Sunday, June 25, 2017

My review of "Extractive Imperialism in the Americas: Capitalism’s New Frontier," edited by James Petras and Henry Veltmeyer

"Extractive Imperialism in the Americas: Capitalism’s New Frontier," edited by James Petras and Henry Veltmeyer. Chicago: Haymarket Books, 2014.


April 2017 issue of Science & Society

The Latin American bourgeoisie has put up varying degrees of resistance to the leftist and center-leftist governments that have come to power in the continent in recent years. From a Marxist perspective, the incongruity between political power held by leftists and the capitalist economic structure, which is as firmly entrenched as ever, cannot continue for long. Analysts on the left differ over the degree to which leftists in power have reacted to this contradiction by making concessions and watering down their original goals in order to accommodate economic elites.


In this volume, editors James Petras and Henry Veltmeyer explore and analyze how the contradictions play out in the area of foreign investments in mining and other primary commodities that have over the recent past become the dominant sector of Latin American economies. The heightened dependence on, and state support for, production of primary products for export, a model known as “extractivism,” contrasts with the “import substitution” stage in which governments promoted the manufacture of consumer items for the domestic market. The editors note that the policy of progressive regimes in Latin America toward foreign investment in mineral wealth and their acquiescence to extractivism have “generated deep paradoxes” (p. 119). Petras and Veltmeyer recognize certain positive features of the “more radical form of progressive extractivism” (p. 26) represented by Venezuela and, to a lesser extent, Bolivia and Ecuador as well as (but to an even lesser extent) the center-left governments of Argentina and Brazil. Specifically, leftist and center-leftist governments have maximized income by driving a hard bargain for the exploitation of their natural resources and have channeled the revenue into social programs. In contrast, the centrist governments of Mexico’s Enrique Peña Nieto and Ollanta Humala in Peru have granted foreign capital much more lenient terms including low taxes on mineral exploitation, and as a result have had much poorer records on poverty reduction.

Nevertheless, Petras and Veltmeyer and the volume’s other authors unequivocally deny extractivism’s potential to promote transformation and sever relations of dependency. They conclude that under the extractivist model the “agency” for real change “is unlikely to be the state” (p. 32). Indeed, the import substitution stage, with all its limitations and disadvantages, produced greater advances than extractivism, with all its revenue derived from high international commodity prices. Not surprisingly, Petras and Veltmeyer title their chapter on Brazil “Extractive Capitalism and Brazil’s Great Leap Backward.”

The inherent flaws of extractivism discussed by the editors sound like a textbook description of enclave economies of the nineteenth and early twentieth century. In the first place, they argue that “without industrialization there can be no development,” which would be better served by the harnessing of “unlimited supplies of labour” as opposed to “a high organic composition of capital” (p. 28). At the same time, they attempt to debunk “the idea of extractivism as a transitional phase in a modernization process” enabling the country eventually to “add value to…natural resources before exporting them” (pp. 35-36). In the second place, extractivism implies dependence on foreign investment and an international market that has always been characterized by sharp fluctuations and usually translates into “a deterioration in the terms of trade for commodity exporting countries” (p. 29). Finally, the authors point to the ecological devastation produced by the extractivist model. In a chapter on oil pipeline construction in northern British Columbia, Veltmeyer and Paul Bowles conclude that “extractive capitalism in its contemporary form is a blight on humanity, a predatory and relatively backward economic and social system based on…the unsustainable development of non-renewable and commodified natural resources” (p. 253). 

The authors take issue with the “world system” approach and other paradigmatic formulations that “lump [s] together disparate political, social and economic internal configurations, opposing strategies and responses to imperialism” (p. 274). In their closing chapters “Dynamics of 21st Century Imperialism” and “Reflections on U.S. Imperialism at Home and Abroad,” Petras and Veltmeyer argue that, contrary to globalization thinking, the U.S. maintains its domination largely through military might and that “U.S. financial and military elites, not industrial-manufacturers, now dictate policy” (p. 277). Even though “Washington lost a strategic economic level – market power” (p. 257), “the thesis of the decline of the U.S. empire… [is] overstated… and lacking in specificity” (p. 295).

