X 7400100102

II
DEBATE
Our central concern in this issue is to raise new questions about dependency theory,
elaborate and refine ideas, and generate new thinking on the subject. Timothy Harding, who
was deeply involved in the dialogue and revision on the Fernández-Ocampo article, is Associate
Professor of History at California State University, Los Angeles and author of a recent study of
labor in Brazil. Raúl A. Fernández and José F. Ocampo argue for discarding dependency theory
altogether and identify a number of weaknesses in that theory. Fernández is Assistant Professor
and Ocampo is Visiting Professor in the Program in Comparative Culture at the University of
California, Irvine. Critical comments on their paper are offered by Fernando Henrique Cardoso
and Marvin Sternberg. Cardoso, director of the Centro Brasileiro de Análise e Planejamento in
Sao Paulo and author of major contributions on dependency strongly attacks Fernández-
Ocampo. Sternberg, Associate Professor of Economics at the State University of New York,
Albany, attempts to move toward a reconciliation of theory by dependentistas and traditional
Marxists. Now associated with the Latin American Institute of the Free University of Berlin,
André Gunder Frank reviews his own writings on dependency and underdevelopment in the light
of many criticisms he has received in recent years, and he offers a negative prognosis on the work
of dependistas. Guy J. Gilbert, a graduate student in political scince at the University of
California, Riverside, delves into another area; he examines and rebuts the proposition that
dependency is of crucial significance in socialist countries.
THE LATIN AMERICAN REVOLUTION: A THEORY OF

IMPERIALISM, NOT DEPENDENCE
by
Raúl A. Fernández and José F. Ocampo*
The theory of dependence is the most influcntial theory used by radical
Latin Americanists to explain the backward situation of Latin America. In general,
the proponents of this theory present it as founded upon Marxism and as the
basis upon which Latin American revolutionary theory should be built. The aim
of this article is to critically analyze the theory of depcndence and to propose an
alternative.
The fundamental themes that we develop are: first, the theory of dependence
is a revision of Marxism which resurrects, in its application to Latin America, an
ancient polemic among Marxists, and which brings to the forefront the necessity
for a theoretical basis of the Latin American revolution; second, the theory of
dependence, in its various forms, does not explain thc nature and persistence of
backwardness in Latin America and leads, therefore, to very basic errors in the
tactics and strategy of thc revolution; and, third, the theory of dependence ignores
the theory of imperialism as a guide for revolution in the backward countries of
Latin America. We will present an alternative view consisting of a three-part
explanation: of the nature of backwardness based upon an analysis of the modes
of production and upon the pattern of capitalist penetration in agriculture; of the
persistence of backwardness based upon the theory of imperialism; and of the
revolution. o new democracy as a guide to the Latin American revolution.
*We wish to thank Timothy Harding, historian at California State University, Los Angeles,
and John Meyer and David Romagnolo, graduate students in history at the University of
California, Irvine, for their assistance and contributions which have enhanced this study. Its
limitations remain our own.
30
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31
We make a number of assumptions which should be clarified at the outset.

Firstly, dependentistas refers to those Latin and North American writers who
maintain that Latin American society is basically capitalistic; and that the im-
mediate enemy of the Latin American revolution is the local burgeoisie. There
are, of course, other criteria which can be used to define who the dependentistas
are, but we consider the above definition as the most useful one in terms of our
purpose. Secondly, we assume the readers familiarity with those works which
are based upon the theory of dependence, since we do not present an exhaustive
summary of the dependentistas position. We are only interested in their ap-

proach to our first assumption. Thirdly, the ideas of Andr6 Gunder Frank will be
our primary target, since he has been regarded as the clearest and most influential
exponent of the dependentista position on the questions of the principal enemy

and the character of Latin American society. Fourthly, one of the implicit
themes of this paper is the importance which must be attached to the theoretical
aspect of revolutionary processes, hence we assume the readers basic familiarity
with the theoretical writings of Marx, Lenin, and Mao. Fifthly, we are not pre-
senting &dquo;Comtist recipes for the soup-kitchens of the future,&dquo; but only general
guidelines for the Latin American revolutionary process. Our position takes into
account the special differences between Latin American countries, the constantly
changing nature of each country, and the consequent difficulties present in the
critical, concrete application of any general statement to particular situations.
Finally, we present our position in strong terms which stem not from sectarian
intentions, but from a deep sense of the importance of the subject.
The paper is divided into four major parts. The first part is devoted to a
critique of the theory of dependence; the other three parts introduce our alter-
native to it.
DEPENDENCE
The theory of dependence has been developed as a critique of the traditional
Marxist analysis and as a re-examination of the history of Latin America. In a
certain sense, it has been presented by its authors as a new interpretation of Latin
American economic and social development, and as the definitive refutation, not
only of Marxists who distort historical realities, but also of bourgeois liberals
who are apologists for the dependence of Latin American countries on the me-
tropolis. There is no doubt that through this debate the most important aspects
about Latin American revolutionary movements have been examined. On the
one hand, the very nature of the economic system and its historical origin have
been discussed. In this respect, the main attack of the dependentistas has been
The principal works on the theory of dependence appear are the following: Frank (1967,
1969), Cockcroft et. al. (1972), Bodenheimer (Jonas), Dos Santos ( 1970, 1971 ) , Cardoso
( 1972, 1973), and Cardoso and Faletto (1969) . Our approach to the theory of dependence
is open to attack on several grounds. First, it can be argued that the theory of dependence
is pre-occupied with many other questions besides the nature of Latin American society,
and the principal enemy. Second, most dcpendentistas do not stress the local bourgeoisie
as the principal enemy. Our critique can thus be seen as directed more against Frank than
against the theory of dependence. It is our contention that these questions are the most
fundamental ones that the theory of dependence has tried to answer, and that the failure
to do so adequately places the theory of dependence in toto under serious scrutiny. More.
over, the conclusions that Frank derives in regards to the principal enemy are, in our
estimation, implicit in, and derivable from, the dependentistas characterization of the
Latin American economies.

32
focused against the question of how to apply the Marxist conception of historical
materialism which divides history into modes of production and which establishes
a relationship between feudalism and capitalism. The dcpendentistas have con-
centrated their attack against the interpretation that other sectors of the Latin
American left have utilized, according to which, Latin America had to pass through
a &dquo;popular&dquo; democratic revolution to achieve national capitalism before the
possibility of a socialist revolution, inasmuch as the economy had a feudal

character; i.e., it was not predominantly capitalistic. Through this approach, the
theory of dependence sought to reject any kind of &dquo;deterministic&dquo; explanation of
underdevelopment stemming from liberal bourgeois theories. On the other hand,
the dependentistas have examined the determining conditions of the backward-
ness, poverty, and class domination that exist in Latin America, and that hold a
direct relationship with imperialism.
Two themes-the character of Latin American society and its principal
enemy-constitute the central aspects of a theory of the Latin American process.
The first theme is related to the question of the historical development of capital-
ism ; the second is related to the problem of imperialism. The principal merit of
the dependentistas is that they have placed these two problems in the forefront
of discussion. 1he great influence acquired by dependentista approaches in the
United States and Latin America makes it imperative to carry out a scrupulous
examination of thc important points of this theory, and to contrast it with what
we understand the Marxist theory of imperialism and backwardness to be.
The Immecliate Enemv

Nothing is more fundamental for revolutionary forces than the correct
identification of their friends and enemies,. An error such as an alliance with
enemies or an attack upon friends can determine, to some extent, the success of
a revolution. Indeed, Mao placed much of the blame for the failure of pre-1926
revolutionary attempts in China on this kind of error. &dquo;The basic reason why all
previous revolutionary struggles in China achieved so little was their failure to
unitc with rcal fricnds in order to attack real enemies&dquo; (Mao Tse Tung, I : 13).
The theory of dependence is also pre-occupied with this point: even one of the
main propositions of the theory has as its object the clarification of the problem of
the immediate enemy and its determination in a precise manner. (Cockcroft, et.
al, 1972: =~2>--1-~3; Frank, 1969: 3711-408). The conclusion which the dependentistas
reach is an outcome of the historical and political premises upon which the theory
of dependence is founded. There is a close relationship between thc premises and
the conclusions of dcpcndcncc thcory, although Frank is the only onc who states
it clearlv:
Tactically, the immediate enemy of national liberation in Latin America is the native
bourgeoisie in Brazil, Mexico, etc., and the local bourgeoisic in the I,atin American
countrysidc. This is so-in Asia and Africa included-notwithstanding that strateg-
ically the principal enemy undoubtedly is imperialism (Frank, 1969: 371 ) .
Frank clarifies this conclusion when lic says that the anti-imperialist struggle
through a class alliance in a united anti-impcrialist front &dquo;docs not adequately
challenge the immediate class enemy, and generally it docs not even result in a
real and necessary confrontation with thc imperialist cnemv&dquo; ( Frank, 1969: 372).
Actually, tlic polemic begun by Frank rcvivcs a discussion of tlic rclation of a
revolutionary process to imperialism which was important il LcIllIlS political
struggle in and out of the Bolshevik party. Most directly concerned with this
qucstion is Leiiiiis work ol the national question (especially during the Third In-
33
ternational) and his refutation of the &dquo;imperialist economism&dquo; of Mr. Pyatakov

(P. Kievsky) (Lenin, 1960; 1968; 1970). According to Lenin, imperialism is not
just one among many possible foreign policies which happens to be &dquo;preferred&dquo; by
finance capital (a position which he severely criticized when it was advanced by
Kautsky); rather, it is the necessa.ry foreign policy of finance capital. Any attempt
to separate imperialism from capitalism in the present stage results in the artificial
separation of the economic struggle from the political struggle, i.e., &dquo;economism,&dquo;
or more correctly, &dquo;imperialist economism.&dquo; In making a distinction between a
tactical immediate enemy (local capitalism) and a strategic enemy (imperialism),
Frank makes an artificial separation, similar to Pyatakovs, between capitalism and
imperialism. This separation allows Frank to deny that imperialism is the im-
mediate enemy and, consequently, to deny the need for class alliances. Although
Frank ostensibly supports class alliances by the proletariat, in reality he negates
any such alliances. He does this first by treating the peasantry as little more than
an appendix of the proletariat without different specific interests that will influence
the conceptualization of a revolution; and secondly, by treating the bourgeoisie

as an undifferentiated class. As a result, there are only two classes left-the bour-
geoisie and the proletariat-and thereby alliances for the proletariat are elimin-
ated. According to Lenin, any country dominated by imperialism has, as its
immediate enemy, imperialism, and this fact makes the necessity of alliances
imperative:
The more powerful enemy can be vanquished only by exerting the utmost effort, and
without f ail, most thoroughly, carefully, attentively, and skillfully using every, even the
smallest &dquo;rift among enemies, of every antagonism of intent among the bourgeoisie
of the various countries and among the various groups or types of bourgeoisie within
tho various countries, and also by taking advantage of every, even the smallest, oppor-
tunity of gaining a mass ally, even though this ally be temporary, vacillating, unstable,
unreliable, and conditional. Those who fail to understand this, fail to understand even
a particle of Marxism, or of scientific, modern Socialism in general (Lenin, 1970b: 67).
Today, the dependentistas call imperialism dependence so as to give an

explanation of Latin American underdevelopment. However, the subtle way in
which they transform imperialism from the immediate enemy into the &dquo;strategic&dquo;
enemy is misleading. To designate imperialism as a strategic enemy means that
imperialism can only be defeated with a socialist revolution; that is, it is an enemy
that cannot be confronted in the immediate battle, but must wait until an initial
victory has been obtained. Moreover, if the enemy ( imperialism ) is confronted
immediately, the result-in terms of the dependence theory-will be the strength-
ening of the local dominant classes. Further, if one tries to confront imperialism
in this way, in reality one does not.
The consequences of this theory for revolutionary practice are disastrous
since they become the negation of the role the democratic struggle plays in the
revolutionary process, the negation of national independence and of the right of
self-determination, and the negation of the right of nations to secede. Since, for
the dependentistas, the strategic enemy is imperialism and since the socialist
struggle is the immediate result of the revolutionary struggle, it turns out that
imperialism cannot be attacked before the revolution because it is detrimental
to the struggle; and when the socialist revolution arrives, then it appears that the
struggle against imperialism becomes superfluous. This is a way to deny in practice
the anti-imperialist struggle.
Even though Franks comments on the petite-bourgeoisie are vague, he appears, at least, very
2
definitely opposed to any alliance with such groups by the proletariat.
34
The Character o Latin American Society

