirection of revenues was short-lived and quickly dead, strangled in its crib by the great capitalist depression of the 1930s. Export revenues declined by two-thirds in the period 1928-1931. Ayora was overthrown by the military in 1932, and near civil war erupted when the candidate of the populist, nationalist Compactation Obrera Nacional (Consolidation of National Workers) Neptali Bonifaz Ascazubi was elected to the presidency. The Liberal paramilitary forces defeated the CON in the streets as the military, giving full expression to the ferocious paralysis of capital, the furious inability of the bourgeoisie to actually govern, stayed in their barracks.

But the Liberal president, Juan de Dios Martinez lasted only 2 years in office. The Chamber of Deputies encouraged the CON to return to the streets to protest, and in 1934, the then president of the chamber, the man who would appear and reappear, or not so much reappear as recur, like a delusion or an infection, throughout the next four decades of Ecuadorean politics, Jose Maria Velasco Ibarra, won the presidency by a huge margin.

But not for long. "Not for long" were the words inscribed on the presidential seal of Ecuador. Not for long Ayora. Not at all Bonifaz. Not for long Dios. Not for long, this time, Velasco.

Velasco was overthrown by the military in 1935 after he had dissolved the Congress. Federico Paez was awarded the presidency. But not for long. In 1937, Paez was overthrown by the minister of national defense, General Alberto Enriquez Gallo. But not for long. In his brief tenure, Enriquez appears as the pre-Peron Peron of Ecuador, instituting and enforcing the Labor Code of 1938 giving legal status to labor protections. Enriquez also confronted the United States over the US owned mining corporation, the South American Development Company. The company, backed by the US government, refused to raise wage rates for Ecuadorean workers, and increase the portion of profits retained in Ecuador.

Enriquez died in 1939 and was followed in office by another representative of the Guayaquil liberals and friend of the US, Carlos Alberto Arroyo del Rio. As WW 2 approached, the US rethought its position on mining profits, ending its support for the South American Development Country, in exchange for agreement allowing the US to build a naval base and an air base in Ecuador.

In 1941, Peru invaded and occupied portions of Ecuador's eastern and southern provinces. The war ended with the Rio Protocol. Arroyo del Rio ceded 200,00 square kilometers of territory to Peru. In 1944, supporters of Velasco, civilian and military, attacked Arroyo's police. Arroyo resigned, and Velasco returned from exile in, where else?, Colombia naturally, to take the presidency one more time. But not for long.

s.artesian March 5, 2006

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Sunday, February 26, 2006

The Importance of Being Ecuador, 5

The Replicant Bourgeoisie

1. Capitalism in Ecuador doesn't actually emerge from the struggle against the vice-royalty, but oozes and seeps out of the pores of the successful and failing vice-royalty. Capitalism in Ecuador withers as it grows, expands here faster there more slowly that its rates of decay, but never without decay. At every moment between origin and demise, capitalist development in Ecuador is the product of accelerated decrepitude.

At origin, capitalism in Ecuador is the offspring, the idiot offspring of conquest and conquerors, survives on a stipend, a "trust fund" established in the impressment, the forced servitude, the degradation of the labor of the indigenous peoples.

With no economic life of its own, the bourgeoisie of Ecuador exist as caretakers of poverty; as agents and the agency of anti-development, and anti-history. Where there has never been a nation, and only a suppressed domestic market, the bourgeoisie propagate a myth of a nation; a pseudo-history of imagined development. The failure of the struggle to overturn the social legacy of the vice-royalty is refurbished and recirculated as the future of liberation. Nostalgia for the construction of an obsolete historical project, "democratic," "national" "independent" capitalism, brands the programs of "progressive" democrats and radicals. The bourgeoisie pursue memories of emancipation, but as with the actual fundamentals of the economy, the memories are not their own, the memories belong to others.

2. Loathed and adored, condemned and honored, tyrant and savior, Garcia Moreno is the perfect picture of the triumphant and failed Ecuadorian bourgeoisie; in his very existence the compressed composite of the baptism of Ecuadorian capitalism in the church of counterrevolution. Born of the proverbial "modest circumstances" in Guayaquil, Garcia Moreno studied in Quito where he married into the local aristocracy. Journeying to Europe after the failed revolutions of 1848, Garcia Moreno studied the importance of counterrevolution to Christianity under the learned theologians of the Catholic Church.

