By CLAUDIO KATZ*
Considerations based on the classic book by Eduardo Galeano
The Open Veins of Latin America begins with a sentence that sums up the essence of Dependency Theory. “The international division of labor is that some countries specialize in winning and others in losing. Our region in the world, which today we call Latin America, was precocious: it has specialized in losing since ancient times”[I]. This short prayer offers a concentrated and highly illustrative picture of the dynamics of addiction. For this reason, it has been cited on numerous occasions to portray the status history of our region.
Galeano's book is a key text in Latin American social thought, which converged with the formation of the Theory of Dependency and contributed to popularize this conception. The first edition of this work coincided with the heyday of the dependentista approach. But, in all its pages, it showed a special affinity with the Marxist side of this theory, which was developed by Ruy Mauro Marini, Theotonio Dos Santos and Vania Bambirra. This view postulated that Latin American underdevelopment corresponds to the loss of resources generated by the region's subordinated international insertion.
Galeano spread this approach early on in Uruguay, and his book reviews Latin American history in a dependentista key. He illustrates very fully how "the mode of production and the class structure were successively determined from outside... through an endless chain of successive dependencies... which led us to lose even the right to call ourselves Americans." He recalls that “as part of the vast universe of peripheral capitalism”, the region “was subjected to looting and dispossession mechanisms”[ii].
This characterization of the frustrated development of Latin America linked the 70s to a broad historiographical production of the same sign. These studies related the impediments imposed by dependency with the repetition of the expansion achieved by the US economy. Galeano resumed a perspective very similar to that exposed by the research of Agustín Cueva and Luis Vitale[iii].
The Uruguayan thinker developed a synthetic history of the region, centered on the four components of Latin American Marxism at the time. He denounced the spoliation of natural resources, criticized the exploitation of the workforce, emphasized the resistance of peoples and adhered to a socialist project of emancipation.
Galeano developed his text by combining several disciplines and gave birth to a story that strikes with its literary beauty. His enthusiasm moves the reader and generates an effect explicitly intended by the book.
The Uruguayan writer decided to disseminate a “dissemination manual that talks about political economy in the style of a love story”. And achieved overwhelming success for this amazing venture. Galeano commented that he followed the path of “a non-specialized author”, who embarked on the adventure of unraveling the “facts that the official history hides”[iv].He approached this objective with a language that was far from “set phrases” and far from “declamatory formulas”. She managed to consummate this ambitious purpose in an impactful work.
Galeano left stiffness, academicism and cold speech behind. He used a language that shook millions of readers and inaugurated a new code to make the dramatic Latin American reality visible. open veins inspired a legion of writers who adopted, developed and enriched this way of portraying the dispossession and oppression suffered by our region.
Conceptual and political affinities
Galeano aligned himself with the radical dependency current led by Marini and Dos Santos, in direct opposition to the eclectic and descriptive current led by Fernando Henrique Cardoso. the affinity of open veins with the first conception is verified in all the enunciations of the book.
In this work, he did not limit himself to describing the economic backwardness resulting from mistaken political models, nor did he observe dependence as an occasional or merely negative trait. Nor did he endorse the associations with foreign capital that Cardoso promoted as a solution to the region's backwardness. When this intellectual assumed the presidency of Brazil, he disavowed his old texts, repudiated his past and objected to his own writings. But the seed of his neoliberal involution was present in the approach to dependency that he postulated while polemicizing with Marini and Dos Santos.
Galeano's vision was also far from ECLAC's. Nowhere in the book are heterodox illusions outlined about overcoming regional underdevelopment through capitalist industrialization led by the national bourgeoisie. Protectionism and state regulation are not seen as the paths to follow to eradicate Latin America's economic ills.
Opposition to this route is also seen in the numerous criticisms of the impotence of the local ruling classes to set in motion some effective modality of regional development. This inability to command an industrial growth similar to that achieved by the powerful central economies stands out.