The dependentistas argue that Latin American backwardness is not due to
the persistence of feudalism, but rather that it is due to external dependence. The
dependentistas refute the bourgeois theory of dualism-the traditional-modern
dichotomy-and the diffusionism which is the result of this theory. But they also
attack what Frank calls the traditional Marxist idea of &dquo;the need for a bourgeois-
democratic revolution&dquo; to destroy feudalism, to build capitalism, and then, to set
the stage for the socialist revolution.
By affirming that there is not, nor has there ever been any feudalism in Latin
America, the dependentistas, and Frank in particular, can then logically conclude
that there has always been capitalism from the time of the conquest in the
fifteenth and sixteenth centuries. If bourgeois economists and sociologists were
to say this, it would be understandable; for a Marxist who has even a cursory
acquaintance with Capital to say this is absurd.3 The feudal or capitalist character
of a mode of production is determined by its relations of production or class
relations. It is not determined by its trade connections. The capitalist mode of
production is commodity production so developed that labor-power has become a
commodity and the owner of this commodity is &dquo;free&dquo; to sell it in the market.
The relationship that Latin America maintained with the rest of the world during
colonial times did not bring about a mod~ of production which divided Latin
American society into capitalists and wage laborers. During this time, Latin
America was characterized predominantly by a mode of production whereby
large aristocratic landowners extracted surplus through the enforced servitude
of Indians: firstly, in economic units characterized by subsistence levels of pro-
duction and in units that marketed a surplus; and secondly, by plantations where
local and foreign entrepreneurs extracted surplus through the slavery of imported
Africans.
The predominant mode of production was determined by a coercive, feudal,
lord-to-serf relationship similar to the situation prevalent in Spain at the time,
although probably modified somewhat by Spanish contact with indigenous soci-
eties. On the plantations, the class relations were those of master-slave character-
istic of a slave mode of production. A contemporary English aristocrat is a
capitalist landowner and not a feudal lord if he employs wage workers on his
lands, and/or capitalist tenants who employ wage laborers and pay him rent. In
the same manner, a capitalist entrepreneur who bought slaves and made them
work as slaves, or an encomendero who enforced Indian servitude did not modify
the relations of production of slave and feudal modes of production.
Responding to criticism on their characterization of colonial Latin America
as capitalistic, the dependentistas have effected a tactical retreat: first, they spoke
of capitalism pure and simple; then this became mercantile and industrial capital-
ism and, finally, we have mercantilism and capitalism (Frank, 1969: &dquo;Preface;&dquo;
Bodenheimer (Joncs), 1971; Cockcroft, et al., 1972: &dquo;Introduction&dquo;).
To resort to a subterfuge such as the distinction between mercantilism and
capitalism to refute thc feudal nature of Latin American backwardness is not a
solution because, for the dependentistas, mercantilism is not capitalism-it is
chosen precisely to dodge the criticism on the attribution of a capitalist character
to Latin America in the sixteenth century-but it is not feudalism either, because
this would destroy the premises of their theory. They view feudalism as ending
Dependentistas such
3 as Cardoso, Dos Santos, and Frank are commonly regarded as social
scientists in the Marxist tradition.
35
with the incorporation of Latin America within the international capitalist system
in the mercantile era. Thus, &dquo;... Underdevelopment in Chile is the necessary
product of four centuries of capitalism itself&dquo; (Frank, 1967: 3).
This process is generalized to all of Latin America: &dquo;The present underde-
velopment of Latin America is the result of its centuries-long participation in the
process of world capitalist development&dquo; (Cockcroft, et. al., 1972: 7). And in a
more recent article the position has been reformulated in this way: &dquo; ... Under-
development has been produced by the development of mercantilism and later

industrial capitalism&dquo; (Cockcroft, 1972: xi). Subsequently, in Latin America
the penetration of capitalism and incorporation within the world market brought
about the dependence which caused and maintains underdevelopment. The in-
teresting claim here isthat from the moment of the conquista, capitalism pene-
trated all Latin American societies; and despite this penetration they were, from
the beginning, underdeveloped, and continue to be underdeveloped for the same
reason. The question is, how can a society be completely capitalistic and under-
developed ?
What, then, is &dquo;underdevelopment?&dquo; There must be some reference point
which allows one to determine, by comparison, the stage and degree of under-
development. The dependentistas appear to suggest such a point when they
outline the difference between undeveloped and underdeveloped countries, and
when they define the advanced countries of today as never having been under-
developed, as having gone directly from undevelopment to development.4 To
justify this distinction they use the notion of undeveloped countries in the sense
of the absence o f market relations.s According to this logic, the trade relations
that France-a backward country-had with England (an advanced country) in
the seventeenth century would make the former &dquo;dependent on the latter. In the
case of France, this dependence relation evidently did not bring about underde-
velopment. With the exception of England, then, the whole world-in the
dependentista sense-was dependent in the 17th century. Those countries which
challenged their dependence upon England were the ones that were able to
develop their own capitalism; and the countries that stayed dependent were the
ones that did not develop their own capitalism. It turns out to be nonsense, then,
to speak of dependence as a determining factor of underdevelopment since we can
easily find countries that were dependent and are now developed. The theory of
dependence runs into a blind alley and into its own denial as a scientific theory
for its failure to resolve what it had proposed. Indeed, it has not produced any-
thing but a vicious circle: underdevelopment is explained by dependence and
dependence is explained by underdevelopment.
There are, however, two more alternatives to dependency theory. The first
is that one could, in the abstract, define a model of a capitalist country: any
country that did not match it perfectly would be defined as underdeveloped. But
this approach is nothing more than the &dquo;bourgeois&dquo; position which leads to dif-
In this
4 connection, Frank feels that "(t)he new developed countries were never underdeveloped,
though they may have been undeveloped" (Cockcroft et. al., 1972: 3).
Bodenheimer presents the problem in this fashion: "Thus unlike undeveloped societies (those
5
few which have no market relations with the industrialized nations), the underdeveloped
Latin economies have always been shaped by the global expansion and consolidation of the
capitalist system and by their own incorporation into the system. In this sense. Latin
Societies brought into existence with their birth their relation to the international system
and hence their relations of dependency" (Bodenheimer-(Jonas), 1971: 159).

36
fusionism and which has been rightly rejected by the dependentistas. The other
alternative would be the application of historical materialism to the history of
modes of production. This alternative eliminates completely the need to determine
development by comparison, and leads to the analysis of the nature of the develop-
ment of productive forces as determinant in the appearance of different modes of
production. Further, it leads to the consideration of quantitative changes leading
to qualitative changes, and implies the existence of new elements in old forms and
old elements in new forms. Thus, underdevelopment would be defined not in
terms of dependence, which does not account for backwardness, but in terms of
the strong or predominant persistence of feudal forms-in this case, the old ele-
ments-in the capitalist development cf a country, as well as the advance of
socialist forms of production in the contradictions that guide the development of
capitalism. Without a certain amount of capitalist development in a country,
socialism cannot arise; in the same manner, without the existence of capitalism in
its most advanced form, imperialism, there can be no possibility of its destruction
as an international system. It is this alternative explanation which we propose to
develop.
Dependence and Capitalism
The basis for Latin American backwardness cannot be attributed to the
capitalist character of its economies and their integration within the world capital-
ist system, but rather by the lach of capitalist development and the persistence of
feudal forms in agriculture. We shall show that underdevelopment is nothing
more than backwardness: a retardation brought about by feudal, semi-feudal, and
pre-capitalist remnants.
Part of the difficulty in clarifying the issue of Latin American backwardness
arises from the tendency of some writers to identify a capitalist mode of production
with any monetary economy. This description hides a premise which is funda-
mental to the depcndentista analysis. This premise is the identification of any
society which has a monetary economy as a society which has a predominantly
capitalist mode of production. Historically, this premise has been an issue which
has pitted Marxist historians against non-~1arxist historians and one which has
caused no small debate among Marxist theoreticians (Dobb, 1947: 194; Bettel-
heim and Sweezy, 1971; Edcl, 1972). It must be made clear that this dependentista
premise docs not merely apply to Latin America today. In fact, it is a premise
about the historical development of the economy of Latin America, and as such
applies to economic development in general, with a number of immediate con-
sequences.
First, is the denial of the existence of fcudalism before and during the twelfth
century in Western Europe, ly- claiming that capitalism developed in that period.
While it is true that the widespread development of a money economy eroded the
basis of the feudal economy, the presence of a money economy within a society
historically did not mean that the society was capitalist. One of the most funda-
mental principlcs of historical materialism is that new social and economic forms
emerge from thc contradictions inherent to an already existing, different social
and economic form. Io deny the presence of feudalism in this period is, in terms
of historical materialism, a dcnial of the very conditions which make the emergence
of capitalism possible. In addition, to claim that cnpitalisllz is present during this
period is to make impossible the differentiation of, for example, the system of land
tenure in 1350 from that one century later.