Petras and Veltmeyer also question the applicability of orthodox Marxist formulations on the primacy of the workplace and the proletariat in the struggle for change in twenty-first century Latin America. The epicenter of struggle has moved to the streets, mining sites and communities. The central issues have also shifted from wages, working conditions and land reform to the defense of “land, water and natural resources” (p. 100). Nevertheless, they point to mine workers as playing a critical role in the resistance to extractive capitalism, an observation also made by Dennis Canterbury in his chapter “Extractive Capitalism and the Resistance in Guyana.”

The volume deals not only with the socio-economic structure of the new extractivism phenomenon in the Americas, but also organized opposition to the system. The book is divided into two parts of equal length, titled “Imperialism and Class Struggle Dynamics” and “Extractive Capitalism and Popular Resistance.” Of the book’s twelve chapters, eight are authored by Petras and Veltmeyer.

The authors have presented a wealth of empirical information to substantiate their thesis regarding the strengthening of dependency in the age of “new extractivism,” even in its progressive form. Nevertheless, they leave out of their analysis certain features of leftist and center-leftist governments that point in the opposite direction and cannot be dismissed as superficial.

Thus, for instance, Washington’s support for intransigent oppositions that have attempted to unseat progressive Latin American governments would indicate that the policies they are following, and not just their rhetoric, undermine established interests tied to global capitalism. In addition, the authors recognize the importance of social programs financed by mineral-derived revenue, but fail to point out that these undertakings do not consist merely of handouts or stop-gap measures. Many of them promote popular participation in decision making and a sense of empowerment among the poor. When the editors argue that the “gains” of progressive governments in reducing levels of poverty “cannot be sustained” (p. 31), they fail to recognize that social transformation may at the outset be as strategically important as economic development. In this sense, the editors’ position coincides with the claims of anti-left scholars that the social programs of the “populist” left, unlike those of non-leftists, are inherently unsustainable, without recognizing their transformational nature. Finally, individual policies need to be contextualized and progressive governments given credit for their implementation. State takeover of basic industries, for instance, was carried out by reformist and conservative governments alike in the post-World War II period, but in the age of globalization they acquired more far-reaching implications. Other examples of policies that represent advances in the context of globalization are the legislation eliminating outsourcing enacted under Chávez and the nationalistic foreign policy of both leftist and center-leftist governments. In short, the editors and the other authors of the book have put forward cogent arguments, though at time overstated, that demonstrate the weak, vulnerable and disadvantaged positions of progressive Latin American governments within the framework of twenty-first century global capitalism.

Steve Ellner



Saturday, June 3, 2017

Venezuelan Dilemma: International Intervention is Justifiable Only in Cases of Systematic and Flagrant Violation of Human Rights and Democratic Norms

Venezuela’s national sovereignty is being breached in that OAS Secretary General Almagro and the governments that support him are acting in an arbitrary fashion. An all-encompassing condemnation of a nation leading to organizational expulsion would be justified in the case of a clear-cut systematic and flagrant violation of human rights. An example of such a clear-cut case is the government of the Philippines, whose president, Rodrigo Duterte, has been lauded by President Donald Trump, the same president who supports measures against Venezuela in the OAS. Similarly, the Mexican government endorses OAS resolutions against Venezuela, but what about the 43 students assassinated (or disappeared) in Iguala with apparent police complicity, or the 14 journalists who have been assassinated in the country over the last 12 months without a single arrest? And if Almagro’s call for general elections in Venezuela on grounds of Maduro’s sagging popularity is taken seriously, then the same demand should be applied to Brazil, where President Michel Temer’s popularity has reached 5 percent, or Mexico, whose president Enrique Peña Nieto has an approval rating of 17 percent.

The relevant issues in Venezuela are not black and white for the reasons. Most important, the government’s actions have to be contextualized. For example, the use of tear gas against a peaceful demonstration which does not threaten public order has to be distinguished from a demonstration which is heading toward the downtown area near the presidential palace where violence is likely to ensue. The latter has occurred nearly on a daily basis over the last two months. In addition, the widespread violence by opposition brigades also on a daily basis throughout Venezuela, the numerous cases of destruction of public property ranging from ministries, to government vehicles to subway stations to public buses, need to be brought into the equation, and yet these actions have been largely ignored by Almagro and other critics of the Venezuelan government as well as the mainstream media. The devil is in the details, and in order to justify sanctions against Venezuela, each one of those details has to be explored in an objective manner.