Such questioning was the axis of the political program inaugurated by the Cuban Revolution and conceptualized by the Marxist theory of dependency. This approach provided a direct and seamless transition to socialism, ruling out any intermediate stage of national capitalism.
open veins subscribes to this current of thought and shares the enthusiasm generated by the initial success of the Cuban Revolution. In numerous paragraphs, Che's spirit, romantic tone and hope in the triumph of radicalized projects bursts through. It also emphasizes the historical roots of popular struggles across the region.
At no point does Galeano forget the structural economic basis of dependency that the Gunder Frank studies emphasized. But, contrary to these studies, he emphasizes the centrality of popular resistance. He doesn't just talk about tin, mining, latifundia and plantations. It highlights Louverture's exploits in Haiti, Tupac Amaru's rebellion in Peru and Hidalgo's action in Mexico.
The book rescues these traditions of popular struggle, highlighting how the official history dilutes the visibility of these resistances. He recalls that this operation of concealment often leads the oppressed to assume as their own “a memory manufactured by the oppressor”.
Galeano not only details how Latin America was structured for centuries by the exploitation of Indians and the enslavement of blacks. He also points out that the subjects affected by this dispossession reacted with revolutions and revolts. These upheavals opened up an alternative horizon of liberation.
open veins it also recalls the connection between these rebellions and the pending issue of regional integration, bequeathed by Bolívar's unfinished project. This emphasis on the insurgent role of peoples illustrates Galeano's affinity with the revolutionary political project of dependency theory.
Primarization and extractivism
The harmony of a book written fifty years ago with a Marxist conception in vogue at the time is not surprising. More problematic, however, is to unravel the actuality of both visions. On which lands is the validity of open veins and dependency?
There are many fragments of a book written in 1971 that seem to allude to situations of 2021. These enduring aspects of the text (and the theory that inspired it) correspond to the dependent condition of Latin America and are corroborated above all by extractivism.
The region's export specialization in primary products – which has blocked its development in the past – continues to obstruct the region's take-off. This impediment is combined, moreover, with an unprecedented worsening of the deterioration of the environment. Open pit mining concentrates a large part of these calamities and has become the epicenter of numerous conflicts in all countries.
Primarization and extractivism are the two terms currently used to denounce the obstruction to productive and inclusive growth that Galeano highlighted five decades ago. open veins describes how the region's submission to the external mandate of commodity prices commodities generates this suffocation.
But this vulnerability is no longer seen as a simple effect of inexorable processes of devaluation of primary product exports. Many economists unraveled the cyclical dynamics of these prices on the world market and studied the complex process of successive rises and falls of raw materials. The big problem is that these fluctuations always obstruct development due to the dependent condition of the whole region.
Latin America never takes advantage of moments of export appreciation and invariably suffers in opposite periods of depreciation. In the current context of high prices, these adversities are verified, for example, in the rise in food prices. The export of wheat and meat became a disgrace to the daily purchase of bread and the consumption of proteins.
Galeano described an economic misfortune resulting from the adverse management of agricultural, mining and energy income throughout the region. The centrality of this remuneration to the ownership of natural resources has been accentuated in recent decades. The great powers dispute – with the same intensity as in the past – the precious booty of Latin American riches. The region continues to suffer the systematic confiscation of this surplus, in a dynamic that combines income erosion with its expropriation.
Currently, the United States disputes with China (and to a lesser extent with Europe) the appropriation of natural resources in the region. The world's giants no longer just get surpluses from grain or meat. They also capture strategic minerals such as lithium and deprecate marine fauna without any restriction.
Unlike other non-metropolitan economies (such as Australia or Norway), which take advantage of income for their development, Latin America suffers from the drain of this surplus. It is unable to transform it into productive investment because of its subordinate position in the global division of labor. This subjection also explains the unfavorable trade with the major buyers of the region's exports.
Latin America does not negotiate its exchanges with China en bloc, and the results of country-by-country negotiations are invariably adverse. The misadventures portrayed by Galeano fifty years ago are recycled again today.
Industry pullbacks
open veins describes how historical processes of industrialization were obstructed in Latin America by free-trade policies. This “industricide” annihilated domestic production in Argentina and destroyed the incipient development of Paraguay, which sought to lay the foundations for an independent manufacturing structure. Later, the railway networks built around the port funnels ensured industrial strangulation. The visible hand of the state did not intervene – as in the United States – to ensure the emergence of a powerful industrial fabric.