37
Second, is the faulty characterization of the medieval traders as a revolutionary

class. Infact, the medieval traders merely reaped the benefit of economic trans-
formation brought about by other classes and conditions. It is easy to confuse the
results of a transformation with the causes of the transformation itself. When the
trade of this period is examined with scrutiny, it becomes clear that, if anything,
these traders in fact hindered the development of capitalism. Trade in this
period consisted almost entirely of high-profit, luxury goods; goods such as spices,
wallhangings, and objects dart. The landholding classes in this period invested
the surplus value which they extracted from the serfs into consumption goods
rather than into new and improved means of production. The traders themselves
did not directly invest their wealth and profit into means of production. What
profit these traders did not re-invest in trade was, for the most part, put back into
the land! In Genoa during the thirteenth century, &dquo;even the greatest merchants
... backed their commercial investments with very considerable investments in
real estate&dquo; (Mandel, 1968, I : 106).
Another consequence is the denial of the revolutionary nature of the rapid
industrialization of the nineteenth century. To a 1B~Iarxist historian, the rapid
industrialization in this period is one of the most revolutionary events in the
history of mankind. This is so for two reasons: first, this rapid industrialization
created the most revolutionary class in modern times-the industrial proletariat;
second, the process itself was not a peaceful, transitionary one, but one marked by
violent, class struggle for the seizure of state power. Mart himself outlines this
process with respect to France in Class Struggles, 1848-1850 and The l8th Brumaire
of Louis Bonaparte.
Yet another consequence is the denial of the revolutionary character of any
industrial bourgeoisie (a logical outgrowth of the above consequence). It was
precisely the revolutionary struggle of the industrial bourgeoisie which finally
broke the political strength of the landed aristocracy.
A final consequence is the fundamental inability to make historical demar-
cations between different modes of production, thereby obscuring (if not in fact
denying) qualitative changes in historical development. This is perhaps the most
damning implication of a theory which professes to be a theory of revolutionary
change. Unwittingly, the dependentistas have fallen into an obvious a priorism:
They deny the existence of feudalism in Latin America and the revolutionary
potential of some sectors of the bourgeoisie because they have assumed those
two things at the most fundamental level of their premises.
The appearance of capitalism cannot be conceived as a sudden, unique act,
occuring everywhere at the same time, but as a slow process of struggle against
feudalism which responds to the fundamental contradiction between the forces
of production and the relations of production, and which is reflected primarily
in the violent class struggles that took place all over Europe between the bour-
geoisie-allied with proletarians and peasants-and the feudal landowning aris-
tocracies. In Spain, for instance, the nascent bourgeoisie was completely defeated
and swept aside, leaving an open field to the feudal nobility.
The revolutionary aspect of the bourgeoisic is crucial in understanding the
four-centuries-long struggle that it waged against the feudal aristocratic nobility
in Europe. In Latin America, the bourgeoisie carried out a revolution against the
(Spanish) colonial domination that prevented the development of their national
productive forces. The wars of independence in Latin America were successful
in their principal goal which was to obtain political independence from Spain.
38
The revolution for independence opened Latin America to England (the vanguard
of the world bourgeois Revolution) and tb*s effected only a change from being
tied to Spain to being tied to the capitalist monster, but it cannot be denied that
it was an historically progressive movement. Spain dominated Latin America
completely, politically and economically, and it thwarted most attempts at capital-
ist development; in this sense, it reproduced in Latin America the existing situa-
tion in Spain, where the landowning classes defeated the bourgeoisie. Although
one should be cognizant of Englands influence on Latin American countries
during the nineteenth century-a harbinger of future imperialist development
it is nonetheless true that Latin American countries had, at this time, certain op-
portunities to develop along capitalist lines in much the same fashion as the
United States and other countries did.
Their failure to do this stemmed generally from two causes: first, the bour-
geoisie that carried out the fight against Spain was not an industrial bourgeoisie,
but a commercial bourgeoisie; second, the landed feudal. aristocracies-in alliance
with the commercial bourgeoisie-retarded-in alliance with the incipient native
manufacturing bourgeoisie. Thus, Latin America became accessible to the im-
perialist advance that began toward the end of the nineteenth century, and which
we still witness today. This new attack was qualitatively different from the in-
fluence England exerted on the world during the early nineteenth century inas-
much as imperialism is an advanced stage c capitalism. If we apply the same
concept of &dquo;dependence&dquo; to sixteenth century Spanish domination, to the early
nineteenth century world-wide influence of England, and to contemporary im-
perialist domination, we are arbitrarily utilizing an historical concept which, in
explaining everything explains nothing. According to Lenin:
Colonial policy and impcrialism existed before this latest stage of capitalism, and even
before capitalism. Romc, founded on slavery, pursued a colonial policy and achieved
imperialism. But general arguments about imperialism, which ignore, or put into the
background the fundamental difference of social-economic systems, inevitably degener-
ate into absolute empty banalities, or into grandiloquent comparisons like &dquo;Great
Britain!&dquo; Even the colonial policy of capitalism in its previous stages is essentially dif-
ferent from the colonial policy of finance capital (1967: 740).
The specific differences between classical capitalism and imperialism are discussed
below.
Latin American underdevelopment can be historically explained by the failure
of Latin American bourgeoisies to develop capitalism and to incorporate the area
into the world capitalist system on a competitive footing. These bourgeoisies were
first stymied by the national landowning class and then easily bought off by
extra-national imperialist forces, and this arrested the process of capitalist de-
velopment. From the historical failure of the Latin American bourgeoisie, the
dependcntistas infer that the bourgeois democratic tasks have disappeared entirely
from the revolutionary process. Our contention is that these tasks remain, and
that the proletariat, rather than the bourgeoisie, must accomplish them.
The Methodological Critique

While most dependentistas have expounded upon the external forces causing
dcpcndence, a new concept, the infrastructure of dependency, is used to describe
the internalization of values which helps create and maintain dependence. This
intcrnalization is pcculiar to &dquo;all classcs and structures in Latin society&dquo; (Boden-
heimer ( Jones ) , 1971: 164). Through this concept, the theory of dependence
continues to perpetuate the artificial separation between tactical and strategic

39
enemies and to insist on the notion of the local bourgeoisie as the immediate
enemy. This theory of internalization is an attempt to explain the internal process
of dependence which had been neglected by the original dependentistas. The
problem of the relation between &dquo;external&dquo; cause-dependence-and the &dquo;intern-
al&dquo; process is resolved with the creation of an infrastructure which enables the
dependent countries to internalize the &dquo;need&dquo; to be dependent-a sort of social
inferiority syndrome. Thus, even if the external cause-the dominant countries-
were to disappear, the reality of dependence and the inferiority complex would
persist. This &dquo;dependentismo&dquo; has consequences that are pernicious. Dependency

would be recast as if Latin American people are dominated and dependent because
they want to be, because they have assimilated the wish to be so. Does this mean
that an &dquo;ideology of subjugation&dquo; has been created? The notion of &dquo;infrastructure
of dependence&dquo; is a logical complement to the theory of dependence. Its emphasis
on the penetration of &dquo;values of underdevelopment,&dquo; without giving any indica-
tion of where revolutionary values might come from, is one-sided and can easily
lead to a politics of quietism or desperation.
Although the relationship between the dependentistas and Marxist social
theory is not clear, it is evident that they frequently utilize terms and modes of
thinking borrowed from this tradition. The backbone of Marxist social theory is
that the critic arrives (by way of the theory of successive modes of production)
at a correct analysis of classes in a concrete situation which forms the base of an
adequate strategy (and tactics) for the transformation of society. Marxism, then,
provides a coherent view of world history, and its categories have been tested and
developed in practice in at least two major successful revolutions. Social hypotheses
based on Marxist social theory can be examined against a theoretical background
of revolutionary theory and practice. If there is no connection between the notion
of metropolis-satellite-which is the cornerstone of Franks argument-and Marx-
ist social theory, his conclusions on the strategic and immediate enemies can only
be tested by their immediate application to revolutionary practice.
Gunder Frank fails to relate his view of Latin America to the experience of
other revolutions in the Third World. He places the Latin American revolution
at the crossroads. Either the Latin American revolution coincides with the princi-
pal aspects of the Chinese revolution (anti-imperialist and anti-feudal struggle) in
which case his theory is destroyed or the Chinese revolution is denied; or, Latin
America is considered essentially different from China, in which case one has to
reject Maos analysis ~f imperialist domination and semi-feudal structures, which
Frank does do very effectively. It is inconceivable that the Latin American
people could be asked to risk all in an effort to validate a theory that takes the
lessons of revolutionary theory and history very lightly or not at all.
Summary of the Argument

The theory of dependence: does not explain the internal process of under-
development ; arbitrarily attributes backwardness to external causes; says next to
nothing about the contemporary nature of imperialism; and constitutes a good
example of a careless use of Marxist theory. In view of these weaknesses, we feel
that the theory of dependence should be rejected. In the next section, we will
begin to sketch the basis for an alternative theory.
BACKWARDNESS IN AGRICULTURE
Marx and Engels developeda science to explain societal change
through the
40
application of historical materialism to history. The fundamental aspect of this

theory is that the development of the history of mankind depends on the develop-
ment of the contradictions between the forces of prcduction and the relations of
production, on the one hand, and upon the material conditions of life (base) and
ideological conceptions (superstructure), en the other (Marx, 1970b; Marx and
Engels, 1972; Lenin, 1970a; Stalin, 1943). The result of their combined work was
the characterization of the capitalist mode of production according to these con-
tradictions ; indeed, to this end Marx wrote his magnum opus, Capital. Marx and
Engels endeavored to determine the fundamental features of capitalism, and to
demonstrate that it was an historical mode of production that arose in a determin-
ate historical moment; that capitalism embodied inherent contradictions which
would eventually destroy and transform it into a different mode of production;
and that capitalism manifested specific traits which distinguish it from previous
forms of social production. These are the basics of Marxism; from them Marxists
derive their interpretations of the history of the world. We might say that an
understanding of the Marxist interpretation of change in history and its applica-
tion to the practical transformation of reality constitute the cornerstone of Marx-
ism. The acceptance or rejection of dialectical materialism in history is basically
what distinguishes Marxists from non-Marxists.
In studying the Latin American process, many dependentistas and Marxists
alike have forgotten the treatment that Marx gave to the fundamental contradic-
tion between forces of production and relations of production in determining the
advance of capitalism in a given society. Marx placed agriculture as a basic sector,
reference to which determined whether capitalism had become predominant over
feudal forms or not. This makes it imperative to study in detail the Marxist
theory of ground rent presented in the third volume of Capital, and which has
been elaborated upon by Kautsky, Lenin (Vol. XII, 1943), Preobrazhensky,
Mandel, and others. Marx placed the key to the development of agriculture in
technological progress and its principal obstacle in land held as private property.
Both the level of technological development and the forms of landed property
determine the level of development of capitalism in relation to the old feudal
system.
In the next two sections of this paper we shall utilize 1B~Zarxs theory of ground-
rent to establish that Latin American backwardness has a pre-capitalist nature.
In order to demonstrate this point, a brief detour into a more abstract theoretical
discussion is necessary. To help the 1CadCr along, the argument takes the following
course: first, the Warxist catcgories for the study of capitalist agriculture are
presented in order to show that even from thc point of view of the capitalist mode
of production, private property in the land can be an obstacle, and a socialist
revolution might have a bourgcois democratic content; second, backward forms of
rent and land tenure are examined and their presence in Latin America is docu-
mented ; third, the degree of pre-dominance of feudal backwardness in each specific
country is shown to be a statistical matter.
Absolute Ground-Rent
The basic categories for the analysis of capitalist ground-rent are absolute
and differential rent. Absolute rent is a portion of the surplus-value of agricultural
commodities which, instead of bcing appropriated by capitalist farmers who
extract it from their laborers, falls into the lap of the landlords. The existence
of absolute ground-rent is predicated on two conditions: first, that the organic

41
composition of capital6 in agriculture is lower than the average organic composi-

tion of social capital; and second, the existence of private property in the land.
The first premise is that
a capital of a certain size in agriculture produces more surplus-value, or what amounts
to the same, sets in motion and commands more surplus labour (and with it employs
more labour generally) than a capital of the same size of average social composition
(Marx, 1970a: 760).
If, &dquo;the average composition of agricultural capital were equal to, or higher than,
that of the average social capital, then absolute rent ... would disappear&dquo; (Marx,
1970a: 765). In his analysis of cost prices and the values of commodities, Marx
had shown that the relationship between the value of a commodity and its price
of production (cost-price) is determined by the organic composition of capital
utilized in the production of such a commodity. In other words, he maintaingd
that the values of commodities may differ from their cost-prices.
This relationship (value over cost production) can be maintained in three
ways: as the value of the commodity equals its price of production; as the value
of the commodity is below its price of production; and as the value of the com-
modity is above its price of production. That the price of a given agricultural
commodity at a given time permits the producer to pay rent to the owner &dquo;only
shows that the agricultural product belongs to that group of commodities whose
value is above its price of production&dquo; ( Marx, 1969, II: 131). When a com-
moditys value is above its price of production, this arises because, in that sphere
of production,
such capital employs living labour, it produces more surplus-value, and, therefore, more
profit, assuming equal exploitation of labour (than an equally large aliquot portion of
the social average capital. llie value of its product, therefore, is above the price of
production, since this price of production is equal to capital replacement plus average
profit, and the average profit.is lower than the profit produced in this commodity. The
surplus-value produced by the average social capital is less than the surplus-value pro-
duced by a capital of this lower composition (Marx, 1970a: 759).
It should be noted that this lower composition of capital in agriculture is of an
historical nature and can, consequently, disappear (Marx, 1969, II: 244). The
fact that the organic composition of capital is lower in agriculture indicates that
progress has not reached the same level there as in the industrial sector. It is
well known that progress in agriculture is expressed by the increase of constant
capital relative to variable capital (Kautsky, 1970: 38-62; Lenin, 1943: XII). The
actual discrepancy in the organic composition of capitals is a matter to be
determined statistically in every historical stage.
But the existence of an excess in the value of agricultural products over
their price of production is not, in itself, a sufficient condition for absolute ground-
rent ; i.e., a rent that arises from the fact that capital is invested in agriculture
rather than manufacturing. Capitalism is characterized by an ever-changing pro-
portional distribution of the aggregate social capital among the various sectors of
production. That is to say, it is a premise of the analysis of capitalist production
that only temporary barriers can succeed in preventing capitalist competition from
reducing values to prices of production and, therefore, to allocate proportionately
the excess surplus-value of one sector of production to all sectors of capitalist
exploitation. But more than a temporary barrier to this process appears, under
The organic composition of capital is to be understood as the ratio of constant capital (value of
6
the means of production) to variable capital (the value of labor power). Two capitals of
the same size may have different proportions of constant and variable capital, and it may be
then said that their organic compositions are different.