There are credible arguments in favor and against this year’s announced electoral agenda. The government, for instance, points out that the opposition itself called for the holding of a national constituent assembly and now they refuse to participate. Given the current deadlock in Venezuela, the constituent assembly call has the potential to bring together diverse sectors in order to solve concrete problems. On the other hand, if it fails to reach beyond the hard-core Chavistas, it will only aggravate an already critical situation. Similarly, the scheduling of gubernatorial and state assembly elections for December of this year is open to debate. On the one hand, those elections should have been held last December. On the other hand, up until the National Electoral Council’s recent announcement of the December 2017 date, the opposition had been demanding the holding of state-wide elections, but now some of its leaders hint that they will oppose participation.
An objective evaluation of the issue of the state of Venezuelan democracy will undoubtedly come up with serious breaches of democratic norms, but the government’s arguments are credible enough to deny a black and white conclusion or blanket condemnation. That being the case, the position assumed by those who call for the application of the OAS’s Democratic Charter lacks validity.

Steve Ellner
Latin American Perspectives





Thursday, June 1, 2017

The OAS Has Contributed to Venezuelan Polarization and Undermined the Call for National Dialogue





Foreign actors such as the Organization of American States need to play a neutral role in Venezuela if they are to contribute to the process of reestablishing stability and avoiding civil war or anarchy. The two sides in the conflict are in a deadlock and at this point neither one is poised to emerge victorious, at least in the near future. Polarization has reached new heights.



Furthermore, neither side has an air-tight justification for its positions and actions. Indeed, the problems the nation is facing defy easy solutions. While the government of Nicolás Maduro has committed its share of errors, the opposition has also assumed positions that do not reflect popular sentiment, which is in favor of national reconciliation and a focus on concrete economic solutions rather than political confrontation.



The Maduro government’s case cannot be dismissed as lacking substance, as if it were an authoritarian regime. The bellicose behavior of opposition street brigades including the destruction of public property and the killing and wounding of numerous security forces –over the last two months as well as during a four months period in 2014 – would be labeled terrorism in the U.S. and elsewhere. Protesters have also systematically blocked traffic in major street arteries, often by starting fires from sidewalk to sidewalk. Furthermore, Maduro has called for open discussions with no strings attached, a proposition that the opposition turned down both in 2014 and 2017. On the other hand, the government provoked the opposition this year by forbidding the electoral participation of governor and former presidential candidate Henrique Capriles for 15 years on allegations of corruption. It also rescheduled state-wide elections, which were slated for December 2016, by one year. While the dozens of deaths related to the protests have occurred under disputed circumstances, the excesses on the part of security forces both in 2014 and this year have been widely recognized, even by the government itself.



This is just the beginning of a list of pros and cons with regard to the government’s democratic commitment, as well as that of the opposition. The point is that the good guy- bad guy narrative is simplistic and does not stand up to the facts.



In spite of the nebulousness and complexity, important international actors such as the OAS as well as the U.S. mainstream media have failed to achieve even a modest degree of impartiality. Specifically, OAS secretary general Luis Almagro has failed to place himself above Venezuela’s internal politics and to facilitate a peaceful and constructive resolution of the conflict. Instead, his statements without exception have been unequivocally in line with the opposition’s narrative and demands.



Almagro’s openly hostile position toward the Maduro government inadvertently strengthens the hard-line position in the Chavista movement and the opposition, both of which are resistant to dialogue. His intromission and discourse that questions the Venezuelan government’s democratic credentials serve to embolden the radicals in the opposition and further polarize the nation. Almagro conflates pressing economic problems and the alleged authoritarianism of the Maduro government. This line strengthens the hand of the opposition hard liners who dismiss all actions (including regional elections) that do not contribute to immediate regime change. In contrast, the moderates within the opposition – although at this point they have no visible national leader – favor emphasizing economic issues in order to reach out to the popular sectors of the population who are most affected by the economic calamity, attract some of the disenchanted Chavistas, and at the same time accept dialogue with government representatives. The moderates therefore place an accent mark on economic issues more than political ones.



In short, the OAS should assume a balanced position by criticizing both sides for their intransigence and specific actions that contribute to confrontation. Along these lines, the organization should call on the government and the opposition to negotiate in earnest. At the same time, it should name a nonpartisan committee to investigate disputed events.

Steve Ellner