This industrial bottleneck was partially modified in the second half of the XNUMXth century by import substitution processes. This model gave rise to the emergence of fragile industrial structures, but illustrative of potential manufacturing expansion. Galeano wrote his book at the end of this scheme, and fifty years later, the industrial landscape is once again bleak in most of Latin America.
Industrial activity has retreated in South America and tends to specialize, in Central America, in the basic links of the global value chain. This adverse scenario is often described with portraits of an “early de-industrialization” of the region, which is different, due to its greater harmfulness, from the relocations prevalent in advanced economies. In all corners of Latin America, the distance from Asian industry has deepened and many manufacturing ventures disappear before reaching maturity.
In medium-sized countries, this deterioration affects the model created to supply the local market. In Brazil, the industrial apparatus has lost the size of the 80s, productivity has stagnated, the external deficit is expanding and costs are increasing in step with a growing obsolescence of the infrastructure. In Argentina, the decline is much greater.
The model of the Mexican maquiladora companies also faces serious problems. It continues to assemble parts for the large US factories, but has lost its centrality in the face of Asian competitors. The renegotiation of the free trade agreement with the United States simply gave way to another agreement (T-MEC), which renews the adaptation of border factories to the needs of companies in the North.
Most countries in the region continue to negotiate (and pass) free trade agreements that erode the local economic fabric. In all cases, internal protection against the uncontrollable invasion of imports is guaranteed. This adversity did not prevent the Mercosur negotiations to sign a free trade agreement with the European Union, nor the negotiations for unilateral agreements with China.
The industrial regression that affects the region updates all the imbalances of the dependent cycle studied by dependency theorists. In the 70s, they highlighted the systematic draining of resources that affected the manufacturing sector, through the remittance of profits. The greater predominance of foreign capital in recent decades has accentuated this obstruction to the local process of accumulation.
But, unlike the 70s, the current retreat of the Latin American industry coexists with the great rise of its Asian counterparts. It is enough to observe the increase in the distance between South Korea and Brazil or Argentina to notice the magnitude of this change. While Latin America was functional to the old model of internal markets of post-war capitalism, Southeast Asia tends to optimize the leap registered in the internationalization of production.
Many heterodox authors assume that the divergence between the two regions is due only to the implementation of opposing economic policies. They believe that the Asians chose the right path, which was rejected by their peers in Latin America. But this view ignores all the structural constraints imposed by profit maximization on the world division of labor.
The dependentista theses highlight this conditioning, which Galeano's book also details. There, the structural historical adversities that the region faces are explained.
Dispossession and exploitation
open veins denounces the suffering of the exploited population in every corner of Latin America. It is not just about the slavery and servility of the past. It describes the inhuman working conditions that prevailed five decades ago. The timeliness of these observations is particularly striking in the current dramatic context of social deterioration.
Neoliberalism not only aggravated unemployment and labor informality. In addition, it consolidated a terrible widening of income differences in the most unequal region on the planet. This polarization explains the terrifying scale of violence that reigns in large cities. Of the 50 most dangerous cities in the world, 43 are located in Latin America.
The social degradation that affects the region is largely due to the renewed expulsion of peasants imposed by the capitalist transformation of agriculture. This mutation potentiated the uncontrolled expansion of a mass of excluded people who arrived in the cities to expand the army of the unemployed. The lack of work in large cities and the very low remuneration of existing jobs explain the enormous increase in informality. In this context, the narco economy became widespread as a refuge for survival.
Latin American specialization in commodity exports is complemented, in some Central American economies, by disjointed tourism growth. It is the only job-creating activity in many locations in this region. In all cases, the lack of jobs multiplies emigration and the consequent family dependence on remittances. Huge contingents of unemployed young people are simultaneously prevented from taking root and emigrating. They cannot find work in their hometowns and are persecuted when entering the United States.
Regional poverty averages continue to spill over into the precarious segment in Latin America and affect a huge portion of stable workers. These data have not changed since the appearance of Galeano's book.