42
the capitalist mode of production, in the form of private property in land. This
is why landed property is different from other forms of private property: even
f rom the viewpoint of a capitalist mode o production, it can be regarded as an
obstacle. If landed property did not exist in agriculture, agricultural capital would
become equalized more rapidly with the average social capital, due to the forces
of competition. Private property in land &dquo;prevents this surplus (of surplus value
over profit) from passing wholly into the process of equalizing profits and absolute
rent is taken from this surplus&dquo; (Lenin, 1943, XII: 71). This is the reason why,
historically, capital and landed property have been antagonistic, why capitalism,
emerging from the womb of feudalism, has developed slowly in agriculture, and
why agriculture has usually been backward, even within an advanced country.
Differential Ground-Rent
In addition to absolute ground-rent, which is manifested by landed property
in the capitalist mode of production, there is also differential rent.
The question as to whether private property in land exists has absolutely nothing to do
with the question of the formation of differential rent, which is inevitable in capitalist
agriculture even on communal, state and ownerless lands. The only consequence of
the limitation of land under capitalism is the formation of differential rent, which
results from the difference in the productivity of different investments of capital (Lenin,
1943, XII: 45).
Differential rent arises from the inequality in the product of two quantities of
capital of the same size with the same organic composition being used on equal
land areas.
The major causes of the differences in results are the fertility of the soil, the
location of the land, and the productivity of additional investments of capital
in the land. In summary, differential ground-rent is the consequence of competi-
tion and the capitalist structure of production; differential rent has nothing to do
with landed property, and will persist after the elimination of landed property.
On the other hand, absolute rent is the result, not of competition, but of land
monopoly and the opposition of interests between landowners and the rest of
society. That is why the bourgeois radicals of the nineteenth century could ask
for the nationalization of land without violating bourgeois economic principles.
Revolutionary socialist movements have proposed either the nationalization of
the land or its release to the tiller of the soil, in order to break up the power-base
of backward interests and develop productivity. These are democratic remedies
which historically have not had a socialist character, but which are indispensable
in solving the agrarian problem.
Backward Forms of Ground-Rent and Land Tenure

Marx also examined the manifestations of ground-rent under feudalism:
labor rent, rent-in-kind, and money-rent. For Marx, money-rent was the final form
-the form which dissolved the type of ground-rent typical of the feudal mode
of production. JB10ney-rent is characterized by the direct producer turning over
part of the price of the product to the landowner, instead of the product itself
as occurred under rent-in-kind, or his labor services as occurred under labor-rent.
A surplus of products in their natural state is no longer the norm, but must be
converted into money form. To illustrate the importance of demarcations between
The differential
7 rent that arises from the differences in plots of land is called "differential rent
I" by Marx; the difference that arises from the productivity obtained through the applica-
tion of different capitals to one plot is called "differential rent II."

43
a monetary-market economy and a capitalist economy, it is sufficient to examine

the following description of the transformation of rent-in-kind into money-rent,
both of which are feudal manifestations of ground-rent:
The transformation of rent-in-kind into money-rent taking place first sporadically and
then on a more or less national scale, presupposes a considerable development of com-
merce, of urban industry, of commodity production in general, and thereby of money
circulation. It furthermore assumes a market-price for products, and that they be sold
at prices roughly approximating their values, which need not at all be the case under
earlier forms (Marx, 1970a, III: 797).
Marx also analyzed a number of land tenure forms that appear in the
transition between feudalism and capitalism. These intermediate or transitory
pre-capitalist forms described are the following: management of estates under
which landlords themselves are independent cultivators; sharecropping (colonos);
and small proprietorships of land parcels. In what sense are these forms transitory?
We will start with the case where the landlords themselves are independent
cultivators. Under a capitalist mode of production, however, this can only be an
exceptional occurrence. Marx explains why in various places:
Such cases occur in practice, but only as exceptions. Just as capitalist cultivation of the
soil presupposes the separation of functioning capital from landed property, so does it
as a rule exclude self-management of landed property. It is immediately evident that
this case is a purely accidental one. If the increased demand for grain requires the
cultivation of a larger area of soil type A than is in the hands of self-managing pro-
prietors, in other words, if a part of it must be rented to be at all cultivated, then this
hypothetical lifting of the limitations created by landed property to the investment of
capital at once collapses (Marx, 1970a, III: 751 ) . ,
The separation of landed property from self-management must be understood

as a tendency of the capitalist mode of production in agriculture. Referring to
peasants who sell commodities for money but who do not employ labor-power
(except their own) in the production of those commodities, Marx states that
this production &dquo;does not fall under the capitalist mode of production&dquo; (1969, I :
407). In the same section, Marx notes that
Separation appears as the normal relation in this society ... it is a law that economic
development distributes functions among different persons; and the handicraftman or
peasant who produces with his own means of production will either gradually be trans-
formed into a small capitalist who also exploits the labour of others, or he will suffer
the loss of his means of production ... aad be transformed into a wage labourer. This
is the tendency in the form of society in which the capitalist mode of production pre-
dominates (Marx, I : 409).
The second transitory form is known as sharecropping or colorcato. This
form appears in many variations within Latin America. The crucial question is
to determine whether these sharecroppers are capitalists, or whether only the
formal expression of landed property appears to correspond to a capitalist mode
of production, without the existence of such a substantive situation (Marx, 1970a,
III: 625).
The third transitory form alluded to by lVlarx is the proprietorship of small
land parcels which he calls
a necessary transitional stage for the development of agriculture itself. The causes
which bring about its downfall show its limitations. These are: destruction of rural
domestic industry, which forms its normal supplement as a result of the development
of large scale industry; a gradual impoverishment and exhaustion of the soil subjected
to this cultivation; usurpation by big landowners of the common lands, which constitute
the second supplement of the management of land parcels everywhere, competi- ...
tion, either of the plantation system or large-scale capitalist agriculture (Marx, 1970a,
III: 807).
44
A further complication arises in relation to the ownership of small land parcels

as well in the first category where the landowner is also his own tenant farmer,
as
i.e., part of the cultivators capital has to be invested in the purchase of the land.
Further, this expenditure may arise to such a point that it affects production, or
even renders it impossible.
Land Tenure in Latin America

The evidence on land tenure structure in Latin America is such that no one
could deny the existence of forms described by Marx as transitory and pre-capital-
ist. Morcover, these forms are usually found in conjunction with even more
backward (and more advanced) arrangements (Pearse, 1970). The first transitory
form-or estate self-management-exisis in Latin America, but in no way repre-
sents the general tendency in agriculture (Pearse, 1970: 25). In this area, the
large estate or latifundia predominates, is essentially unproductive or devoted to
extensive cattle-raising, and represents a formation descended from the early
encomiendas or from the later development of slave plantations. Any Latin
America country presents-according to the most conservative estimates-a large
degree of monopoly in land, and a chronic deficiency in agricultural production.
The effects of monopoly in landowncrship have become clearer as a result
of the detailed analysis of landownership patterns in Cuba before the revolution
(Boorstein, 1968). The contemporary Latin American large estate is generally
characterizcd by the utilization and amalgamation of various forms of labor
exploitation: labor-rent, rcnt-in-kind, and some wage-labor; a system of social
control designed to tie the worker to the land through various techniques of
coercion and paternalism, i.e., a situation predominantly fcudal in nature. These
characteristics are thoroughly documented (Pearse, 1970; Feder, 1971).
Closely tied to thc largc cstatc (actually part of the large estate) is the second
transitory form described by Marx: shnrccropping or the colonato. Except that
here, thcre is no question of capitalistic methods; in actuality, they are the most
backward of feudal forms. With thc exception of Cuba, everywhere in Latin
America we find service-tenants and labor-rent and similar arrangements known
as huasipungos, inquilinajcs, aparccros, ctc. Extensive cattlc-raising is carried on
with natural pastures and a minimal employment of capital or labor. In cattle-
raising, coffee, cacao, and other products the usual arrangement is leasing the
peasant a small parcel of land for a fixcd period of time, coupled with his entering
into obligations of money, paymcnt in kind, or direct labor services for the use of
this land. This mode of production is widespread in the &dquo;advanced&dquo; countries of
the region such as Brazil, Colombia, Venezuela, Mexico, and others. Even cash
tenants arc sometimes obliged to pay through labor-services (Pearse, 1970: 21 ) .
Finally, there exist in Latin America smallholder communities of various
historical origins. Generally located in areas of high population density, they show
a tendency toward higher fragmcntatLon and fertility decline. The prohibitive
price of additional land becomcs, in this case, a crucial factor thwarting the utili-
zation of advanced methods. Due to low productivity, domestic manufacturing
is an integral part of the total production. While the major part of cultivatable
land in Latin America is monopolized and unproductive, the major portion of
proprietors is reduced to minifundios which restrict the proprietors to the satis-
faction of their most basic necessities. The current breaking-up of minifundios
Land has no value, but it has price. The mushrooming of
8 speculation in land becomes visible
in the imperialist stage of capitalism.

