Latin America &Underdevelopment

L E O H U B E R M A N

On NBC Television News, last Friday night, pictures were shown ofAmerican refugees who had fled from Panama following the rioting there.One woman, relating the frightening experience of her husband, said:His car was overturned, rocks were thrown at him, and he barely madeit into the Canal Zone.

Another woman said, I wish the American people would take aninterest in what is going on there. We just give and give and this is whatthey do to us.

I, too, wish the American people would take an interest in what isgoing on in Panama and in the rest of Latin America. If they did so, if theyreally studied the facts, then they would get out of the habit of swallow-ing whole the propaganda fed them on the air and in the press, that othernations are always villainous or inferior, while the United States isalways moral and noble. If the American people knew their history as itreally was, not as it is taught in their schools, then they would immedi-ately be aware of the fact that the formulation by the refugee fromPanama was upside down; not We just give and give, and this is whatthey do to us, but rather We just take and take, that is what we do tothem.

The story of how we took the Panama Canal Zone proves the point. In1903, Panama was a province of Colombia. When the Senate of Colombiarejected an agreement giving the United States the right to build a canal,a revolution, in quotes, was staged by the members of the ruling classof Panama, instigated and guided by the United States. Panama secededfrom Colombia, and the moment it did so, the new government was rec-ognized and it gave the United States the right to build the canal. We

This is a slightly abridged version of a speech delivered by Leo Huberman to theMethodist Student Christian Citizenship Seminar on Latin America, on February 4, 1964.It is being published here for the first time. We would like to thank the University ofOregon Special Collections for providing access to this manuscript from their collectionof Leo Hubermans papers. We thank Elizabeth Huberman for her help in publishing thistalk. Hubermans talk had no title. The present one is supplied by the editors.

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have this on the best authorityTheodore Roosevelt, who was Presidentof the United States at the time. He described how the revolution start-ed in these words; I simply lifted my foot. And, he added, I took theIsthmus, started the Canal, and then left Congressnot to debate theCanal, but to debate me.*

You have seen the newspaper stories, quoting Secretary of State Rusk,designed to make you believe that Fidel Castro and the Communistswere partly responsible for the recent rioting in Panama. This has beendenied by the spokesmen for the Panama government. The technique ofblaming Communists whenever a revolution breaks out anywhere is afamiliar one. The charge may or may not be true. But what we know istrue is that the government of the United States, in furtherance of its ownends, staged a phoney revolution in Panama in 1903, and again inGuatemala in the 1950s, and most recently in Saigon.

I am suggesting that we just take and take, that is what we do tothem.

In an article entitled, Brazil: Exploitation or Aid, in the Nation ofNovember 16, 1963, Professor Andre Gunder Frank, formerly at WayneState University in Detroit, and currently visiting professor of economicsat the University of Brasilia, cites figures to show how much we justtake and take.

For the years 19471960, the total amount of new investment and loansthat flowed into Brazil was $1,814,000,000.

The amount that flowed out of Brazil in profits and interest paymentswas $2,459,000,000. This means that $645,000,000 more was paid out byBrazil than came into Brazil. Add to that figure an estimated additionalbillion dollars for services, representing mainly secret remittancesabroad, and the total outflow becomes nearly twice as much as theinflow.

Another statistic, this one from the Joint BrazilU.S. EconomicCommission, is even more startling. In the fourteen years from 1939 to1952, withdrawals to the United States from Latin America came to sixty-one times the amount of long-term investments. You heard that correct-lysixty-one times as much money withdrawn from Latin America thanwas invested, in those fourteen years.

In the specific case of Brazil, it doesnt matter which years you take,the picture is the same. An ECLA study shows that in no decade of thepast century has the total flow of goods and services out of Brazil been

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* See Dwight Carroll Miner, The Fight for the Panama Route, Columbia UniversityPress, 1940.

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smaller than the flow into Brazil. For Latin America in general we have other revealing figures from the

U.S. Department of Commerce: For the period 19501961, net new privateU.S. investment came to $2,962,000,000 but the profit and interest onthat sum came to $6,875,000,000; which means that well more than dou-ble the amount put in, was taken out.

Ah, yes, you may point out, but those figures pertain only to privateinvestment, and in that same period the U.S. government was giving andgiving and giving to the countries of Latin America. To present a true pic-ture you must include, in addition to the amount of private capital, theamount of public capital poured into Latin America.

Quite correct. Let me now include the amount of public capitalagain the figures are from the U.S. Dept. of Commerce. United States aid,and loans, came to the truly munificent sum of $3,910,000,000. But therepayments and the interest thereon, were also munificentthey cometo $1,554,000,000 to date, and more still to come. So, adding up both pri-vate and public capital poured into Latin America by the United States,against profits, repayments, and interest poured into the United Statesby Latin America, we find a net capital movement to the United States ofover two billion dollars.

The refugee from Panama who told her television audience that wejust give and give, was spouting what she and most Americans havebeen led to believe was the truth. But it is not the truth. The truth is thatwe just take and take.

The myth is that unselfish, beneficent, American (or English, orFrench) private and public capital goes to the underdeveloped countries,at a considerable sacrifice, to provide the wherewithal, the technology,the know-how to help develop these backward countries.

The reality, not surprising to those who know how the capitalist sys-tem works, is quite different. The goal of investment capital is to benefitthe investors. And thats precisely what capitalist investment in theunderdeveloped countries of Latin America (as well as of Asia andAfrica) has doneit has benefited the investors.