The fragility of the middle class also persists, in a region with a reduced presence of this stratum. Compared to advanced countries, the middle sectors provide a very small cushion for the abyss that separates the rich from the poor. This segment is formed mainly by small traders (or self-employed) instead of qualified professionals or technicians.
This adverse scenario worsened dramatically during the last biennium pandemic. In percentage terms, Latin America was the region with the highest number of infections and deaths on the planet and also suffered the greatest economic and social impact of the disease.
The drop in GDP in the region was twice international averages and this deterioration deepened inequality. Half of the workforce (which survives informally) has been severely affected by the economic downturn imposed by the coronavirus. These sectors had to increase their family debts to compensate for the brutal drop in income.
Digital inequality has also increased across the region and has severely impacted impoverished children who miss a year of schooling. This deterioration in education has explosive effects due to its intertwining with the growing precariousness of work. Large companies take advantage of the new scenario to reduce labor costs, with new forms of teleworking that multiply the exploitation of employees.
Over the past five decades, capitalists have resorted to numerous mechanisms to compensate for their international weakness, further exploiting the workforce. For this reason, the wage gap between the region and the core economies has increased significantly. The global trend towards job segmentation – between a formal, stable sector and an informal, precarious one – is on a frightening scale in Latin America.
This disparity ratifies the validity of the dependentista diagnosis and confirms the continuity of the same problems that Galeano observed in the world of work. Fifty years later, all of his observations are corroborated on another scale.
The old nightmare of debt
Em open veins, the tripling of the foreign debt between 1969 and 1975 and the consequent consolidation of a vicious circle that suffocated the region's economy were denounced. This link forces Latin America to follow a roadmap of increased exports, industrial foreignization and bankers audit imposed by the IMF. Galeano highlighted that these demands consolidate, in turn, the action of US capitalists, who control a large part of the region through financial management.
In the last fifty years, this nightmare has been maintained without structural changes, and has accentuated fiscal imbalances and external deficits, which increase liabilities and precipitate new crises.
During the neoliberal era, there were periods of varying severity of this financial vassalage. In the last decade, the appreciation of raw materials and the inflow of dollars allowed some relief, but when the commercial breath disappeared, the indebtedness reappeared with great intensity. Currently, the IMF and investment funds are again playing a leading role in managing an impractical debt.
In the most dramatic moments of the pandemic, the IMF issued hypocritical messages of collaboration. But, in practice, it was limited to validating a negligible relief of liabilities among a small group of ultra-impoverished nations. It repeated the attitude assumed in relation to the 2008-2009 crisis, when it combined formal calls for international financial regulation with increasing adjustment requirements for all debtors.
The dependentista tradition has avoided analyzing debt in terms of simple financial speculation. He emphasizes that the growing weight of liabilities expresses the productive and commercial fragility of dependent capitalism. Latin America's financial vulnerability only adds to these inconsistencies.
There is an overload with interest payments, with compulsory refinancing and with defaults without reason due to the underdeveloped profile of primary economies, marked by industrial weakness and high specialization in basic services. Indebtedness is not triggered only by the “looting of the financiers”. It reflects the growing structural weakness of accumulation processes.
The region is not exempt from the financialization process that characterizes all the ruling classes on the planet. But the central mutation that took place in Latin America was the transformation of the old national bourgeoisies into new local bourgeoisies.
Galeano's text was still inscribed in the first period. Since then, the capitalist groups that prioritize the expansion of demand with a production oriented to the domestic market have lost their centrality. Sectors that prioritize exports and prefer to reduce costs rather than increase consumption have gained weight.
This turn also confirmed all the dependentista diagnoses of the intertwining of big Latin American capital with its peers abroad. The location of large local fortunes in tax havens and the close association created by the main companies in the region with transnational companies illustrate this symbiosis. The indebtedness denounced by Galeano supported this mutation of the dominant classes.
stormy crises
The Uruguayan writer's book is moving for the desolate portrait it presents of everyday reality in Latin America. This scenario is conditioned by the systematic eruption of suffocating crises that dependent capitalism imposes. These convulsions derive, in turn, from external strangulation and the periodic internal reduction of purchasing power.