45
appears to be caused not by the intrusion of capitalist forms, but by the further
concentration of land in the hands of latifundistas.
From the point of view of land tenure, the existence of feudal forms of
ground-rent, and the mode of the extraction of surplus-value, it can be said that
the Latin American agrarian sector is semi-feudal and extremely backward.
From Feudalism to Capitalism in the Economy
It can be said, heuristically to some extent, that whereas under feudalism
&dquo;profit&dquo; is determined by rent, under capitalism rent is determined by profit.
Under feudalism, unpaid surplus-labor expresses itself directly as rent, i.e., as
labor-rent, rent-in-kind, or money-rent. In this case, it is possible for the laborer
to produce a surplus that he may keep for himself. &dquo;This surplus above the indis-
pensable requirements of life, the germ of what appears as profit under the
capitalist mode of production is therefore wholly determined by the amount of
ground-rent (Marx, 1969, I : 48).
On the other hand, in a social formation where it is capital which performs
the function of enforcing all surplus-labor and appropriating all surplus-value, then
profit becomes the general form of surplus-value, and interest and rent become
&dquo;mere offshoots of industrial profit, which is distributed by industrial capitalists
to various classes, who are co-owners of surplus-value&dquo; (mark, 1969, I : 48). The
transition from feudalism is characterized, among other things, by this role-reversal
of economic categories.
To what extent the general form of the manifestation of surplus-value in
Latin America is industrial profit is a statistical matter. Available evidence sug-
gests that this may be true in some countries, but not in others. Certainly to
speak of capitalism in agriculture,
average profit itself must already be established as a standard and as a regulator of
production in general as is the case undcr capitalist production. For this reason there
can be no talk of rent in the modern sense, a rent consisting of a surplus over the
average profit, i.e., over and above the proportional share of each individual capital,
in social formations where it is not capital which performs the function of enforcing
all surplus-labor, and where therefore capital has not yet completely or only sporadically,
brought social labour under its control (Marx, 1970a, III: 634).
Consequently, to determine the degree of capitalist development (or of feudal
backwardness) in any given country it is necessary to measure the extent to which
the surplus product is extracted through capital or through more primitive forms
of coercion. It is almost self-evident that some Latin American countries are more
beckwards than others.
Another indication of the degree of capitalist development of a society is
given by the characteristics of the social divison of labor. Under the capitalist
mode of production, the social division of labor is characterized by anarchy,
whereas the division of labor within a workshop or a farm is typified by despotism.
In this connection, ~1arx says
We find ...in those earlier [precapitalist] forms of society in which the separation of
trades has been spontaneously developed, then cii.stalized, and finally made permanent
by law, on the one hand, a specimen of the organization of labour in society, in ac-
cordance with the approvcd and authoritative plan, and on the other, the entire exclu-
sion of division of labour in thc workshop. or at all events a mere dwarfing or sporadic
and accidental development of the same. (mary. 1970a, 1: 356-357).
It is a safe generalization that in terms of the division of labor within the farms,
the Latin American farm estate is far from having a division of labor which is
both specialized and centrally directed: i.e., is far from being a capitalist estate.
Lastly, when Marx utilized such notions as agricultural labor, he meant pure
46
agricultural labor where the laborer is ccmmitted to specific food-producing ac-

tivities. All remnants of rural manufacturing are non-existent in this conception.
The situation is clearly different in Latin America where the agricultural &dquo;wage-
labourers&dquo; spend much time in handicraft production, a characteristic of back-
wardness which is being intensified by the development of the tourist &dquo;industry.&dquo;
The appearance of pure agricultural labor is a consequence of the separating and
specializing tendencies of a capitalist mode of prcduction.
Conclusion
The adequate category to describe Latin American backwardness should not
be capitalist underdevelopment, but feudalism, semi-feudalism or strong remnants
of feudalism depending on the individual case. To generalize further: Latin
American backwardness has a pre-capitalist character.9 This conclusion does not
imply the absence of capitalist sectors, in agricultural areas, within particular
countries. The pre-capitalist character of this backwardness is a conclusion dia-
metrically opposed to that of the dependentistas, and directly affects an objective
analysis of classes. That a backward economy should prove so resilient in the
contemporary world of high technology and immense scientific advance is due to
imperialism.
IMPERIALISM
Imperialism explanation of backwardness in Latin America, rather,
is not the
it provides an explanation for the persistence of backwardness, and an argument
for the necessity of a revolution that will leave backwardness behind. The proposal
here is a return to Lenins theory of imperialism to derive its logical consequences
for revolutionary practice, and to apply them concretely to the Latin American
case. The genesis of underdevelopment must be explained in accordance with the
historical process that placed Latin America in a dominated position during the
imperialist stage of capitalism. The goal here is not exhaustively to clarify this
genesis; instead, we shall attempt to interpret the present epoch of imperialist
domination with the objective of drawing conclusions regarding the revolutionary
process; in Latin America.
Imperialism as a Special Stage of Capitalism

Today the world lives in the cra of imperialism. Imperialism is capitalism-
with all of its economic structure and political superstructure-in an advanced
stage which constitutes capitalisms last, decadent stage. Lenin summarized the
fundamental traits of imperialism in five thesis:
(1) The concentration of production and capital developed to such a high stage that
it created monopolies which played a decisive role in economic life.
(2) Bank capital merged with industrial capital creating the &dquo;finance capital&dquo; of a
&dquo;financial oligarchy.
(3) The export of capital became extremely important as distinguished from the
export of commodities.
(4) International capitalist monopolies were formed, and shared the world among
themselves.
(5) The territorial division of the entire world among the greatest capitalist powers
was completed (Lenin, 1967, 1: 745-746) .
This definition of imperialism does not mean that its characteristics are
entirely present in the same country at the same time, but that they are the general
This argument is not affected
9 by the presence of an "Asiatic mode of production" in some areas.

47
tendencies of capitalism from the end of the nineteenth century onward, appear-
ing with vacillations, slow-downs, and actual regressions.
Lenins theory of imperialism as a special stage of capitalism is the logico-
historical conclusion of four tendencies that Marx pointed out as peculiar to the
capitalist form of production: a tendency towards the concentration of production;
a tendency of the rate of profit to fall; a tendency towards the progressive im-
poverishment and relative increase of the proletariat; and a tendency towards

periodic crises of increasing intensity. Marx described capitalism as a system con-
,stantly struggling against the ostensible manifestations of tendencies that might
endanger the mechanics and functions of that system. Imperialism is the result
of this internal struggle described by Marx in a section regarding stock-companies

( corporations ) .
As such, imperialism is the manifestation of the ultimate development of
contradictions in the capitalist mode of production. Of these, the most important
contradictions are between wage-labor and capital, between the various monopolist
groups and imperialist powers, and between a few dominant and many dominated
countries (Stalin, 1947: 15). The immediate manifestation of the contradiction
between wage-labor and capital during the epoch of imperialism is the omnipotente
of monopolies in the most advanced capitalist countries-imperialist countries.
To the extent that revolutionary struggles advance in the world, imperialism will
exhaust the possibilities of exporting its contradictions to the dominated countries,
and the oppressed masses of those countries will face no other alternative but
revolution. The manifestation of the contradiction between monopolist groups
and imperialist powers generate inevitable rivalries due to the competition for
sources of raw materials and markets for commodities and capital. In this sense,
the possibilities of war among the large powers have not diminished. At the same
time, a new form of warfare has already emerged: localized wars in which the
imperialist powers are indirectly involved. The consequences of this struggle
toward an even larger monopolization are the weakening of specific imperialist
powers, and the position of capitalism in general. Finally, the objective mani-
festation of the oppression and exploitation of the majority of peoples in the
world by a tiny minority of powerful countries is the multiplication of wars of
liberation in the whole world. In its wild drive for super-profits and super-ex-
ploitation, imperialism generates the appearance of national consciousness and
an increasing number of movements for self-determination; movements which no
longer make the backward countries into capitalist reserves, but rather transforms
them into the reserves of the world proletarian revolution.
10 we go any further, there is still the following economically important fact to be noted:
"Before
since profit here assumes the pure form of interest, undertakings of this sort are still possible
if they yield base interest, and this is one of the causes stemming the fall of the general rate
of profit, since such undertakings, in which the ratio of constant capital to the variable is
so enormous, do not necessarily enter into the equalisation of the general rate of profit . . .
This is the abolition of the capitalist mode of production within the capitalist mode of
production itself, and hence a self-dissolving contradiction, which prima facie represents a
mere phase of transition to a new form of production. It manifests itself as such a contra-
diction in its effects. It establishes a monopoly in certain spheres and thereby requires
state interference. It reproduces a new financial aristocracy, a new variety of parasites in
the shape of promoters, speculators, and simply nominal directors; a whole system of
swindling and cheating by means of corporation promotion, stock issuance, and stock
speculation. It is private production without the control of private property" (Marx, 1970a,
III: 437-438).

48
Imperialism appears as the direct development and continuation of the funda-

mental attributes of the capitalist mode of production. Capitalism does not
reach this stage until its typical characteristics become its fetters; i.e., until free
competition disappears and capitalist monopolies begin to appear. If free com-
petition in commodity production characterizes capitalism, monopoly or the op-
posite of free competition characterizes imperialism. Monopolies, however, do
not completely eliminate competition, but rather impose a new kind of competi-
tion where the contradictions, frictions, and conflicts are more sharpely defined.
Imperialism is the monopoly stage of capitalism.
Finance Capital
The highest degree of capitalist development manifests itself in the pre-
dominance of finance capital, in the power that finance capital lends to capitalist
oppression over the world, and in the decadent imprint that this financial pre-
dominance stamps on the system. Lenin explained this tendency of capitalism
in an important passage of Imperialism:
It is characteristic of capitalism in general that the ownership of capital is separated
from the application of capital to production, that money capital is separated from
industrial or productive capital, and that the rentier, who lives entirely on income ob-
tained from money capital is separated from the entrepreneur and from all .that are
directly concerned in the management of capital. Imperialism, or the domination of
finance capital, is that highest stage of capitalism in which this separation reaches
vast proportions . The supremacy of finance capital over all other forms of capital
means the predominance of the rentier and of the financial oligarchy; it means the
crystallisation of a small number of financially &dquo;powerful&dquo; states from among all the
i
rest ... (1967, II : 721 ) .&dquo;
It is precisely this characteristic of capitalism in the imperialist stage which is
forgotten or criticized by modern writers who pass over the most basic scientific
concepts established by Marx. The former characterize imperialism as the prefer-
red policy of an international bourgeoisie and ignore the meaning of finance
capital.
The concept of the predominance of industrial capital through large multi-

national corporations reinforces Franks theory of the immediate enemy, according
to which he is able to make a distinction betwecn imperialism and local capitalism.
The belief in the predominance of industrial capital permits the dependentistas
to regard the struggle against imperialism as secondary to the class struggle and
the battle against capitalism. On the other hand, it allows other authors to mask
the true enemies of the proletariat by inventing a theory of administrative capital-
ism. Not only docs the enemy fade out of the picture in the backward countries,
but within the imperialist countries it is converted into a phantom while the power
passes to the managcrs of the large monopolistic enterprises. Thus, the concept
of monopoly capital characterizes the corporation as the decisive unit of im-
perialist economy, and the managers of thc corporation as the decisive group.
These notions form a concrete rcjcction of Lenins theory of imperialism: they
Marx himself had noticed the tendency towards the predominance of finance capital when he
11
wrote that "Aside from the stock-company which represents the abolition of capitalist
private industry on the basis of the capitalist system itself and destroys private industry as it
expands and invades new spheres of production, credit offers to the individual capitalist,
or to one who is rcgardcd as capitalist, absolute control within certain limits over the
capital and the property of others. The control over social capital, not the individual
capital of his own, gives him control of social labour. The capital itself which a man really
owns or is supposed to own in the opinion of the public, becomes purely a basis for the
superstructure of credit (1970a, III : 439).

49
deny the financially predominant character of capitalism and its transition into a
qualitatively different stage.
Lenin described capitalism, however, as a system which has grown into an
identification with the predominance of credit-the most refined expression of
money-since it is completely separated from production, leading a separate
existence based upon the exploitation of a large number of countries. The im-
portance of this understanding of imperialism is that neither the international
commodity markets nor the deterioration of the terms of trade, nor even the
direct investment of industrial capital in backward countries explain the control
exerted by credit and capital markets in the world. The power of imperialism is
located in a few countries and it operates through a world-wide credit system-
international financial operations controlled by one, two, or three countries,
either competitively or monopolistically-which imposes various conditions on the
debtor countries, and which directs the economic, educational, and bureaucratic
policies in the monopolistic interests in all countries. In the meantime, the real
beneficiaries in the financial scene remain hidden, veiled, and protected behind
charitable foundations, living at the expense of a system which they do not dj-
rectly run, but which is run entirely for their benefit. This is a parasitic capitalism
living by the law of minimal effort and maximum profit. Lenin considered this
parasitic condition as a signal of the decadence of capitalism, but it also shows
.
that the immense socialization of production to which it has given rise and of
which it is a product signals the development of a new economic system. This
widespread socialization of production has brought about the necessity for regional,,
national, and international planning; it has brought state intervention into the
capitalist economy, and it has initiated a period of state capitalism in both ad-
vanced and backward countries.
The Current V alidity of the Theory of Imperialist

Lenins theory of imperialism has been consistently subjected to both overt
and surreptitious attack. A full empirical presentation of its adequacy is not
included here, due partially to the limitations of space, but mainly because of the
availability of a superb work that has statistically updated the theory ( Jalee, 1972).
However, it is imperative that we deal with three intimately related arguments
which have been utilized by dependentistas and others to criticize the Leninist
theory of imperialism which obscure the role of finance capital.