Upon those rocks of Catholicism and counterrevolution, Garcia Moreno built his church and state. Catholicism was not just the official religion, it was the only religion, named as such in two constitutions of Ecuador. The "republic" itself was dedicated to the "Sacred Heart of Jesus."

The anti-clerical, trading liberals of Guayaquil were incensed by the restrictions on exchange, on access to property inherent in the conservative church-state. Garcia Moreno, however, fought off coup and invasion, and even overthrew his own successor in 1869 when it appeared that scheduled elections favored the Liberals.

Finally, or not, in 1875 Garcia Moreno was hacked to death on the steps of the presidential palace by a Colombian man wielding a machete, avenging perhaps his own sense of aggrieved "national honor," that Ecuador had left the Confederacion Gran Colombia in the first place.

Garcia Moreno's rule had overseen significant structural change in the economy. Economic growth was restored as a product of export and production for export. Roads and railroad were constructed linking Quito, Guayaquil, Riobamba, Babahoyo, Esmeraldas.

Exports grew tenfold between 1850 and 1890, and cacao became the number one export crop. Production tripled in this same period. With this growth in exports, the economic power of the Guayaquil liberals grew, but their social cohesion did not.

It took the Liberals 20 years to consolidate themselves enough to take power in Ecuador. That opportunity was seized not when the Conservatives were in power, but when the Progressives, who pretended at a compromise between Liberals and Conservatives, assumed leadership.

In 1895, the Progressive president, Cordero, resigned amid charges of bribery and betrayal in allowing Chile to used the Ecuadorian flag as cover for selling a warship to Japan. In June 1895, the Liberals in Guayaquil seized power in the name of a caudillo, General Jose Eloy Alfaro Delgado. In September, Alfaro returned from his exile and marched into Quito.

3. In the first years of Liberal rule significant political and structural changes of occurred. The Catholic Church was divested of its official status and of its control of the educational system. Civil marriage and divorce were institutionalized. More than that, the church's rural properties were seized by the government. The Church in turn incited a civil war. The church in Ecuador, led by its foreign-born bishops of Portoviejo and Riobamba, preached and fought agains the "atheistic alfaristas."

The arbitrary debt-peonage that had survived from the conquest was not abolished. It was regulated. Imprisonment for debt was finally abolished in 1918. Still, these structural changes were overwhelmed by the real economic decline that pressed upon the indigenous and workers. The liberal government suppressed by force of arms the struggles of both groups for economic power.

The economy remained what it always had been. In decline, ruinous to the living standards of the indigenous and the poor. In expansion, opposed to improvements in those standards. In expansion, the Ecuadorian economy remained deformed, suppressed, stunted; its deformation being the greatest achievement of bourgeois power.

Exports and export earnings financed the spending plans of the governments, with such plan inevitably requiring the assumption of greater debts. The power of the Liberals was centered in Guayaquil; the center of power in Guayaquil was the group of bankers, landowners, merchants known as la argolla-- the ring. At the center of the ring was the Commercial and Agricultural Bank of Guayaquil, making large loans to the government. What the Catholic Church was to the Conservatives, the bank was to the Liberals.

And then, again as before, the influence of Britain in the world markets pushed the export economy of Ecuador to collapse. This time however, in the 20th century, it wasn't the domestic industry of British capitalism that overwhelmed export Ecuador. This time, in the 20th century, it was the cacao production from Britain's African colonies that undermined Ecuador's position.

Inflation coupled with declining export earnings forced the the economy into depression. A general strike in Guayaquil in 1922, and a rebellion by indigenous rural workers and peasants in 1923 were subdued only after massacres of the strikers.

Finally, or not, in 1925 a group of reformist military officers, the League of Young Officers, overthrew the Liberal president Cordova.

S. Artesian
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Sunday, January 29, 2006

The Importance of Being Ecuador, 4

1.Independence brought neither emancipation nor peace to the territory that would become Ecuador. Bolivar, the would be Bonaparte searching for a wished for bourgeoisie, entered Quito to hero's welcome. San Martin, meanwhile, traveled to Guayaquil, home of the almost-bourgeoisie. There he and Bolivar met and discussed the division and integration of the conquered territories. Bolivar convinced San Martin that the former Quito Audiencia was better off as part of Gran Colombia, and so what had been an audiencia became District of the South of the Confederation of Gran Colombia.