The neoliberal era that followed the publication of open veins it was marked by more frequent and intense economic crises, which precipitated deeper recessions and induced massive bank bailouts. These turbulences were invariably triggered by bottlenecks in the external sector, leading to trade imbalances and loss of financial resources.
As Latin American economies depend on fluctuations in the prices of raw materials, in periods of appreciation in exports, currencies flow in, currencies appreciate and spending expands. In the opposite phases, capital migrates, consumption decreases and fiscal accounts deteriorate. At the height of this adversity, crises erupt.
These fluctuations, in turn, increase debt. In times of financial appreciation, capital enters to profit from high-yield operations, and in the opposite periods, capital outflows are generalized. Such operations are consummated by the increase in liabilities of the public and private sectors.
Another determining factor of regional crises is the periodic reductions in purchasing power. These amputations compound the structural absence of a norm of mass consumption. The weakness of the internal market and the low income level of the population explain this lack. The expansion of labor informality, low wages and the narrowness of the middle class accentuate the fragility of purchasing power.
The two types of crisis – due to external imbalance and the retraction of consumption – were verified in all models of the last decades. They initially emerged during import substitution (1935-1970) and reappeared with greater virulence in the “lost decade” of stagnation and inflation (80s). They became more intense in the later onset of neoliberalism, as a result of financial deregulation, trade openness and labor flexibility.
Dependency theory has always studied these tensions with multicausal criteria and has emphasized the absence of a single determinant of the crisis. The upheavals in the region are triggered by different forces, which combine external imbalances with restrictions on purchasing power.
This combination of external and internal determinants had a devastating impact on the last two years of the pandemic. Latin America has suffered the greatest planetary contraction in working hours, in line with similar declines in popular income. After five years of stagnation, Covid accentuated a huge deterioration in the productive structure. To make matters worse, signs of recovery are tenuous and growth forecasts are lower than the world average. another chapter of open veins occurred in the region during the “Great Lockdown” of the last biennium.
the political scene
the affinity of open veins with Dependency Theory is not limited to the narrow domain of economics. In the expository tradition of the latter conception, the book avoids overwhelming the reader with mere numbers and intricate statistics. It highlights with examples the impact of imperialist domination on regional underdevelopment. He especially denounces coups d'état, which have always used US embassies to install governments favorable to large companies in the North.
Fifty years later, this meddling by Washington persists in greater disguises, but with the same brazenness as in the past. The United States is currently seeking to restore its deteriorating world hegemony by tightening its grip on Latin America in order to contain China's growing centrality. The first power is willing to use its enormous geopolitical-military power to recover lost economic positions. For this reason, the region is once again treated as a “backyard”, subject to the norms of submission established by the Monroe Doctrine.
The United States seeks to reduce the margin of autonomy of the three middle countries in the region. It demands that Brazil hand over supervision of the Amazon, that Mexico reinforce DEA infiltration, and that Argentina accept the orders of the IMF. As direct invasions (such as Grenada or Panama) are no longer viable, the Pentagon reinforces its bases in Colombia and sponsors numerous conspiracies against Venezuela.
Trump has implemented that road map with brutality, and Biden is quick to continue it in good manners. He needs to restore the North's deteriorating dominance and reduce the verbal excesses of his predecessor in order to rebuild alliances with the North. establishment Latin American. But, like Trump, he prioritizes reducing China's presence in the region. All White House initiatives belie the naive perception “that the United States is no longer interested in Latin America”. Regaining full domination of the hemisphere is Washington's top priority.
That is why it supports right-wing governments that act as heirs to the dictatorships denounced by Galeano. Like dependency theorists, the Uruguayan thinker in the 70s questioned the coercive pillar of all Latin American political systems. He portrayed how tyrannies implemented different models of totalitarianism and highlighted the primacy exercised by military bureaucracies in state management.
In the post-dictatorial period of the following decades, this scheme was replaced by different types of constitutionalism, which combined neoliberal economic policies with the forced acceptance of democratic achievements.