The first argument points to the fact that &dquo;foreign investment ... in Latin
America is moving rapidly away from oil, raw materials and agriculture and in the
directions of the industrial sectors&dquo; (Cardoso, 1973: 11). In Cardosos view,
this new development runs counter to Leninist theory. According to him, &dquo;from
the theoretical Leninist point of view ... imperialism should tend to restrict the
economic growth of backward countries to mineral agricultural sectors ...&dquo;
(1973: 29). Consequently, the theory of imperialism emerges as an outdated
view in need of revision. In reality, the Leninist position is very far from Cardosos
interpretation of it. The notion that imperialism consists of the striving of every
industrial nation to control or annex increasingly larger areas of agrarian territory
was the position Kautsky maintained, a position which Lenin specifically attacked.
In this connection, Lenin stated that &dquo;the characteristic feature of imperialism is
precisely that it strives to annex not only agrarian territories, but even the most
highly industrialized regions ...&dquo; (1967, I: 747).
Cardoso and Dos Santos-who have done much to chart the appearance of
50
foreign investment in Latin American industry-are more in touch with the facts
than Gunder Frank, who appears to have taken a Kautskian position on his
&dquo;development of underdevelopment&dquo; thesis, but what they regard as a crucial
change in international economic relations is not inconsistent with Lenins theory
of imperialism (Cardoso, 1972; Dos Santos, 1971).
The second argument suggests that the flow of the &dquo;export of capital&dquo; has
been reversed: where advanced nations previously exported capital to the backward
nations, now the opposite holds true. Once again, this is not a revision since, for
Lenin, one of the characteristics of this new stage of capitalism was the export of
capital in general. That he did not view the export of capital as a one-directional
flow from advanced to backward countries is clear from Lenins analysis of French
and German capital exports around the turn of the century. Besides misrepre-
senting the theory of imperialism, notions of the reverse flow of capital hide a
crucial fact: the gaping hole left in Third World accounts by the deficit in
capital flows must be filled somehow, and this has been generally accomplished
through foreign aid-one of the fundamental instruments of the imperialist policy
of domination and exploitation in Latin America. This policy is carried out by
large financial agents of finance capital: the International Monetary Fqnd, the
World Bank, the United States Agency for International Development, the Inter-
American Development Bank, the Inter-American Committee for the Alliance
for Progress, etc. The insidious role of these agencies has been superbly docu-
mented by Hayter (1971).
The third argument involves an attempt to refute the concept of finance
capital: &dquo;previous notions of banking control over industry,&dquo; Cardoso (1973: 10)
says, &dquo;need to be rethought.&dquo; This is another example of disproving a thesis by
making it mean something it does not.
In the works of Marx and Lenin, there are two closely related concepts:
&dquo;finance capital&dquo; and &dquo;financial oligarchy.&dquo; Finance capital can in no way be
interpreted as banking control over industry as it is carefully defined by Lenin as
&dquo;the concentration of production; the monopolies arising therefrom; the merging
or coalescence of the banks with industry ...&dquo; (1967, I : 711). Lenin goes on to
say, however, that the predominance of &dquo;finance capital&dquo; over all other forms of
capital signifies the supremacy of the rentier and of the &dquo;financial oligarchy.&dquo;
Whether this financial oligarchy emerges from the womb of an industrial corpor-
ation or from a bank is immaterial. It is interesting that those who have taken
pains to show that Lenin was &dquo;wrong&dquo; have only succeeded in showing that cor-
porations have achieved financial independence by acquiring control over financial
institutions or creating, as it were, their own &dquo;banks.&dquo; Moreover the notion of the
predominance of the rentier and of a financial oligarchy finds its first expression
in Marx (quoted above), not in Lenin and it arises in a discussion about industrial
corporations, not banks! Marx and Lenin were expressing the importance of
separation as a characteristic process of capitalism: the separation of the ownership
of capital from the application of capital to production; the separation of money
capital from industrial, productive capital; and the separation of the rentier, who
lives on the income from money capital, from the enterpreneur and all those who
are directly involved in the management of capital. To suggest that Lenin thought
of the financial oligarchy as emerging solely from banking institutions and to
equate the notions of finance capital, financial oligarchy, and the predominance
of banks over industry constitutes either an error that arises from a narrow
reading of Lenin or an attack upon the Leninist theory of imperialism. Lenin
51
illustrated the general process of separation through the use of particular con-
temporary statistics in which banks played a paramount role. The history of
imperialism since then demonstrates other particular manifestations of this process,
and has proved its generality.
These three arguments are those most commonly utilized to criticize the
theory of imperialism; they have been used as a justification for the theoretical
blind alleys of the theory of dependence. All three are based upon a careless
reading of Lenin and upon an empiricist interpretation of his works. The argu-
ments show how impossible it is to grasp the full meaning of imperialism without
an adequate understanding of finance capital and the financial oligarchy. The
international work of finance capital has been recently documented in a NACLA

(May-June, 1973) report on Central America. In this report, the major role of
banking and financial powers in opening up the region for imperialist industrial
investment is undeniable. Finally, there is more to imperialism than economics,
and to this theme the next section is devoted.
The Political Aspects of Imperialism

Marx described the free enterprise capitalist system as characterized by an
internal despotism combined with strict discipline and a rigid hierarchization
within the factory designed to guarantee maximum efficiency, while chaos and a
relatively total freedom of market supply and demand operated in the society as a
whole, without any kind of state intervention (1970a, I: 350-351). The era of
monopoly changed this characteristic of capitalism: not only was an extreme des-
potism required within the factory, but despotism also became the form of
government. The state became a. factory, with all its efficiency and repression, in
order to control society on behalf of the monopolies.
Thus, as Lenin indicated, &dquo;the political superstructure of this new economy,
of monopoly capitalism is the change f rom democracy to political reaction.
Democracy corresponds to free competition. Political reaction corresponds to
monopoly&dquo; (Lenin, 1960: 43). In other words, it follows historically that domin-
ation does not limit itself to the economic sector, but penetrates the political-
social sector-both at home and abroad. The qualitative change economically
undergone by capitalism has its parallel in the power relations which it obtained
in the political arena; the concentration of economic power-the rationalization
of economic development-is followed by the rationalization of the state ap-
paratus.
Max Weber, a sociologist of the imperialist epoch, painted a detailed picture
of society in the early stages of its transformation from competitive to monopoly
capitalism, from imperialism as an &dquo;accidental&dquo; feature of a society to a necessary
feature of advanced Western countries. Marcuse (1968: 215) has shown that &dquo;in
Webers work the formal analysis of capitalism ... becomes the analysis of forms
of domination.&dquo; While Weber viewed domination as essential for the preservation
of capitalist national independence within the context of the international power
struggle characterizing the era of imperialism, he failed to grasp the conclusion.
That is, he failed to notice that the forms of domination which he described were
historically peculiar to the advanced stage of capitalism, and not necessarily
peculiar to industrialization as such.
Lenin perceived that the change in the political superstructure of capitalism
has been characterized by &dquo;an unprecedented growth of its bureaucratic and
military apparatus ... The specific political features of imperialism are reaction
52
all along the line and increased national oppression&dquo; (Lenin, 1967, II : 290; I : 771).
Militarism has become crucial in the survival of finance capital. In the United
States, it preserves unemployment at five percent of the white male force, provides
business with profitable enterprises, and, as of late, blatantly doles out dollars and
credit to keep military contractors from going under. Internationally, the sources
of raw materials and investments are projected within &dquo;spheres of influence,&dquo; as
the world is salt and peppered with protective bases and &dquo;friendly&dquo; governments
are encouraged to remain so.
In the imperialist countries, the escalation of state powers has signified a

decline in the effective power of parliamentary institutions. In Latin America, it
has signified the elimination of all democracy, the imposition of lackey military
rulers, and the launching of repeated offcnsives against democratic guarantees on
the continent. &dquo;Both in foreign and home policy imperialism strives towards
violations of democracy, towards reaction. In this sense imperialism is indisput-
ably the negation of democracy in general, and not just of one of its demands,
national self-determination&dquo; (Lenin, 1960: 43).
The decadence of capitalism, its parasitic character, the extreme socialization
it produces,and the rejection of its democratic political shell indicate that the
social relations of production no longer correspond to the powerful advance of
productive forces and that only the proletarian revolution can solve this contra-
diction. The Latin American revolution is against this imperialism, against the
decadent capitalism which has begun to suffer definitive defeats in Russia, China,
Eastern Europe, Cuba, and other countries throughout the world.
Decadence and parasitism make imperialism a moribund capitalism in transi-
tion to socialism: &dquo;monopoly, which grows out of capitalism, is already capitalism
dying out, the beginning of its transition to socialism&dquo; (Lenin, 1968a: 300). This
is an indication that the contradictions of capitalism in its imperialist stage are
irreversible, and produce the necessary conditions for a revolution directed by
proletarian forces in the world.
As imperialism negates the characteristic of free competition, it also negates
the characteristic of bourgeois democracy, thereby intensifying its political con-
tradictions. If imperialism were free of all political contradictions, its preferred
policy would be colonialism: the no-holds-barred, total, political domination.
This is the ultimate political consequence of monopoly capitalism. But it is not an
easily obtainable result: imperialism has to utilize all means available through the
power of finance capital to extort, manipulate, strangle, and eliminate national
political power; with this intention, it establishes alliances with the most reaction-
ary class in the backward countrics-the local landowner-and transforms the
native, big bourgeoisies into docile, subject middlemen. By way of this mechanism,
it achieves two effects: first, it exports monopoly to countries where capitalism
has not yet completely developed; sccomlly, it changcs national political indepen-
ence into an opera bouffe. To the degree that the historical process unfolds and
imperialism is backed into a corner, imperialism becomes increasingly fierce,

