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