The confederation, however, was neither nation nor continent. It was a structure built on the weakness, the absence of a single class with a singular property that could absorb, overturn, subjugate, and speak for all in its terms of production, commerce, and exchange. It was this weakness, this absence, that made Bolivar, Sucre, and those who would follow, these men on horseback, heroes. And failures.

The Confederation went to war first against the Spanish vice-royalty in Peru and then against the criollos and peninsulares of Peru itself. Finally, in 1830 the Confederation disintegrated with the withdrawal of Venezuela.

In August 1830, a constituent assembly dominated by the "notables" of Quito met and chartered a constitution for a state to be called Ecuador. The Quitenos, in an act simultaneously of maximum self-criticism, self-awareness, historical recognition , and self-parody, handed power to the Venezuelan General Juan Jose Flores, who had been appointed governor by Bolivar of Ecuador during its "integration" into the Confederation of Gran Colombia.

Would-be capitalism wishes for national development, that is to say establishment of a domestic market not just in and for the exchange of commodities, but first and foremost a domestic market for the appropriation of "free," unlanded, labor. But wishes aren't horses, and men on horseback are in riding breeches and not sans culottes.

The potential for the creation of such free, unlanded labor power existed only in the emancipation of the indigenous peoples from the encomienda, the mita, the hacienda; in short emancipation from the very organization of private property that created peninsulare, criollo, and indigeno. No such potential existed in the saddlebags of Bolivar, in the armies of a gran confederation.

2. Economically sterile, the would be bourgeoisie of Ecuador endured, tolerated, supported, criticized, and plotted against Flores for 15 years until March 1845, when an insurrection in Guayaquil forced the general to vacate at a high rate of speed. The insurrectionists, marcistas, from Guayaquil were no more capable of governing Ecuador, of organizing the economy than the general or the notables of Quito.

In 1851, General Jose Maria Urbina took power in a coup and accomplished what the bourgeoisie and notables had never dared-- the abolition of slavery. In 1857, Urbina's successor, General Franciso Robles abolished again something the bourgeoisie and notables never dared, the annual payments of tribute required from the indigenos. Both actions places the Guayaquil generals in direct opposition to the hacendados and the Catholic Church.

The linkage of Guayaquil's economic and commercial liberalism with anti-clericalism, with better treatment of the indigenos, only strengthened the regional, isolated, enclave, nature of would-be capitalism.

By 1859, the centrifugal forces overwhelmed the Liberal regime. Local caudillos declared their autonomy from the central government. In response to the occupation of the southern regions by a Peruvian army, Flores made his last long march, returning to Ecuador, forcing out the Peruvians and subjugating the caudillos. But the real power, the power of centralization would not belong to Flores. It was in the hands of Garcia Moreno, the man from Guayaquil who was more Quitoeno than the Quitoenos; more conservative than the notables; more clerical than the clerics; and more a man of international capital in his nationalism than all the traders, merchants, factory owners, exporters of Ecuador.

3. Where class, parliament, even army had failed, Garcia Moreno achieved success in wielding the vicious legacy of the original conquest, the Catholic Church. What plunder, landed property, and god's enforcers had achieved hand in hand, destruction of a superior indigenous society, devastation of rural productivity, liquidation of the indigenous peoples, could and would be utilized again to build atop those ruins the form of a unified state, and to permit the penetration of capital.

Education and infrastructure, the supposed "social" benefits of the liberal capitalism, would be and were harnessed to the clerical state. The "ease" of this accommodation of capital to the national clerical state was, again, in the suppression of the indigenous population, the very source of landed property itself.

With the land itself held not as a value to be realized in commodities, in exchange, in its very alienability, but rather as monument, as title to the past; economic "development" was always and forever a product of export, of the paucity of the domestic market, of the connection to the world market through weak urban areas. Capitalism, internally, and capitalist penetration internationally, converge in the establishment of the enclave, the concession. The port, the plantation, the hacienda, the railroad, the factory exist, and grow, as grafts upon the trunk of impressed, indigenous labor. And so we have advanced world capitalism and its national agents as the true heirs to the conquistador, the cleric, Spanish mercantilism, the hacienda, the vice-royalty. And also as heirs and victors in the failed struggles of Bolivar and Sucre, the failed Gran Confederation. Dis-integration is the once and future history of Ecuador in the world market.

S. Artesian
February 5, 2006

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