savagc, and oblivious to even the most elcmental political expedience, even in
internal affairs. Its repressive force, its inherent militarism, its expansionism, its
53
autocratic power, are the mark of its decadence. For these reasons, Mao Tse-tung
coined his famous representation of imperialism as a paper tiger.12
The Alliance of f Reactionari~es
The economic advancement of dominated countries is the initial effect of
imperialist penetration. But the purpose of imperialism is not to improve the
living conditions of people who live in backwardness, but to safeguard profit-
making outlets. Moreover, since imperialism is monopoly, it cannot allow the
appearance of new competitors in the world, and it further faces a continual~ly
ruthless struggle with other competing imperialist countries. To obtain its objec-
tives, imperialism averts the capitalist development that it sets in motion and that
it is always promoting. Thus, it encounters the great contradiction: once capitalism
is started in a backward country, its internal dynamic moves it toward the des-
truction of all obstacles-including the imperialist obstacle-and at the same time
imperialism has to oppose this internal dynamic since it represents a constant
threat to its monopoly. Imperialism attempts to resolve this contradiction in
various ways, but all of them, in the final analysis, result in the reservation off
agricultural backwardness. The policy of imperialism in the backward countries is
designed to permit sufficient development in industry and other sectors that wjll
allow a market for capital, foreign imperialist investment, and the maintenance of
the international commodity market; but it is also geared to the preservation of
feudal remnants in agriculture as manifested by land tenure structures and the
power of large landholders.
This policy is blatantly obvious in Latin America. Imperialism first promoted
the policy of import-substitution and, later, policies relating to the export of
manufactured products and regional integration while not generally allowing any
decrease in the landowners power. Some agrarian reform programs were designed
during the sixties-according to the latest bourgeois economic theory-to guar-
antee and protect the interests of the landowners and the market for agricultural
products of U.S. monopolies. In the last analysis imperialism, at the same time
that it destroys the feudal economy and moves capitalism into various sectors of
the economy, preserves backwardness in agriculture and warps the advancement
of industry with the object of preventing the appearance of competitors, and of
preserving the advantages that the backward countries offer-in terms of profit-
to the imperialist monopolies.
We can ennumerate the following methods utilized by imperialism to stop
the progress of its dominated countries: destructive wars of aggression against the
nation; unequal treaties that grant imperialism control over sections-if not the
whole-of the economy; control over commerce, agriculture, and communications;
penetration of foreign capital replacing domestic capital by means of extortion,
competition, and superior technology; monopolization of credit, banking, and
financial operations; creation of a coniprador bourgeoisie which works in the
interests of the imperialist country through the usurous exploitation of the weak
sectors of the national economy; firm alliances with the landholding class and
with the merchant bourgeoisie geared to the preservation of feudal elements in
agriculture; provision of weapons and military training to the army, police and
. imperialism and all reactionaries have dual natures—they are real tigers and paper tigers
12"
at the same time. . . all reactionaries are paper tigers. In appearance, the reactionaries are
terrifying, but in reality they ar not so powerful. From a long-term point of view, it is not
the reactionaries but the people who are really powerful" (1970, IV: 98-100).

54
other repressive forces; cultural penetration via control over the educational
system and the instruments of mass media; and the training of intellectuals.
When the dependentistas fail to consider imperialism as the immediate enemy,
what they are doing, in effect, is leaving imperialism out of the struggle. They
make imperialism something alien to capitalism or, at best, a preferred foreign
policy of the bourgeoisie. For Lenin, this position was equivalent to a concrete
defense of imperialism since instead of directing the struggle against the concrete
reality of contemporary capitalism, i.e., against imperialism, it leads to an imaginary
struggle against an abstract capitalism which may or may not be related to im-
perialism. This position is prevalent among liberal writers who talk about the
United States and the transformations of capitalism in this country without once
mentioning the intrinsic imperialist nature of the U.S. today. They believe that
imperialism is something that can exist only beyond the U.S. border, and they
cringe before the characterization of U.S. internal political and economic policies
as imperialist in nature. Of course, as Lenin himself indicated in his dispute with
Kautsky, the name of a reality is secondary, but when not only the name but also
the reality itself is befogged, muddled, and spirited away, then the name acquires
a definitive importance.
The local capitalism of Latin America can only be analyzed in relation to
imperialism, not apart from it. This analysis will identify the classes objectively
oppressed by imperialism, including sections of what Mao called the &dquo;national
bourgeoisie.&dquo; It will also identify those elements of the local bourgeoisie who are
the agents of imperialism. An analysis that separates imperialism from capitalism
leads to the construction of an undifferentiated &dquo;bcurgeoisie&dquo; as the immediate
enemy, to be defeated through an immediate, single, socialist revolution. This is
Franks position; of it Mao would say: &dquo;the theory of a single revolution is simply
a theory of no revolution at all, and that is the heart of the matter ...&dquo; (Mao,
1970, II: 359).

The analysis presented in this section can be summarized as follows: im-
perialism is not a policy, but the advanced stage of capitalism; imperialism is not
industrial capital, but finance capital; the measure of imperialism is not the de-
terioration of the terms of trade, the commoditv market, or the differences in
the development of industry, but the power that one country exerts over others
through finance capital and direct investment; imperialism is not a power on the
way up but a decadent power that tries to intimidate everyone in the hopes of
maintaining its world-wide exploitation; imperialism has not ceased to be colonial-
ist, it is ready to launch punitive expeditions against both advanced and back-
ward countries if circumstances make it necessary to do so; imperialism is not
the result of free competition, but of the growing concentration of production
and of the monopoly which carries the economy toward inevitable concentration
and socialization; imperialism does not rely on democracy, but on anti-democracy
and repression, internally and externally; imperialism does not promote the full
development of the countries it dominates, but maintains agricultural backward-
ness ; imperialism docs not lead to peace, but aggravates the struggle among the
powers for spheres of influence and control over countries; imperialism is not
the power of capitalism, but the beginning of its end.
THE LATIN AMERICAN REVOLUTION

In this section, we will address ourselves to the problem of the Latin American
revolutionary process. This process will, in some ways, resemble and in others
55
differ from the Cuban revolution. It will resemble it by learning from the Cuban
leadership that the key question of the revolution involves taking over state
power with the assistance of all revolutionary elements, and also by understanding
the two stages of the Cuban revolution: the democratic stage, and the subsequent
socialist stage. 133 Observers have noted that counterrevolutionaries learn more
quickly than revolutionanes trom past revolutions. After the Cuban Revolution.,
the U.S. repressive apparatus was quick to see the revolutionary implications of
any upheaval. Thus, of necessity, the Latin American revolution will differ from
the Cuban revolution in this respect: the ideology of the leadership of the revolu-
tion will be openly socialist from the beginning. However, to engender the
support of its peasant masses, it will have to first struggle for a revolution of new
democracy and, afterwards, for a socialist revolution. This was, in fact, what
the Cuban leadership did; for this reason, Castro has been referred to as an
&dquo;intuitive Leninist.&dquo; But neither left-wing phrasemongers that would have &dquo;Cuba
1974&dquo; transplanted into Latin America immediately, nor right-wing bourgeois
reform-revolutionaries will succeed in Latin America today because neither can
count on the masses.
The countries of Latin America are distinguishable as colonies or semi-
colonies dependent upon the United States, England, France, and Holland, the
United States being the most powerful imperialist country in this area and in
the world. The countries of Latin America are also characterized by semi-feudal-
ism or by the existence of strong feudal survivals which determine their back-
wardness. Presently, with the exception of Cuba, this feudal Latin American
backwardness is fundamentally conditioned by the imperialist domination of
all these countries. The basic contradictions in the contemporary societies of
Latin America are those between imperialism and the nations of Latin America,
and the contradiction between feudal backwardness and the great masses of
people in each country. There are, of course, other contradictions-such as the
contradiction between the bourgeoisie and the proletariat-and contradictions
within the reactionary classes themselves. But the principal contradiction is
between imperialism and each Latin American nation. The fundamental reason
for this determination of the principal contradiction is that the central problem
in Latin America is its backwardness; a backwardness maintained at this moment
in time, by imperialism.
The Character of the Latin American Revolution

From the Marxist point of view, any revolution against imperialism is part
of the world proletarian revolution which began with the October revolution in
Russia and which continues with the revolutions in China and other countries;
i.e., the revolution in Latin America is part of the world socialist revolution.
No matter what classes, parties or individuals and no matter whether they themselves
are conscious of the point or understand it, so long as they oppose imperialism, their
revolution becomes part of the proletarian-socialist world revolution and they become its
allies (Mao, 1970, II: 346).
This is the logical conclusion of considering imperialism as a stage-the decadent
stage-of capitalism. But the struggle against imperialism is primarily a political
struggle of national liberation. As such, the Latin American revolution has,
The Cuban revolutionary process is largely, but not entirely, beyond the democratic stage even
13
today, as witnessed by the existence of a sizable number of small peasant proprietors in the
agricultural sectors.

56
as its object, the dictatorship of the proletariat, but liberation from imperialist
not
domination; in this sense, it is a democratic revolution. Lenin explained this
problem in the following way: while the objective of the world socialist revolution
is to eliminate borders between countries and to establish proletarian international-
ism, this objective can only be effected through the vehicle of national independ-
4
ence in all the oppressed countries of the world. 14 In Latin America, the socialist
revolution is not possible without national liberation from the yoke of imperialist
domination.
The other fundamental aspect of the revolution in Latin America is that its
immediate consequence will be to advance the development of productive forces
in the economy, which means generating a limited capitalist development especially
in the agrarian sector. Since it must struggle against land monopolies and other
feudal obstacles for capitalist development to occur, the principal target will be
the latifundistas who preserve backwardness and their bourgeois accomplices who
favor the interests of the most backward classes. The agrarian revolution in
Latin America supports the expropriation of the large landowners and private
property of the land for the direct producer-the tiller of the soil. This struggle,
which is opposed by imperialism, has a democratic character since it protects
private property in the land and the limited development of capitalism in the
countryside.
This revolution has democratic social aspects. It is not, however, a bourgeois
revolution of the old type, as were the revolutions of the two previous centuries,
but a different type of democracy, a new democracy, which is part of the world
proletarian revolution. The Latin American revolution can thus be divided into
two stages: the stage of the new democratic revolution against imperialism and
backwardness, and the stage of socialist revolution against the bourgeoisie and
capitalism in general. 166
The Politics of the New Revolution
The task of the revolution of new democracy in Latin America is the struggle
against two allied principal enemies: the struggle to topple imperialist oppression,
and the democratic struggle to topple and destroy the feudal landlords. The
feudal landholders cannot be defeated without the defeat of imperialism; imperial-
14 aim of socialism is not only to abolish the present division of mankind into small states
"The
and all national isolation; not only to bring nations closer to each other, but also to merge
them . . . Just as mankind can achieve the abolition of classes only by passing through the
transition period of the dictatorship of the oppressed class, so mankind can achieve the
inevitable merging of nations only by passing through the transition period of complete
liberation of all oppressed nations, i.e., their freedom to secede" (Lenin, 1968: 114).
15"
.
private capital cannot dominate the livelihood of the people: this is the main principle
. .
of the regulation of capital . . . Chinas economy must develop along the path of the regu-
lation of capital and the equalization of land-ownership, and must never be privately
owned by the few; we must never permit the few capitalist and landlords to dominate the
livelihood of the people; we must never establish a capitalist society of the European-Ameri-
can type or allow the old semi-feudal society to survive" (Mao, 1970, II : 353).
Mao Tse-tung, who characterized the Chinese revolution as having a bourgeois-democratic

16
character, wrote in 1945: "Why do we say our revolution in the present period is bour-
geois-democratic in nature? We mean that the target of this revolution is not the bour-
geoisie in general but national and feudal oppression, that the measures taken in this revolu-
tion are in general directed not at abolishing but at protecting private property, and that as
a result of this revolution the working class will be able to build up the strength to lead
China in the direction of socialism, though capitalism will still be enabled to grow to an
appropriate extent for a fairly long period" (Mao, 1970, III: 247).