I am not suggesting that some benefits do not flow to the people of theunderdeveloped countries, as a byproduct of the desire by capitalistinvestors to enrich themselves. But the slight gains to the underdevel-oped countries are far outweighed by the severe damage done to them inthis colonial relationshipthe plunder of their natural resources, the dis-tortion of their economies, the hindrance to their economic growth, theirlow productivity especially in agriculture, their loss of dignity, the pover-

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ty and disease and hunger and illiteracy which is the inevitable accom-paniment of trying to live on a per capita income of $300 a year. I am sug-gesting that the result of our policy of just take and take is to make richNorth Americans very much richer and poor Latin Americans very muchpoorer.

There are some nations in the world which are poverty-strickenbecause they lack natural resources. But that is not true of the LatinAmerican countries. They have an abundance of the resources necessaryto make a country rich. No continent in the world compares with LatinAmerica in the amount of cultivable high-yield soil, or in reserves of tim-ber. List the metals important to industrial developmentcopper, tin,iron, silver, gold, zinc, leadall of them and many others, as well as oiland hydroelectric power, are found in great abundance in Latin America.

Yet the people of Latin America are desperately poor. The statisticspresented to Congress by former President Kennedy in his messageproposing the Alliance for Progress program, on March 14, 1961, tell thestory:

The average per capita annual product is only $280, less than one-ninth of the United Statesand in large areas, inhabited by millionsof people, it is less than $70....

The average American can expect to live seventy years, but lifeexpectancy in Latin America is only forty-six....While our rate ofinfant mortality is less than 30 per thousand, it is less than 110 perthousand in Latin America....

Illiteracy extends to almost half the adults, reaching 90 percent in onecountry. And approximately 50 percent of school-age children have noschools to attend....

In one major Latin American capital, a third of the total population isliving in filthy and unbearable slums. In another country, 80 percentof the entire population is housed in makeshift shacks and barracks....

Poverty, illiteracy, hopelessness and a sense of injusticethe condi-tions which breed political and social unrestare almost universal inthe Latin American countryside.

Mr. Kennedy not only described the need, he also advised on the stepsto be taken: A program for improved land use, education, health, andhousing.There is an immediate need for higher and more diversifiedagricultural production, better distribution of wealth and income, andwider sharing in the process of development.

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The statement of the problem by Mr. Kennedy and what must be doneabout it were convincing and the Congress of the United States adoptedhis Alliance for Progress aid program. Today, almost four years later, ithas become apparent to almost everybody, that the plan has one impor-tant defectit wont work. Not because the appropriation isntenoughthe plan wouldnt work if the appropriation were multipliedten times.

It wont work because it doesnt affect the imperialist relationshipwhich is the fundamental cause of the conditions which the UnitedStates says it wants to alleviate. Latin American countries are rich in nat-ural resources but their people are poor, because their economies are lop-sided; the wealth flowing from their natural resources is appropriated byU.S. monopoly corporations which have distorted these economies intheir concentration on the extraction of profitable raw materials. Theland which is not in the hands of foreign interests is held by the nativebourgeoisiethe traditional land-owning aristocracies now intertwinedwith the financial, commercial, and manufacturing classes. Much of theland is out of production and much of the rest is underutilized. Unlessand until these two ruling groupsthe foreign and domestic capital-istsare forced to give up their power, property, and privilege, unlessthe economic and social structure of these Latin American countries isradically altered, then nothing fundamental will be changed. The peoplewill remain hungry.

The aid program wont do what Mr. Kennedy said it would dobecause it does not give the Latin American countries genuine nationalindependence, it does not break the economic stranglehold that U.S.imperialism has on the whole continent. Without national indepen-dence, the Latin American countries will remain, in effect, colonialappendages of the North American metropolis. And their most basic dif-ficulties arise precisely from their past history and present status as colo-nial appendages.

If the Alliance for Progress wont solve the problem for the LatinAmerican countries, what will? My own answer is socialism. I am con-vinced that Latin America, as well as the other underdeveloped areas ofthe world, must have socialism because capitalism, which is inseparablefrom imperialism, is incapable of generating the kind and degree of eco-nomic development that is absolutely essential to provide rising livingstandards for rapidly growing populations.

Socialism, on the other hand, would make it possible for the LatinAmerican countries to take the steps necessary for economic develop-

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ment. As I wrote in Which Way for Latin America? in Monthly Reviewin March 1961, Political independence, though of the utmost impor-tance, is not enough; they must win economic independence too. Andeconomic independence in the sense of establishing their own controlover their own economic surplus so they can apply it to productive cap-ital investment for the planned economic development of the wholenation, involves those far-reaching social changes which spell revolutionand socialism.

Sugar and ColonialismIn a fully liberalized global market-place...Europe would produce no sugar

whatsoever. It would be far cheaper to import the sweetener from tropical cli-mates that Europeans once colonized precisely because they were rich in thingslike sugar cane.

Editorial, New York Times, August 11, 2003

You believe perhaps, gentlemen, that the production of coffee and sugar is thenatural destiny of the West Indies.

Two centuries ago, nature, which does not trouble herself about commerce,had planted neither sugar-cane nor coffee there.

Karl Marx, Speech on Free Trade, January 9, 1848

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