But after several decades, the right-wing regimes are trying to regain dominance again at the pace of a conservative restoration. They act through the continuation of reactionary governments, new electoral captures and reiterated institutional coups. In the last biennium of the pandemic, they militarized their administrations and established states of exception, with the growing role of the armed forces.
The regional right now operates in a coordinated fashion to establish authoritarian regimes. It does not promote the overt military tyrannies of the 70s, but disguised forms of civil dictatorship. Among its exponents, a visible division persists between extremist and moderate characters, but all join forces in decisive moments.
The right implements a common strategy of banning the main leaders of progressivism. They resort to creative mechanisms to disqualify opponents and orchestrate parliamentary, judicial and media coups. They aspire to achieve brutal control of the governments portrayed in Galeano's text. They recreated, moreover, the primitive discourses of the Cold War and the delirious campaigns against communism that were propagated when the first edition of open veins has been published.
But all figures on the regional right face major political erosion for their responsibility for the disastrous management of the state. They must deal, moreover, with the great resurgence of popular mobilization.
In three strongholds of neoliberalism (Colombia, Peru and Chile) there were huge riots in the streets, and in other cases, protests allowed the reintegration of the progressive government replaced by a military coup (Bolivia). In different corners of the hemisphere, a converging trend is emerging for the resumption of the rebellions that convulsed Latin America at the beginning of the millennium.
A symbol of our struggles
Em open veins, there is a repeated call to build a non-capitalist society of equality, justice and democracy. This message is present in several passages of the text. Galeano shared with dependency theorists the objective of reinforcing a socialist project for the region.
In the 1960s and 70s, progress towards this goal was expected after victorious popular revolutions. This expectation was confirmed by the anti-colonial rebellions, the protagonism of the Third World and the triumphs of Vietnam and Cuba.
Later, an inverse stage of expansion of neoliberalism prevailed, the disappearance of the so-called “socialist field” and the reconfiguration of global domination. In Latin America, however, hopes resurfaced with the rebellions that marked the beginning of the new century, facilitating the emergence of the progressive cycle and the appearance of several radical governments. The current context is marked by an unresolved dispute and persistent confrontation between the dispossessed and the privileged.
This shock includes popular uprisings and reactions from the oppressors. At one pole, collective hope emerges, and at the other, the conservatism of the elites. Significant victories coexist with worrying setbacks, in a context marked by the lack of definition of results. The outcome of the battle between the wishes of the people and the privileges of minorities is pending.
open veins it is a representative text of this struggle and for this reason it is periodically rediscovered by Latin American youth. The same occurs with the Marxist Theory of Dependency. This theoretical instrument regains its audience due to the explanation it provides for understanding the contemporary dynamics of the region. It awakens the interest of all those interested in changing the region's oppressive reality.
Galeano's book and dependentismo share the same reception among the new generations that recover the ideals of the left. open veins it is a true emblem of transformative ideals. That is why in April 2009, during the Fifth Summit of the Americas, President Chávez publicly presented Barack Obama with a copy of the book. With this gesture, he highlighted the text that summarizes the sufferings, projects and hopes of the entire region.
Galeano personified these ideals and also generated an unparalleled fascination in the public. He conveyed enthusiasm, sincerity, and conviction. His words called for building a future of fraternity and equality and the renewal of this commitment is the best tribute to his work.
*Claudio Katz is professor of economics at Universidad Buenos Aires. Author, among other books, of Neoliberalism, neodevelopmentalism, socialism (Popular Expression).
Translation: Fernando Lima das Neves.
Notes
[I] Galeano, Edward. The Open Veins of Latin America, Siglo XXI. 1971, Mexico (p. 15).
[ii] Galeano, Edward. The open venas of Latin America, Siglo XXI. 1971, Mexico (p. 16-23).
[iii] In our book on the subject, we analyze all the authors and conceptions mentioned in this article. The theory of dependency, 50 years since, Batalla de Ideas Ediciones, Buenos Aires, 2018.
[iv] Galeano, Edward. The Open Veins of Latin America, Siglo XXI. 1971, Mexico (p. 339-363).