57
ism is the landholders main prop in all the of economy and politics. With-
areas
out the cooperation and the strengthening of the peasants in their struggle
against the landholders, sufficiently strong anti-imperialist force, sufficient to
a
defeat imperialism, cannot be created. The most important struggle lies, with
a few exceptions, in the peasantry: &dquo;Therefore, the two fundamental tasks, the
national revolution and the democratic revolution, are at once distinct and united&dquo;
(Mao, 1970, II: 318).
The type of state which the new democratic revolution will establish will be
a democratic dictatorship of the classes participating in the revolution. It will
not be a bourgeois democratic republic, that is, a dictatorship of the bourgeoisie.
The bourgeoisie, as a general rule, is no longer ready to direct the struggle for
national liberation against imperialism in Latin America; democracy has become
an enemy of imperialism, and the bourgeois elements have become allied with &dquo;the
landholding classes in the exploitation of the masses. The proletarian republic-

the dictatorship of the proletariat-is the most appropriate form for the advanced
capitalist countries where conditions are rapidly developing toward its establish-
ment. The democratic dictatorship of the anti-imperialist classes
... is the transitional form of the state to be adopted in revolutions of the colonial and
semi-colonial countries. Each of these revolutions will necessarily have specific character-
istics of its own, but these will be minor variations on a general theme. So long as
they are revolutions in colonial or semi-colonial countries, their state and governmental
structure will of necessity be basically the same, i.e., a new-democratic state under the
joint dictatorship of several anti-imperialist classes (our emphasis) (Mao, 1970, lI: 3511.
In Latin America, the establishment of a democratic dictatorship of all
anti-imperialist classes requires a precise determination of different social classes.
The fundamental distinction between the bourgeois-democratic revolution and
the new democratic revolution lies in the class that will lead the revolution, and
the classes that will support the revolution; it is the proletariat, with its ideology,
that must lead the new democratic revolution in alliance with all other anti-
imperialist classes, and not the bourgeoisie. In forgetting this aspect, many
erstwhile Marxist writers confuse a bourgeois-national program of capitalist de-
velopment with a proletarian program of national liberation and the destruction
of feudal backwardness. If the proletariat does not lead, through its party, the
revolution of new democracy, then this revolution will not constitute one of the
two stages of a socialist revolution. In Latin America, the leading role of the
proletariat has been frequently denied, and this denial has signified the rejection
of the Marxist-Leninist notion of a vanguard party of the working class. The
proletariat is the most advanced class in history and, consequently, it is the most
exploited class in Latin American society as the victim of imperialist, capitalist,
and feudal exploitation. At the same time, proletarian leadership is the only
guarantee that a new democratic revolution (which integrates the democratic
interests of other classes) will be oriented towards the establishment of a dic-
tatorship of the proletariat.
The other classes directly oppressed by imperialism are the peasantry and
the petty-bourgeoisie-the latter composed of intellectuals, small merchants,
handicraftsmen, and professionals. In almost every Latin American country, the
peasants constitute the largest sector, and they have become a pivotal element in
the revolution precisely because of their numbers and their decision to fight
against feudal oppression. They cannot be the leading force because their ultimate
interest is the acquisition of private property in the land. But the specific economic
character of much of Latin American society is such that the arena of the revolu-
58
tion will be the countryside. Although the peasants the main allies of the
are
proletariat in the revolution, the oppression exerted by imperialism over intel-

lectuals, students, professionals, and the small merchants, transform these classes
into strong allies of the revolution under a proletarian leadership. A series of
left-opportunist currents in Latin American countries have rejected in theory the
alliance of the proletariat with the peasantry and the petty-bourgeoisie. In the
backward Latin American countries, the majority of the population is not
proletarian, and the only way of mobilizing forces against imperialism is a front.
This mobilization-respecting the interests of the participating mases-is what
determines the democratic character of the first stage of the socialist revolution in
Latin America.
In the oppressed countries of Latin America one sector of the bourgeoisie, the
national bourgeoisie, suffers intensely from imperialist domination. According
to Mao Tse-tung, the national bourgeoisie has a double character: on the one
hand, it suffers at the hands of imperialism and feudalism and, on the other
hand, its political and economic weakness makes it vacillate; it lacks the courage
to oppose imperialism because it maintains ties with it. This double character
permits the proletariat to ally itself with it when the contradictions of the
revolutionary process force the national bourgeoisie to struggle against imperialism
and feudalism. In this connection, onc must distinguish between opportunists of
the right, who see in every bourgeois of progressive appearance a representative
of the potentially revolutionary national bourgeoisie, and opportunists of the
left, whose revolutionary purity does not allow them to discover any contradictions
among the bourgeoisie, imperialism, and the large landowners. In the practical
revolutionary history of Latin America, both right and left-wing opportunism
have prevented an understanding of this fundamental problem. Some have taken
the revolution down the road to failure by handing it over to the bourgeoisie,
whereas others have done the same by ignoring the concrete reality of Latin
American society and its enemies. 17
The principal enemy of the Latin American people are the landlord class and
the big bourgeoisie. The landholders main interest is the preservation of feudal
backwardness; the big bourgeoisie-whose interests lie in commerce and finance-
serve the interests of imperialist countries and live off them. Further, the big
bourgeoisie maintains numerous ties with feudal forces in the agrarian sector.
Among some excellent, well-intentioned writers, one can frequently find a posi-
tivistic vision of social classes which causcs them to analyze class nature and
antagonisms purely on a basis of the personal attitudes of numbers, while ignoring
their class interest and their concrete objective situation in relation to the economy.
As a consequence, these writers err in equating different sectors of the dominant
alliance of reactionaries.
Conclusions
(1) The theory of dependence does not explain underdevelopment, ignores
In dealing with this problem, Mao Tse-tung outlined its implications for China in the follow-
17
ing manner: "Chinas democratic revolution depends on definite social forces for its ac-
complishments. These social forces arc the working class, the peasantry, the intelligentsia,
and the progressive section of the bourgeoisie, that is, the revolutionary workers, peasants,
soldiers, students and intellectuals, and businessmen, with the peasants and workers as the
class which leads the revolution. It is impossible to accomplish the anti-imperialist and
anti-feudal democratic revolution without these basic revolutionary forces and without the
leadership of the working class (Mao, 1970, II: 233) .
59
the basic character of imperialism, is theoretically vague, and should, consequently,

be rejected.
(2) Latin American backwardness has a pre-capitalist character.
(3) The theory of imperialism provides an explanation for the persistence
of backwardness.
(4) The Marxist theory of imperialism and backwardness identifies the basic
contradictions in Latin America as those between imperialism and the nations in
Latin America, and between backwardness and interests of great masses of the
people in each country. The &dquo;revolution of new democracy&dquo; is proposed as a
solution to this double contradiction.
Postscript
This manuscript had been completed when the &dquo;Chilean experiment&dquo; came
to an abrupt end. In the aftermath of the September 11, 1973, military coup,
many observers have discussed the relative merits of the different alliances struck
by the Unidad Popular government and, more generally, the lessons to be learned
from this experience.
The position outlined in this work differs from the vision of the Popular
Unity coalition in several important respects. First, it is assumed through-
out, in accordance with the Marxist theory of the State, that there can be no
peaceful or parliamentary transition to socialism. Second, the theory of the
&dquo;revolution of new democracy&dquo; implies the exercise of leadership by a revolutionary
working class party. In contrast, the Unidad Popular relied on bourgeois legality
and lacked a vanguard party. The Chilean defeat did not come as a surprise to a
student of State and Revolution where Lenin clearly demonstrates that the bour-
geois state must be smashed or it will smash socialism. The Chilean military
provided a cruel textbook lesson on the Marxist theory of the State. Lastly,
it would be understood then that the alliances discussed in this paper are
alliances struck by and for the benefit of a disciplined vanguard party of the
working class and as such, they have nothing in common with the alliances (or
lack thereof) of Unidad Popular in Chile.
REFERENCES
Bettelheim, Charles and Sweezy, Paul

1971 On the Transition to Socialism, New York: Monthly Review Press
Bodenheimer (Jonas), Susanne
1971 "Dependency and Imperialism: The Roots of Latin American Underdevelopment,
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Boorstein, Daniel
1968 The Economic Transformation of Cuba, New York: Monthly Review Press
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1969 Dependencia y desarrollo en America Latina, Mexico: Siglo Veintiuno Editores
Cardoso, Fernando Henrique
1972 "Dependent Capitalist Development in Latin America," New Left Review, 74 (July-
August), 83-95.
1973 "Dependency and Development in Latin America," pp. 7-16, in Frank Bonilla and
Robert Girling (eds.) Structures of Dependency, Stanford
Cockcroft, James D., André Gunder Frank and Dale Johnson
1972 Dependence and Underdevelopment: Latin Americas Political Economy, Garden City:
Doubleday Anchor
60
Dobb, Maurice
1947 Studies in the Development of Capitalism, New York: International Publishers
Dos Santos, Theotonio
1970 Lucha de clase y dependencia en América Latina, Medellín, Colombia
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(eds.) Readings in U.S. Imperialism, Boston: Porter Sargent
Edel, Matthew
1972 "Exchange and Production: A Controversy in Anthropology and Political Economy,"
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Hayter, Teresa
1971 Aid as Imperialism, Baltimore: Penguin
Jalee, Pierre
1972 Imperialism in the Seventies, New York: The Joseph Okpaku Press
Kautsky, Karl
1970 La cuestión agraria, Paris: Ruedo Ibérico
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1968 Marxist Economic Theory, New York: Monthly Review Press, 2 vols.
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1970 Selected Works, Peking: Foreign Languages Press, 4 vols.
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by Jeremy Shapiro, Boston: Beacon Press
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1969 Theories ofSurplus Value (in 3 parts), Moscow: Progress Publishers
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Marx, Karl and Frederick Engels
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1970 "Agrarian Change Trends in Latin America," pp. 11-40, in Rodolfo Stavenhagen (ed.),
Agrarian Problems and Peasant Movements in Latin America, Garden City: Doubleday
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Petras, James and Maurice Zeitlin (eds.)
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61
Preobrazhensky, E.
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II

THE LATIN AMERICAN REVOLUTION: A THEORY OF

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We make a number of assumptions which should be clarified at the outset.

summary of the dependentistas position. We are only interested in their ap-

exponent of the dependentista position on the questions of the principal enemy

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possibility of a socialist revolution, inasmuch as the economy had a feudal

The Immecliate Enemv

ternational) and his refutation of the &dquo;imperialist economism&dquo; of Mr. Pyatakov

the conceptualization of a revolution; and secondly, by treating the bourgeoisie

Today, the dependentistas call imperialism dependence so as to give an

The Character o Latin American Society

development has been produced by the development of mercantilism and later

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Second, is the faulty characterization of the medieval traders as a revolutionary

The Methodological Critique

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persist. This &dquo;dependentismo&dquo; has consequences that are pernicious. Dependency

Summary of the Argument

application of historical materialism to history. The fundamental aspect of this

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composition of capital6 in agriculture is lower than the average organic composi-

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Backward Forms of Ground-Rent and Land Tenure

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a monetary-market economy and a capitalist economy, it is sufficient to examine

The separation of landed property from self-management must be understood

A further complication arises in relation to the ownership of small land parcels

Land Tenure in Latin America

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agricultural labor where the laborer is ccmmitted to specific food-producing ac-

Imperialism as a Special Stage of Capitalism

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poverishment and relative increase of the proletariat; and a tendency towards

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Imperialism appears as the direct development and continuation of the funda-

The concept of the predominance of industrial capital through large multi-

superstructure of credit (1970a, III : 439).

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The Current V alidity of the Theory of Imperialist

theory of imperialism which obscure the role of finance capital.

international work of finance capital has been recently documented in a NACLA

The Political Aspects of Imperialism

In the imperialist countries, the escalation of state powers has signified a

imperialism is backed into a corner, imperialism becomes increasingly fierce,

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1970, II: 359).

THE LATIN AMERICAN REVOLUTION

The Character of the Latin American Revolution

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Mao Tse-tung, who characterized the Chinese revolution as having a bourgeois-democratic

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landholding classes in the exploitation of the masses. The proletarian republic-

proletariat in the revolution, the oppression exerted by imperialism over intel-

the basic character of imperialism, is theoretically vague, and should, consequently,

Bettelheim, Charles and Sweezy, Paul

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